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.

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

Chapter 13 May Allow You to Keep Your Home

A substantial number of homeowners in New Jersey have taken out home equity loans to allow them to make their monthly mortgage payments but, for many in these difficult economic times, it has become nearly impossible to make payments on these loans. Filing for Chapter 13 bankruptcy may provide people in this situation with a way to keep their homes. Many homeowners in New Jersey have dreamed of owning their own home for their entire lives. Due to the high cost of homes in New Jersey many people have to take out a home equity loan to allow them to make their mortgage payments each month. A home equity loan is like a second mortgage that provides the consumer with cash and requires that a piece of property, most likely the home, serve as the security on the loan. For homeowners who, for whatever reason, find that they are unable to continue to make the payments on these loans, the bank's repossession of the home is a very real and scary possibility. Fortunately, for individuals who find themselves in this situation there are options that may allow them to retain possession of their home. Unlike a Chapter 7 bankruptcy wherein the debtors assets are sometimes substantially liquidated, Chapter 13 bankruptcy may provide the debtor with the financial relief that they are seeking while allowing them to remain in possession of their home. Filing for bankruptcy under Chapter 13 allows a debtor to reorganize all of their debt and assets into a manageable payment plan that will permit them to more easily continue to make payments on their debts and retain their assets. The entire process is handled through the bankruptcy court. The court will create a payment plan based upon the debtor's amount of debt and income. The repayment plan is typically set for a period of three to five years. During this repayment period, the homeowners are expected to make monthly mortgage and other bill payments to the court according to the plan. The court, not the debtor, will apply such payments to the remainder of the debtor's loan. Ultimately, in such a situation, as long as the debtor continues to maintain their monthly payments as set forth by the court's repayment plan, they will remain in possession of their home as they climb out of their financial crisis. For many debtors who have fallen behind on their bills a a result of illness, layoff or significant events but would now be able to meet regular monthly obligations if substantial interest and penalties for the prior late payments could be managed Chapter 13 bankruptcy is a very real possibility. If you are having trouble making your mortgage payments but would like to remain in your home it is critical that you seek the advice of experienced legal counsel to advise you on the issues concerning bankruptcy. For more information regarding Chapter 13 bankruptcy, Chapter 7 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

Credit Card Debt and Bankruptcy

As the holiday season comes to a close, many people may already be starting to worry about their growing credit card debt issues. Statistics indicate that millions of people are still trying to pay the credit card debt that was incurred during the previous holiday season a year after making their purchases. The high interest rates that are attached to credit card purchases combined with excessive holiday gift buying could result in a financial disaster that many people simply cannot find an easy way out of. To avoid finding themselves in the aforementioned financial crisis, consumers should strive to make credit card payments that are higher than the minimum monthly payments. For some, their debt is so high that they even have difficulty paying the monthly minimum payment amounts. If an individual becomes overwhelmed by their credit debt bankruptcy may be an option to help them find a way out of their consumer debt crisis. Upon filing for bankruptcy, the debtor will receive the benefit of the automatic stay, which prohibits creditors from harassing the debtor to make payments on their debt. Some debtors may even receive a complete discharge of their credit card debt through the bankruptcy process. It is important to find out whether your holiday shopping debt is dischargeable in bankruptcy before filing your petition. During the bankruptcy proceedings, if the bankruptcy court concludes that a debtor purposely incurred the debt with the intention of filing for bankruptcy in the new year, the debtor will remain liable for all of the debt that assumed. If you are having trouble dealing with your credit card debt or other consumer debts and are considering filing for bankruptcy, it is critical that you seek the advice of experienced legal counsel to advise you on the options you have in resolving such matters. For more information about credit card debt, 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.

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.

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.

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.

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.

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

Reaffirmation Lets You Keep Your Car After Bankruptcy

If you have a vehicle and are filing for bankruptcy, you may want to reaffirm the lease/loan so that you can keep the vehicle. Many people hesitate on filing for bankruptcy because they do not know what will happen to their car which is their primary means of getting around. People who have continuing and steady income may have the ability to repay their debts when a repayment plan is established allowing them to retain their vehicle under a Chapter 13, referred to as a reorganization bankruptcy. When people file for Bankruptcy under Chapter 7, known as a liquidation bankruptcy, the "non-exempt" assets are liquidated and the proceeds used to pay their debts. Eligible debts which cannot be paid are then discharged. If the eligible debt is secured by a vehicle then upon discharge the creditor will get the vehicle back. The Debtor has the option however of reaffirming the lease or loan which then becomes a new contract, which cannot be withdrawn. Through reaffirmation, the debtor enters into a new contract with the creditor to make payments in exchange for retaining the vehicle. Assumption of a vehicle lease or loan may or may not be allowed by the bankruptcy court, especially if it is a lease or loan payment that is not affordable. Assumption may be beneficial under certain circumstances. If the payments on the vehicle are current and the interest rate and the monthly payments are low and affordable which may not be available if dealing with a new creditor right after a bankruptcy. If it is a lease and the purchase price of the vehicle at the end of the lease contract is reasonable then an assumption may be beneficial. However, you may be better off walking away from the unexpired lease and allowing the vehicle to be taken if the permissible amount of mileage was exceeded and you cannot afford to catch up on the missed payments. If you are thinking about filing bankruptcy you should consult with an experienced foreclosure attorney immediately in order to protect your rights. For more information regarding bankruptcy and reaffirming your vehicle loan or lease, 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.

Daughter Not Liable For Student Loan Taken By Father On Her Behalf

Creditor could not hold a former student liable for repayment of a student loan applied for by the former student's father (debtor) who was obligated under his Property Settlement Agreement at the time of his divorce to pay for her college expenses. Creditor produced loan documents which listed the former student as "borrower" and her father as a "co-signor" and which creditor claimed was executed by the former student. Creditor was successful in obtaining a judgment against the former student's father. The court however found the former student's testimony credible when she testified she had not signed the loan documents or had any knowledge of the loan. Her mother's testimony corroborated her testimony and her father was unable to identify the signature on the loan documents as that of his daughter and he claimed he did not know how the signature got on the documents. The court held that the father's testimony was not believable because he prepared the loan documents. The Appellate Court in its unpublished opinion of Educap Inc. v. Davis, upheld the lower court's opinion that the former student had neither expressly nor by implication agreed to repay the loan and though she benefited from the loan by being able to go to school it was the father's sole obligation to repay the student loan which he arranged for in compliance with his obligation under his divorce agreement. To hold the former student liable for her father's debt would be inequitable. If you are having problems with creditors due to student loan debt you should consult with an experienced consumer debt attorney immediately to protect your rights. For more information regarding student loans, 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.