Chapter 7 vs. Chapter 13 Bankruptcy: What’s the Difference?
May 22, 2025
Chapter 7 vs. Chapter 13 Bankruptcy: What’s the Difference?
When debt becomes overwhelming, filing for bankruptcy can provide a clear path forward. At The Law Offices of Stuart M. Nachbar, P.C., we help individuals throughout New Jersey understand their legal options, including the two most common forms of consumer bankruptcy: Chapter 7 and Chapter 13.
Each type of bankruptcy has unique features, benefits, and eligibility requirements. In this article, we’ll break down the key differences so you can make an informed decision about your financial future.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, often referred to as “straight bankruptcy” or “liquidation bankruptcy,” is designed for individuals who do not have the income to repay their debts. When you file under Chapter 7, certain unsecured debts—like credit card balances and medical bills—can be wiped out entirely.
Key Points:
- Quick Process: Most cases are completed in 4–6 months.
- Debt Discharge: Eliminates qualifying unsecured debts.
- Property Exemptions: Many filers are able to keep their home, vehicle, and other essentials.
- Means Test Required: Your income must fall below a certain threshold to qualify.
This option can offer a clean slate, though it's important to understand what property is protected under New Jersey's bankruptcy exemptions.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is often called a “reorganization plan.” It allows individuals with regular income to create a structured repayment plan, usually over 3 to 5 years. Instead of eliminating debt outright, it gives you time to pay back what you owe—often at a reduced rate—while keeping your assets.
Key Points:
- Repayment Plan: Debts are paid in manageable monthly installments.
- Keep Your Property: Ideal for those trying to avoid foreclosure or repossession.
- No Income Limit: However, there are limits on how much debt you can have.
- Good for Secured Debt: Useful if you’re behind on mortgage or car payments.
Chapter 13 is best suited for people who have steady income and want to retain important assets while managing past-due accounts.
Which Option Is Right for You?
Choosing between Chapter 7 and Chapter 13 depends on several factors:
- Your current income and job stability
- The types of debt you owe (secured vs. unsecured)
- Whether you’re behind on mortgage or car payments
- Your long-term financial goals
If you need a quick reset and don’t have the means to repay your debt, Chapter 7 may be the best fit. If you’re trying to protect your home from foreclosure or want to catch up on payments over time, Chapter 13 may be more appropriate.
Talk to a New Jersey Bankruptcy Attorney
Deciding whether to file for bankruptcy—and which type to choose—isn’t easy. At Stuart M. Nachbar, P.C., we’ve helped countless New Jersey residents navigate Chapter 7 and Chapter 13 filings. Our goal is to help you understand your options and take the right steps toward financial relief.
We offer personalized guidance tailored to your situation, and we’re committed to helping you make decisions that support your long-term well-being.
Ready to Take Control of Your Financial Future?
If you're thinking about filing for bankruptcy in New Jersey, schedule a consultation with Stuart M. Nachbar, P.C. today. We’ll review your situation, explain your rights, and help you move forward with confidence.
Filing for bankruptcy can feel overwhelming, but understanding the process can help you feel more confident about your financial future. With guidance from an experienced attorney, you can navigate the necessary steps smoothly and make informed decisions about the best course of action for your situation. Step 1: Initial Consultation The bankruptcy process begins with an initial consultation where you and your attorney discuss your financial situation. During this meeting, Stuart Nachbar, a trusted bankruptcy attorney in New Jersey, will help you understand your options. He will evaluate whether Chapter 7 bankruptcy, which involves the liquidation of non-exempt assets, or Chapter 13 bankruptcy, which allows for a structured repayment plan, is the best fit for your circumstances. This step ensures you have a clear understanding of the potential outcomes before proceeding. Step 2: Preparing and Filing Your Case Once you’ve decided to move forward, your attorney will handle the preparation and filing of your case. This involves compiling all necessary financial documents, such as income statements, debt information, and asset lists, to provide a comprehensive picture of your financial status. Stuart Nachbar will ensure that all required paperwork is complete and accurate before filing it with the bankruptcy court. Step 3: Working with the Bankruptcy Trustee After filing, a bankruptcy trustee is assigned to your case. Your attorney will submit all required documentation to the trustee, ensuring your case proceeds smoothly through the legal system. The trustee's role is to oversee the bankruptcy process, whether it involves liquidating non-exempt assets under Chapter 7 or managing payments under a Chapter 13 repayment plan. Step 4: Navigating the Bankruptcy Process Throughout the process, your attorney will represent your interests, respond to any challenges, and address any questions or concerns you may have. Even having to attend the mandatory meeting of creditors, your attorney will guide you every step of the way. Why Legal Guidance Is Important Bankruptcy laws and requirements can be complex, and having an attorney to navigate the process can help avoid mistakes that could delay or jeopardize your case. A knowledgeable attorney will ensure that all legal procedures are followed and that your rights are protected throughout the process. Take Control of Your Financial Future Filing for bankruptcy is a significant step toward resolving overwhelming debt and rebuilding your financial future. With guidance and support from Stuart Nachbar, you can feel confident in navigating the bankruptcy process. Contact the Law Office of Stuart M. Nachbar today to schedule a consultation and take the first step toward financial stability.
