What is a Chapter 13 bankruptcy?

A Chapter13 bankruptcy may be filed by individuals with regular income.  Debtors must present a plan to repay all or part of their debts.  The plan must provide for fixed monthly payments to be made to the Chapter 13 trustee for a period of three to five years, depending on income and other factors.  The plan must be approved by the court at a Confirmation Hearing.  The trustee begins collecting funds from the debtor during the first full month after the filing.  Following confirmation of the plan, the trustee begins to distribute funds to creditors according to the terms of the plan.

Filing a Chapter13 petition automatically “stays” (stops) most collection actions against  debtors or their property.  A Chapter13 case is often used to stop foreclosure proceedings and repay a mortgage delinquency, or to prevent the repossession of a vehicle.  As long as the automatic stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or demand payment.  However, there are many exceptions to the automatic stay (a criminal proceeding, for example), and in some instances the automatic stay may only be in place for a short period of time.

For more information about Chapter 13, refer to the Bankruptcy Basics Guide.

What does the debtor need to do before filing for bankruptcy?

Before filing a Chapter 13 case, the debtor MUST obtain credit counseling from an approved credit counseling agency.  The debtor must receive credit counseling during the 180 days before the bankruptcy filing.  If the debtor is married and filing a joint petition, both debtors must obtain credit counseling.  Credit counseling may be conducted over the phone, over the internet or in person.  When the credit counseling is completed, the credit counseling agency issues a credit counseling certificate.

In addition to the credit counseling certificate, the debtor(s) must also complete Vountary Petition for Indviduals Filing for Bankruptcy (Bankruptcy Form 101) and place a check in the appropriate box of Part 5 of the Voluntary petition indicating one of the following:

• Box 1 states that you received credit counseling within 180 days before the filing of the petition and you have the certificate from the agency.
• Box 2 states that you received credit counseling within 180 days before the filing of the petition, but you do not have the certificate from agency.

Limited exceptions to the credit counseling requirement are addressed in Box 3 and Box 4:

• Box 3 states that you requested counseling from an approved agency, but were unable to obtain services within 7 days of the request and you are filing for an extensionof time to file the Certificate of Credit Counseling due to exigent circumstances.  This means that unusual things happened that prevented you from getting credit counseling before you filed the petition.  You must attach a separate sheet explaining what efforts you made to obtain the briefing, why you were unable to obtain it before you filed for bankruptcy, and what exigent circumstances required you to file this case

• Box 4 states that you are not required to receive credit counseling because of incapacity or disability (defined in 11 U.S.C. §109(h)(4)), or active military duty in a military combat zone.If you believe you are not required to receive a briefing about credit counseling, you must file a motion for a waiver of the credit counseling requirement with the court.

Click here to locate an approved Credit Counseling Agency.

Click here for more information about Credit Counseling

Note: Credit Counseling is not the same as the Personal Financial Management Course (Debtor Education).  The Personal Financial Management Course is required AFTER the petition is filed and must be completed before receiving a discharge.  See section titled "What is the Personal Financial Management Course (Debtor Education)?" for more information.

Am I eligible to file a Chapter 13 case?

Only an individual with regular income who owes noncontingent, liquidated, unsecured debts (such as credit card debt or medical bills) of less than $383,175, and/or noncontingent, liquidated secured debts (such as mortgages or car loans) of less than $1,149,525 may be a Chapter 13 debtor.  Individuals who operate businesses as sole proprietors may be a Chapter 13 debtor.  Corporations and partnerships cannot file for relief under Chapter 13.

Where should I file my petition?

The petition and all documents relating to the bankruptcy case must be filed at the Bankruptcy Court Clerk's Office located in the geographic area (commonly referred to as “vicinage”) in which the debtor resides.  The Bankruptcy Court for the District of New Jersey is divided by county into three vicinages:  D.N.J. LBR 1002-1

The Camden vicinage consists of Atlantic, part of Burlington (the townships of Cinnaminson, Delran, Edgewater Park, Evesham [Marlton], Maple Shade, Moorestown, Mt. Laurel, Palmyra, Riverside and Riverton), Camden, Cape May, Cumberland, Gloucester and Salem counties.

