Robert Manchel

NJ. Bankruptcy Attorney Explains What Happens To A Person Who Owes A Debt With Someone Who Filed For Bankruptcy Protection in New Jersey.

Two people that owe a joint debt to a New Jersey creditor, are both responsible for the entire debt. The creditor may sue each person for the entire debt, or any portion of the debt. However, obviously, the creditor may not receive more than the total amount due.
Lets assume two people owe the same credit card debt, but only one files a New Jersey chapter 7 bankruptcy case. The person that files the bankruptcy case is called a bankruptcy debtor. Pursuant to the bankruptcy Automatic Stay Provision, after the bankruptcy filing, the creditor may no longer collect the debt from the bankruptcy debtor. Immediately upon the bankruptcy filing, the creditor’s action to collect the debt from the bankruptcy debtor must cease, no matter the status of the collection process. This means that if the bankruptcy case is filed after a lawsuit has commenced, the lawsuit must be dismissed as to the bankruptcy debtor, only, after the bankruptcy filing.
However, the bankruptcy filing has no effect on the creditor’s ability and right to continue and/or pursue the collection of the same debt against the non bankruptcy filing joint debtor. This means that after the bankruptcy filing, the creditor may commence and/or continue a lawsuit against the non bankruptcy filing joint debtor, only, without limitation.
However, in a New Jersey chapter 13 case, the bankruptcy laws are different regarding two people that owe a joint consumer debt, when only one debtor files for bankruptcy protection. The Chapter 13 bankruptcy code includes additional protections as to the non bankruptcy filing joint debtor, who owes a joint debt with a chapter 13 debtor. The chapter 13 “Co-Debtor Stay” prohibits a creditor from pursing and/or collecting a debt from the non bankruptcy filing joint debtor, who has not filed for bankruptcy, in connection with a joint consumer debt.
This means that the creditor must cease any and all collection efforts against the both, the non bankruptcy filing joint debtor  and the chapter 13 bankruptcy joint debtor, upon the bankruptcy debtor’s bankruptcy filing. Such a stay applies against the non bankruptcy filing joint debtor for the entire bankruptcy case, or until the creditor requests permission from the bankruptcy court to proceed against the non bankruptcy filing joint debtor. Therefore, if the creditor takes no action to proceed against the non bankruptcy filing joint debtor, the creditor may pursue such person for the entire debt balance, after the bankruptcy case is either dismissed or discharged.
A creditor may proceed against the non bankruptcy filing joint debtor by requesting permission from the bankruptcy court to collect the amount that the bankruptcy debtor is not paying to the creditor, through his bankruptcy plan. Consequently, if the bankruptcy debtor is not paying any of the debt, the creditor will likely be granted permission to collect the entire debt from the non bankruptcy filing debtor, while the case is pending. If the bankruptcy debtor is paying back 100% of the debt, it is unlikely that the court will permit the creditor to pursue the non bankruptcy filing joint debtor.
You may call attorney, Robert Manchel, at 866 503 5644, to discuss your New Jersey. bankruptcy law questions.

NJ. Attorney Explains Who Can File For Bankruptcy Protection.

