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.

Debtor's Transfer of Property to Wife is Fraudulent as Prepetition Planning

A debtor's transfer of his interest in real property to his wife in advance of filing bankruptcy is fraudulent when made with the intent to delay, hinder or defraud creditors. In a process termed "bankruptcy planning" debtors seek ways to maximize exemptions and assets in a bankruptcy. Although there are certain limited exemptions for both real and personal property, overreaching is fraudulent. A debtor may use cash on hand to pay debts that will not be discharged such as child support, spousal support, taxes or secured debt rather than paying unsecured creditors whose claims are likely to be discharged in the bankruptcy. Debtors may convert some non-exempt assets into exempt assets. However, a debtor may not take loans for the purpose of purchasing exempt property, increase unsecured debt in advance of filing or transfer assets to a spouse or other insiders for inadequate consideration. When such transfers are made the court will infer an intent to delay, hinder or defraud creditors. If you are considering bankruptcy you should seek experienced legal counsel immediately in order to fully protect your rights, avoid dismissal of your petition and understand how the bankruptcy laws can help you. 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.