Disposing of An Unaffordable Vehicle Through Bankruptcy

In the shadow of a tenuous economy, the vehicle that you leased or purchased can very rapidly become an enormous financial inconvenience, filing for bankruptcy may help individuals who find that their vehicles are not longer affordable within their current lifestyles. As one can easily imagine, banks and lending institutions are not typically amenable if one simply tries to give their vehicle back. If one falls behind on payments, usually the vehicle will be repossessed and sold at an auction and the debtor will owe the difference between the sales price and the amount that is still owed on the vehicle. If a debtor files for Chapter 7 bankruptcy, he or she can forfeit any property that serves as a security for a loan relinquishing any continuing obligation to repay the outstanding debt. When a debtor surrenders property during the pendency of bankruptcy proceedings, he or she is effectively discharged of any obligation to repay any remaining loan for that property. Any bank or lending institution is precluded from continuing to seek repayment from the debtor as soon as he or she files for bankruptcy. Although filing for bankruptcy will have a negative impact on a debtor's credit score, they will be relieved of their loan obligation instantly. Filing for Chapter 7 bankruptcy also provides a debtor with another option if he or she wishes to keep the vehicle. A debtor may be able to redeem his or her vehicle through a I.R.S.C. Section 722 redemption, in which a debtor is afforded the opportunity to pay off the actual value (or current fair market value) of the vehicle instead of the full balance of the loan. Filing for Chapter 13 bankruptcy may provide a debtor in this situation with another option. In a Chapter 13 bankruptcy proceeding, a debtor can cram down a secured debt, if the debt exceeds the value of the collateral. Therefore, if a debtor owes $15,000 on a vehicle that has an actual value of $8,000, the debt can be readjusted to conform the actual value of the car instead of the loan balance when the debtor's monthly repayment amounts are calculated by the court. If you believe you are in over your head due to a luxury vehicle or other luxury purchases and believe you need help, it is critical that you seek an experienced bankruptcy attorney to assist you with your consumer debt issues and advise you properly in regard to the bankruptcy. For more information regarding Chapter 7 bankruptcy, Chapter 13 bankruptcy, exemptions,foreclosure or other consumer debt issues visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

Bankruptcy Notice of Proposed Abandonment

Chapter 7 bankruptcy petitioners in New Jersey may receive a notice of proposed abandonment in the mail from the bankruptcy court, although this may seem foreboding, it may actually be something positive for the debtor. In New Jersey, a debtor filing for bankruptcy under Chapter 7 is advised that this process involves the liquidation of virtually any asset as a means to discharge the debts that are serving as major a impediment to his or her life. Unfortunately, and much to the chagrin of many debtors, this includes their house. Very often, mortgage payments represent one of the largest debts that a petitioner faces. In addition, an individual's house is usually the most valuable piece of property that he or she owns. Therefore, one of the first properties that a bankruptcy trustee will look to sell to satisfy major debts is a debtor's home. During the bankruptcy proceedings, a trustee will perform a liquidation analysis to ascertain whether or not there is enough equity in the home to warrant the sale of the property. Further, if through this analysis the trustee discovers that the home does not have any value or only has a nominal value, she must alert the court to his fact. When the trustee notices the court of the fact that she has decided to abandon her interest in the property at issue, she will issue a notice of proposed abandonment. If the trustee decides to abandon the property, it means that she does not want to exert the court's right to sell the property to satisfy bankruptcy debts and therefore ownership and control over the house returns to the debtor. Therefore, receiving a copy of a notice of proposed abandonment could prove to be a very good thing for the debtor. It is important to note that the issuance of a notice of proposed abandonment does not mean that the debtor automatically receives control over his or her house again. Any creditor or party has the right to file an objection to the court's abandonment of the property and receive a hearing before the court to voice an objection, although this is very rare. If no interested party voices an objection with the court by a specified date, the property abandonment takes place before the scheduled court date. In New Jersey, bankruptcy laws are very complicated, therefore it is strongly advised that a potential debtor seeks out the advice of an experienced bankruptcy attorney to assist him or her with bankruptcy matters. For more information regarding, Chapter 7 bankruptcy, Chapter 13 bankruptcy, foreclosure, or other consumer debt issues in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

Foreclosure- Is Bankruptcy the Answer?