Facing the possibility of losing your home due to foreclosure can be overwhelming, but Chapter 13 bankruptcy may provide a way to protect your property while addressing your financial challenges. Unlike Chapter 7 bankruptcy, which often involves liquidating assets to pay off debts, Chapter 13 focuses on creating a structured repayment plan that allows you to catch up on missed payments and stay current on your mortgage. How Chapter 13 Can Help You Save Your Home One of the primary benefits of Chapter 13 bankruptcy is its ability to stop foreclosure proceedings. As soon as you file for Chapter 13, the court issues an automatic stay, which temporarily halts foreclosure and other collection efforts. This gives you time to work out a repayment plan, which typically lasts between three to five years. Your repayment plan will include catching up on overdue mortgage payments while continuing to make regular payments moving forward. This structured approach can give you the breathing room needed to regain financial stability and protect your home from being taken by creditors. Loan Modification Opportunities Another key advantage of Chapter 13 is the opportunity to pursue a loan modification through the Court’s Loan Modification Program (LMP). This program is designed to help homeowners negotiate more favorable terms with their lenders, such as reduced interest rates, extended repayment periods, or even a lower principal balance. While loan modifications are not available in Chapter 7, they can play a crucial role in helping you stay in your home under Chapter 13. Timing Is Critical If you’re concerned about losing your home, it’s important to act quickly. Waiting until foreclosure proceedings are well underway can limit your options. Filing for Chapter 13 before your home is at risk can provide more time to create a viable repayment plan and explore loan modification options. Why You Need a Bankruptcy Lawyer Navigating the complexities of Chapter 13 bankruptcy can be challenging. From understanding the repayment plan requirements to leveraging the Court’s Loan Modification Program, having a knowledgeable bankruptcy attorney by your side is invaluable. An attorney can help you assess your financial situation, develop a strong case for repayment, and negotiate with your creditors to achieve the best possible outcome. Take Action to Protect Your Home If you’re facing foreclosure or struggling to keep up with mortgage payments, Chapter 13 bankruptcy may offer the relief and protection you need to save your home. Contact the Law Office of Stuart M. Nachbar in Livingston, NJ, to discuss your options and take the first steps toward financial stability. Call us today to learn more about how Chapter 13 can work for you.
