Bankruptcy and Foreclosure Litigation

For many Americans owning their own home is the fulfillment of the American dream and facing foreclosure litigation may represent one of life's worse nightmares. In a situation where a debtor is facing foreclosure and does not have any money or other means to pay back their debts, bankruptcy may offer a way out. Most people may avoid filing for bankruptcy at all costs because they do not want to experience the negativity associated with filing or the unwanted impact on their credit, but in truth bankruptcy may provide them with the financial relief that they are so desperately seeking. Once one files for bankruptcy they get the immediate benefit of the statutory automatic stay and may assist in avoiding foreclosure litigation for at least a duration of time that will allow the debtor to explore various options to keep their property. The automatic stay immediately prevents all creditors from pursuing lawsuits against a debtor and from persistently attempting to get the debtor to repay their debts. This includes foreclosure litigation and the immediate threat of losing access to one's home. In this situation, Chapter 7 bankruptcy may only offer limited assistance. The creditor seeking foreclosure on a debtor's home may continue the lawsuit once the bankruptcy is over, but filing Chapter 7 may, at the very least, provide the debtor with additional time to explore financial option to begin paying back the debt. Chapter 13 bankruptcy can provide a debtor with total relief from the threat of foreclosure. If a debtor is generating a certain income in the face of a financial crisis the bankruptcy court will establish a repayment plan where the debtor makes affordable monthly payments for up to five years and is able to maintain possession of all of their assets and property. The best part of this option is that the debtor will not be faced with the threat of creditor lawsuits or foreclosure throughout the entire process. If you are having trouble dealing with your consumer debt issues and fear that you may become involved with foreclosure proceedings that may result in the loss of your home it is critical that you seek the advice of experienced legal counsel to advise you on these issues. For more information regarding foreclosure litigation, Chapter 13 bankruptcy, Chapter 7 bankruptcy, or any other consumer debt issues visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

Credit Card Debt Greater Than Savings For Americans

The results of a recently conducted survey revealed that for many Americans their credit card debt is greater than the money that they have saved in their bank accounts. According to the survey, only 51% of survey responders had enough money saved in their bank accounts to pay off the remainder of their credit card debt. Over 30% of all Americans reported that their credit card debt was greater than the money that remained in their bank accounts. Throughout the United States, the personal savings rate is continuing to decrease. The U.S. Department of Commerce indicates that the savings rate for Americans dropped to 4.2% as of November 2013. The dropping savings rate and the high percentage of Americans reporting that their credit card debt outweighs their savings is most likely the result of extended periods of unemployment, high living expenses, declining incomes, or underemployment. Studies also reflect that consumer debt increased at a rate of 3.3% leading up to the end of the 2013 holiday season while the amount of disposable income per household did not increase which means that more and more people were making purchases using credit cards who will not have the ability to pay off their debts. More troubling is that currently 44% of American households report that they have less than three months savings in their accounts and mounting credit card debt could cause these families to have to endure a complete financial disaster. Oppressive debt issues can have a profoundly negative effect on the lives of families both financially and emotionally. Although a difficult decision for most families, filing for bankruptcy could provide the financial relief and peace of mind that overwhelming credit card debt causes. If you are having trouble dealing with your consumer debt issues and you need help negotiating with creditors or want to know how you may be able to discharge your overwhelming credit card debt through bankruptcy proceedings it is critical that you seek the advice of experienced legal counsel to advise you on these issues. For more information regarding credit card debt, the impact of bankruptcy on your credit, Chapter 13 bankruptcy, Chapter 7 bankruptcy, foreclosure or any other consumer debt issues visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

How Can I Discharge Tax Debt?

