Robert Manchel

Difference Of Paying Auto Financing And Auto Lease In A New Jersey Chapter 13

February 28, 2016 by Robert Manchel

Attorney explains the difference between auto finance and auto lease payments in a New Jersey chapter 13 case.

There are three different approaches to paying auto financing in a New Jersey chapter 13 case. The fist approach is to continue to make the regular finance payments directly to the auto finance company during the plan. One may pay the arrears at the time of the filing through the bankruptcy plan, while making the regular payments directly to the company.
The second option is to pay the entire balance due on the financing through the chapter 13. The balance would include any amount that a person is behind with their payments at the time of the filing. The interest rate that must be paid, on the balance depends on various factors, such as when the auto was financed and whether all auto financing debtors are filing for bankruptcy. This option requires the payment of adequate protection, which is explained below.
The other option is to pay to the finance company, the retail value of the auto, plus a fair rate of interest, through the bankruptcy plan. The total amount that must be paid is not the balance that is due, but the amount of the auto’s sale’s value, if the dealer sold the car. The amount of the arrears is not relevant. This option is only permitted if the auto was purchased 910 days prior to the bankruptcy filing. The total amount must be paid through the bankruptcy plan and not directly. This option also requires adequate protection payments.
A trustee may not commence distributing payments to the finance company, through the plan for many months or years. During the period prior to receiving disbursements, the finance company is vulnerable to a loss if the debtor stops making payments, while the debtor is using the auto. In order to prevent such a loss, the finance company is entitled to a monthly distribution, from the trustee, that will at least cover the monthly depreciation of the auto’s value. The monthly payment is called adequate protection payments.
Typically, a New Jersey debtor continues to make regular monthly lease payments, directly to the auto lease company after the bankruptcy filing. If there are lease payment arrears, at the time of the filing, the arrears amount must be paid and cured, through the chapter 13 plan “promptly”. This means that in addition to making monthly lease payments, the trustee payments must be sufficient to cure the arrears within a certain time period that is deemed promptly, by the judge. Each judge may have a different understanding of the number of months or years that is deemed a “prompt cure” under the bankruptcy code. Therefore, the monthly trustee payments must be sufficient to pay the total amount of the pre-filing arrears within the time period that is required by that particular judge.
Contact the NJ.bankruptcy lawyer, Robert Manchel at 866 503 5644 to discuss your questions.

What Happens If I Owe Business And Personal Debt In A New Jersey Bankruptcy Case.

February 16, 2016 by Robert Manchel

Attorney Explains How A Person With Business And Personal Debt Is Handled In A New Jersey Bankruptcy Case.

As I explained in my other blogs, two people who owe a joint debt, in New Jersey, both owe 100% of the debt. This means that the creditor may sue each person for the entire debt, or any percentage of the debt. By way of example, a creditor may receive 80% from one co-debtor and 20% from another, or 40% from one co-debtor and 60% from the other. Obviously, the creditor may not obtain more than the total amount due on the debt.
A corporation “Corp” and limited liability company “LLC” are separate and distinct entities. For the purposes of this blog a corporation “Corp” and limited liability company “LLC” are synonymous and both will be referred to as a “Corp”. A “Corp” has similar characteristics of a person, regarding many creditor and debtor legal issues. The same explanation in paragraph one above applies to a “Corp” that owes a joint debt with a person. In other words, a creditor of a joint debt, with a person and “Corp”, may sue the person for the entire debt and/or the “Corp” for the entire debt. Additionally, in this scenario, the creditor may sue the person and/or “Corp” in any percentage for the outstanding debt.
A person that is operating her business, that is not designated as a “Corp” is treated as personal debt and not as separate debt. For example, the debt due to a business, such as John Doe’s Lawn Service, that did not establish a “Corp with the state, is a debt that is owed solely by the personal owner and not the business.
In New Jersey, a “Corp” may file a chapter 7 to liquidate the business or a chapter 11 to reorganize the business. However, a “Corp” cannot file a chapter 13 to reorganize. A person can file a chapter 7 to liquidate and a chapter 13 to reorganize. Additionally, a person is also permitted to reorganize through a chapter 11. However, typically, a person would only file a chapter 11, unless the debt is substantial, Typically, chapter 11 filing fees and attorney’s fees are considerable.
If a person owns a business that is not related to a corporation, the person may resolve all business and personal debt through a single bankruptcy filing. Under this scenario, a person may file a chapter 13 or 11 to reorganize the business and personal debt, or a chapter 7 to liquidate the business and personal debt. If a person owes joint debt with a “Corp”, the “Corp” and person must file separate bankruptcy cases to resolve each of their respective debts.
You may contact Robert Manchel, at 866 503 5644, for a free bankruptcy consultation.

