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.

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.

Abandonment of Property By Bankruptcy Trustee

A Bankruptcy Trustee moved to sell the property of a debtor and the debtor cross-moved to compel abandonment of the property based on the debtor's reported transfer to another. Under Section 11 U.S.C. 554(b) of the Bankruptcy Code, the court may, upon request of an interested party and notice of hearing, "order the Trustee to abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit." The burden is on the party seeking to compel abandonment to show the property meets the criteria for abandonment. If the burden is met, then the burden shifts to the Trustee to show that the property is of value and can be utilized to satisfy a debt of the bankruptcy estate. The debtors in the matter of In re Taggart sought abandonment on the grounds that the real property was not part of the bankruptcy estate according to Bankruptcy Code Section 541(d) and that, if the real property is deemed to be property of the bankruptcy estate, a constructive trust should be imposed in favor of the disputed buyers. The debtor, Raymond Taggart, claimed the property was transferred to his brother and sister-in-law, Dennis and Kathleen Taggart, brother and sister-in-law of the debtor, prior to filing bankruptcy. Under the law, Raymond Taggart was without rights to transfer the property without assent of the mortgage holder. The Taggart's second argument was that a constructive trust in favor of the alleged buyers, Dennis and Kathleen should be imposed post-petition. Under Section 544(a) the trustee has power to avoid any transfer by the debtor or any voidable obligation incurred by the debtor. The Taggarts could not provide evidence they were bona fide purchasers for value and had not recorded any deed transfer. At best there was an agreement of sorts between brothers and perhaps there was intent to transfer the property to Dennis upon payment in full of the mortgage. Even if transfer to Dennis upon full payment was the intent, Dennis and Kathleen could have taken steps to obtain their own mortgage on the property in order to pay off the mortgage taken by Raymond. As long as Dennis and Kathleen could not obtain a mortgage, Raymond was not unjustly enriched by their payment of the carrying costs because it could be considered rent. For the foregoing reasons, the court finds that there was no basis to impose a constructive trust and the trustee was not required to abandon the property but rather could sell it for the benefit of the unsecured creditors. The manner in which property is titled and used by the debtor can affect the treatment of such property in the event the debtor files for bankruptcy. Knowing how your assets are likely to be treated in bankruptcy often makes a critical difference in the decision of whether to file. If you are considering bankruptcy you should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding foreclosure, bankruptcy or other consumer debt matters in New Jersey visit 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.

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.

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.

Are You Contemplating Bankruptcy Due To Foreclosure?

During this troubled financial time many New Jersey homeowners find themselves facing foreclosure. Mortgage companies, in spite of the massive number of foreclosures pending, tend to remain unwilling to discuss the issues or consider modification, partial payments or other means of resolving the matter. Often the homeowners will not speak to anyone and simply try to straighten out their finances by seeking additional employment or borrowing from others. Months go by and they receive a Complaint for Foreclosure which is ignored simply because they are frozen with fear by the prospect of losing their home. Eventually, if the homeowner does not respond to the complaint, even if they do try to negotiate directly with the mortgage company, they will receive Notices regarding Default as a result of not filing an Answer to the Foreclosure Complaint. Finally, the homeowner will find themselves facing an actual Judgment of Foreclosure. In a recent case, the Court denied a litigant's request to vacate a default judgment of foreclosure against his investment property. The debtor's claim was that under New Jersey Court Rule 4:50-1 (d) the Assignee Mortgagee did not have the original Promissory Note or Mortgage so that the Judgment was invalid and that the judgment should be set aside under Rule 4:50-1(f) due to exceptional situations to prevent a grave injustice. There was no denial that the mortgage was not paid or that there was a justification for failing to make the mortgage payments or any other justification for relief from the judgment under Rule 4:50-1 such as mistake, newly discovered evidence, fraud, misrepresentation, misconduct by the Assignee Mortgagee, that the judgment was satisfied, or released. The Court found there was no demonstration of prejudice which would warrant the litigant's last ditch effort at a reprieve from the judgment of foreclosure and the decision was upheld by Appellate Division. In another matter, the Appellate Court dismissed a complaint for foreclosure because the bank failed to provide proof of its status as the lender pursuant to the requirements of New Jersey Statute 12A:3-301 or the Uniform Commercial Code (UCC) and filed to comply with the notice requirement of the Fair Foreclosure Act (FFA) and N.J.S.A. 2A:50-56. In this matter, the debtor filed an objection with the court to the Bank's Complaint for Foreclosure prior to a Judgment being granted. There are no guarantees that if a homeowner attempts to address the issue of foreclosure prior to a Judgment that a foreclosure will not result, however, there are standards that a Bank must meet including proof of service, appropriate notice and the fact that is in the actual holder of the mortgage and entitled to bring the foreclosure action. If you are facing foreclosure, you should consult with an experienced foreclosure attorney immediately in order to protect your rights. For more information regarding foreclosure, bankruptcy 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.

