Typically, if a person is about three months behind with their monthly auto finance payments, the finance company will commence the repossession process.

Theoretically, a chapter 7 or chapter 13 filing will stop the repossession of an auto, due to a default. However, only a chapter 13 will allow the debtor to keep the auto and cure the default. Also, if the auto has been repossessed, a chapter 13 filing, will require the finance company to transfer possession of the vehicle back to the debtor, if the auto has not yet been sold. This means that if the auto was transported to another state for auction, prior to the bankruptcy filing, the finance company must transport the auto back to New Jersey, after the filing.

To obtain possession of the auto, the debtor must provide proof of adequate insurance coverage that has a reasonable deductable and covers the finance company, as the loss payee, in the event of damage or loss of the auto. Also, the debtor must have filed a feasible chapter 13 bankruptcy plan with the court, that provides for payment of the financing. Depending on various factors, the debtor has various options regarding the payment of the financing. It may be possible to cure the arrears through the monthly bankruptcy plan, while making the future payments as they come due. The debtor may be able to pay the entire amount that is due on the automobile through the bankruptcy plan. Or, under certain scenarios, the debtor may be able to pay only the value of the vehicle, at a fair interest rate, through the bankruptcy plan. Under all scenarios, the debtor’s bankruptcy schedules must reflect the ability to pay the monthly trustee payments and/or direct payment to the finance company.

There may be various issues that arise when requesting the transfer of a repossessed auto back to the debtor, in addition to the above. After an auto is repossessed, the finance company will incur fees for storage, transportation, etc. The finance company will generally demand payment of all fees and costs prior to the transfer.

You can call the NJ.consumer bankruptcy lawyer , Robert Manchel, at (866) 503-5655, to discuss how bankruptcy can save your auto.

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Please note that it is unusual for a chapter 7 trustee to sell a debtor’s asset.

A chapter 7 trustee’s job is to review and investigate the debtors’ total financial picture to determine if the debtor is entitled to a discharge and/or whether the debtor owns substantial assets that may be liquidated, with the funds to be paid to the creditors. If the trustee believes that the debtor is entitled to a discharge, the trustee will recommend to the judge that an order of discharge be entered. If the trustee believes that the debtor should not be entitled to a discharge, the trustee should advise the court accordingly. However, under this scenario, the debtor may contest the trustee’s objection.

The issue of selling property is not mutually exclusive to an entry of discharge. In other words, a debtor may be entitled to a discharge and the trustee may sell the debtors’ assets, if possible. Typically, if the trustee sells an asset and the debtor is entitled to a discharge, the discharge will be entered in the normal time period, with the sale of the asset at a much later date.

Prior to the Meeting of Creditors, the debtors’ attorney forwards all of the debtors’ financial documents to the trustee for his review. This includes: six months of debtors’ and household members’ paystubs; six months of all bank statements; all relevant income tax returns; professional valuations for real estate and other property; estimated mortgage and auto finance payoff statements; alimony and support orders, etc. Typically, if the debtors’ expenses are reasonable, the trustee will not require proof of the reasonable and necessary expenses, such as food and clothing. In the event that a debtor operates a business, the debtor must provide proof of the business’ income and expenses, such as a profit and loss statement, receipts, business bank statements, etc.

Prior to the meeting, the trustee will prepare for the hearing by reviewing all of these documents. If the documents appear to the trustee to be contradictory to each other or the bankruptcy petition information, the trustee will make a note of these issues.

You may call the NJ. bankruptcy attorney, Robert Manchel, at (866) 503-5655 to discuss your chapter 7 bankruptcy questions.

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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.

You may call theNew Jersey bankruptcy lawyer, Robert Manchel, at (866) 503-5655 to discuss your bankruptcy options.

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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 the NJ. bankruptcy attorney, Robert Manchel, at (866) 503-5655, to discuss your rights.

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If the debtor incurred certain debt, prior to the bankruptcy filing, which appears to be obtained by fraud, each creditor may file a complaint with the bankruptcy court requesting that such debt be excluded from the discharge. Typically, if a creditor can prove, in court, that at the time the debt was incurred, the debtor had no intention of paying the debt, such debt will be excluded from discharge. If the court determines that such debt was obtained by fraud and thereby excluded from discharge, the creditor will have the right to pursue the debtor for the money owed, as if no bankruptcy case was filed.

