Manchel
New Jersey
Bankruptcy Law

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Email:manchellaw@yahoo.com

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NJ Bankruptcy Attorney Details What Happens With A Car In Chapter 7

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One of the most common questions posed to me by potential Chapter 7 bankruptcy clients is, “Can I keep my vehicle after filing Chapter 7 bankruptcy?” The answer to this question, like most legal questions is, “it depends”. As a New Jersey bankruptcy attorney, it is my job to counsel clients on whether or not they can retain their car should they decide to file for Chapter 7 bankruptcy. When consulting with a client, I ask the potential filer the following questions:
Is the fair market value of the vehicle greater than the loan balance?
If you have equity in your vehicle it may be at risk for potential sale by the Chapter 7 trustee. Chapter 7 bankruptcy is designed to “wipe out” your unsecured debts; but there is a catch. If you own property in excess of the Bankruptcy Code’s exemptions, the bankruptcy trustee may sell some of it, with the proceeds going to your creditors. Bankruptcy law allows a filer to keep a certain amount of property away from those creditors. These laws are known as exemptions. In the state of New Jersey, a filer is allowed to have up to $3,450.00 of equity in a vehicle without losing it. If the vehicle has equity in excess of the exemption amount, the trustee may allow you to buy out the equity, and if that is not possible, the vehicle will be sold to pay creditors.
However, even if you have no lien on the vehicle, or are unable to exempt the full amount of the vehicle, the trustee may still abandon it (decide not to sell) if it is not worth much. This happens if the costs associated with selling the property and the trustee’s fee may mean that after the sale, there is little left for creditors. For example, if your vehicle has equity in the amount of $4,000, the trustee will probably let you keep it even though the value is in excess of the exemption amount, because there likely won’t be anything left over after the cost of selling it.
Is the fair market value of the vehicle less than the loan balance?
Many potential filers are “upside down” on their car notes, meaning that the fair market value of the vehicle is far less than the balance of the loan. In situations like these, you do not have to worry about the trustee attempting to sell the vehicle. However, if you wish to retain the vehicle, you must continue making regular payments to your finance company. This leads into the final and sometimes most difficult question to answer.Can you afford to continue making your car payments?
If you are unable to afford your monthly payment or if you just do not want the vehicle anymore, it can be surrendered. Surrendering a vehicle during bankruptcy means you give it back to the creditor and the remaining debt is discharged. You can simply walk away from the vehicle owing nothing. If you can afford to make the payment and want to keep the vehicle, then you can reaffirm the debt. By signing a reaffirmation agreement, you are agreeing to still be responsible for the entire loan amount after the Chapter 7 bankruptcy is discharged. This means that should you default on payments after the case is discharged, the creditor can repossess the car and you will be held responsible for the remaining balance
If you are worried about keeping your vehicle after a Chapter 7 bankruptcy, speak to attorney Robert Manchel to discuss your situation. As an experienced New Jersey bankruptcy attorney, I can explain the options of surrender, reaffirmation, and redemption in greater detail. I will be able to help you plan on how to keep your vehicle well before your Chapter 7 case is filed.

What Happens To Debt Incurred After A New Jersey Bankruptcy Filing?

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In general, bankruptcy deals with debt that was incurred prior to the filing. In a chapter 7, the bankruptcy filing, has no effects on debt that was incurred after the filing. This means that if the debtor finances a car or uses a credit card after the filing, the creditor may pursue the debtor for the collection of the debt.
A debtor has the option of converting their chapter 13 case to a chapter 7. In the event that a debtor incurs debt after the filing of a chapter 13 and prior to the conversion, the debt is treated as though it was incurred prior the chapter 13 filing. This means if the debt is typically dischargeable in a 7, then the debt will be discharged.
Any debt incurred by a chapter 13 debtor during the bankruptcy plan, has the right to wait until the completion of the case to pursue the debtor for any default or funds due to the creditor. However, certain chapter 13 creditors who lent funds to the debtor, after the filing, have the right to receive payment by the trustee, through the bankruptcy plan.
If a chapter 13 debtor incurs tax debt after the filing, the taxing entity may require the debtor to pay the debt during the balance of the trustee payment plan. Also, if the chapter 13 debtor incurs domestic support debt after the filing, the court will require that the debtor cure this debt, prior to receiving a discharge.
In a New Jersey chapter 13 bankruptcy case, if the debtor incurs a consumer debt that is necessary for the debtors performance under the plan, such as auto financing, the creditor may file a claim. The claim must be handled and paid, in compliance with the manner in which claims of that type are normally paid. Please note that if a chapter 13 debtor wishes to borrow money, she must first request approval from the trustee or court.
If a debtor incurs a debt in a chapter 13 that is not necessary for performance of the plan, or not for an after filing tax liability, and not for a domestic support obligation, the debtor and the creditor must agree to include the creditor’s claim in the bankruptcy case in order to be paid by the trustee.
To contact an experienced New Jersey Chapter 7 or Chapter 13 Bankruptcy Lawyer, call Robert Manchel at 1.866.503.5655.