Debt can quickly become overwhelming, especially during challenging economic times. If you find yourself struggling to make ends meet as your income is consumed by debt payments, you are not alone. Chapter 7 bankruptcy may offer a path to regain control of your finances and get the fresh start you deserve. Why Consider Chapter 7 Bankruptcy? When debt becomes unmanageable, it can lead to significant financial stress. You may be worried about losing your home, car, or other assets. Chapter 7 bankruptcy offers relief by discharging certain unsecured debts, such as: Credit card debt Medical bills Non-Collateralized Debt Filing for Chapter 7 also initiates an automatic stay, which temporarily halts actions from creditors, including foreclosure, repossession, and wage garnishments. This immediate relief can provide much-needed breathing room to begin rebuilding your financial future. Acting Quickly Matters Delaying action can lead to severe consequences, such as foreclosure, repossession, or depleted savings. The sooner you explore your options, the better positioned you’ll be to protect what matters most. If you’re in Livingston, NJ, and considering Chapter 7 bankruptcy, taking swift action can help you regain financial stability. How Attorney Stuart M. Nachbar Can Help Navigating bankruptcy can be complex, but you don’t have to face it alone. Attorney Stuart M. Nachbar has been helping individuals and families in Livingston, NJ, work through the Chapter 7 process. From evaluating your financial situation to representing your interests in court, Mr. Nachbar is committed to guiding you through every step. Benefits of Chapter 7 Bankruptcy Debt Discharge : Eliminate qualifying debts and start fresh. Immediate Relief : Stop creditor actions with an automatic stay. Protect Assets : Retain certain exempt property during the process. Take Control of Your Financial Future Living with debt can feel like an endless cycle, but you don’t have to face it alone. Chapter 7 bankruptcy can offer a way forward, giving you the chance to rebuild and move toward financial freedom.
In a groundbreaking move, Congress has authorized nearly $2 billion in funding to enhance autism research and support services over the next several years. This significant investment underscores a growing commitment to addressing the needs of individuals with autism and their families. From advancing scientific understanding to expanding access to critical resources, the funding aims to create a brighter future for the autism community. Read this article from DisabilityScoop to explore what this means for research, services, and advocacy efforts nationwide.
Drivers failing to pay surcharges are sent a notice indicating when their license will be suspended and another notice confirming suspension for non-payment. Moving out of state or failing to maintain a current address with the MVC does not excuse surcharge debts. After suspension, surcharges and a $100 restoration fee must be paid to restore the license privilege. If the surcharge remains unpaid a Certificate of Debt is filed in Superior Court. The court issues a judgment, which allows the state to collect unpaid surcharges through involuntary means. The judgment amount (surcharge debt) must be paid before personal property can be transferred or sold. Judgments include a collection cost and interest charges calculated on the judgment balance. Unpaid judgments are assigned to collection agencies and law firms. Credit bureaus are made aware of unpaid accounts. If you accumulate too many points against your license or are convicted for particular traffic offenses, you may be required to pay a surcharge in order to keep your license. For 6 points within 3 years, you’ll have to pay $150, plus $25 for each additional point. For your first DWI, you’ll have to pay $1,000. Worse, those aren’t just one-time charges. You’ll have to pay every year for three years. So, you’ll pay a total of $450 over 3 years for having 6 points. For a DWI, you’ll pay a total of $3,000 over 3 years. What Happens If You Don’t Pay A Surcharge? If you don’t pay a surcharge, the New Jersey DMV will suspend your license. In order to get your license reinstated, you’ll have to pay the surcharge and a reinstatement fee of $100. Remember that driving on a suspended license will cost you a surcharge of $250 per year for 3 years, so you can’t just ignore the problem. How Can We Help? When you file for bankruptcy, the New Jersey DMV will reinstate your license. You can discharge your surcharge debt through the bankruptcy process under either Chapter 7 or Chapter 13, so you won’t have to worry about your license getting suspended again for the same charges. What Fines and Surcharges Can Be Discharged? Any municipal traffic court fines from speeding, to DUI, to driving without a license can be discharged by filing Chapter 7 bankruptcy or Chapter 13 bankruptcy. In addition, all DMV surcharges (including the $3,000 surcharge for DUI) can be discharged. Fines and surcharges are unsecured debts. All unsecured debts can be discharged by filing Chapter 7 bankruptcy. Most unsecured debts can be discharged in a Chapter 13 bankruptcy filing, but you may have to pay back a small percentage of the fine or surcharge over a three- to five-year period. DUI Arrest and Bankruptcy A drunk driving arrest can put anyone into a deep financial hole. In today’s economy, few people can afford the fines or vehicle surcharges that come with a conviction. Filing bankruptcy can be a way to get a fresh start. Your Time Is Limited If you let surcharges go unpaid, the DMV may