Debtors filing for Chapter 7 bankruptcy in New Jersey may be surprised to learn that even after they file for bankruptcy their homes can, and in many instances will, still be foreclosed upon by their lending banks. Most people file for Chapter 7 bankruptcy to discharge all or most of their debt, but filing for Chapter 7 bankruptcy does not automatically or necessarily allow a debtor to keep his or her home. Beyond this, even if a mortgage is one of the debts that is discharged upon the bankruptcy filing, the lender still retains the right to come in at a later time and re-possess the debtor's home. Typically, a bank or similar lender will re-possess a debtor's home using a deed in lieu of foreclosure or by a judicial or non-judicial foreclosure proceeding. A deed in lieu of foreclosure is used when a debtor relinquishes all of his or her interest in the home to the lender. This method reflects slightly better than a foreclosure on the debtor's credit report. A judicial foreclosure occurs when a bank petitions the court system to be awarded the legal right to take back a debtor's residence and/or property. In a non-judicial foreclosure, a bank will sell the debtor's property at a foreclosure auction without the need to petition a court for the right to do so. Although, in a non-judicial foreclosure, the lending bank must still abide by the New Jersey statutory foreclosure process before it can re-possess and sell a debtor's home at an auction. In some bankruptcy cases, the lending bank will not attempt to re-possess or sell the debtor's home until the bankruptcy proceedings have concluded. On the other hand, many banks will immediately petition the court to remove a debtor's home from the stay of bankruptcy protection so that foreclosure proceedings can commence. In New Jersey, bankruptcy laws are very complicated, therefore it is critical that debtors seek out the advice of an experienced bankruptcy attorney to assist them with bankruptcy matters. For more information regarding, Chapter 13 bankruptcy, Chapter 7 bankruptcy, foreclosure or other consumer debt issues in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

Filing Bankruptcy and the Automatic Stay: A Method for Keeping the Dragons at Bay?

For a financially overwhelmed debtor, filing a chapter 13 or chapter 7 bankruptcy petition can keep creditors at bay. Once the individual files the petition an automatic stay is ordered and becomes effective immediately upon the filing of the petition. The stay prevents all of the debtor's creditors from continuing to seek repayments on their debts until the bankruptcy proceedings are concluded. To many people in bankruptcy situations, the automatic stay provides a saving grace and permits their lives to return to some semblance of normalcy until the conclusion of the proceedings when their financial situation has been improved by the bankruptcy. In addition, once a person files for either chapter 13 or chapter 7 bankruptcy, any and all lawsuits with regards to the debtor's debts are stalled and creditors cannot seek wage garnishments from the debtor. If the debtor files for bankruptcy after creditors were awarded wage garnishment, these garnishments immediately stop and any funds that were taken from the debtor he or she has filed the bankruptcy petition must be refunded to the bankruptcy estate. Further, once a bankruptcy petition has been filed, creditors cannot communicate or attempt to contact a debtor by phone, letters, or most other means of communication. This usually comes as a huge relief to debtors who typically find that they are inundated with constant phone calls and letter correspondence from creditors seeking repayments of debts. The following are just some of the other creditor actions that must stop when a person files for bankruptcy: applications for liens against property, mortgage foreclosures, termination of utility services such as electricity and phone, tax foreclosures, repossession of property, and eviction proceedings - just to name a few. Bankruptcy laws are very complicated, therefore it is strongly advised that debtors seek out the advice of an experienced bankruptcy attorney to assist him or her with bankruptcy matters. For more information regarding Chapter 13 bankruptcy, Chapter 7 bankruptcy, foreclosure or other consumer debt issues in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.