How Long Is The Bankruptcy Process If I File Chapter 13?

Arriving at the decision to file for bankruptcy is not an easy one and most people angst over questions such as should I file for bankruptcy or how long will a Chapter 13 bankruptcy take? Many people with secure jobs and steady incomes find that they become overwhelmed by rising living expenses and mounting financial debts. These people may not even initially consider filing for bankruptcy because they may assume that because they are employed and earning an income, even a substantial income, they will not qualify for bankruptcy. Meanwhile, as they struggle to maintain payments on their bills they inch closer and closer to a home foreclosure or the repossession of necessary assets such as a vehicle. Filing for bankruptcy under Chapter 13 may provide a person in this very situation with the financial relief that they are seeking for themselves or their families. When a debtor decides to file for Chapter 13 bankruptcy, both they and their attorney will work with Trustee appointed by the Bankruptcy Court to create a manageable re-payment plan that will include allowances for living expenses and other mortgages and loans. The debtor will then be required to pay the remainder of funds to the bankruptcy trustee each month who will allocate a portion to the debtor's various creditors. The benefit of a Chapter 13 payment plan is that the debtor will not be required to make payments that exceed their monthly income and the creditors will be prohibited from making harassing phone calls or sending constant letters in an attempt to get the debtor to pay back their debt. Further, all creditors will be prevented from filing any lawsuits, making any repossessions, or garnishing any wags during the bankruptcy repayment. Once the debtor makes all of the payments for the repayment period, any remaining unsecure debts are discharged. The length of a Chapter 13 payment plans will be contingent upon a debtor's monthly income and how high the bankruptcy payments are set at. Generally, most Chapter 13 payment plans last for approximately five (5) years. Although plans may be structured for shorter periods of time. If you are having trouble dealing with your consumer debt issues and are deciding if you should file for bankruptcy or have questions about the length or complexity of the process it is imperative that you seek the advice of experienced legal counsel to advise you on the issues concerning bankruptcy. For more information regarding whether you should file for 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.

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.

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.

Rebuilding Your Credit After Bankruptcy

If you have recently filed for bankruptcy or are considering filing for bankruptcy you may be concerned about the impact of bankruptcy on your credit and how you can immediately begin to rebuild your credit once your file for bankruptcy. After filing for bankruptcy, an individual's initial instinct will most likely be that he or she will never use a credit card again. Especially, if it was credit card debt that got them in the precarious financial situation that lead to the bankruptcy. Although, with the status of the U.S. economy as it is people may quickly realize that buying items on credit is a near necessity. People in this country assume that having a high credit score is the primary indicator of financial stability, but this is an incorrect assumption. An individual could boast a high credit score but harbor a huge sum of debts and may be in a constant struggle to keep up with payments. This could be a financial disaster waiting to happen. Once a bankruptcy debtor has been discharged of his or her debt at the conclusion of the proceedings they must get a credit report from all three of the most common credit bureaus - Equifax, TransUnion, and Esperion. These reports must indicate that all of the debtor's debt has been successfully discharged. For some, this could take a few weeks or months to occur. If over time, all three reports do not reflect the discharge, the debtor must take steps to ensure that the bureaus amend their reports to reflect the full discharge. After all of the reports reflect the complete discharge of debt, the best way a debtor can begin to rebuild credit is to seek to obtain a secured credit card from a bank. A secured credit card is a credit card issued by a bank which is connected with a money deposit. The credit limit on the card is the amount of money that remains in the debtor's bank account, therefore the debtor cannot charge more money than he or she maintains in the account. The debtor will improve his credit over time as he continues to make timely payments on charges made from his secured credit card. Over time, once the debtor's credit score reaches a certain number he can apply for additional credit cards upon which he can make timely payments to further strengthen his credit score. If you are having trouble dealing with your consumer debt issues and you need to know how filing for bankruptcy will impact your credit and how, once bankruptcy is filed, you can begin to rebuild your credit it is imperative that you seek the advice of experienced legal counsel to advise you on these issues. For more information regarding 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

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

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.

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.