FDCPA Offers Protection From Harassing Creditors

The Federal Trade Commission released a study on January 30, 2013, discussing the shady actions harassing creditors take to unfairly collect debts. Many of these debts are usually from credit cards and can be discharged if the debtor files a Chapter 7 bankruptcy. The FTC found that debt buyers, usually collection agencies or law firms who have bought the debt from the original creditor, often lack basic information about the debt they are trying to collect. Many times they do not even know if the debt is valid, whether the consumer has disputed the debt or even when the statute of limitations has run on the debt. The FTC requires that creditors have a reasonable basis for believing a debtor lawfully owes the debt they are trying to collect on, yet some creditors cannot even establish that much when they file judgments against debtors! The FTC concluded that the Fair Debt Collections Practices Act (FDCPA) should be updated to better protect debtors from unscrupulous debt collectors. In the meantime, if you are considering filing for bankruptcy and are receiving harassing communications from creditors who may not even have a legitimate claim against you, remember filing for bankruptcy will stop the harassment and allow you time to scrutinize your debts. If you are considering filing for bankruptcy you will be addressing many issues concerning protection from creditors and should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information on how to protect yourself from creditors, foreclosure, other consumer debt or bankruptcy law 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. We are a Debt Relief Agency. We help people file for bankruptcy relief.

You Occupation Can Be Used Against You in Foreclosure

In the matter of Salierno v. Kosky, the debtor was penalized in a foreclosure action as a result of knowledge he was assumed to have from an external source. In the above foreclosure matter, a loan was made to the debtors which was secured by mortgages properties in Mahwah, NJ. One on a property which Barbara Kosky owned and resided in and another on a property on which Daniel Kosky owned and resided in. When the debtors defaulted, plaintiff filed a complaint in foreclosure. The debtors filed a motion to dismiss the complaint because the properties secured by the mortgages are residential and, therefore, protected under the Fair Foreclosure Act (FFA). The FFA requires strict notice requirements for mortgages on properties used as the debtor's primary residence. The court held that, although the required notice of intent to foreclose was not sent to the debtors prior to the filing of the foreclosure action, the foreclosure action need not be dismissed because Daniel Kosky was formerly employed as a bank executive and should have known the rights of lenders and borrowers in a foreclosure action. If you are facing foreclosure, considering bankruptcy or trying to deal with overwhelming debt, you should seek experienced legal counsel immediately in order to protect your rights. For more information on foreclosure, bankruptcy or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and in no way intended to replace the advice of an attorney regarding your specific matter.

Protecting Your Home in Bankruptcy

If you are a homeowner and thinking about filing for bankruptcy, there are many factors which you must take into consideration in order to protect your home. When you file for bankruptcy, you must inform the bankruptcy Trustee of all the assets you own, including your home. Assets which are not exempt will be used by the Trustee to pay off your creditors. Under New Jersey law, there is no homestead exemption; only a non-debtor spouse’s survivorship interest in the home is spared. However, under Federal law an individual is allowed to exempt $21,625, of equity in their home, $43,250 for a married couple filing jointly. If you have more equity in your home than what is allowed to be exempt, a Trustee could force the sale of your home to pay your creditors. If that is the case, you should look to remove second and third mortgages on your home or even look into trying to file a Chapter 13 bankruptcy. If you are considering filing for bankruptcy you will be addressing many issues concerning your home, and should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding how to protect your home during a bankruptcy, foreclosure, consumer debt or other bankruptcy law 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. We are a Debt Relief Agency. We help people file for bankruptcy relief.