The Newark vicinage consists of Bergen, Essex, Hudson, Morris, Passaic, Sussex, and Union counties.

The Trenton vicinage consists of part of Burlington (excluded are the townships of Cinnaminson, Delran, Edgewater Park, Evesham [Marlton], Maple Shade, Moorestown, Mt. Laurel, Palmyra, Riverside and Riverton), Hunterdon, Mercer, Middlesex, Monmouth, Ocean, Somerset and Warren counties.

What filing fee do I have to pay?

The filing fee for a Chapter 13 petition is $313.00.  The court does not accept cash or personal checks.  The fee may be paid by money order, certified check, or bank check payable to the Clerk, United States Bankruptcy Court.

If the full filing fee cannot be paid at the time the petition is filed, Chapter 13 debtors may apply for an installment schedule by filing Application for Individuals to Pay the Filing Fee in Installments (Bankruptcy Form 103A).  Debtors may make up to four installment payments. The first installment must be paid at the time of the filing of the petition and must be equal to 25% of the full filing fee. Each additional installment must also be in an amount equal to 25% of the full filing fee. The final installment must be made within 120 days after the petition is filed.  If the debtor fails to pay any installment when due, the case may be dismissed and the debtor will not receive a discharge of debts.

Click here for the complete Fee Schedule

What forms do I have to file?

The table below lists all the forms that must be filed to commence a Chapter 13 case.

Click here for more information on Required Lists, Schedules, Statements and Fees

Note: The Bankruptcy Court Clerk’s Office does not maintain hard copies of the official forms required for filing bankruptcy, but they may be downloaded from our website, www.njb.uscourts.gov.  They may also be purchased from any office supply store.   Please be sure to sign all documents where applicable.  Proper signatures are required to process all paperwork.  If a married couple files a joint case, both spouses must sign wherever a signature is required.

How many copies of all forms do I need to file?

When you file for bankruptcy, you must file an original and one copy of all forms.

How do I fill out the forms?

ALL BLANK SPACES AND LINES ON EACH FORM must be completed.  Some forms (Schedules E/F, G, and H, and the Statement of Financial Affairs for Individuals Filing for Bankruptcy) contain boxes to indicate that the debtor has nothing to report or a question does not apply.  On all other forms, a debtor should either insert “N/A” or “None” in response to any question or request for information that is not applicable or should cross out a printed statement that does not apply and initial the cross out.

You should not include sensitive information in any document filed with the court unless such inclusion is required by statute, Federal Rules of Bankruptcy Procedure or Official Bankruptcy Forms or the inclusion is otherwise necessary and relevant to the case.  You must remember that any personal information not otherwise protected will be made available over the Internet via WebPACER.

Social Security numbers should only include the last 4 digits, except when the full number is required. Financial account numbers, dates of birth and names of minor children should only be included if required.  Exercise caution when filing any of the following:

• any personal identifying number, such as driver’s license number
• medical records, treatment and diagnosis
• employment history
• individual financial information
• proprietary or trade secret information.

The Clerk’s Office will not review documents for the purpose of deleting sensitive information. The court will image all pleadings as submitted even if they contain personal identifying information.

Click here for our court’s Privacy Guidelines.

What do I do if I have to file immediately?

The following MUST be filed:

• B 101 for indvidual debtors (including married debtors)
• B 201 for nonindividual debtors
• B 401 for foreign procedings
• Statement About Your Social Security Numbers (Bankruptcy Form B121)
• A Credit Counseling Certificate (See the frequently asked question titled "What do I need to do before filing a chapter 13 case?" for more information regarding credit counseling)
• A complete list of creditors (you must list at least one creditor)

In addition, you must include the full filing fee of $313.00 OR an Application for Individuals to Pay the Filing Fee in Installments. 

What happens if I do not file all of the required forms?

Failure to file all required documents at the time the petition is filed will result in the issuance of an Order to Show Cause.  This Order advises debtors that they must submit all required documents or the bankruptcy case will be dismissed without further notice.  Debtors must request an extension by application to the court.  Click here for the proposed order that must accompany any extension request.