Prior to 2005, the following type of debt was presumed to be excluded from discharge:

a. consumer debt for luxury goods and services, incurred from a single creditor, totaling more than $1,225, within 60 days, prior to the bankruptcy filing; and,

b. cash advances for consumer debt, incurred from a single creditor, totaling more than $1,225, within 60 days, prior to the bankruptcy filing.

In 2005, Congress modified this bankruptcy code section, to establish that the following transactions are presumed to be excluded from discharge:

a. consumer debt for luxury goods and services, incurred from a single creditor, totaling more than $500.00, within 90 days prior to bankruptcy filing; and,

b. cash advances for consumer debt, incurred from a single creditor, totaling more than $750.00, within 90 days prior to the bankruptcy filing.

Please note that the presumption of discharge does not mean that such debt is automatically excluded from discharge, as the creditor must prove such allegations in court. Also, a creditor has the right to file a complaint alleging fraud, in connection with any type of debt that was incurred at any time.

Robert Manchel, the bankruptcy lawyer in New Jersey , can be reached at 1 (866) 503-5655, to discuss your situation.

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Typically, if a homeowner files for bankruptcy protection and surrenders their house, any payments connected to the property is discharged. For example, an individual who owns a house can surrender their house and discharge any real estate taxes and mortgages that are associated with the house.

However, the bankruptcy code includes a specific exception for association fees that are incurred after the bankruptcy filing, through the date of the sale of the house. Any debtor that surrenders their house does not discharge the association fees that come due after the bankruptcy filing. This law does not include pre-filing association fee arrears, only payments that are due after the bankruptcy filing. In other words, any fees that are due prior to the filing, are eliminated. However, after the bankruptcy filing, the association may attempt to collect and sue the debtor for after-filing association fees that come due after the bankruptcy filing.

The debt that is due after the filing, ceases to continue to be due, after the debtor’s name is no longer on the deed and the debtor no longer resides in the property. This means that when the deed is transferred to another person, after a sheriff’s sale or short sale, the debtor is no longer responsible for any of the association dues that came due after the filing.

Years ago, this issue was rarely relevant because the entire New Jersey foreclosure action process was less than one year. However, the present condition of the economy and the astounding amount of New Jersey foreclosure actions, has substantially lengthened the foreclosure process, which results in the association’s collection of the fees, between the time of the bankruptcy filing through the transfer of the deed.

Please call thebankruptcy lawyer in NJ., Robert Manchel, at (866) 503-5655 to discuss how association fees are handled in bankrutptcy.

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The process is generally intended to allow debtors an opportunity to modify their residential first mortgage loans. The court does not possess the power to require the mortgage company to enter into a loan modification. Although, the mortgage company applies the same criteria in determining whether to enter into a loan modification, as they would, without the bankruptcy filing, the court’s Loss Mitigation Program considerably expedites the modification process.

The court encourages the debtors and mortgage representatives to use an internet portal that facilitates and controls the flow of documents between the parties. All communication and document exchange is documented. Therefore, the mortgage company cannot use their typical excuse that certain documents were not received.

The court requires the filing of certain documents, throughout the process, to guide and control the negotiations. Also, the company that owns the internet portal can assist the attorney and debtor with document gathering and the flow of information and documents between the parties.

Please note that in addition to applying for the loss mitigation program, a bankruptcy debtor will reap the benefits and protections of the bankruptcy laws. Also, if the debtor is unable to modify their loan, the debtor may still be able to save his house from foreclosure, if he can cure all mortgage arrears through a chapter 13 case, in addition to making their regular monthly mortgage payments.

Please call, the New Jersey bankruptcy law attorney, Robert Manchel, at (866) 503-5655, to discuss your bankruptcy questions.

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In general, a pension is an asset. However, the question is whether a debtor can fully exempt and keep their pension. The bankruptcy code permits a debtor to exempt and keep their entire pension, if the pension is ERISA (Employee Retirement Income Security Act) qualified. In other words, the pensions must be legitimate under the tax code.