When an individual is contemplating filing for bankruptcy he or she will most likely wonder how their bankruptcy and tax issues may overlap and what can be done to discharge certain tax debt. In New Jersey, typically, there are two methods for minimizing or discharging income tax debt. One way is through an Offer in Compromise and the other method is by filing for bankruptcy with the appropriate court. An Offer in Compromise is a very complex and arduous process through which a debtor may lower their tax debts. In order to obtain an Offer in Compromise a debtor must complete an application and submit an exhaustive list of documents and other information that reflects the debtor's present assets, expenses, and income to a tax agent to determine the debtor's ability to pay. As part of the process, the debt is required to present an offer suggesting a resolution to the tax debt problem and select a repayment option. Ultimately, the end result is completely subject to the discretion of the tax agent that is assigned to the debtor's case and therefore it is impossible to predict the end result before the process begins. Bankruptcy is a process that is bound by federal bankruptcy laws and will result in a determination of which tax debts can be discharge and which cannot. This determination will be based purely on the existing laws found in the U.S. Bankruptcy Code. Generally, these laws will dispose of a debtor's tax debt based up on their tax filings by year. For instance, a debtor may be able to discharge their tax debt liabilities for 2008 but not for 2013. In contrast to the Offer in Compromise, the bankruptcy process does not allow for the debtor to negotiate for any specific discharges because, as was previously stated, the proceedings are completely guided by federal bankruptcy codes. A debtor who chooses bankruptcy as the method to reduce or eliminate tax debts will generally know before the process begins which, if any, of his tax debt is dischargeable through the process by consulting with an experienced tax attorney who is familiar with the Bankruptcy Code. If you are having trouble dealing with your consumer debt issues, you need to know how your bankruptcy and tax issues affect each other or what your options are with regard to discharging tax debt, it is critical that you seek the advice of experienced legal counsel to advise you on these issues. For more information regarding bankruptcy and tax issues, Chapter 13 bankruptcy, Chapter 7 bankruptcy, foreclosure or any other consumer debt issues visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

My Ex-Spouse Has Filed For Bankruptcy, Can I Still Enforce My Divorce Judgment?

As if a divorce and a bankruptcy are not complex and anxiety-producing enough on their own, what happens when a bankruptcy and divorce have overlapping issues? For instance, what happens when an ex-spouse files for bankruptcy when he or she is bound by a divorce judgment? The U.S. Bankruptcy Code under 11 U.S.C. 523(a)(15) specifically provides that non-support related obligations and debts that are related to contemporaneous or prior divorce proceedings are not dischargeable in Chapter 7 bankruptcy cases, if such a discharge would harm the spouse/ex-spouse of the debtor. The primary issue for a court to consider in a divorce case involving bankruptcy is whether a particular debt is classified as a support obligation or a property settlement claim. The language of the U.S. Bankruptcy Code is such that it intends to provide financial relief for the debtor while simultaneously remaining sensitive to the needs of a non-debtor spouse or ex-spouse and the minor children of the parties. With regard to equitable distribution and debts in a Chapter 13 bankruptcy, the debtor must make all of his or her payments pursuant to a repayment plan to obtain a discharge of debts. In these cases, the bankruptcy court will have to decide whether a divorce debt is a non-dischargeable support obligation or a marital debt which may be discharged. To do this, the court may undertake a two-part analysis that was established in In re Gianakas, 917 F. 2d 759, 762 (3rd Cir. 1990). First, the court must review the language of any applicable property settlement agreement or Final Judgment of Divorce to provide evidence on the nature of a debt. If this analysis does not yield relevant information, the court must review any relevant secondary evidence that may elucidate the nature of a debt as a means to determine whether or not it is a support debt. In addition, the court must consider a set of factors when making its determination such as: the parties' financial circumstances at the time of their divorce, the function served by the debt/obligation at the time of the divorce, and whether or not the debt/obligation functions to maintain the necessities of the non-debtor party such as shelter, food, and transportation. If you are having trouble dealing with your consumer debt issues and you want to explore how filing for bankruptcy and divorce will affect each respective process, it is imperative that you seek the advice of experienced legal counsel to advise you on these issues. For more information on bankruptcy and divorce, chapter 7 bankruptcy, chapter 13 bankruptcy or any other consumer debt issues visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

Should Both Spouses Join in Bankruptcy Filing?