Virtually anyone can file for bankruptcy protection in New Jersey. Typically, the issue is not if one can file, but rather which bankruptcy chapter is applicable based on the debtor’s financial situation and goals.
The following information pertains to a New Jersey chapter 7 case.
A person, corporation, partnership, limited liability company and a small corporation may file for chapter 7 bankruptcy protection.
A New Jersey Chapter 7 bankruptcy does not require a person to make any payments and lasts about four months. In approximately four months, after the filing, a person is completely out of the bankruptcy case, with certain debts discharged. There is no maximum or minimum debt amount required to file. The bankruptcy code does not require that a debtor amass a specific amount of debt to file for chapter 7 bankruptcy protection.
However, in order to obtain a discharge, a debtor(s) must meet the chapter 7 criteria. The general chapter 7 criteria is as follows:
1. The debtor does not own any assets with a substantial value, unless he understands that the trustee may sell the asset;
2. The debtors’ monthly average gross household income, for the six months prior to the filing, is less than the average monthly gross income of a household of that size, in New Jersey; However, in the event that the debtor’s household income in more than the average, he may still meet this criteria, if his allowable necessary and reasonable household expenses, exceed his household’s income.
3. The debtor’s projected household net monthly income is less than the household’s reasonable and necessary monthly expenses.
4. The reason for the debtor’s financial situation must have been unintentional
The following information pertains to a New Jersey chapter 13 case.
Only a person may file for chapter 13 bankruptcy protection in New Jersey. A person, corporation, partnership, limited liability company and a small corporation may not file for chapter 13 bankruptcy protection. Chapter 11 is the appropriate reorganization chapter for such entities in New Jersey. Additionally, a chapter 13 debtor must earn regular income, that is sufficient to make the monthly trustee payments.
A New Jersey Chapter 13 bankruptcy has a debt limit that is distinguished from a chapter 11 bankruptcy case. A debtor can file for New Jersey chapter 13 bankruptcy protection, if their unsecured debt is less than $394,725 and their secured debt is $1,184,200. Please note that said figures periodically change. Unsecured debt is debt that is not connected to any property, such as a personal loan, credit card debt, and medical debt. Secured debt is debt that is attached to property, such as a mortgage and a car loan.
Although extremely unusual, if a person’s debt is in excess of the above stated amounts, he may be able to reorganize through a chapter 11 bankruptcy case. Please note that an experienced attorney can argue that certain debt may be secured and/or unsecured based on various circumstances.
A New Jersey chapter 13 case requires a person to make monthly payments to a trustee. The amount of the payment, depends on the person’s household income, expenses and the reason for the filing.
The most typical reasons for a chapter 13 bankruptcy filing are as follows:
1. Pay funds to creditors as a result of not meeting the chapter 7 criteria;
2. Saving a house from foreclosure by paying back the arrears, or seeking a loan modification;
3. Saving an auto from repossession, by paying the arrears, or otherwise making payments on the auto.
4. Avoid eviction by paying the rental arrears through the bankruptcy plan;
5. Paying a debt that is not “dischargeable” in a chapter 7 case.
Contact the NJ. Bankruptcy lawyer, Robert Manchel at 866 503 5644.

New Jersey Attorney Explains How New Jersey Bankruptcy Deals With A Personal Loan

A personal loan is typically referred to as a loan that is not connected to property. In words, the person giving the loan does not ask for an interest or a lien in any property. A person or company can provide a personal loan. A bank loan that is not contingent on pledging property for the funds, is considered a personal loan. A personal loan does not require a contract to enforce the agreement. For example, an agreement to lend a friend money, without a written agreement, is still a legally binding contract, that must be paid. However, enforcing the oral agreement, without the written contract may be an issue.
The creditor that lent the funds, in connection with the personal loan, is the creditor of the person who received the loan. The person who received the funds is the debtor. A personal loan debt is called unsecured debt in a New Jersey bankruptcy case, as the debtor did not pledged property for the loan, such as a car or a boat, etc. Other types of unsecured debt is credit card debt.
A debtor may be permitted to discharge and eliminate the personal loan (unsecured debt) debt in a chapter 7, if the debtor meets all of the chapter 7 criteria. Discharge means to forever eliminate the debt from collections. I have written numerous blogs explaining, in detail, the chapter 7 bankruptcy criteria of discharging unsecured debt in a New Jersey.
I explained, in numerous blogs, how the New Jersey chapter 13 process works regarding unsecured debt. In short, if a person does not own real estate or personal property having a substantial value and has insufficient income capable of paying the unsecured debt, the debtor can also discharge the personal loan in a chapter 13 case. A chapter 13 discharge means that the debt need not be paid. In certain circumstances, the debtor must pay some or all of the personal loan, through a monthly trustee payment.
Robert Manchel may be contacted at 866 503 5644 to discuss your NJ. bankruptcy questions.