Cram Down Or Strip Off Options For Those Beneath The Water Line in NJ

By filing for Chapter 13 bankruptcy there may be some relief to those who face this situation in the form of a process called a "cram down" or "strip off." Ultimately, these options may provide a debtor with the chance to reduce or eliminate the payments that he or she owes on their secured mortgages and eliminate liens on their homes. In today's economic climate, an increasing number of homeowners are facing the grim realization of foreclosure. For most people this is an extremely upsetting circumstance, but there are options to help people keep their homes in the face of foreclosure. A "cram down" is a process where the court may reduce certain secured debts to the market value of the collateral that secures that debt and thus reduces the amount that a debtor must repay. This sounds complicated, but consider the following example for clarification. A person buys a brand new car for $30,000, by taking out a loan for $45,000 (which includes interest) to be paid back through specified monthly repayments. After a few years, this person files for Chapter 13 bankruptcy, and still owes $30,000 for the car even though the fair market value of the car has declined to $18,000. Under a Chapter 13 repayment plan, the court could “cram down” the loan to $18,000 thus reducing the amount that the debtor has to pay back each month, thus allowing the debtor to more easily make mortgage payments for his or her home. A “cram down” is typically only available for certain secured debts such cars, furniture, jewelry, computer, and rental homes (not primary residential homes). Sometimes the mortgage balance that people owe on their residence exceeds the current market value of that home. If this is the case, it is said that the home is “under water.” Under Chapter 13, a "strip off" may be an option to modify mortgage repayment amounts by “stripping off” or discharging the balances owed on second and third mortgages and reducing the homeowner’s overall mortgage balance. To accomplish this, a court may reclassify junior mortgages from a secured debt to an unsecured debt thus allowing these debts to be completely discharged or dramatically reduced. This results in an overall reduction in the mortgage balance that needs to be repaid which could, in turn, determine whether a homeowner can keep his or her home despite the threat of foreclosure. If you are facing bankruptcy and have investments or other property to which you believe a strip off or cram down may be applicable, you should consult an experienced attorney to protect your rights. For more information regarding cram downs, strip offs, debt reduction, foreclosure or other matters relating to Bankruptcy in New Jersey visit TheNJBankruptcyAttorney. This blog is for informational purposes only and not intended to replace the advice of an attorney.

Chapter 13 Cram Down and Your Residence

While a first mortgage on a primary home cannot be "crammed down," if you have a second and third mortgage a Chapter 13 bankruptcy may allow you, the homeowner, to wipe out or strip the second and third mortgages. If you are like your fellow New Jersey neighbors you may owe more on your home than your home is now worth, often referred to as being "under water" or "upside down". When the home is worth less than what is owed on the first mortgage, and you have a second and third mortgage then you may be eligible for this cram down or strip off option. The Chapter 13 "Reorganization" bankruptcy allows the homeowner to catch up on the arrears on their first mortgage over a three to five year plan thus avoiding a foreclosure. The amount owed on the second or third mortgage that is above the value of the home is classified as "unsecured debt" and is then grouped with your other unsecured debt, such as credit cards and medical bills, which is treated differently than your first mortgage under the bankruptcy laws. How much you will have to pay back on this unsecured debt will be determined during the bankruptcy procedure and then you will be required to pay back only the amount determined within the three to five years of the repayment period. Debtors must show they have the means to make the payments to be eligible for approval of a Chapter 13 bankruptcy. At a minimum, this will require employment providing a steady cash flow which may be applied to payment of outstanding debts while leaving enough for basic living expenses. If you owe more than you can pay and have a second or third mortgage, you should consult with an experienced New Jersey bankruptcy attorney immediately to protect your rights. For more information regarding bankruptcy, foreclosure, student loans 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.

Wells Fargo Internal Procedures Unfair To Debtor?

A bank, in following its own foreclosure procedures, does not necessarily rise to the level of good faith in the eyes of the court. Bergen Assignment Judge Peter Doyne has been drafting opinions with an eye in favor of the consumer. In Wells Fargo Bank v. Schultz, the judge decided that homeowners are entitled to appropriate treatment, whether qualifying for foreclosure or not. A debtor spent the better part of a year diligently working to submit documents to avail herself of Wachovia Bank's "Unemployment Program" following the loss of employment by both the debtor and her husband. She was repeatedly advised documents she submitted were not submitted and sent multiple copies thereof. The bank further suggested the debtor apply for the federal Home Affordable Modification Program (HAMP), when she also did. When Wells Fargo sent a determination letter to the debtor indicating she had submitted all required documents she was also notified that the loan modification program for which she applied was no longer available. Although the homeowner was precluded from raising certain defenses, Judge Doyne ruled that a debtor is permitted to raise a claim of bad faith against the lender where a valid basis for such a claim exists. If you are seeking loan modification in an effort to fend off foreclosure, you should consult with an experienced consumer debt attorney immediately in order to protect your rights. For more information regarding your decision to defend against a foreclosure action, file for bankruptcy or other consumer debt matters in New Jersey visit 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.

Homestead Exemption in Chapter 7 Bankruptcy

A debtor sought to claim a homestead exemption for property formerly owned by his father which passed to him upon his father's death in the matter of In re Stoner. The bankruptcy Trustee objected to the exemption, filed under 11 U.S.C. Section 522(d)(1), claiming that, as the executor of his father's estate, the debtor held an interest in the property on the date of the bankruptcy filing. The Court found that qualification of a residence includes permanence. Although the debtor's father passed away prior to the filing of the bankruptcy petition, the debtor used a different address when filing and, in a later amendment to the petition 2 years after the original filing, chose to amend his address to the property for which the exemption is now being claimed. Prior to amending the petition to reflect his address as being that of the property claimed for exemption, the debtor sold the property and divided the proceeds. Further, the Court held that 11 U.S.C. Section 522(d)(1) was intended specifically for the protection of home-mortgage lenders. The Bankruptcy Court, in the case of in re Stoner, held that the mere possession of a future interest as a beneficiary to a will does not qualify a debtor to claim a property under the homestead exemption. If you are considering filing for bankruptcy you will be addressing many issues such as exemptions and whether you qualify for same. You should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding bankruptcy, exemptions, foreclosure and other consumer debt matters in New Jersey visit 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.