There are many times throughout a lifetime when debts may become overwhelming and individuals may ask themselves should I file bankruptcy? If the answer to that question is a "yes," a very common follow up question, for couples who are married, is: Do married couples have to file bankruptcy together? The short answer to the aforementioned question is simply, no. Married couples do not have to file for bankruptcy together. Debtors will have the option to file for bankruptcy either singly or jointly with their spouse. The filing fee for filing singly or jointly is exactly the same. Any individual who is contemplating filing a bankruptcy petition and is deliberating about whether to file as a single person or a married couple should consult an attorney for advice on how that decision will impact the lives of the parties involved. For instance, if a debtor decides to file jointly with his or her spouse there will be joint meetings and hearings. Perhaps the most important factor when filing jointly is that all of the spouses' marital property will be subject to the bankruptcy proceedings. This may have two very different affects on the process. First, if the couple is filing under Chapter 7, there is a risk that anything that is part of the marital property is at risk of liquidation. Conversely, with a larger corpus of property at stake, there is less of a chance that particular variables will be seized to satisfy debts because the bankruptcy trustee has more property to choose from. In addition, if a couple files jointly, all of the marital debt may be discharged - meaning each spouse's debt and any joint debts will be forgiven. In this situation, both spouse's credit will be negatively impacted, but both will also enjoy the benefit of getting a new start. On the other hand, if the debtor decides to file as a single person, maybe because only she is battling personal debt issues, her spouse's property and credit will be protected from the proceedings and will not be at risk of liquidation or seizure. Further, all of the property that the spouse had acquired before the marriage will be shielded from the entire bankruptcy process. In this case, only the spouse who has filed for bankruptcy will suffer the negative credit impact that results from filing for bankruptcy. It should be noted, that even if a spouse files singly, her spouse will still be liable for any joint debt that was accumulated during the marriage. This means that the trustee can still seek repayment for debts from the non-filing spouse. In sum, if you are facing severe financial hardship and feel that bankruptcy may provide you with the relief from your consumer debt issues that you so desperately need, it is imperative that you seek out the advice of experienced legal counsel to advise you on these issues. For more information on if you should file for bankruptcy, the impact that bankruptcy has on your credit, credit card debt, or any 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 and Child Support Enforcement

You may become concerned about your child support payments if you learn that your ex-spouse is filing for Chapter 7 or Chapter 13 bankruptcy after your divorce, especially if you are the custodial parent. If this is the case, there is no reason to worry as the law protects a child's right to his or her child support payments which are not dischargeable in a bankruptcy proceeding. With regard to the vast majority of debts, filing for bankruptcy will provide a debtor with instant relief in the form of the automatic stay. The automatic stay prevents creditors from continuing to contact a debtor regarding outstanding debts as soon as the bankruptcy petition is filed with the appropriate court. Although, there are exceptions to the automatic stay to prevent ex-spouses from avoiding their obligations under their divorce judgment. The automatic stay does not relieve a debtor from their legal obligations to pay child support or alimony. According to the Bankruptcy Code, 11 U.S.C. Section 507, child support and alimony payments are given a higher priority compared to other debts and therefore, a non-custodial parent is not allowed to get out of paying his or her child support simply by filing for bankruptcy. In addition, an ex-spouse filing for bankruptcy may actually be beneficial to the custodial parent. As part of the bankruptcy proceedings, a debtor must disclosure all of his or her financial information such as debts, income, and assets to the court. Therefore, he or she will be unable to conceal any income or assets that they may be receiving which can factor into potential modifications of alimony or child support amounts. If you are having trouble dealing with your consumer debt issues and you need information regarding how filing for bankruptcy may affect your other legal obligations such as spousal support or child support it is imperative that you seek the advice of experienced legal counsel to advise you on these issues. For more information on Chapter 13 bankruptcy, Chapter 7 bankruptcy, how bankruptcy will affect your credit, foreclosure or any other consumer debt issues visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