What happens after I file for bankruptcy?

Shortly after the petition is filed, a Chapter 13 trustee is appointed and the court will issue a Notice of Chapter 13 Bankruptcy Case. This notice is sent to all creditors in the case and contains the following  information:

• Debtor’s name and address
• Date/time/location of the First Meeting of Creditors (also known as 341 Meeting)
• Deadline for creditors to file a proof of claim.
• Deadline to file a complaint objecting the dischargeability of debts
• Deadline to object to the property you claimed as exempt

Note: Please read the notice carefully.  The meeting may not be held in the courthouse, but may be held at another location.

What is the role of the trustee in my case?

The trustee is appointed by the United States Trustee to administer the case.  The primary functions of the trustee are to examine your Chapter 13 Plan, make recommendations regarding confirmation of the plan, receive and account for your payments made through the plan and serve as the disbursing agent to the creditors.

What is the First Meeting of Creditors, and how do I prepare for the meeting?

All debtors MUST attend the First Meeting of Creditors. Failure to attend may result in the dismissal of your case.  If you and your spouse filed a joint petition, both of you must appear. At the meeting, the Chapter 13 trustee will ask you questions, under oath, about what you owe, what you own, your income, and your Chapter 13 Plan. 

No later than seven (7) days before the Meeting of Creditors, you must send the following to the trustee:

• A copy of your most recent federal income tax return (or transcript of return).
• Copies of pay stubs received within 60 days before the filing of the petition

NOTE:  DO NOT SUBMIT PAY STUBS OR INCOME TAX RETURNS TO THE COURT.  Remember, it is the sole responsibility of the debtor to delete or black out sensitive information such as children’s names, account numbers (except the last 4 digits) and dates of birth (except the year).  You should only show the last 4 digits of your Social Security number.

Bring the following with you to the First Meeting of Creditors:

• Picture identification
• Proof of Social Security number
• Market analysis of any real estate that you own

What is the Chapter 13 Plan?

The Chapter 13 Plan is a repayment plan, typically spread out over three to five years.

The Chapter 13 Plan must:

• provide for payments of fixed amounts to the trustee on a regular basis, typically monthly
• provide for the full payment of all claims entitled to priority under section 507, such as taxes and child support (unless the holder of a particular claim agrees to a different treatment of the claim)
• provide for equal monthly payments to secured creditors, such as mortgage companies and car lenders, to be paid through the Chapter13 plan
• if the plan classifies claims, provide for the same treatment for each claim within each class

After the Meeting of Creditors has taken place, the court will hold a hearing to determine whether the plan filed with the court is feasible, complies with all requirements, and is otherwise confirmable.  This hearing is referred to as the Confirmation Hearing. Creditors receive notice of the hearing and may object to the confirmation of the plan.

Starting with the first full month after you file your Chapter13 case, you must begin making  payments to the trustee.  Once your plan is confirmed by the court, the trustee will distribute the funds to creditors according to the terms of the plan.

After I file, what happens to my creditors' collection activities against me?

Once the petition is filed with the court, the automatic stay will go into effect. The automatic stay is an injunction that automatically stops lawsuits, foreclosure, garnishments and all collection activity against you by your creditors for any debt which arose before the filing of the bankruptcy.

Note: There are exceptions which may result in the automatic stay not going into effect, or being limited in duration.

Some exceptions, but not all, are listed below:

• Debtor had a previous case pending within the preceding one-year period, but the case was dismissed.  In this situation, the automatic stay would terminate on the 30th day after filing the new case, unless the debtor applies for an extension of the automatic stay.
• Debtor had more than one previous case pending within the preceding one-year period, but the cases were dismissed.  In this situation, the automatic stay does not go into effect unless the debtor applies for imposition of the stay.

A creditor may file a Motion to Lift the Automatic Stay, which is a request by a creditor that, if granted, would allow the creditor to collect a debt against a debtor or the debtor’s property that would otherwise be prohibited by the automatic stay.

How do I amend my schedules after filing?

