Robert Manchel

In a New Jersey chapter 7 bankruptcy case, the trustee may only sell the debtor’s property if the house has substantial equity in excess of the mortgage payoff. Therefore, if the debtor’s house has substantial equity, he would avoid this issue by not filing a chapter 7 bankruptcy case.
Upon the filing of a chapter 7, the mortgage company cannot commence or continue a foreclosure action against the debtor’s house. However, by court motion, the mortgage will likely be granted permission from the bankruptcy court to commence or proceed with a mortgage foreclosure action if the debtor is in default with the mortgage payments.
The mortgage company’s request to the court for permission to proceed with the foreclosure action is called a Motion for Relief from the Automatic Stay. Typically, the mortgage company would file such a motion about one to two months after the bankruptcy filing. The motion would be granted about 30 days after the filing of the motion.
The bankruptcy filing has absolutely nothing to do with the mortgage company’s right to commence or pursue a foreclosure action. The mortgage company may only commence or proceed with a foreclosure action if the mortgage is in default. A foreclosure action is a state court action, not a federal or bankruptcy type action.
In the event that the mortgage company is permitted to proceed with the foreclosure action, the action commences or continues at the point of the procedure where the action ceased at the time of the bankruptcy filing. After the mortgage company is granted permission to proceed, the bankruptcy case has no impact on the mortgage company’s foreclosure proceedings or the debtor’s your rights regarding the mortgage and possession of the house. This means that the debtor may continue to reside in the property until the completion of the foreclosure action. Additionally, the debtor has the right to work out a loan modification as well.
Please contact New Jersey Chapter 7 Bankruptcy Lawyer Robert Manchel at 1 (866) 503-5655 to discuss the effects of a bankruptcy filing on a mortgage foreclosure. Call to discuss your personal situation and the potential for bankruptcy protection.

In a chapter 13 case, the debtor must make monthly payments to a trustee for 36 to 60 months. The monthly trustee payment is based on numerous criteria. A chapter 13 case is typically comprised of different classes of debt (i.e. priority, secured, unsecured). Certain type of debt such as priority (i.e. child support, certain taxes) must be paid through a chapter 13 bankruptcy plan, no matter the circumstances. The debtor must pay this debt and prove sufficient monthly disposable income to pay such debt. Payment of this debt cannot be eliminated.
A substantial part of the bankruptcy code deals with the various analyses that determine the portion of the unsecured debt (i.e. credit card debt) that must be paid. A debtor must pay no less than their unexempt equity in property towards the aggregate amount of unsecured debt, through monthly bankruptcy installments. In other words, if the debtor has real estate or personal property with a substantial value, the debtor is required to pay towards the total unsecured debt over the plan’s life- the property’s fair market value minus bankruptcy exemptions. It is not typical that any debtor has property with substantial value. However, generally, in the event that a debtor’s monthly trustee payment is based on this criteria, the monthly payment can never be modified to reduce the amount that is to be paid to the unsecured creditors.
Also, the debtor must pay no less than all of their monthly disposable income to the trustee, unless payment of 100% to all unsecured creditors will require a monthly payment of less than all of their monthly disposable income. Monthly disposable income is net income minus necessary expenses- such as mortgage, food, clothing, transportation, utilities, etc. Monthly disposable income is based on two criteria. If a debtors’ payment is based on monthly disposable income and there is a substantial change in circumstances regarding income or expenses, the monthly payment may be modified to the changed monthly disposable income.
A debtor can include a certain amount of secured debt in a chapter 13 bankruptcy case. For example, a debtor may save their house from foreclosure by curing the arrears through the bankruptcy plan, while maintaining monthly payments directly to the mortgage company. A debtor may save their auto from repossession, by paying their auto arrears through the bankruptcy plan. Typically, if a debtor is no longer able to afford the trustee payments that include mortgage or auto finance arrears, he may wish to surrender the property and reduce the monthly payment. However, the debtor must continue to pay all disposable income through the plan.
You may contact Bankruptcy Lawyer Robert Manchel at 1 (866) 503-5655 to discuss your chapter 13 payments in NJ.

The number of months of a chapter 13 bankruptcy plan depends on numerous factors, including, the value of assets, amount of monthly disposable income, and the reason for the filing. The bankruptcy code requires a debtor to pay no less than all monthly disposable income to a trustee for at least 36 months. If the debtor’s household income for the six months prior to the filing is more than the average income of a household of the same size in New Jersey, most likely the plan will be 60 months. In other circumstances, the length of the plan may be between 36 to 60 months.
If the debtor has property worth a substantial value that is in excess of their bankruptcy exemptions and costs to sell the property, the amount of the unexempt property value must be paid to the trustee over the life of the bankruptcy plan. Although unusual, if the debtor has personal property or real estate that has substantial value, the debtor will likely be required to pay additional funds to the trustee over the life of the bankruptcy plan. Under this scenario, the debtor may require a longer monthly plan to allow for the additional funds that must be paid. The debtor may wish for a plan longer than 36 months to allow for payment of these funds over a longer period.
Also, a debtor may wish to file a chapter 13 case for a number of reasons, such as to cure mortgage, auto, child support, or income tax arrears. The funds that are required to cure certain arrears may require substantial payments that will be reduced by extending the months of the plan. Under this Scenario, assuming that all disposable funds are paid to the trustee on a monthly basis, the debtor may wish to extend the months of a plan, to a period between 36 to 60 months.
The numerous issues related to a chapter 13 are involved and the above explanation is extremely simplified. In fact, the number of months of a plan is affected by numerous factors, and the amount of months of a plan may be modified.
Please contact NJ Bankruptcy Lawyer Robert Manchel at 1 (866) 503-5655 to discuss your chapter 13 bankruptcy questions.