How Many Times Can I File For Bankruptcy?

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A person cannot file a subsequent chapter 7 case, within eight years of the filing of the prior chapter 7 case that received a discharge. In other words, if a person received a chapter 7 discharge, the debtor cannot receive another chapter 7 discharge unless the subsequent chapter 7 is filed at least eight years from the date of the filing of the prior chapter 7 case that was discharged.
A debtor that received a prior chapter 13 discharge can obtain a subsequent chapter 7 discharge if the prior chapter 7 case was filed at least six years before the filing of the present chapter 13 bankruptcy case. However, there are exceptions as to when a person may file for a chapter 7 after a chapter 13 discharge. The exceptions are as follows: The debtor paid all unsecured debt through their chapter 13 case, or they paid 70% of the unsecured debt and the plan was proposed in good faith, in addition to applying his best efforts.
A chapter 13 debtor who filed and received a prior chapter 7 discharge within four years of the subsequent chapter 13 filing will not receive a discharge of any debt that is not paid through the present chapter 13 plan. Please note that the debtor can file the chapter 13 case under this scenario, but the debtor will not receive a discharge for debt that is not paid through the subsequent chapter 13 filing.
A chapter 13 debtor who filed and received a prior chapter 13 discharge in connection with the prior case that was filed within two years of the subsequent chapter 13 filing will not receive a discharge of any debt that is not paid through the subsequent chapter 13 plan. Please note that the debtor can file the chapter 13 under this scenario, but the debtor will not receive a discharge for any unpaid debt.
A debtor that files a chapter 13 or chapter 7 case after the dismissal of a prior chapter 7 or chapter 13 case, within one year of the subsequent chapter 13 or chapter 7 filing, may need to meet certain criteria to continue the subsequent case.
The New Jersey Bankruptcy Practitioner, Robert Manchel, can be reached at 1 (866) 503-5655, to discuss whether you can file a subsequent bankruptcy case.

NJ Bankruptcy Lawyer Explains What Bankruptcy Fraud Is In Regards To Credit Card Use

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Typically, if a debtor meets the criteria for a chapter 7 bankruptcy, all unsecured debt is dischargeable, including credit card debt. However, if a creditor, such as a bank in connection with credit card debt, believes that certain debt was incurred by fraud, the bank may object to the discharge of such debt.
Although unusual, a creditor may contest the discharge of such debt by filing a “Complaint for the Non-Dischargeability of Debt”. The complaint is a lawsuit within the bankruptcy case, which is generally settled by agreeing to pay back a certain amount, on a monthly basis, over a reasonable time period. Please note that typically, with the exception of the settled amount, all other debt that is due to other creditors is discharged.
What facts will a creditor focus on, when deciding whether to object to the dischargeability of debt? Typically, the creditor will rely on the following facts: 1. did the debtor have sufficient income to pay for the charge; when was the charge, the day prior to the filing or five years prior to the filing; number of payments made on the debt; what was the money used for, a vacation, or food; etc.
Under the bankruptcy code, in the event that a debtor incurs over $500.00 of debt for luxury items, within 90 days of the filing, to any one creditor, the debt is presumed to be nondischargeable. Also, cash advances in excess of $750.00, within 90 days of the filing, is presumed to be nondischargeable. However, a “presumption” does not mean that is was fraud.
Also, if credit card debt that was incurred by fraudulent means, such as forging a person’s name, would be nondishcargeable.
The Law Offices of Robert Manchel is experienced in counseling individuals about possible fraud issues prior to filing, so as to prevent disastrous results with the courts of NJ. Please contact bankruptcy attorney Robert Manchel at 1-866-503-5655 for help and how bankruptcy protection and laws apply in your individual case.

