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.

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.

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

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

Should You File for Bankruptcy? What You Should Know First

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

Costs and Benefits of Bankruptcy Reaffirmation

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

Bankruptcy and Divorce

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

Meeting Of Creditors Is Not What Most Debtors Expect

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

Bankruptcy Notice of Proposed Abandonment

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

Foreclosure- Is Bankruptcy the Answer?

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

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

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

No NJ Homestead Exemption in Bankruptcy But There May Be Hope

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

Options For Chapter 13 Debtors Who Cannot Make Re-Payments

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

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.

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.

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

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

Blocking a Chapter 7 Discharge

A woman claiming misrepresentation by a construction company filed a complaint seeking to block entry of a Chapter 7 discharge. The appeal was dismissed for failure to comply with Federal Rule of Bankruptcy Procedure 8006 and the woman sought reconsideration of the dismissal. The woman attempting to block the discharge, Filomena Boccella commenced an adversary proceeding pro se against the debtor based on claims grounded in consumer fraud and theft by deception. At the last minute, the Boccella sought to amend her complaint in order to avoid dismissal. Boccella’s opposition to the discharge was based on the fraud portions of 11 U.S.C. § 727(c), (d),(e) but her allegations were more aligned with 11 U.S.C. § 523(a)(2). Due to Boccella’s ineffective pursuit of the matter her case was dismissed, as was her appeal for failure to comply with Federal Rule of Bankruptcy Procedure 8006. In reviewing the motion for reconsideration of the dismissal the court, in In re Purington, looked to the matter of Poulis v. State Farm Fire & Cas. Co.,747 F.2d 863, 868 (3d Cir. 1984) where the court set forth 6 factors which must be considered in deciding whether a case may be dismissed without a hearing on the merits. The Poulis factors included (1) the extent of the party's personal responsibility; (2) the prejudice to the adversary caused by the failure to meet scheduling orders and respond to discovery; (3) a history of intentional delay by the party; (4) whether the conduct of the party or the attorney was willful or in bad faith; (5) whether other sanctions, short of dismissal, are more appropriate and curative; and (6) the meritoriousness of the claim or defense. Upon consideration, the court found dismissal of Bocella’s motion for reconsideration was inappropriate and reinstated her appeal. If you have been carrying the burden of IRS or other substantial debt, you can also obtain relief through bankruptcy. 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.

IRS Fraud is Likely Reason to Vacate Bankruptcy Order

IRS debt is a reason for many bankruptcy filings. Although bankruptcy can permit debtors to escape massive tax debt, if the IRS discovers the debtor willfully failed to pay the debt, misrepresented income or expenses or otherwise attempted to defraud the Internal Revenue Service, it is highly likely that the debt will not be avoided. Additionally, if IRS debt is expunged, reduced or modified and the IRS learns of fraud relating to the debt there will likely be a dispute as to the dischargeability of the debt and any reduction or modification. In the recent matter of In re Clemente, the United States filed a motion for reconsideration of the order permitting the Chapter 7 trustee to expunge, reduce and modify 2 proofs of claims. The court found that the debtor did willfully refuse to pay taxes due and also levied penalties and interest. The order to expunge and reduce the claim of the IRS was vacated as the priority claim was nondischargeable. If you have been carrying the burden of IRS or other substantial debt, you can also obtain relief through bankruptcy. 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.

Dionne Warwick Seeks IRS Relief Through Chapter 7 Filing

Singer Dionne Warwick's affiliation with the Psychic Friends Network provided her with no known warning of her future bankruptcy or the need to cut back on her spending. Dionne Warwick filed a Chapter 7 bankruptcy petition in March 2013 stating her income and expenses to be equal at $21,000 per month and leaving her with nothing to pay outstanding debts. Dionne Warwick's stated expenses may have been substantial but, based on her outstanding unpaid tax burden of approximately $10,000,000 they were not substantially deductible. Dionne Warwick owes $7,000,000 to the Internal Revenue Service which accumulated from 1991 to 1999. There is a potential dispute as to the portion of this debt attributable to penalties and interest. IRS debts are dischargeable in the event the debtor meets all of the following criteria: 1) the taxes are only income taxes; 2) the debtor properly filed all returns; 3) the debtor did not attempt to evade payment of the taxes; 4) the debt is at least 3 years old; and 5) the debt was assessed at least 240 days before the debtor files the bankruptcy petition or was not yet assessed. Representatives for Dionne Warwick say she filed all returns and paid the debt leaving only interest and penalties to make up the $10,000,000 outstanding debt. If this is true, because of the age of the delinquent taxes, Dionne Warwick will likely find herself free of this substantial debt she has carried since 1999. If you have been carrying the burden of IRS or other substantial debt, you can also obtain relief through bankruptcy. 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.