Actor/Singer Aaron Carter Values Dog As $0 On Bankruptcy Petition

Actor and singer Aaron Carter has filed for Chapter 7 bankruptcy and valued his pet bulldog as $0 on the bankruptcy petition. According to a news source, the entertainer has claimed debts in the amount of $2,204,854 and remaining assets totaling $8,232.16. In his petition, Carter lists his assets as a 61 inch flat screen television, two MacBook computers, two Headset microphones, a speaker, a guitar, $60.00 in cash, a Louis Vuitton backpack, a duffle bag, a printer worth $2,500, and a watch worth $3,750. Most interestingly, Carter listed the value of his purebred English Bulldog pet at $0. It was reported that Carter stated that he devalued his beloved pet because he was afraid that the bankruptcy trustee would attempt to sell off the dog to satisfy his creditors. Traditionally, all of a debtor's assets in a bankruptcy proceeding have some worth or value and debtors are under an obligation to accurately and fairly place a value on all of the assets that are listed on the bankruptcy petition. In truth, Carter most likely did not have anything to worry about even if he accurately assessed the value of his pet, which most likely is worth between $1,500 and $2,000, because a bankruptcy trustee will rarely attempt to sell an animal as the time and effort involved in selling an animal usually exceeds the price at sale. Further, the fact that Carter overtly devalued one of his assets could raise a suspicion in the trustee as to what other assets he may have purposely devalued. Bankruptcy petitions are legal documents that are filed with the court, therefore, lying on such documents could result in the dismissal of a debtor's bankruptcy case. If you are having trouble dealing with your consumer debt and are considering filing for bankruptcy or would simply like to know more about the process of filing for bankruptcy it is critical that you seek the advice of experienced legal counsel to advise you on the issues concerning bankruptcy. For more information regarding bankruptcy, foreclosure or any other consumer debt issues visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney

Should You File for Bankruptcy? What You Should Know First

During these difficult economic times many people drowning in debt may begin to ask themselves, should I file for bankruptcy? With bills mounting, debts becoming overwhelming, and options running out - families may begin to panic in the face of daunting financial crisis. To many, "bankruptcy" is a word that conjures feelings of embarrassment or reflects sentiments of weakness. This simply is not true. Instead, for the vast majority of people who engage the process, bankruptcy provides them with a new beginning and a clean slate. Filing for bankruptcy stops creditors from constantly sending harassing letters and making continuous calls and, in the end, it may provide the debtor with a complete discharge of his or her debts. In order to decide if one should file for bankruptcy it helps to know a little more about the process itself. The first step in filing for bankruptcy is the filing of the bankruptcy petition with the United States Bankruptcy Court in the state where the debtor lives. Immediately upon filing creditors are bound by the automatic stay and are prohibited from contacting the debtor regarding the collection of debts. Within the petition, the debtor will list all of the property that they own and other information which will provide the court with all of the information it needs to understand that debtor's entire financial situation. During the automatic stay period, the debtor can attempt to protect certain kinds of property from the bankruptcy proceedings by making use of some of the many exemptions that the Bankruptcy Code provides. The filing of the bankruptcy petition, including the classification of debts and exemptions, can be very complicated. It is strongly advised that debtors seek out the advice of an experienced attorney before doing so. After the petition is filed, the debtor will have to appear before the bankruptcy trustee who will review the petition and ascertain if there are any available funds to satisfy any money owed to creditors. Usually, if the debtor has hired an attorney, the attorney will accompany them to this meeting which, for the debtor, is often one of life's more difficult moments. If the trustee discerns that there are no available funds to repay the debts that are owed to the creditors the debtor will receive a discharge order from the court indicating that he or she is discharged of all outstanding debts and then all creditors will be notified that the debtor is no longer liable for their debts. If you are having trouble dealing with your consumer debt and deciding if you should file for bankruptcy it is imperative that you seek the advice of experienced legal counsel to advise you on the issues concerning bankruptcy. For more information regarding if you should file for Chapter 7 bankruptcy, Chapter 13 bankruptcy, foreclosure or any 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