choose to file a Certificate of Debt in court. The court will issue a formal judgment against you and may allow the DMV to collect from you whether you like it or not. That may mean levying your bank account or garnishing your wages. Filing for bankruptcy will get you the protection of the automatic stay, which will stop wage garnishment and other collection actions for the duration of the bankruptcy, but you won’t be able to get a discharge for surcharge debt if there’s already a judgment against you. Here is the NJ MVC's Official Policy, Taken from the State's Website: I FILED FOR BANKRUPTCY. HOW DOES THAT AFFECT THE SURCHARGES THAT I OWE? If you have a surcharge assessment and have filed for bankruptcy, a copy of your bankruptcy petition needs to be forwarded to the Surcharge Administration Office, P.O. Box 136, Trenton, NJ, 08666 or faxed to (609) 633-8273. After the MVC receives the petition, a hold will be placed on your surcharge account and any surcharge suspensions will be satisfied. If an MVC restoration fee is due, you will be responsible for that payment. Once your bankruptcy case is discharged, the Surcharge Administration has the ability to write-off the entire balance on all pre-petition event violations. However, you will be responsible and billed for all post-petition surchargeable violations. These are violations you incurred after filing for bankruptcy. Please note that only surcharge assessments are dischargeable. Judgments are non-dischargeable. To have the judgments satisfied, you will need to pay them in full, or petition the Superior Court, a year after your discharge, to have the judgments vacated. If your bankruptcy case is dismissed, you will be responsible and billed for the entire balance of your surcharge account. If you re-file or your case is re-opened, you will need to mail or fax the Surcharge Administration. Please contact the Bankruptcy Unit at (609) 292-7500, extension #5025 for further information.
When it comes to education, there are a lot of indications that special needs law is improving. Resources and research continue to guide parents and teachers into best practices and science-based tips for success. But even with the continued improvements and awareness, many experts believe that the special needs education system is still broken and far more complicated than it needs to be. In 1975, President Gerald Ford signed the “Education for All Handicapped Children Act.” But he signed it with a statement of concern that the law was underfunded, promised too much to families, and was burdened by complex technical requirements, according to Education Week . Now, over 43 years later, many people still adhere to Ford’s concerns. Education Week goes on to say that the most concerned people are those who have spent their professional careers or personal lives deeply involved in the cause of educating students with disabilities. Many experts agree that while the specialized education system for special needs children is progressing, the implementation of the system is broken and so it is not fully functioning. Judith Heumann – a pioneer in securing legal rights for the disabled – explains some main areas of concern for the future of special needs education: Underfunding. Special Education Degrees further explains the budget issues that span the nation regarding special needs education, saying that special education programs are facing increasing enrollment and decreasing budgets. The result is that there are fewer teacher assistants available, which results in a greater workload for special education teachers. The teachers available may also face shortages of essential resources and equipment for delivering effective lessons. Failure to identify and evaluate students properly. Sometimes the special learning needs are either not identified at all, or not identified in a timely manner. Misplacement of services. Some children receive special needs instruction who do not need it, and some children who need it do not receive it. A chronic shortage of special needs teachers. This shortage is in part due to the budget constraints, and also due to lack of professional support for teachers in this field. Poor implementation and the need for simplicity in a complex system. This is apparent in the reality that many parents with special needs children still find it difficult to secure the education that their children need and deserve. In these and other respects, the future of special needs education does look concerning. And if you’re the parent of a child with special needs, you’ve likely faced your own unique challenges. We have a long way to go in making education fulfilling and fair for all children with disabilities. But that doesn’t mean you have to weather the storm alone! Sometimes, bringing justice to the system starts with bringing justice to your child and your family. If you’re concerned about the special needs education your child is receiving in New Jersey, or feel that your child is being treated unfairly, it might be time to talk to an attorney experienced in special needs law. The Law Office of Stuart M. Nachbar. has been helping families like yours for 20 years now, and he’s here to help fight for the legal rights of you and your child. Give us a call at (973) 233 4049 or contact us online today ! We serve clients throughout the following counties: Essex, Warren, Sussex, Morris, Passaic, Union, Somerset, Hunterdon. Bergen, Hudson and Middlesex. We are close by to Livingston, West Orange, Newark, Belleville, Clifton, Irvington, East Orange, Paterson, Passaic, and Verona and more.
