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The New Jersey Bankruptcy Process When Losing A House

September 16, 2015 by Robert Manchel

New Jersey Attorney Details The Bankruptcy Process When Losing A House

This blog pertains to individuals who are either unable to, or do not wish to, save their house from foreclosure. A person may be unable to save their house, due to a loan modification denial or a substantial reduction in income. Sometimes people understand that their house cannot be saved through any option, including bankruptcy. A person may understand that saving a house is too costly, not worth the monthly payment, or would prefer renting at this time.

Although a chapter 13 may save someone’s house, a person may change their mind and decide to surrender their house, while in a New Jersey chapter 13. A person may modify their chapter 13 plan and surrender their house at any time. If a modified plan surrendering the house is filed with the court, the mortgage company will likely ask the court for permission to proceed with the foreclosure action. The court will likely grant the mortgage company permission to proceed with the foreclosure action. After such permission is granted, both the chapter 13 case and the mortgage foreclosure action will continue simultaneously. At this time, the homeowner, may continue to reside in the property, until the house is sold, at sheriff;s sale. Typically, the house is taken by the mortgage company and not the bankruptcy court or trustee.

A chapter 7 will not allow a person to save a house that is in foreclosure due to mortgage payment arrears. However, the filing of a chapter 7 will initially stop the foreclosure action. In a chapter 7, if the house does not have substantial equity, the trustee and the court will not sell the property. In other words, typically the bankruptcy court will not take the property and the house will be lost by way of the foreclosure action that is not connected to the bankruptcy filing.

If a chapter 7 debtor is in arrears with their mortgage payments, typically, the mortgage company will file a motion with the court asking for permission to proceed or commence a mortgage foreclosure action. Similar to the chapter 13 situation, the mortgage company will likely be granted permission to proceed with the foreclosure action, while the chapter 7 case continues. If the mortgage company does not ask the court for permission to continue the foreclosure action, the mortgage company will be permitted to proceed with the foreclosure action after the chapter 7 case is discharged. A New Jersey chapter 7 case process is about four months to discharge. Ultimately, the house is lost by way of the mortgage foreclosure action and not by way of the bankruptcy case, court, or trustee.

Robert Manchel, the bankruptcy lawyer in NJ. can be contacted at (866) 503-5655.

Losing A House New Jersey Bankruptcy

August 31, 2015 by Robert Manchel

NJ. Lawyer Explains How A Property Is Lost When Surrendered And A Bankruptcy Case Is Filed.

This blog pertains to individuals who are either unable to save their house, or do not wish to save their house from foreclosure. Sometimes people understand that their house cannot be saved through any option, including bankruptcy. A person may understand that saving a house is too costly, not worth the monthly payment, or would prefer renting at this time.
There are various reasons for not saving a house from foreclosure. A person may be unable to save their house, due to a loan modification denial or a substantial reduction in income. Also, a chapter 13 debtor may change their intention, at any time, and decide to surrender their house, during a chapter 13 plan.
Although a chapter 7 will not allow a person to save a house that is in foreclosure, the bankruptcy filing will initially stop the foreclosure action for a short time period. It is unlikely that a bankruptcy trustee will sell a house, in connection with a chapter 7 case. If the house does not have substantial equity, the house will not be sold in the bankruptcy case.
If a chapter 7 debtor is behind with payments, the mortgage company may ask the bankruptcy court for permission to proceed with the foreclosure action. Or, in the alternative, the mortgage company will be permitted to proceed with the foreclosure action after the case is completed and the debt is discharged. Ultimately, the house will be sold at sheriff’s sale and at some time thereafter, the house must be vacated.
If a chapter 13 debtor, at any time, wishes to surrender the house, the mortgage company will be permitted to proceed with the foreclosure action, during the pending bankruptcy case. The chapter 13 bankruptcy case may continue even though the mortgage company proceeds with the foreclosure action and sheriff’s sale. As explained above, typically, the house is lost by way of sheriff’s sale, through the foreclosure process, even though the owner has filed for a chapter 13 or chapter 7 case.
Robert Manchel, the NJ. bankruptcy attorney, may be reached at 866 503 5644.

Is the Over Payment Of Unemployment Benefits Dischargeable In A New Jersey Bankruptcy Case?