Discharge All Your Debt to Protect Your Future Credit by Disclosing All Debts in Bankruptcy Filing

One of the most obvious benefits of filing for bankruptcy is having your debts discharged and one of the most common concerns is the effect of bankruptcy on your credit score. When your debts are discharged, you no longer have to repay the debt and your creditors lose the right to seek repayment. In order to successfully discharge your debts, however, you must be extremely cautious when preparing your petition as you will need to satisfy the scrutiny of both the court appointed trustee and judge who are assigned to your case. It is required that you provide information about each creditor and details regarding each debt. Failure to disclose essential information could lead to painful consequences such as the debt not being discharged. For example, a U.S. Bankruptcy judge in Newark recently refused to discharge a person’s $40 million debt when he failed to keep records required by the Bankruptcy code and grossly impaired the ability of the assigned trustee to perform his duties. Filing for bankruptcy certainly hurts your credit score in the short term, but at least it will allow you to start fresh by eliminating your debts. Not filing properly could lead to a bankruptcy filing which leaves you with serious debts a damaged credit report, so it is imperative to disclose accurate information when filing. If you are considering filing for bankruptcy you will be addressing many issues concerning discharging your debts and should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding discharging your debts, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, foreclosure, consumer debt, credit card debt or debt related 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. We are a Debt Relief Agency. We help people file for bankruptcy relief.

Bankruptcy and Foreclosure

If your bank has threatened you with foreclosure or has already begun the process of foreclosing on your home, bankruptcy could provide you with an opportunity to save your home. Upon filing your petition for bankruptcy, you will receive what the courts call an “automatic stay”. This means that creditors will not be able to contact you, attempt to collect any debt you owe them and will stop foreclosure efforts against your home. However, banks usually file a motion to lift the automatic stay and seek to proceed with the foreclosure, but it will take some time before a judge grants their motion. If you have multiple mortgages and are seeking to save your home, you should consider filing for Chapter 13 bankruptcy which could allow you to remove your second and third mortgages. This will occur if the value of your home is worth less than what you owe on your first mortgage. You will still be liable to the bank holding your first mortgage, but by stripping off your second and third mortgage, you could substantially reduce your monthly payments, leaving you with the extra cash necessary to save your home. If you are considering filing for bankruptcy you will be addressing many issues concerning foreclosure and should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding consumer debt, bankruptcy and foreclosure or other bankruptcy law 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. We are a Debt Relief Agency. We help people file for bankruptcy relief.

Celebrity Bankruptcies

Some would hesitate to file bankruptcy, believing it would be a shameful or immoral thing to do. It is certainly ideal to be independent and able to work ones own way out of financial trouble without the need of having to file bankruptcy. However, life throws many unexpected obstacles in our way. Sometimes the only way to recover from them is to make the decision to go ahead and file for bankruptcy. Even the rich and famous among us have had to declare bankruptcy in order to move forward to stardom or simply to get their life back on track. Walt Disney Walt Disney, prior to making some of the best known movies of all-time, owned an animation company called Laugh-O-Gram Studios. Laugh-O-Gram Studios had to declare bankruptcy due to its financial backer having gone out of business. After moving to California he ultimately created the Walt Disney Company and lead it to be one of the biggest entertainment companies in the world. Elton John Although at one time he was worth over $260 million, superstar musician Elton John declared bankruptcy. John's bankruptcy was necessitated by his having spent an estimated $2 million a month to support his extravagant lifestyle. In fact, BBC reported that his credit card bills alone averaged an estimated $400,000 a month! Larry King Talk-show host Larry King fell into debt over $350,000 after having been arrested for grand larceny and losing his job. Shortly after declaring bankruptcy, King began his late-night talk show which ultimately lead to his televised show on CNN. As the examples show, bankruptcy is not the end of the world. In reality, bankruptcy provides a fresh start and the ability to get ones life back on track and, if you play your cards right, you may just end up with your own famous success story. If you are considering filing for bankruptcy you will be addressing many issues concerning your decision to file bankruptcy and should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding your decision to file for bankruptcy or other bankruptcy law 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.

