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New Jersey Bankruptcy Blog

NJ Bankruptcy Attorney Explains What Someone Can Accomplish When Filing a Chapter 13

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What can I accomplish with a Chapter 13 bankruptcy filing?
A chapter 13 requires monthly trustee payments. The payments must be made for at least 36 months and no more than 60 months. The amount of the payments must be no less than the debtor’s monthly disposable income.
Why would a person file a chapter 13 and not a chapter 7?
If a person does not meet the criteria for a chapter 7 and has too much monthly disposable income, he must pay back a portion of the debt. Also, an individual may wish to save a house or auto from repossession / foreclosure, which requires a monthly payment to a trustee. Additionally, a person may wish to pay a creditor through a chapter 13 plan, that is not dischargeable in a chapter 7. Furthermore, there is certain debt that may be dischargeable in a chapter 13 that is not dischargeable in a chapter 7, such as certain type of marital debt. Similar to a chapter 7, immediately upon the filing, no creditor may pursue the debtor for the collection of any debt.
A chapter 7 does not prevent repossession of an auto or foreclosure of a house if the person is behind with their monthly payments. A chapter 13 can prevent a repossession and a foreclosure action, by paying back the payment arrears, through the monthly trustee payments, while continuing to make regular monthly payments on the auto and/or house. When the chapter 13 is completed, the pre filing arrears should be cured and the property is no longer in danger of loss.
Also, in New Jersey, a chapter 13 bankruptcy can permanently strip away a second mortgage from the debtor’s house. This is called avoiding the lien. A debtor can avoid the second mortgage if the present market value of the house is less than the mortgage payoff of the first mortgage. A New Jersey chapter 7 case does not permit second mortgage lien avoidance.
Based on various factors, a person may be able to pay their entire auto balance, plus a fair rate of interest, through a bankruptcy plan. This can reduce your monthly auto payment by lengthening the years of the financing. Also, under certain circumstances a person can keep their auto by paying the value of the auto, plus a fair rate of interest, through the plan. This will allow a person to keep the auto and reduce the amount that is paid.
In addition to the above, a person may be able to eliminate all or a portion of their unsecured debt (ie. credit card debt), depending on their monthly disposable income and asset values.
The Law Offices of Robert Manchel limits their practice to bankruptcy law. Please contact New Jersey bankruptcy attorney Robert Manchel at 1 (866) 503-5655, for questions and more bankruptcy information.

NJ Bankruptcy Attorney Explains What Someone Can Accomplish With A Chapter 7 Filing

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If a person meets the chapter 7 criteria, he can discharge all debt except the following type of debt: students loans, (unless undue hardship); debt incurred by fraud; certain taxes; condo fees due after the filing and before transfer of the property, etc.
Also, after a discharge, a judgment lien cannot attach to a house purchased after the discharge. Although a discharge does not eliminate the judgment lien from the debtor’s present house, in most cases the lien may be reduced or eliminated by filing a separate motion with the court, requesting same.
Typically the debt that is discharged is unsecured debt, such as credit card debt and personal loans. Discharging a debt means that the creditor may never attempt to collect the money from the debtor personally. Secured debt (i.e. auto financing, mortgage) may be discharged as well. However, if the monthly payment is not made after the filing, the creditor can apply to the state court to repossess or foreclose on the property and take the collateral, such as a house or car.
In addition to the discharge and the fresh start aspect of a chapter 7 case, the law permits the debtor to keep a certain amount of personal property and real estate. In the vast majority of cases, the court or trustee will not take your property, unless the value of any property is substantial. The trustee will only take an auto or a house if the value is substantially more than the payoff of the mortgage / financing. If a debtor is able to fully exempt the equity of any property, the trustee or court will not sell the property.
Immediately upon the filing of any bankruptcy case no creditor may commence or pursue an action to collect a debt. This means that the following actions must stop immediately: wage garnishments; law suits for collection of money; avoid utility termination; require utility restoration; bank account levy; attempt to repossess automobiles; mortgage foreclosure actions; must restore license if suspended due to state surcharges. Bankruptcy only deals with money and money related issues.
Robert Manchel is an experienced New Jersey bankruptcy lawyer whose practice focuses exclusively on bankruptcy law. Please call Robert Manchel at 1 (866) 503-5655 to discuss your situation and how bankruptcy protection may be applicable to your personal situation.

Bankruptcy Options For Saving House From Foreclosure

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How can bankruptcy save my house from foreclosure
There are three options, involving a chapter 13 case.
Option One (cure mortgage arrears)
Pay the total amount that the debtor is behind with their mortgage over a period of 36 to 60 months., in addition to making regular monthly mortgage payments. The debtor may be unable to make such payments. In other words, if a person is $40,000 behind with their mortgage payments, this will require a monthly trustee payment, not including costs and expenses, of about $666.00, plus future monthly mortgage payments. The debtor is able to keep his house and reinstate the mortgage, if he completes all required payments, that are due through the bankruptcy case and directly to the mortgage company.
Second option (pursue loan modification)
Requesting a loan modification through a chapter 13. Typically, the mortgage company will allow six months for the loan modification process. In this situation, the debtor is puttihg all of their eggs in one basket. If the mortgage company approves the loan modification, the debtor is able to save their house. Under this option, the debtor must make the regular monthly mortgage payments or possibly less, in addition to a monthly trustee payment. The trustee payment must be a reasonable payment based on the debtor’s disposable income and asset values. If the loan modification is denied, the debtor will, likely, be unable to save his house. A person may chose this alternative, solely, if he is unable to pursue both options.
Third option (pursue loan modification and cure mortgage arrears)
A person may pursue both options explained above. If the loan modification is denied, he may save his house by completing the required payments.
Please note that this is an extremely simplified explanation of these matters, which vary greatly based on different circumstances and finances.
Robert Manchel is a New Jersey bankruptcy attorney, who may be reached at (866) 503-5655.

New Jersey Bankruptcy Attorney Discusses What Happens If Someone Is Unable to Attend Their Bankruptcy Hearing

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What happens if someone is unable to attend the bankruptcy hearing?
The bankruptcy code requires every debtor (person filing) to attend a Meeting of Creditors Hearing, which is also called a 341(a) hearing. The hearing is held in a room, other than a court room, before the trustee, who oversees the case.
In the event that a debtor is unable to attend the hearing due to circumstances, such as a physical disability or incarceration, the court may permit the debtor to proceed with the hearing without their physical appearance. Depending on the reason for the inability to attend the hearing, the trustee may require the debtor to file a specific request with the court, asking for a court order allowing the debtor to proceed with the hearing by other means. Alternative means of proceeding with the hearing, without a physical appearance, could include a telephone conference, written interrogatories, or by way of another person’s testimony on behalf of the debtor, pursuant to a power of attorney.
Assuming that the debtor has a legitimate reason for his inability to personally attend the hearing, the debtor is generally permitted to conduct the hearing by a separately scheduled conference call, with the trustee and the debtor’s attorney. Although unusual, the debtor may be permitted to proceed with the hearing through certified written answers to the trustee’s questions, called interrogatories. If the debtor is unable to communicate, it may be possible for another person to answer the questions, on behalf of the debtor, by way of a power of attorney. Inability to speak English does not excuse the personal attendance of the debtor.
At the hearing, the trustee is required to validate the debtor’s identity, by way of two valid pieces of ID. The trustee requires a photo identification card, such as a drivers’ license, and proof of the debtor’s social security number. In the event that the debtor completes the hearing by conference call, the debtor’s identity may be confirmed by the debtor’s attorney’s certified statement, reflecting that the attorney personally viewed the two forms of id. The attorney’s signed statement and a copy of the two forms of ID., must be forwarded to the trustee.
Robert Manchel is a New Jersey lawyer who limits his practice to bankruptcy and foreclosure resolution. He may be contacted at (866) 503-5655 to discuss your filing options for bankruptcy protection.

NJ E-ZPass and Bankruptcy

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In general, debt that is owed to NJ E-ZPass is considered and treated as unsecured debt in bankruptcy. Unsecured debt is debt that is owed to a creditor that is not holding a lien on any property, such as credit card or personal loan debt.
This means that a person who is entitled to a chapter 7 discharge, could discharge (eliminate) this debt. E-ZPass debt is treated as unsecured debt in a chapter 13, which means that any unsecured debt that is not required to be paid under the bankruptcy code, is eliminated and discharged.
I have never experienced any difficulty in discharging E-ZPass debt. However, debt that is obtained through fraud may not be discharged. Therefore, theoretically, if E-ZPass successfully contested a discharge as a result of fraud, the debt would not be discharged and would continue to be due and owing at the completion of the case. In other words, if E-ZPass proves, in court, that the debtor incurred the toll charge with no intention of ever paying the toll, the charge would not be discharged. Please note that I have never heard of E-ZPass contesting a discharge. Also, the cost of pursuing such an action, would likely deter the action altogether.
Robert Manchel is a New Jersey bankruptcy lawyer, who may be contacted at (866) 503-5655.

Payday Loans Are Explained by A NJ Bankruptcy Attorney

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Recently, payday loans are becoming very popular.
Typically, a payday loan (creditor) requires the borrower to approve the creditor’s right to withdraw funds directly from the borrower’s bank account.
At some point, after borrowing additional funds, the cost of the loan, including interest and fees, may spiral out of control. Thereafter, the creditor may continue to withdraw more and more funds out of the debtor’s bank account, which is unmanageable. In the event that payments are not timely paid, the creditor’s representatives’ communications may be harassing and unrelenting. At this point, the borrower may look for bankruptcy relief.
Typically, a payday loan is an unsecured loan that may be discharged like any other unsecured (ie. credit card) debt, assuming the borrower meets the necessary bankruptcy criteria. Also, immediately upon the bankruptcy filing, the Payday loan creditor is prohibited from collecting the debt, which means that the creditor may not withdraw any funds from the debtor’s bank account.
Robert Manchel, a NJ bankruptcy attorney, will answer your bankruptcy questions at 1(866) 503-5655. Schedule a free consultation to learn how bankruptcy protection may be applied to your personal situation.
Disclaimer: The above information is based on my experience in communicating with a number of people. Obviously, the manner in which creditors handle their collections varies. I am not suggesting that any creditor is acting in a manner that is illegal and/or unethical.

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    Manchel
    New Jersey
    Bankruptcy Law

    This web site is designed to provide general information regarding the bankruptcy laws. The bankruptcy laws are complex and may be applied differently, in each case, depending on the particular facts. There may be numerous exceptions and variations for each law and rule. Do not rely on the information provided in this web site. If you are considering filing for bankruptcy protection, you should consult with an experienced NJ bankruptcy lawyer. We are a debt relief agency. We Help people file for bankruptcy relief under the bankruptcy code.

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