August 17, 2015 by Robert Manchel

New Jersey Lawyer Explains When Unemployment Benefits are Dischargeable

Typically, an over payment of New Jersey unemployment benefits is dischargeable in bankruptcy, unless the debt was incurred by fraud. Unemployment debt is not included in any of the bankruptcy code exceptions to discharge. Therefore, in a chapter 13 and chapter 7 unemployment debt is generally dischargeable and classified as general unsecured debt.
However, the New Jersey Department of Labor and Workforce Development, Division of Unemployment and Disability Insurance (dept. of labor), may bring a bankruptcy action to deny the discharge of unemployment debt, under the fraud provision of the code, which states as follows:
“(a) A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt—
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by—
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;
(B) use of a statement in writing—
(i) that is materially false;
(ii) respecting the debtor’s or an insider’s financial condition;
(iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and
(iv) that the debtor caused to be made or published with intent to deceive; …”
The New Jersey bankruptcy court requires the Department of Labor to prove that the debtor obtained the unemployment debt by actual fraud, which includes the following elements:
“(1) [the debtor] obtained money, property or services through a material misrepresentation; (2) the Debtor, at the time of the transaction, had knowledge of the falsity of the misrepresentation or reckless disregard or gross recklessness as to its truth; (3) the Debtor made the misrepresentation with intent to deceive; (4) the Dept. of Labor reasonably relied on the misrepresentation; and (5) the Plaintiffs suffered loss, which was proximately caused by the Debtor’s conduct.”
The above means that the debtor may discharge the unemployment debt unless the Dept. of Labor can prove, by a preponderance of the evidence, that the debtor is guilty of all five of the above listed elements. A preponderance of evidence means proof of more than 50% that the debtor committed each of the five elements. In other words if the debtor received an over payment without obtaining the funds through fraud, as explained by way of the five elements above, the debt is discharged in a chapter 13 and chapter 7.
Contact the NJ.bankruptcy lawyer, Robert Manchel at 866 503 5644 to discuss your questions.

Bankruptcy Attorney Discusses the Facts About Bankruptcy in NJ

July 1, 2015 by Robert Manchel

Below Is A List of Facts About New Jersey Bankruptcy

Bankruptcy stops debt collection and protects property.

All assets and debts must listed on the petition.

Husband and wife may file together or separately.

Even though the husband may file without wife, or vise versa, both of their income must be included on the petition. This assumes that they are not separated.

The bankruptcy code does not set forth a minimum amount of debt that is required for filing.

Typically, a chapter 7 case requires one hearing and a chapter 13 case requires two hearings.

The Trustee’s “Notice of Abandonment” means that the trustee is abandoning his right to property and does not mean that the debtor must abandon the property. In other words, “Notice of Abandonment” is a good thing, not bad.

A chapter 7 will stop a foreclosure action, but not permit someone to permanently save a house with mortgage arrears.

A chapter 13 will stop a foreclosure action, and may permit someone to permanently save a house with mortgage arrears.

Typically, the chapter 7 process is about four months and the chapter 13 process is about thirty six to sixty months.

Chapter 7 does not require any payments to be made.

Chapter 13 bankruptcy requires monthly trustee payments.

Although the filing of a chapter 7 bankruptcy petition stops an auto repossession, a chapter 7 does not allow a person to permanently save their auto, if there are payment arrears.

Typically, a chapter 7 allows someone to eliminate unsecured debt, such as credit card debt.

There are three bankruptcy courthouses in New Jersey, which are Newark, Trenton and Camden.

The bankruptcy code lists certain debt that cannot be discharged or eliminated.

Certain types of debt must be paid in a chapter 13.

Even though a bankruptcy filing is included on one’s credit report, does not mean that the person cannot restore their credit and credit report.

There are three New Jersey chapter 13 standing trustees, with one trustee handling all cases that are filed in each particular courthouse, as explained above

There are numerous chapter 7 trustees that handle cases in each courthouse.

Robert Manchel is an experienced New Jersey Bankruptcy Lawyer. His telephone number is (866) 503-5655. Please call to discuss your bankruptcy protection options.