Anyone who has special needs children will say that raising them is a joy, but also a challenge. Because of the unique attention and environment that special needs children require, just getting them effective education can be tough. But discrimination against special needs children is all too common! Add discrimination to the mix, and parents face an even more difficult journey. The good news is that you’re not alone! The Law Office of Stuart M. Nachbar has been fighting special needs discrimination cases in New Jersey for years now, and we’re here to fight for your child too! Did you know? According to the U.S. Department of Education , any entity that receives federal financial assistance (such as grants or student loans) is prohibited from discriminating against persons with disabilities. Your child is legally protected against discrimination while at school! Unfortunately, many parents do not get legal help because they do not realize that their child is being discriminated against. Uphill battles might feel normal to many parents of special needs children, making it challenging to spot the unjust discrimination happening in their schools. What are some signs that your special needs child is battling discrimination at school? Your Child Doesn’t Have a Role to Play in School Activities or Extracurricular Athletics Other Students Aren’t Made to Understand the Needs of Your Child Teachers Don’t Employ Adaptive Strategies for Your Child Your Child Lacks Peer Support at School The School Refuses to Develop an IEP (Individualized Educational Plan) for Your Child The School Fails to Provide Elementary and Secondary Students a Free Appropriate Public Education (FAPE) Your Child Receives Discriminatory Discipline at School These are just a few examples of how your special needs child might be experiencing discrimination at school. According to StopBullying.gov , teachers, school staff, and other students need to understand the specific impairments of a child’s special needs, so that they can develop strategies and support systems to help special needs children participate and succeed in class and with their peers. If you feel that your child is not getting the support they need at school, it might be time to contact a lawyer who specializes in Special Needs Law! Whether you have questions about how your child is protected by the law in New Jersey, or are ready to pursue a case, The Law Office of Stuart M. Nachbar, P.C. is here to support you! Get started by calling our office at 973-834-8058 or by contacting us online for more information. We serve clients throughout the following counties: Essex, Warren, Sussex, Morris, Passaic, Union, Somerset, Hunterdon. Bergen, Hudson and Middlesex. We are close by to Livingston, West Orange, Newark, Belleville, Clifton, Irvington, East Orange, Paterson, Passaic, and Verona and more.
Many people wonder what actions they take effect their Credit? What can they do to raise a Credit Score? What are the Criteria that Equifax, Experian and TransUnion use to create and reduce/raise the score? Below are the primary items these groups look at: 1. On-Time Payments: To lenders, your history of on-time payments indicates whether you'll make payments on-time in the future. 2. Oldest Credit Line: The age of your oldest account indicates to lenders how much experience you have handling credit. 3. Credit Used: Lenders look for signs of responsible credit usage, and the less you use, the better it is for your score. If it's possible, try to reduce how much you owe by paying as much as you can each month. Using less than 30% of your available credit is a good goal. 4. Recent Inquiries: With some exceptions, lenders tend to see too many recent inquiries as a sign of risk, so the fewer the better. If you're borrowing too much, a lender might see this as a sign that you're stretched too thin financially and might not be able to pay them back. 5. New Accounts: To lenders, opening too many new accounts in a short window of time could point to credit problems. 6. Available Credit: Your Debt to Income Ratio as well as the amount of Credit accessible balanced against the amount that you owe in Credit Debt. Obviously, such things as Judgments, Foreclosure, Bankruptcy and Repossessions can also effect your credit score. Each one of these items works differently as well. Speak to your bankruptcy lawyer about your situation and perhaps he/she can explain this part and how bankruptcy may actually help to raise the score.
