General Bankruptcy Information

Immediately upon the filing of any bankruptcy case, no creditor may contact the person filing bankruptcy (debtor) by any means.
Immediately upon the bankruptcy filing, the Automatic Stay Provision of the bankruptcy code, is in effect. The Automatic Stay prohibits any and all communication between the creditor / debt collector and the debtor.
This means that the creditor may not attempt to collect a debt by letter, voice mail, telephone, or though a third party. Any intentional or repeated violations, may permit the debtor to obtain sanctions against the creditor or debt collector, from the bankruptcy court.
The bankruptcy court generates notices to every creditor that was listed on the bankruptcy petition. The creditor should receive the bankruptcy notice within ten days of the filing. Typically, every creditor and debt collector knows that after the bankruptcy petition is filed, they are prohibited from communicating with the debtor.
However, companies may continue to violate the Automatic Stay based on their failure to properly note their file of the bankruptcy filing.
Robert Manchel, an experienced New Jersey Lawyer who limits his practice to bankruptcy, is available to answer your questions regarding bankruptcy protection at 1 (866) 503-5655.

There are a number of reasons for opening a closed bankruptcy case.
After a discharge, a creditor is not permitted to attempt to collect a debt from the debtor. Any attempt of a creditor to collect a debt after discharge is a violation of the injunction provision of the bankruptcy code. A debtor may wish to open a bankruptcy case and file an Adversary Complaint against the creditor for such a violation, in addition to a request for sanctions. A creditor’s attempt to pursue the collection of a discharged debt is typically, a violation of the Fair Debt Collection Practices Act. The complaint may include an additional count for such a violation.
After a discharge, the debtor may wish to open a bankruptcy case for the purpose of requesting additional relief that was not requested while the case was open. An example would be to open a case to request an order to avoid or eliminate a lien on property. In certain situations, the dischargeability of certain debt is not clear, such as an income tax liability for a specific year. An individual may wish to open the case and file the appropriate documents, requesting an order reflecting that certain tax debt is dischargeable.
A bankruptcy case may be opened to include a creditor and provide them with the proper notice. A trustee may wish to open a case to revoke the discharge in the event of a debtor’s fraud. Also, a creditor that was not notified of the bankruptcy case, may wish to open a case to request an order reflecting the nondischargeability of the debt due to the creditor.
There is no specific limit as to the number of times a case may be opened. A case may be opened a number of times in the event that creditors repeatedly violate the injunction provision.
Robert Manchel is a bankruptcy attorney in New Jersey that is available to answer your questions regarding bankruptcy protection at (866) 503-5655.

Some people believe that a bankruptcy filing is published in a newspaper. However, this is not true. A bankruptcy filing is not published anywhere. Many people derive this belief because of the weekly sheriff sale notices that are published in newspapers. Also, people cannot obtain information about a bankruptcy filing from a google search.
Even though a bankruptcy filing is a public record, anyone that wishes to obtain the information must specifically request the information from the particular bankruptcy court. Sensitive information about a debtor or their family may be eliminated from the record and a person’s access.
Any creditor that is listed on the bankruptcy petition will receive general notice from the bankruptcy court, about the filing and their rights. If a chapter 13 case is filed, a copy of the plan will be provided with the notice. However, the petition is not forwarded to a creditor.
The debtor’s credit report will reflect the bankruptcy filing. Also, the debtor’s bankruptcy may or may not be reflected on the credit report of a person that owes a joint debt with the debtor.
New Jersey Bankruptcy Attorney Robert Manchel is available to discuss your financial situation and options for bankruptcy protection at (866) 503-5655.

The 2005 amendments to the bankruptcy code require individuals to obtain a credit counseling briefing from a state approved non profit budget and credit counseling agency. The counseling is about 1 and ½ hour and can be completed by telephone or internet. The counseling must be completed during the 180 period prior to the filing and costs approximately $50.00. The counseling is intended to assist the individual with budgeting.
An individual who is incapacitated, disabled, or on active military due in a combat zone, need not complete the briefing. Incapacity means that the person is so impaired due to mental illness or mental deficiency, that the person is incapability of realizing or making rational decisions with regard to their finances. Disability means that the person is physically impaired to the point that after reasonable effort, he is unable to participate in an in-person, telephone, or internet briefing.
After the bankruptcy filing and prior to the discharge, each bankruptcy debtor must complete an instructional course concerning financial management. The bankruptcy code allows for an exception based on the same criteria of the credit counseling briefing, that is explained above.
The bankruptcy code was amended in 2005 to include an additional criteria for bankruptcy debtors. The criteria is called the “Means Test” or “Current Monthly Income Test”. This test determines whether the debtor’s household has disposable income. The household expenses are generally limited to the allowable expenses permitted under the IRS Code. The amendments specifically allow the debtors to use as an expense actual, reasonable, and necessary expenses for the care and support of a chronically ill or disabled household member.
Additionally, the 2005 amended code provides protections from the “Current Monthly Income Test” for disabled veterans, who incurred debt primarily during a period when they were on active duty.
Please call the New Jersey bankruptcy lawyer Robert Manchel at (866) 503-5655 to discuss your bankruptcy protection options.