NJ Bankruptcy Attorney Details What Happens to Marital Debt in Bankruptcy

February 13, 2014 by Robert Manchel

The 2005 bankruptcy code amendments resulted in stricter protections for individuals entitled to receive payments for support, alimony, equitable distribution, maintenance, etc. In other words, it is more difficult to eliminate such debt.
A chapter 7 debtor may not eliminate or discharge any debt that is due to a spouse, ex-spouse, or child, for support, alimony or maintenance. Maintenance includes any funds or property that is used for the support or sustenance of an individual.
In addition, a chapter 7 debtor may not eliminate or discharge equitable distribution, under certain situations. Equitable Distribution is typically the acquired assets, such as money and property, or a liability, such as marital debt, incurred during the marriage. Typically, bank accounts, real estate, and autos that were acquired during the marriage, which is distributed at divorce is deemed equitable distribution. Also, joint or personal debt acquired during the marriage, that is ordered to be paid by a spouse, as part of a divorce, is deemed equitable distribution.
A debtor’s Equitable distribution debt may not be discharged or eliminated in a chapter 7, if the debt is due to a spouse, former spouse, or child of the debtor and incurred by the debtor in the course of a divorce or separation, or in connection with a separation agreement, divorce decree, or other order of a court.
Typically, the issue in a chapter 7, is whether the debt is actually support, maintenance, or equitable distribution.
A chapter 13 debtor must pay, and may not eliminate, a spouses obligation to pay any support, alimony, or maintenance. Any support, alimony or maintenance arrears,due at the time of the filing, must be paid through the chapter 13 plan payment, in additional to payment of all future monthly payments for such debt. If the debtor is not current with all such payments, he will not obtain a chapter 13 discharge. At the end of the plan, the debtor must file a document that indicates all post filing payments were paid in full.
If the debtor is unable to pay all arrears through the bankruptcy plan, in addition to all post filing monthly payments, at any time during the case, the debtor will not be able to proceed with the chapter 13 case. This means that if the debtor has insufficient funds to pay all support arrears, through a 60 month bankruptcy plan, in addition to making the monthly support payments, the debtor will not be permitted to proceed with the case, no matter the reason for the filing.
The main difference between a chapter 7 and 13, regarding marital debt, is that a chapter 13 debtor is permitted to eliminate and discharge equitable distribution, no matter when and how the debt was incurred, with very limited exceptions. This means that any debt that is deemed equitable distribution may be eliminated, if the debtor does not have the ability to pay such debt, in a chapter 13.
Robert Manchel is a bankruptcy attorney in NJ., who is available to answer your questions at 866 503-5655

NJ Bankruptcy Lawyer Discusses How To Improve Your Credit After Bankruptcy

January 27, 2014 by Robert Manchel

Many clients advise me that they only want to use cash and will never use credit cards, again, after bankruptcy. However, in the U.S. economy it will likely be necessary to use credit for various needs. In other words, you may need credit to buy an automobile or other essential items. Therefore, the better your credit worthiness the lower your interest rates and the cost of credit.
Also, please note that a high credit score does not necessarily mean that you are a good credit risk. For example, a person with a high credit score, with tons of debt and a very low paying job, may not be a good credit risk.
After a bankruptcy case is completed and the debtor has been granted a discharge, the debtor must obtain their credit report from all three credit bureaus- Experian, Equifax and TransUnion. The credit report must reflect that all dischargeable debt is marked as discharged. The debtor may need to wait some time after their discharge for their credit report to accurately reflect the bankruptcy discharge. If their credit report is not properly reflecting this information, the bureaus must amend the credit report accordingly. In the event the credit report is not properly reflecting this information after a reasonable time period, one should send a letter requesting the change to all three bureaus with the discharge order enclosed. Also, a copy of the letter should be sent to the creditor.
Also, after the discharge, the debtor should obtain a secured credit card from a bank. My explanation of a secured credit card is in a separate blog. After making timely payments in connection with your secured credit card, the individual should apply for additional credit cards from other banks. All monthly credit card payments should be current and up to date.
You may contact Robert Manchel, NJ bankruptcy attorney, for a free consultation, at (866) 503-5655. We can discuss your individual circumstances and whether bankruptcy protection is an option for you.

Manchel
New Jersey
Bankruptcy Law

The New Jersey Bankruptcy Process When Losing A House

New Jersey Attorney Details The Bankruptcy Process When Losing A House

Losing A House New Jersey Bankruptcy

NJ. Lawyer Explains How A Property Is Lost When Surrendered And A Bankruptcy Case Is Filed.

Is the Over Payment Of Unemployment Benefits Dischargeable In A New Jersey Bankruptcy Case?

New Jersey Lawyer Explains When Unemployment Benefits are Dischargeable

Bankruptcy Attorney Discusses the Facts About Bankruptcy in NJ

Below Is A List of Facts About New Jersey Bankruptcy

NJ Bankruptcy Attorney Details What Happens to Marital Debt in Bankruptcy

NJ Bankruptcy Lawyer Discusses How To Improve Your Credit After Bankruptcy

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Manchel
New Jersey
Bankruptcy Law