ERISA permits two types of pensions, defined benefit plans and defined contribution plans. The defined benefits plans, promises to pay a retired individual a specific monthly amount based on different factors, such as a percentage of income earned and the years of service of the employee. The defined contribution plans are plans that are funded from the employee and possibly the employers’ contributions over the years of service. At retirement, the employee is entitled to the available funds that have accumulated from the funds’ investments. The following are examples of defined contribution plans: employee stock ownership; 401(k); 403(b); and, profit-sharing plans. Typically, in a chapter 13 and 7, all of the above referenced plans are fully exempt under the bankruptcy code, with few exceptions. This means that a debtor can keep all of the funds in the plan.

Chapter 7
The other issue pertains to whether a debtor may use as an expense, the monthly payments of the pension plan contribution. Typically, in a chapter 7, a debtor may only use a monthly pension contribution payment as a monthly expense, if the monthly contribution is required. An example is a New Jersey state employee’s monthly pension contribution. However, in general, an employee of a private company is not required to contribute to their pension. Therefore, under this scenario, the monthly contribution is not permitted as a legitimate monthly expense on the petition. Typically, the chapter 7 trustees will allow the debtors to use any monthly pension loan contribution as a legitimate monthly expense.

Chapter 13
Similar to a chapter 7, a chapter 13 debtor is permitted to use any monthly pension loan contribution as a legitimate monthly expense. In a chapter 13, a debtor may use as an expense, a monthly contribution to a pension, even though the contribution is not required by law. However, the monthly contribution must be reasonable.

Please call the Law Offices of Robert Manchel, the NJ. bankruptcy attorneys, at 1 (866) 503-5655, to discuss your bankruptcy questions.

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Prior for 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 thebankruptcy expert in New Jersey, Robert Manchel, at (866) 503-5655 to discuss your options.

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Unlike the numerous “debt reduction” or “debt consolidation” firms that flood our airways with advertisements, a licensed professional bankruptcy attorney is uniquely qualified to review your case and determine if bankruptcy is the proper course of action for you. Licensed attorneys have taken an oath to represent their clients to the best of their ability. Additionally, conversations with your attorney are confidential. Non-attorney debt firms do not have these same obligations. It is, therefore, better to speak with an attorney first, rather than last.

The process of filing for bankruptcy protection may seem relatively simple for the debtor, but it requires knowledge of very complex bankruptcy laws and regulations and should not be attempted without qualified legal representation. Failure to timely and correctly file required court documents can result in a case’s dismissal or the loss of property.

What follows here is a general overview of the bankruptcy process and requirements for an individual or married couple. There is more detailed information as well as clarification of a number of common misconceptions about bankruptcy which are addressed in more detail in following sections.

Bankruptcy Overview

When an individual, referred to as a “debtor”, files for bankruptcy, he is filing for “relief” or “protection” under the United States Bankruptcy Code. The creation of a Bankruptcy Law is provided for in the U.S. Constitution. An individual may file either under Chapter 7 of the Bankruptcy Code, referred to as “liquidation”, or under Chapter 13, which is often referred to as “reorganization.”

Many people believe that if they file for bankruptcy, they must give up all of their property. To the contrary, however, the Bankruptcy Code provides for what are called “Exemptions” under Section 522 of the Bankruptcy Code which allow for certain values a debtor may hold in various types of property such as real estate, household goods, automobiles, retirement funds, and other property.

Three types of debts are addressed in a debtor’s bankruptcy filing: 1) Secured Debts which include mortgages, car liens, tax and judgment liens; 2) Priority Debts which include unliened taxes, child and marital support obligations; 3) Unsecured Debts which include credit card debt, old utility bills, medical bills, pay-day loans and personal loans.

When a bankruptcy case is filed, the “automatic stay” goes into effect, pursuant to Section 362 of the Bankruptcy Code. This “stay” means that none of the debtor’s creditors may take any further steps to collect on a debt. They cannot call or write the debtor, they cannot file or continue a lawsuit, or execute on a judgment without first receiving the Bankruptcy Court’s permission to do so.

At the completion of a case under Chapter 7, the debtor’s unsecured debts are “discharged”, meaning the debtor no longer has a legal obligation to pay those debts. If the debtor wants to retain property that is subject to a secured debt, such as his home or car, he must continue to make those payments. (More on secured debts below).

At the completion of a Chapter 13 case, after the “Plan of Reorganization” has completed, the debtor also receives a discharge of any remaining unsecured debt. As with a Chapter 7 filing, the debtor must continue to pay secured debt to retain the property.

Robert Manchel,New Jersey bankruptcy practitioner, will explain how bankruptcy can help you with your debt.

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