New Jersey Attorney Explains How A Charitable or Religious Donation or Contribution is Handled in Bankruptcy.

In a New Jersey chapter 13 bankruptcy case, the debtor must pay all of their monthly disposable income, after allowable expenses, towards their general unsecured debt. “Unsecured debt” is debt that is not related to any property, such as credit card debt. The allowable expenses must be necessary and reasonable, such as food, clothing, utilities, transportation, etc. A reasonable and necessary expense does not include a payment on a recreation vehicle that is used for vacations.
The religious Liberty and Charitable Donation Protection Act of 1998 amended section 1325(b) of the bankruptcy code, thereby permitting a monthly allowable expense for religious and charitable donations. Section 1325(b) relates to payments in a chapter 13 bankruptcy case. The act specifically permits such a contribution in an amount not to exceed 15% of their gross monthly income. However, the contribution must be paid to a qualified religious or charitable organization.
A New Jersey chapter 7 bankruptcy case has certain criteria that allows a person to discharge their debt. The chapter 7 bankruptcy law requires a person’s household net income to be less than their reasonable and necessary expenses, that are required to live. Such expenses are the same as the chapter 13, as explained above. As a result of the aforementioned amendment, chapter 7 trustees also allow the same monthly contribution in determining disposable income.
Depending on the NJ. bankruptcy trustee, a debtor may be permitted to make a larger monthly contribution if he can establish a history of making such payments. Also, depending on the trustee, the debtor may be required to establish proof of any contributions.
Contact Robert Manchel, esq. at 866 503 5644 to discuss your NJ. bankruptcy law questions.

Attorney Explains How Financed Jewelry Is Treated In A New Jersey Chapter 13 Bankruptcy Case.
Typically, a person will file a chapter 13 bankruptcy case for issues other than jewelry financing. However, when a New Jersey chapter 13 is filed, the debtor must include on the petition any and all debt and assets. Additionally, the debtor must handle this issue per the bankruptcy code, in addition to all of the other issues.
A chapter 13 bankruptcy case requires a monthly trustee payment for 36 to 60 months. The debtor must pay all of his household disposable income to the trustee, each month, after payment of all reasonable and necessary expenses. If a debtor has sufficient monthly disposable income to pay a portion toward their unsecured debt, such as credit card debt, the debtor must make such payments. The application of the necessary and reasonable expenses that a debtor uses to determine his disposable income, must, in fact, be necessary and reasonable. In other words, a debtor cannot use a $3,000 monthly food budget for a household of 2. Also, a debtor cannot use an $800 finance payment on their third car, for a household of 2.
Each trustee may handle the reasonable and necessary expense issue differently. The trustee’s dilemma is whether they will permit the monthly finance expense of keeping a ring, which reduces the debtor’s disposable income. In other words, will the trustee allow the debtor to make jewelry finance payments thereby reducing the funds that would have been available to other creditors. A New Jersey chapter 13 trustee may either disallow the payment, or permit the payment, if the debtor reduces the amount of another expense. If the trustee disallows the payment, the debtor may not make the jewelry finance payments and/or keep the jewelry. If the trustee disallows the payment, the debtor will likely not be permitted to keep the jewelry.
If the New Jersey chapter 13 bankruptcy trustee permits the debtor to keep the jewelry and make the finance payments, there are various options as to how the payments may be made. The first option is to make the monthly payments directly to the finance company with no portion to be paid through the chapter 13 bankruptcy plan. The second option permits the debtor to pay the entire balance due, plus a reasonable interest rate, entirely through the bankruptcy plan. If the debtor is behind with his finance payments, he may be permitted to pay the arrears through the bankruptcy plan, with the future monthly payments to be paid directly to the finance company. Also, under certain situations, the debtor may be permitted to keep the jewelry by paying back only the value of the jewelry, plus a fair interest rate, through the bankruptcy plan.
Please note that there are numerous exceptions to the above issues.
You may contact Robert Manchel at 866 503 5644 to discuss your NJ. bankruptcy law questions.