You may need to amend your original schedules filed with the petition. See D.N.J. LBR 1009-1 and the court's General Order Pending Amendment of Local Rules Under the Court's Annual Rule Making Cycle, dated January 27, 2016 for information about filing an amended schedule.

The addition of new creditors requires a new List of Creditors containing only those creditors being added.  There is fee of $32.00 to amend Schedules D, E/F, G or H.  There is no fee if the nature of the amendment is to add the address of a listed creditor, or to add the name and/or address of an attorney for a listed creditor.

The court will issue and serve an Order Respecting Amendment.

What are my responsibilities while my Chapter 13 case is open?

You must continue to pay all of your regular bills as they come due, including your monthly mortgage payment or rent.

You must make monthly payments to the Chapter 13 Trustee according to your Chapter 13 Plan.

If you intend to sell any assets (including your home or car) while your Chapter 13 case is open, you must get court approval to do so by filing a motion with the court.  See our Local Rules regarding motions 9013-1 through 9013-4..

If you plan to use a real estate broker, you must get court approval first. Click here for an Application For Retention of Professional. See also Local Rules 2014-1 through 2014-3.

If you intend to refinance existing debt (including your mortgage) or incur new debt, you must obtain court approval to do so by filing a motion.

When do creditors file claims against me?

To participate in distributions from the bankruptcy estate, creditors must file their claims with the court within 90 days after the first date set for the First Meeting of Creditors.  Governmental units have 180 days from the date the petition is filed to file a proof of claim.

What is a discharge and how do I receive my discharge?

A discharge releases a debtor from personal liability for certain debts known as dischargeable debts and prevents the creditors owed those debts from taking any action against you or your property to collect the debts. The discharge also prohibits creditors from communicating with you regarding the debt, including telephone calls, letters, and personal contact.

When all plan payments have been made, a Chapter 13 debtor is eligible for a discharge, as long as you:

• file a Certification in Support of Discharge indicating whether you owe domestic support obligations, and if so, if your payments are paid up to date.
• have not received a discharge in a Chapter 7, 11 or 12 case during the four years preceding the new case
• have completed the Personal Financial Management course (Debtor Education) and a Certificate providing compliance with the financial management course requirement has been filed by you or by the course provider.

Creditors provided for in the Chapter 13 Plan may no longer initiate or continue any action against you to collect debts that have been discharged.  However, there are exceptions to the discharge which include:

• debts for alimony and child support
• most student loans
• debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs
• debts for criminal fines or restitution.

NOTE:  Once a debt is discharged, you are legally free of that debt.  The discharge is a permanent order that prohibits creditors from taking any type of collection action on discharged debts.   Any attempt to collect discharged debt is prohibited by bankruptcy law.  For your own protection, you should maintain accurate records and copies of all matters related to your bankruptcy.  In addition, you should routinely check your credit report with the various reporting agencies to ensure that discharged debts are not being reported as outstanding. 

What is the Personal Financial Management Course (Debtor Education)?

Debtors are required to complete an instructional course in personal financial management as a condition for receiving a discharge.  This course is in addition to the credit counseling requirement. When the personal financial management course is completed, the debtor or approved course provider must file the Certificate issued by the course provider.  If you and your spouse filed a joint petition, both of you must attend the course and both of you must file separate Certificates.   The Certificate must be filed no later than the date you make the last payment under your Chapter 13 Plan.  If the Certificate is not filed, the court may close the case without a discharge.  If you then file a motion to reopen the case to allow the filing of the Certificate, you must pay the full filing fee due for filing such a motion.

There are limited exceptions to the personal financial management course requirement such as incapacity or disability (defined in 11 U.S.C. §109(h)) or active military duty in a military combat zone.  If you believe that an exception is applicable to you, you must file a motion for exemption, which will be heard by the court on an appropriate hearing date.

Click here for a list of approved Debtor Education Providers.

Where can I find additional information about Chapter 13?

Additional information regarding Chapter13 may be found on the web sites maintained by each of the Chapter 13 Trustees. The contact information and links to the Chapter13 Trustee for each vicinage are listed below: