Chapter 7 Bankruptcy

Typically, someone can keep all of their property in a chapter 7 New Jersey bankruptcy without the trustee selling any property. The loss of any property by way of the sale by a trustee is very unusual. Also, prior to filing a chapter 7 the person filing (debtor) should know, based on the value of his property, that the trustee will sell a particular piece of property. The sale of any property should never be a surprise.
A trustee will only sell property if the particular property is very valuable and may not be fully exempt. However, if a debtor owns any property with a substantial value, the trustee may be permitted to sell such property. The fact that someone else owns the property jointly will not prevent the trustee’s right to sell. However, the non filing joint owner will be paid their ownership interest in the property.
Example:
A trailer is jointly owned by a New Jersey chapter 7 debtor and a person who did not file a bankruptcy case.
Trailer value is $75,000.00;
Loan financing balance is $5,000.00;
Cost of sale is $8,000.00
The amount received by the bankruptcy trustee after the sale is $62,000, which is the balance after paying the costs and the loan balance. The non filing joint owner would be paid $31,000, which is his one half interest in the trailer.
Now, lets assume that the debtor can apply $10,000 of his bankruptcy exemptions towards the trailer in a New Jersey bankruptcy. This means that the trustee must pay the debtor $10,000.00, which is his exemption. The trustee would be paid his commission, with the balance to be paid to the creditors, pursuant to priority, under the bankruptcy code.
Robert Manchel is an experienced lawyer in New Jersey, that limits his practice to bankruptcy and foreclosure resolution. Mr Manchel may be contacted at (866) 503-5655.

Every debtor must complete a financial management course and file the appropriate documents with the court, regarding such course, no later than 60 days after the initial date of the first scheduled Meeting of Creditors’ Hearing.
The course takes about 2 1/2 hours and may be completed online or by telephone. The subject matter of the course relates to how to proceed financially after obtaining a chapter 7 discharge. More specifically, the course explains how the discharge effects your credit report, how to create a budget and how to avoid future financial issues. The course also explains how to avoid scams relating to your credit.
If the debtor fails to complete the course and file the appropriate documents with the court in a timely manner, the debtor’s case will be closed without a discharge. This means that the debtor will still owe all of the debt and the bankruptcy filing will not have benefited the debtor. However, typically, the court will allow the debtor to obtain a discharge out of time, if the debtor completes the course and obtains the course certification.  Under this scenario, the debtor must file a Motion with the court requesting to reopen the case, file the documents, and request the discharge.
At the time this blog was written, the court costs to reopen a chapter 7 case is $260.00, which is totally ridiculous.
If you need a bankruptcy lawyer in NJ, Robert Manchel, is interested in assisting you with your bankruptcy questions, at 1 (866) 503-5655.

Every debtor must complete a personal financial management course, that is provided by a New Jersey Bankruptcy Court approved credit counseling company. The course must be completed, with a certification filed with the court, within 60 days from the date of the first scheduled Meeting of Creditors’ hearing date.  The list of approved counseling agencies may be obtained through a link from the home page of the NJ. bankruptcy court’s website.
The course may be taken through the web or by way of a telephone conference. The course is not a pass/fail test, but rather, an approximate 3 hour course, informing the debtor as to how to deal with their life and finances post bankruptcy. The counseling agency provides a certificate reflecting that the course has been completed. Thereafter, the debtor must complete and sign another certification that reflects the counseling agency’s certificate number, which must be filed with the court.
If the debtor has not filed the appropriate certificate with the court, in a timely manner, their case will be dismissed. Thereafter, the debtor will likely be permitted to take the course, file a Motion to Reopen the Case, and file the certificate, to obtain a discharge. However, the cost of reopening a chapter 7 case, at the time of the this blog is $260.00.
Robert Manchel, a bankruptcy lawyer in New Jersey, may be contacted at 1 (866) 503-5655 to discuss your options for bankruptcy protection.

A debtor may personally request that the bankruptcy discharge be denied by executing a written waiver that is approved by the court.
This is extremely unusual. Typically, an individual would only agree to such a waiver if they believed that the court would not have granted them a discharge.  For example, a debtor may prefer to sign a waiver rather than defend a Trustee’s Complaint requesting to deny the debtor a discharge. Also, a debtor may prefer to avoid the publication of embarrassing information that may be related to a creditor or trustee’s court submissions regarding a discharge contest.
It may be possible for only one joint debtor to execute the waiver, thereby permitting the other joint debtor to receive a discharge.
If you need a bankruptcy attorney in NJ, Robert Manchel may be contacted at 1 (866) 503-5655, to discuss any questions you may have regarding bankruptcy protection.

Prior Chapter 7 Discharge
A debtor is not entitled to a chapter 7 discharge, if he has received a chapter 7 discharge of a prior chapter 7 case that was filed less than 8 years before the filing of the subsequent case. The time is measured from the date on which the prior case was filed with court to the date of the filing of the subsequent case, and not the discharge date of the prior case.
A debtor is not entitled to a chapter 7 discharge if the debtor received a chapter 13 discharge within 6 years, from the filing of the prior chapter 13 case.  In other words, to obtain a discharge, the subsequent chapter 7 must have been filed 6 years after the filing of the prior chapter 13 case. However, the exception to the six year time period rule is applicable if the following criteria was met in the prior chapter 13 case:
1. the debtor paid 100% of the allowed unsecured claims; or
2. the debtor paid 70% of the allowed unsecured claims, the debtor’s plan was proposed in good faith, and the debtor applied his best effort to pay the unsecured debt.
Robert Manchel, a NJ bankruptcy attorney, can be contacted at 1 (866) 503-5655 to discuss your options for bankruptcy protection.

Some of our previous posts in the series stated certain acts or behavior of a debtor that may cause a person to file an objection to a chapter 7 discharge, which could possibly result in the denial of a discharge.  A general description of these acts or behavior include the debtor’s failure to cooperate with the bankruptcy process and the debtor’s fraudulent intent regarding the bankruptcy petition information, such as assets, income, etc.
The debtor may also be barred from a chapter 7 discharge, if they committed any of the above referenced wrongful acts, during their case, or during the one year prior to the filing of their case, in connection with a separate bankruptcy case, that involves an insider’s bankruptcy case. An insider is a person, corporation, or entity, that has a special relationship with the debtor, such as the following: relative; partner; partnerships and corporations, of which the debtor is the director, officer or person controlling the business. For example, a father is the insider of his son, the debtor, who filed for bankruptcy. If a corporation filed for bankruptcy, the director of the corporation would be considered an insider.
Although this section may be applied to a personal consumer debtor, the main reason for the section is to prevent an individual to benefit from his wrongful acts related to a separate bankruptcy case, involving his bankrupt business.  For example, if the director of bankrupt corporation commits fraud, in connection with that bankruptcy case, he may not file subsequent bankruptcy case and obtain a chapter 7 discharge.
Robert Manchel, a bankruptcy attorney in New Jersey, can be contacted at 1 (866) 503-5655 to discuss your situation and how filing for bankruptcy protection may benefit you personally.