Deductions That Spell Trouble For Small Business Owner Seeking Chapter 7 Bankruptcy

In a Chapter 7 Bankruptcy matter, the IRS may challenge the amount of taxes due when a debtor seeks to eliminate IRS debt through the bankruptcy. The IRS is likely to challenge certain deductions taken by the debtor against small business income. The first hurdle in an IRS challenge to small business expenses is proof that the purchases you are seeking to deduct were actually made according to IRC Section 274. Two areas the IRS will question, even though allowable with appropriate documentation are gifts and wages to a spouse, child or other relative they claim to employ. In the case of such wages, the business owner must issue W-2’s or 1099’s for the wages paid or included as business expenses. A business owner is also prohibited from deducting wages paid to herself. Credit card interest is allowable only if the card is limited solely to use for business charges. If it is determined the credit was utilized for household or personal items of the business owner, the interest on the cards will not be deductible. Some deductions you absolutely may not take are dues for social, athletic, vacation and lunch clubs, charitable contributions, donations to political causes, penalties and fines to government agencies, personal expenses for yourself, family or home or repairs that add value to your business property or extend the life of the property. Some deductions are allowable but the IRS may still require proof that the expenses are legitimate in order to eliminate IRS debt through Chapter 7 bankruptcy. Allowable deductions include business travel, use of your car for business, business meals and entertainment, education pertaining to your trade, tools and supplies. If you are considering Chapter 7 Bankruptcy and have substantial IRS debt, you should seek experienced legal counsel immediately in order to fully protect your rights. For more information on foreclosure, bankruptcy or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and in no way intended to replace the advice of an attorney regarding your specific matter.

Eliminating IRS Debt Through Chapter 7 Bankruptcy

Many times a debtor will have a substantial income which results in a tax liability to the IRS, even though their income is still not enough to satisfy the repayment of their debts. When filing a Chapter 7 Bankruptcy it is critical that all the debtor’s debts are discharged or they will be in a very difficult position after bankruptcy. It is possible to eliminate all delinquent taxes in a Chapter 7 Bankruptcy. In order to eliminate the debts you must meet certain criteria including: 1) The tax liability must be at least 3 years old to be eliminated. 2) You must have filed your returns. If you filed for extensions it may make you unable to eliminate the delinquent taxes. 3) The IRS has not filed an assessment against you in the last 240 days. In spite of the above, if you tried to hide from the IRS, you may face a challenge to the discharge. The IRS is very patient, unless you try to avoid them. If this happens, you may still obtain a Chapter 7 Bankruptcy but the substantial IRS debt may remain as a burden you will have to repay. If you are considering Chapter 7 Bankruptcy and have substantial IRS debt, you should seek experienced legal counsel immediately in order to fully protect your rights. For more information on foreclosure, bankruptcy or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and in no way intended to replace the advice of an attorney regarding your specific matter.

Bankruptcy Offers Protection From Harassing Creditors

It is very easy for a person who faces some misfortune to fall behind on their debts whether they have lost their job, have gone through a divorce, became seriously ill or injured, or have fallen on hard times for any number of reasons. Despite a person’s change in circumstances, their debt is fixed and creditors can be merciless in their attempts to have their clients repay them. Receiving constant phone calls, letters in the mail, and court notices from creditors can become oppressive and put a serious strain on person’s life. If an individual does not have enough money to satisfy all his creditors and is stuck beneath crushing debt, bankruptcy is an option which can provide relief from harassing creditors and can offer them a fresh start to regain control of their life. One way filing for bankruptcy can provide much needed relief for a person being harassed by creditors is through what is known as the “automatic stay” provision. This bankruptcy provision prevents creditors from taking any collection actions against a person who has filed for bankruptcy while their bankruptcy matter is pending. This provides someone who has filed for bankruptcy much needed peace of mind and relief while they begin the process of getting back on their feet. If you are considering filing for bankruptcy you will be addressing many issues concerning how to resolve your debt with creditors and should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding obtaining relief from harassing creditors or other bankruptcy, consumer debt or foreclosure 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.

Sales Tax and Bankruptcy

Retail sales tax is not dischargeable in bankruptcy. Excise taxes under 11 United States Code Section 507(a)(8)(E) enjoy priority status and are non-dischargeable unless over 3 years from the filing of the bankruptcy petition. Trust fund taxes under 11 U.S.C. Section 507(a)(8)(C) are never subject to discharge in bankruptcy, no matter how old the tax debt. As a tax which is required to be withheld, retail sales taxes may be considered trust fund taxes. As a tax on the "manufacture, sale, or use of goods," Black's Law Dictionary 646 (9th ed. 2009), retail sales tax is an excise tax. The Legislature created ambiguous language, however, the court, in Dep't of Revenue v. Hayslett/Judy Oil, Inc., 426 F3.d 899, 904-905 (7th Cir. 2005), held that a tax collected on behalf of another was a trust fund tax. When collecting sales tax, a proprietor is aware the tax is to be held until paid to the government. Therefore, retain sales tax is trust fund tax and non-dischargeable in bankruptcy no matter how long the time it has been owing. In re Calabrese, No. 11-3793 (3rd Cir. 2012) sets forth the premise that, although a debtor may obtain a discharge from his debts, it is unjust for him to retain the money of another for his own benefit through the declaration of bankruptcy. As sales tax is truly a tax on the consumer rather than the seller of goods, the seller of goods never truly has title to the funds collected as sales tax. If you are considering bankruptcy you should seek experienced legal counsel immediately in order to fully protect your rights. For more information on foreclosure, bankruptcy or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and in no way intended to replace the advice of an attorney regarding your specific matter.

