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What do I need to know about filing for Chapter 13 bankruptcy?

If your debts have become unmanageable, but you want the opportunity to pay off your reorganized debts, filing for Chapter 13 bankruptcy may be your best option.

Debtors are required to seek credit counseling before they are allowed to file their bankruptcy petition. Once they complete this counseling, they pay a fee to file the petition. Debtors also have to answer questions under oath about their debts, income, assets, expenses and the types of debt they have — secured or unsecured, or both.

Trustees then are appointed to review debtors' cases. They have to stay in contact with the debtors, as well as the creditors, and arrange the creditors' meeting.

Debtors also have to file repayment plans with the courts, which will subsequently be approved by the judge when the terms of the repayment plans have been met.

Filing for Chapter 13 bankruptcy doesn't stop collection activities for some debts, including priority debts like tax arrearages or child or spousal support, or loans from pension funds.

All secured debt has to be paid back, which includes loans and obligations that were secured with property or auto titles. But some portions unsecured debts also have to be paid off, such as credit card balances.

It is very important to include each and every outstanding, eligible debt on your Chapter 13 bankruptcy filing. Anything that is omitted will not be discharged by the bankruptcy at its conclusion. All debtors should first obtain copies of credit reports from all three main reporting agencies to ensure that all debts have been included. Your bankruptcy attorney can handle this task for you as part of the process.

Source: Findlaw, "Chapter 13 Bankruptcy Rules FAQ," accessed Oct. 28, 2016

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At the law offices of William H. Oliver, Jr. & Associates in Toms River and Lakewood, New Jersey, we represent clients in Toms River, Neptune, Trenton, Middletown, Red Bank, Wall, Lakewood, Lakehurst, Manchester, Asbury Park, Old Bridge, Jamesburg, Barnegat, Forked River, Manahawkin, Ocean Township, Brick, Manasquan, Howell, Freehold, Hazlet, Bradley Beach, Brown Mills, Long Branch, Keansburg, Marlboro, Bayville, Beachwood, Whiting, Sayreville, South River, East Brunswick, Monmouth County, Ocean County, Middlesex County, Burlington County and Mercer County.