When Should I File For Bankruptcy? -'Tis The Season

Many individuals who are facing mounting consumer debt issues may begin to wonder: "When should I file for bankruptcy?" When it comes to filing for bankruptcy, as with many other legal proceedings, timing is a major factor and should be considered when deciding when is the right time to file for bankruptcy. Many debtors may substantially benefit from filing a bankruptcy petition in December rather than in January or other ensuing months. First, many employers give their employees annual bonus checks at the end of the calendar year to coincide with the holidays. The bonus money becomes part of an individual's income and is factored into the Means Test calculation if the debtor files in January. This may cause the debtor's average income amount, for the purposes of the test, to exceed the allowable amount thus disqualifying him from filing for Chapter 7 bankruptcy. Therefore, it would be beneficial for a debtor to file after he receives a bonus check, but before the income is used as part of the Means Test calculation. Next, if a debtor owes federal taxes and expects a tax refund, he can avoid a federal tax offset if he files before December 31st . The Bankruptcy Code permits a creditor to decrease the refund amount that is owed to a creditor by the amount that a debtor owes to that creditor. Stated differently, if the IRS owes a debtor a tax refund and the debtor owes the IRS a tax debt for a previous year, the IRS can keep that debtor's tax refund and use it to satisfy his tax debt, even with the automatic stay that bankruptcy provides to debtors. Although, there are some rules that the Bankruptcy Code includes, one being the "mutuality of the debts." As expressed in the court case, In re Meyer Med. Physicians Group, Ltd., 385 F.3d 1039, 1041 (7th Cir. 2004), most courts find that mutuality requires that: 1) the debts are held by the same parties; 2) in the same capacity; and 3) the off-setting debts are both either pre-petition or post-petition. A debtor's tax debt is a pre-petition obligation owed by the debtor to the IRS. If the debtor files for bankruptcy in December rather than in January, the income tax refund is a post-petition debt owed by the IRS to the debtor - as a refund for tax year 2013 is not owed by the IRS until after December 31, 2013. The Bankruptcy Code does not allow the IRS to take and apply your post-petition income tax refund to offset a pre-petition tax debt because there is no mutuality of the debts. If you are having trouble dealing with your consumer debt and are wondering when it would be the right time to file for bankruptcy it is imperative that you seek the advice of experienced legal counsel to advise you about the timing of your bankruptcy filing. For more information regarding when you should file for bankruptcy, Chapter 7 bankruptcy, Chapter 13 bankruptcy, foreclosure or any 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

Costs and Benefits of Bankruptcy Reaffirmation

Individuals usually choose to file bankruptcy to discharge debts that they simply are unable to pay but, because the process carries a risk of having to forfeit certain property they wish to retain, people may wish to reaffirm some of their debt as a means to keep certain items. It should be duly noted that bankruptcy reaffirmation comes both with costs and benefits. Filing for bankruptcy is usually a last resort for most people and for the vast majority of people the process allows them to start their financial lives anew and debt free. The first issue is that many are concerned that a bankruptcy filing will ruin their credit, however, those considering bankruptcy are likely substantially behind in their bills and their credit is already in bad shape. With a fresh start from bankruptcy, as long as filers begin making all payments on time thereafter, the former debtors will reverse the downward spiral and their credit will improve. Second, depending upon whether the debtor files for chapter 7 or chapter 13 bankruptcy, a great deal of their assets and property may be at risk of being taken by the bankruptcy trustee to sell to satisfy some of the debts. If a debtor decides that he or she would like to reaffirm a debt, they are effectively removing a particular debt from the bankruptcy discharge proceeding so that it may never be discharged. The reason that a debtor may elect to reaffirm a debt is so that he or she may keep a particular asset or piece of property. For instance, many people need a car to get to and from work and they do not want to risk losing the car in the bankruptcy proceedings, therefore they choose to reaffirm the debt they owe on the vehicle so that they do not lose it. The obvious benefit of reaffirming a particular debt is the debtor keeps that property. Upon reaffirmation, the debtor will immediately need to continue to make full and regular payments on the affirmed debt and satisfy any back payments on the debt that are owed that the time of the reaffirmation. When a debt is reaffirmed and thereby removed from the bankruptcy, the debtor may not later cease paying or pay late and may not reopen the bankruptcy to include the asset. As bankruptcy may be filed only once every 7 years, it is critical that you seek the advice of experienced counsel in the event you are considering bankruptcy and reaffirmation of certain debts. For more information regarding reaffirmation, Chapter 7 bankruptcy, Chapter 13 bankruptcy, foreclosure or any 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 and Divorce