The bankruptcy code specifically prohibits the government from discriminating against an individual due to the filing of a bankruptcy case or based on a debt that was discharged or included in a bankruptcy case. Also, the government cannot discriminate against someone who is associated with another who filed for bankruptcy protection. More specifically, the government cannot discriminate against a debtor with regard to employment, including termination of employment and denial of employment.
The government cannot deny a person a license or permit based on having filed for bankruptcy protection. Also, the government may not discriminate against a debtor in connection with any benefits that are provided by the government, such as housing, disability, unemployment, etc.
The government is not permitted to deny a person a government student loan or student grant based on having filed for bankruptcy. This also, includes any entity that provides a student loan that is guaranteed or insured by the government.
A utility company may not discriminate against an individual who has filed for bankruptcy, with regard to terminating or restoring service.
The bankruptcy code also prohibits private employers from terminating employment or discriminating against individuals based on the filing of bankruptcy case. However, since the code does not specifically prohibit the denial of employment for private employers, as it does regarding government employers, some courts believe that the code does not prohibit a private employer from denying employment based on having filed for bankruptcy.
Please contact NJ bankruptcy attorney Robert Manchel at (866) 503-5655 to discuss your rights.

Prior to Filing
Prior to filing a bankruptcy petition, debtors must obtain a “Pre-Bankruptcy Screening” or “Pre-Bankruptcy Counseling” from a credit counseling agency approved by the U.S. Trustee’s office. The agency issues a certificate which is provided to the debtor’s attorney to file with the bankruptcy petition. This certificate is valid for six months. It is best to meet with an attorney prior to obtaining the certificate in order to make sure that a bankruptcy filing is appropriate as well as to determine when the best time would be for filing. There are often considerations which can have an effect on the best time for a party to file, including income and asset issues.
Along with the certificate, the attorney will collect information from the debtor on his income, assets, liabilities, and expenses to prepare the petition to file on the debtor’s behalf. The law requires the debtor to submit proof of his or her income and to provide copies of their federal tax returns upon filing.
The attorney will need fairly detailed information on the assets owned by the debtor in order to determine if the assets are “exempt” under the Bankruptcy Code. Assets that are exempt are those that the debtor is able to retain. The attorney will help the debtor decide whether to file using state or federal exemptions.
This will depend on the amount and type of assets the party owns and what it is most important for him to protect. In general, the federal Bankruptcy Exemptions tend to be generous enough that the majority of Chapter 7 filers do not have to turn over any of their assets. For example, under the federal bankruptcy exemptions, all qualified retirement savings (pensions, IRAs 401(k)s are exempt.
There are exemptions available for a certain amount of equity in a home, for value in a car, for household goods and furnishings, and then there is a federal “wild-card” exemption which can be applied to any property up to a certain amount.
The attorney will also collect information on the debts owed. There are three major credit reporting agencies from which debts can be determined – Transunion, Experian, and Equifax. All through credit reports can be obtained at www.annualcreditreport.com at no charge. It is also important to let your attorney know of any other debts which might not appear on the credit report, such as loans from friends or relatives, medical bills and any other debts owed.
In order to determine if a debtor qualifies for a Chapter 7 filing, the attorney will evaluate his or her income and expenses. To qualify, a debtor’s income must either be at or below the median income of the geographical area of the country in which he or she lives – or – the debtor must have necessary but extraordinary expenses that qualify a debtor with higher income. If a debtor’s income is at or below the mandatory figures, they qualify for a Chapter 7 filing.
If their income is higher but they also have substantial and necessary medical expenses, they may still qualify even with the higher income. If the debtor does not qualify for a Chapter 7, he or she can discuss the ramifications of filing a Chapter 13 petition with their attorney.
The most important thing an individual can do prior to filing bankruptcy is to meet with a qualified attorney that can lead him or her through the process so that an initial determination can be made as to whether bankruptcy is the correct step.
Taking the time to make sure that the attorney as all of the needed information can make the entire process one that is much less stressful for the debtor and helps to make sure that the debtor emerges from bankruptcy with the “fresh start” the law was enacted to provide.
If you have questions regarding bankruptcy, call the bankruptcy expert in New Jersey, Robert Manchel, at (866) 503-5655 to discuss your options.