New Jersey Attorney Explains How New Jersey Bankruptcy Deals With A Personal Loan
A personal loan is typically referred to as a loan that is not connected to property. In words, the person giving the loan does not ask for an interest or a lien in any property. A person or company can provide a personal loan. A bank loan that is not contingent on pledging property for the funds, is considered a personal loan. A personal loan does not require a contract to enforce the agreement. For example, an agreement to lend a friend money, without a written agreement, is still a legally binding contract, that must be paid. However, enforcing the oral agreement, without the written contract may be an issue.
The creditor that lent the funds, in connection with the personal loan, is the creditor of the person who received the loan. The person who received the funds is the debtor. A personal loan debt is called unsecured debt in a New Jersey bankruptcy case, as the debtor did not pledged property for the loan, such as a car or a boat, etc. Other types of unsecured debt is credit card debt.
A debtor may be permitted to discharge and eliminate the personal loan (unsecured debt) debt in a chapter 7, if the debtor meets all of the chapter 7 criteria. Discharge means to forever eliminate the debt from collections. I have written numerous blogs explaining, in detail, the chapter 7 bankruptcy criteria of discharging unsecured debt in a New Jersey.
I explained, in numerous blogs, how the New Jersey chapter 13 process works regarding unsecured debt. In short, if a person does not own real estate or personal property having a substantial value and has insufficient income capable of paying the unsecured debt, the debtor can also discharge the personal loan in a chapter 13 case. A chapter 13 discharge means that the debt need not be paid. In certain circumstances, the debtor must pay some or all of the personal loan, through a monthly trustee payment.
Robert Manchel may be contacted at 866 503 5644 to discuss your NJ. bankruptcy questions.