Although couples decide to get divorced for many reasons, disagreements over money and finances are one of the main reasons that people file for divorce in New Jersey, if the issue is the mismanagement of money, filing for bankruptcy and divorce simultaneously can be a dangerous combination if the individuals involved are not well informed. A couples' marriage and their finances go hand in hand. Most married couples share a residence, hold joint bank accounts, share jointly owned vehicles, share credit cards, and incur shared expenses. Therefore, in the event that a couple is contemplating a divorce and a bankruptcy at the same time, the process can become very complex. Filing for either a Chapter 7 or Chapter 13 bankruptcy or getting a divorce are each stressful and arduous processes by themselves, but combining both may seem unimaginable to some. Therefore, it is imperative that individuals who find themselves in this situation make sure that they are well informed about both divorce, bankruptcy, and the affect that one has on the other - before engaging the processes. First, the couple will need to decide whether they wish to file for bankruptcy prior to the divorce proceedings or following them. If the spouses file for bankruptcy before their divorce, they will have the option to file either jointly or singly. By doing this, the couple will be compelled to present the court and the bankruptcy trustee with all of their financial information - such as assets and other property. In the vast majority of cases, most of the couples' assets will be exempt, but non-exempt assets will become part of the bankruptcy estate and the uncertainty of their discharge may make divorce property settlement negotiations more difficult. Alternatively, filing for bankruptcy may settle many debt or property issues between the couple before divorce negotiations even begin, thereby easing the process. If a couple can anticipate an amicable divorce it may be within their best interest to file for bankruptcy before filing for divorce for this aforementioned reason, as issues regarding ownership and title of property will be settled during the bankruptcy. If the couple realize early in the process that their divorce will be contested by either or both spouses, they may want to distribute the marital assets first, through negotiation and agreement, and then deal with each of their respective debts later. If you have any questions regarding how filing for bankruptcy and divorce will affect each respective process, it is critical that you seek out the advice of an experienced bankruptcy attorney to assist you with your finacial issues and to advise you properly in regard to bankruptcy. For more information regarding Chapter 7 bankruptcy, Chapter 13 bankruptcy, foreclosure or any other consumer debt issues visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