Is Your Lawyer Protecting You By Filing An Involuntary Chapter 7 Petition Against a Debtor?

Recently the chairman of a large firm's bankruptcy division filed an Involuntary Chapter 7 petition against a debtor on behalf of 4 creditor clients. When the case was ultimately heard by the U.S. Bankruptcy Judge Novalyn Winfield dismissed the Chapter 7 petition finding the Debtor had been paying their debts with certain exceptions for which they expressed reasons. As a result of hardships caused them by the bankruptcy petition, the debtor sought compensatory and punative damages as well as legal fees and costs resulting from the creditors' bad faith filing. Prior to the judge deciding the matter of damages and costs, settlement was reached between the debtors and creditors resulting in $4.45 million in costs to the creditors as a result of the failed suit. Although there is evidence the attorney filing on behalf of the creditors may not have undertaken due diligence in investigating the financial condition of the debtors, the firm he is umployed by maintains that the creditors are simply unhappy with their results and do not wish to pay their legal fee, which was described by the firm which filed the petition as being in "the significant six figures." If you are attempting to pursue a debtor, facing foreclosure, considering bankruptcy or filing an involuntary Chapter 7 petition against a debtor, you should seek experienced legal counsel who will act in your best interests in order to protect your rights. For more information on foreclosure, bankruptcy or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and in no way intended to replace the advice of an attorney regarding your specific matter.

N.J.S. 2A:16-49.1 Permits A Debtor To Cancel Liens Against Real Property

Bankruptcy relieves a debtor from debts but does not cancel liens against property of the debtor. In the event a debtor wishes to cancel a creditor's lien against real property the debtor may avail themselves of New Jersey Statute 2A:16-49.1 in certain situations. The debt must be a dischargeable debt to qualify and, if the creditor has levied on the property prior to the bankruptcy filing, the lien will not be dischargeable. If the lien is dischargeable, N.J.A. 2A:16-49.1 permits the debtor to cancel the lien in the event the creditor does not levy within one year of their receipt of notice of the bankruptcy. However, in the event the debtor fails to list the creditor on the bankruptcy petition, unless there is proof the creditor received notice of the bankruptcy, the debtor may not cancel the debt until one year after the creditor receives actual notice. If you are facing foreclosure, considering bankruptcy or an appeal in a bankruptcy matter, you should seek experienced legal counsel immediately in order to protect your rights. For more information on foreclosure, bankruptcy or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and in no way intended to replace the advice of an attorney regarding your specific matter.

Rooker-Feldman Provides For Preservation of Favorable State Court Decision

In a proceeding to determine whether the debtors are subject to creditors' proof of claim stemming from a foreclosure action the debtors took the position that creditor, a bank, was not the actual holder of the note. The debtors also argued that the prior creditors were not proper holders of the note. The creditors opposing motion challenged the exercise of jurisdiction by the court on the grounds that hearing the matter would violate the Rooker-Feldman doctrine by altering the state court's ruling in the foreclosure. The Rooker-Feldman doctrine provides that the only court with authority to review a state court's final judgment is the United States Supreme Court. A state's district court is not authorized to review a decision of the state court. Because the bankruptcy court is a lower federal court, the bankruptcy court may not reconsider a state court judgment. This means a party with a favorable state court judgment can challenge the review of the judgment by a bankruptcy court in order to retain the favorable status. If you are facing foreclosure, considering bankruptcy or an appeal in a bankruptcy matter, you should seek experienced legal counsel immediately in order to protect your rights. For more information on foreclosure, bankruptcy or other consumer debt related matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and in no way intended to replace the advice of an attorney regarding your specific matter.