How does debt relief work? According to a Debt Relief Program Group, whose name shall remain nameless in this article, a debt relief program reduces the outstanding principal amount you owe to your creditors. Most can not decrease interest rates or change the length of a loan term, but some may. During debt relief, the company negotiates directly with creditors on behalf of their clients in an attempt to have the Creditor accept less than the full amount owed. This, in theory, enables the creditor to get paid sooner and the client to resolve the debt in two to five years, which is much faster than by making minimum payments. In addition, they are usually able to waive interest, while in the program. Compare this to the relief under title 11 of the United States Code (the Bankruptcy Code). In a Chapter 7, all debt (excluding Tax and Domestic Support Obligations) are subject to discharge. In a Chapter 13, even some tax debt is able to be discharged. Any debt not paid in full in your Chapter 13 Plan is discharged in full. Timing is also very crucial. A Chapter 7 (if you qualify) is usually completed 6-7 months from the date you file. A Chapter 13 is usually 36 - 60 months. Interest on your unsecured debt (your credit cards) is frozen as of the date of the filing, whether in Chapter 7 or Chapter 13. According to the Debt Relief Program, these are the upsides and downside of Debt Relief:
As all parents know, kids can add an aspect of difficulty to just about anything. And when you have a child with special needs , everyday situations can become especially challenging. Add the disruption of holiday plans, family gatherings, and travel into the mix and things can get more complicated than ever! If you’re a parent who is dreading the holiday season for these reasons, keep reading! We’ve gathered tips from experts on how to make the holiday season enjoyable for you, your special needs child, and your entire family! Be Brave! As a parent with a special needs child, you might be afraid to try something “complicated” like traveling for the holidays, but it might not be as complicated as you imagine! Try branching out this season if you think it would benefit your family. Even family trips don’t have to be as stressful as you might imagine, says My Family Travels . Plan Ahead! Whether you’re planning a trip or just planning a family gathering, planning ahead can help minimize stress for everyone involved. Planning ahead can help ensure that both you and your child have what’s necessary to avoid stress or anxiety. Don’t Overwhelm Your Child. Figure out the hours of the day when your child will be the most rested, relaxed, and engaged, and plan holiday meals, gift exchanges, and gatherings around those times. Scale Down. This advice can be helpful to almost any aspect of holiday planning and festivities with special needs children. Don’t feel pressured to do anything just because it’s what other families are doing, or even if it used to be part of your tradition as a child. Do what works – in the time frame, quantity, and energy level that works for your child. For example, there’s no need to attend the full performance of The Nutcracker Ballet. Watch a video at home, or research some shorter, special needs-friendly performances in the area. Similarly, if your child wants to go shopping to buy presents for friends and family, try shopping in small doses – maybe just looking for one or two gifts at a time, or try online shopping from the comfort of home. Brief Friends and Family Ahead of Time and Ask for Their Understanding. Don’t be afraid to explain your child’s needs and comfort zones to holiday guests. Let them know what your child can handle and what might be overstimulating. Ask for understanding and let them know that some activities might need to be cut short or adapted. Don’t worry if friends and family don’t understand – just move forward in a way that’s best for your family. When Traveling, Call Ahead to Ensure Accessibility. If you decide to travel for the holidays, make sure to ask if your planned lodging, entertainment, dining, and transportation locations offer the accessibility your child needs. If accessibility isn’t an option, don’t be afraid to provide feedback and then look for other options. Avoid Crowds and Overstimulation. There are lots of ways to avoid crowds and overstimulating situations while still enjoying the festivity. For example, pack cookies for a car excursion to find the best decorations instead of walking through busy malls or markets to see the sights. Try visiting holiday displays on off-hours, and even invite Santa for a private visit rather than the potentially overwhelming experience of visiting Santa at the mall. Research “sensory-friendly” experiences in the area that your child might enjoy. Plan Fun Holiday Activities at Home. Make your child feel both comfortable and important by planning activities they can participate in and enjoy at home. Baking cookies, making decorations, building gingerbread houses, watching age-appropriate holiday movies, and holiday sing-alongs are all great places to start! Don’t Be Afraid to Walk Away . As Very Well Family reminds us, some friends and family are great with understanding your life with a special needs child, and others are not. It’s okay to walk away from situations where you feel pressure, judgment, criticism, or unnecessary stress. Take It Easy. Remember that the holidays aren’t a contest. It’s not about doing it best or better. It’s about making memories and connecting with loved ones. When making plans, and deciding where to cut back, revisit your priorities. As a law office dedicated to special needs law, we care about your entire family’s well-being. If you ever feel that your special needs child is being treated unfairly or unjustly in regards to their rights under special needs law , don’t hesitate to get compassionate legal assistance. Call 973-834-8058 or send a message online . We serve clients in Livingston, West Orange, Newark, Belleville, Clifton, Irvington, East Orange, Paterson, Passaic, and Verona.