Meeting Of Creditors Is Not What Most Debtors Expect

In New Jersey, when a debtor files for bankruptcy the process that follows may seem frightening and confusing for the debtor, especially when debtors learn that there is a meeting of the creditors that is held as part of the process. Most debtors who are filing for bankruptcy have recently experienced months or even years of badgering at the hands of harassing creditors who have sent many letters and made many phone calls in an attempt to get repayment. Therefore, the thought of having to confront these dunning creditors at a meeting during the bankruptcy proceeding could cause debtors to experience a reasonable degree of anxiety and distress. First, it should be noted that although this anxiety and distress is reasonable, it is usually unfounded because it is very rare that a creditor will attend the meeting of the creditors, and in the event that a creditor does attend - it is even rarer that the creditor would have direct contact with the debtor. In a Chapter 7 bankruptcy, this meeting of the creditors, called a 341(a) hearing, is mandatory. In a Chapter 13 bankruptcy, this hearing is the first hearing in the process. Typically, the only people who attend this hearing will be the debtor, the debtor's attorney, and the trustee. The only time that a creditor might appear at the 341(a) hearing is when a creditor is someone that has a personal involvement with the debtor such as a former business partner, an ex-spouse, or a landlord. Even in this very unusual and rare occasion, the creditor would only be given a very limited time to question the debtor. If you have any questions regarding the bankruptcy process including what you should anticipate, what you will need or other important questions it is critical that you seek out the advice of an experienced bankruptcy attorney to assist you with your consumer debt issues and to advise you property in regard to bankruptcy. For more information regarding Chapter 7 bankruptcy, Chapter 13 bankruptcy, meeting of creditors, foreclosure or any other consumer debt issues visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

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.

No NJ Homestead Exemption in Bankruptcy But There May Be Hope

New Jersey bankruptcy exemption laws do not include an exemption for the homestead, but there may be an option for people who find themselves in this precarious predicament. In some states, debtors can protect a limitless amount of home equity from the eager hands of creditors and the bankruptcy trustee during bankruptcy proceedings. Unfortunately, New Jersey is not one of those states. There may be hope for New Jersey residents filing bankruptcy who hope to keep their homes. New Jersey permits debtors the option of choosing between state and federal exemptions during a bankruptcy. Under the allowable federal exemptions, there is a $22,975 federal homestead exemption that would be available to people in New Jersey to take advantage of. In order to qualify for this federal homestead exemption a New Jersey resident must be filing for chapter 7 bankruptcy and must choose to use the federal bankruptcy exemptions, meaning they would use all federal bankruptcy provisions and would not be able to select other new Jersey provisions that may be favorable to their bankruptcy filing for other assets. Homestead exemptions provide debtors with the opportunity to protect their home equity when in bankruptcy by exempting the debtor's home equity from the reach of the bankruptcy trustee. During the proceedings, the interested parties are not concerned with the actual value of the home, but the debtor's home equity is what becomes the focus in a homestead analysis. For instance, a debtor's home may be worth $400,000, but if he or she still owes $380,000 on the house there is only $20,000 of home equity. The homestead exemption analysis is only concerned with the home equity amount for the purposes of the bankruptcy and the exemption. Therefore, if the home equity number falls to $22,975 or below (as in the example above), the debtor can choose to use the federal bankruptcy homestead exemption and shield his or her home from the trustee. It is important to note, that the debtor should be able to maintain his or her mortgage payments on the home if they plan on keeping their home in a chapter 7 bankruptcy proceeding, notwithstanding the federal homestead exemption. This exemption does not strip off the remaining debt but simply protects equity, up to the exemption amount, from being applied to payoff of creditors claims. If you are facing foreclosure or simply overwhelmed with debt and believe bankruptcy may be a solution you should be aware the rules of bankruptcy are very complex. It is imperative that you obtain experienced counsel to review your matter and represent you in your bankruptcy filing. For more information regarding, Chapter 7 bankruptcy, Chapter 13 bankruptcy, foreclosure or other consumer debt matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.