No Two Debts are Alike: Secured v. Priority Debt in New Jersey Bankruptcy

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Often times when filing for bankruptcy, New Jersey residents do not realize that there are different types of debt, and that the bankruptcy court treats them as such. Two different types of debt recognized by the New Jersey bankruptcy court includes secured debt and priority debt. Secured debt in New Jersey often takes the form of a house mortgage or an automobile financing loan, while priority debt refers to those financial obligations that cannot be eliminated by bankruptcy, namely child support payments, spousal support, and some types of taxes.
Secured debt is a lien against property, such as a car or a house. In taking out financing against such property, the debtor is granting the lender an interest in their personal or real property, with that interest eventually expiring once the loan is satisfied. In a chapter 7 bankruptcy, secured debt is discharged only in the sense that the creditor cannot sue a debtor for the amount owed. Typically, however, the creditor can still foreclose on or repossess the debtor’s property in order to satisfy the debt, if the debtor is in default of the loan agreement. In chapter 13 bankruptcy proceedings, a debtor can save their property if their payments are in default to a secured creditor, by paying the total secured debt arrears to the creditor through a monthly trustee payment, while making the future regular monthly payments, directly to the creditor.
On the opposite side of the spectrum, priority debt is, for the most part, entirely unaffected by a chapter 7 filing. This means that the debt continues to be due to the creditor and the creditor may pursue the debtor for the debt, after the bankruptcy case is completed. In a chapter 13 plan, the debtor must pay the priority debt to the creditor through a monthly trustee payment. After the completion of the chapter 13, the priority debt should be satisfied and paid in full.
The experienced bankruptcy attorneys at the Law Offices of Robert Manchel have assisted many individuals, throughout the state of New Jersey, with their bankruptcy filings. We understand that bankruptcy proceedings can be complicated. For more information about bankruptcy, regardless of your situation, please call our skilled NJ bankruptcy lawyers today at 1-866-503-5655.

New Jersey Bankruptcy Lawyer Explains How Filing For Chapter 7 Differs from Chapter 13

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Many people do not realize that there are multiple ways for an individual to file for bankruptcy in the state of New Jersey, depending on an individual’s assets and income. The Chapter 7 bankruptcy process takes about five months from the filing until discharge. If the debtor meets all of the criteria, all unsecured debt is discharged (eliminated). In a very small number of cases, the trustee may liquidate assets, if the debtor owns certain assets with a substantial value.
On the other hand, chapter 13 bankruptcy requires an individual to pay a monthly payment to a trustee for a period of thirty six to sixty months. The monthly payment is based on asset values, monthly income and expenses. A debtor may file under chapter 13, instead of a chapter 7, for various reasons, such as the inability to meet the chapter 7 criteria or to save a house from foreclosure. Chapter 13 requires a debtor to pay to a trustee all disposable income for the entire plan period. A chapter 13 may permit an individual to eliminate all unsecured debt, like a chapter 7, in addition to providing other benefits.
While many people adopt the approach that filing for bankruptcy in New Jersey will ruin their credit score, they fail to realize that large amounts of debt can wreak havoc on one’s ability to obtain credit. Although bankruptcy will negatively affect a credit score, an individual who obtains a chapter 7 or chapter 13 discharge may reestablish and repair their credit, within a reasonable time period. While filing for bankruptcy is not necessarily an option for all people, it is the most viable option for some.
In order to determine whether or not filing for bankruptcy in New Jersey is right for you, it may be in your best interest to retain the services of an experienced New Jersey bankruptcy attorney who will examine your financial situation and help you make the best decision. At the Law Offices of Robert Manchel, our legal team will walk you through the bankruptcy process, ensuring that you understand every detail along the way. To find out more about filing bankruptcy in New Jersey, call us today at 866-503-5655.

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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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