Options For Chapter 13 Debtors Who Cannot Make Re-Payments

Chapter 13 debtors who cannot make their required re-payments have options to assist them from becoming delinquent. The purpose of a Chapter 13 Bankruptcy is the re-organization of debts and assets and the judicial institution of a re-payment plan to allow a debtor to remain in possession of his or her assets. Since under Chapter 13, a debtor has the opportunity to potentially keep their property and/or assets it is an attractive option for many people facing debts that they have been delinquent in paying. Unfortunately, filing a Chapter 13 Bankruptcy petition may not be feasible for everyone facing substantial debts that he or she cannot pay. The Bankruptcy Court will not allow a debtor to proceed with a Chapter 13 petition unless the debtor can provide sufficient proof to the bankruptcy trustee that he or she is earning enough of an income to cover the court's mandatory monthly re-payment amounts. If a married couple reside together, both partners have to include their income and expenses on the Chapter 13 petition, despite who actually filed the petition. Further, any other individuals who live in the same household must also include his or her income and expenses on the petition. In the event that the debtor does not have enough household income to make the monthly payments to the trustee, the trustee may allow a non-household person, such as a relative or close friend, to make income contributions to assist the debtor in making his or her required monthly payments. Typically, a trustee will require that the person who is making income contributions to the debtor sign a legal document stating his or her intent to contribute a certain amount or a certain duration of time. Additionally, the individual who is making contributions will most likely have to submit proof of his or her earnings. If you are facing or considering bankruptcy the options and obligations can become confusing very quickly. Rather than making a life-changing decision without understanding your choices, you should consult with an experienced Bankruptcy attorney to gain more information or assistance with your individual situations. For more information about Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, debt relief, consumer debt, foreclosure or other bankruptcy matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes and in no way intended to replace the advice of an attorney.

Options For Handling Credit Card Debt

Many New Jersey residents have accumulated credit card debt they can no longer afford. Whether using credit cards to make ends meet due to a temporary loss of a job, unexpected medical expenses, damages due to Hurricane Sandy or simply as a result of increased monthly expenses, if the minimum payments are not paid there are options. One one option is to speak directly to the credit card companies for a forbearance, which temporarily suspends your payments for up to a few months, or negotiate to lower the interest rate and fees or a debt settlement of a lower amount than what is owed. If the credit card debts are overwhelming or the credit card companies are unwilling to negotiate another option is to file for bankruptcy. Filing a Chapter 7 allows for the elimination of dischargeable debts so that your personal liability for that debt ends and creditors cannot seek further payment. Not all debts are dischargeable however. Filing a Chapter 13 where a reorganization plan is created allows for the elimination of dischargeable debts when payment is complete so that your personal responsibility for that debt ends upon discharge. Before filing bankruptcy, it is important to meet with experienced legal counsel to discuss whether creditors may challenge your bankruptcy petition. A creditor may challenge the discharge of the debt by filing an adversary proceeding in the bankruptcy court if they believe the debt was incurred due to fraud, because the information provided for the credit application was not incorrect, the credit limit was exceeded purposefully, the credit cards were still being used close to the bankruptcy petition being filed, the types of purchases made were for luxury items, or cash advances taken, for which they have to prove in the court. Honest use of a credit card will be defendable against a challenge and permissible for discharge either under the Chapter 7 or Chapter 13 Bankruptcy. If you have outstanding credit card debts and want to discuss your options you should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding credit card debt, bankruptcy, foreclosure, or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and is in no way intended to replace the advice of an attorney regarding your specific matter. Our law firm is a debt relief agency and helps people file for bankruptcy relief. Contributed by Tracy Luciano

Can Credit Cards Be Used To Pay Bankruptcy Attorney's Fees?

Bankruptcy attorneys fees depend on the type of bankruptcy being filed, whether it be Chapter 7, 13 or 11 for businesses, plus there are filing fees charged by the Bankruptcy Court. Many of our potential clients, known as "debtors" ask if they can put the fees on their credit card. The fees cannot be put on the debtors' credit card and it is best if all credit card use is stopped because non-essential transactions which appear on credit cards within two years of filing for bankruptcy are highly scrutinized. In some cases the filing fees may be waived for hardship or allowed to be paid in installments. It is critical that you do not violate the bankruptcy code when filing your petition. If you are considering bankruptcy you should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding foreclosure, bankruptcy or other consumer debt matters in New Jersey visit www.TheNJBankruptcyAttorney.com. This blog is for information purposes only and in no way is intended to replace the advice of an attorney regarding your specific matter. Our law firm is a debt relief agency and helps people file for bankruptcy relief. Contributed by Tracy Luciano