Can I Get Rid Of A Homeowner Association Lien In A New Jersey Bankruptcy?

February 9, 2016 by Robert Manchel

Bankruptcy lawyer Explains How A Homeowner Association Lien Is Treated In A New Jersey Bankruptcy Case

There are two types of homeowner association (condominium association) liens in New Jersey. One type is derived from a lawsuit that is filed with the superior court of New Jersey, and subsequently filed as a lien on real estate in state court. This type of lien is explained in a separate blog. The second type of lien is created by filing the appropriate documents with the county register of deeds, where the real estate is located.
The state statute NJSA 46:8B-21, permits an association to file and record documents, with the county, reflecting the amount due to the association. The following explanation describes how such a lien has been treated in a New Jersey bankruptcy case, until recently. Until recently, such a lien would be considered a secured interest in the property that cannot be reduced or modified. In other words, the total amount that was due to the association per the lien, could not be reduced. Therefore, a debtor in a chapter 13 was required to pay the entire amount due on the lien to the association, through the monthly bankruptcy plan.
However, recently, NJ.bankruptcy court judge Christine M. Gravelle published her opinion that permits a debtor to modify the secured portion of such a lien to the amount of the lien representing the customary condominium assessment, against the unit owner, for the six month period prior to the recording of the lien. This means that if a lien was filed in the amount of $4,000.00 and the monthly assessment is $200.00 monthly, the secured portion of the lien may be reduced to $1,200.00
Please note that there are a number of exceptions to permitting a person to modify the lien as explained above, including, but not limited to, a debtor that has equity in the property. Also, the remaining balance of the lien in excess of the $1,200.00, in the above example is deemed unsecured debt and must be treated and possibly paid as an unsecured debt.
The judge’s opinion has been appealed and is presently in the appeal process. Also, as my readers know, if a specific issue has not been decided by appeal from the third circuit court, each bankruptcy court judge is not bound by this decision. This means that another New Jersey bankruptcy judge has the power to rule that such a lien may not be modified, which is how this issue has previously been handled. Or, in the alternative, a judge may decide to modify the lien, if he concurs with Judge Gravelles’ analysis.
You may contact Robert Manchel, at 866 503 5644, to discuss your bankruptcy law homeowner association questions.

How Can A New Jersey Bankruptcy Filing Help Me?

January 24, 2016 by Robert Manchel

New Jersey Attorney Details How Bankruptcy Can Help Someone

New Jersey Bankruptcy law may possibly allow you to achieve the following: stop all creditors’ telephone calls and collection letters; stop bank and property levies; stop wage attachments; reinstate drivers’ license, if suspended solely due to fines or surcharges; stop utility shutoff; reinstate utility service; ease support arrears’ payments; stop automobile repossession; get back auto after repossession; pay taxes through the bankruptcy plan, and/or possibly eliminate all or a portion of a tax liability; and, stop law suits.

A New Jersey Chapter 7 bankruptcy filing is usually referred to in terms of obtaining a fresh start. In a Chapter 7 case, the court allows individuals to keep certain exempt property, while discharging all unsecured debt. Unsecured debt is debt that is not related to an interest in property, such as a house or an automobile Additionally, secured debt is also discharged, if the debt is not reaffirmed. A debtor must pay a secured debt, such as a mortgage or auto financing, if he wishes to keep the property. Similar to a chapter 13, there are specific criteria for filing a chapter 7, based on one’s financial situation and assets. There are no monthly payments in a chapter 7.

A New Jersey chapter 13 bankruptcy requires the debtor to make monthly trustee payments. A chapter 13 may permit a person to eliminate all or a portion of their debt, if she does not meet the chapter 7 criteria. Additionally, a chapter 13 plan may allow a person to save an auto from repossession and a house from foreclosure.

Under Chapter 13 bankruptcy protection, an individual is allowed the opportunity to payoff their mortgage arrears over a 36 to 60 month period. Saving your house by paying your mortgage arrears through the plan is your right and the law. The mortgage company must allow you to pay off the arrears in this manner, without their consent.

Typically, the longer the bankruptcy plan, the lower the monthly bankruptcy trustee payments. Under most circumstances, the individual must continue paying their regular monthly mortgage payments, in addition to making their monthly bankruptcy trustee payments. The monthly bankruptcy trustee payment may require disbursement to various creditors, depending on the type of creditors, your financial situation, and the kind of property owned.

You may contact Robert Manchel at 866 503 5644 to discuss the benefits of filing a bankruptcy case in New Jersey.

What Payments Must Be Made In A New Jersey Chapter 13 Case?

January 11, 2016 by Robert Manchel

Bankruptcy Attorney Details What Payments Should Be Made And When Payments Should Be Made In A NJ. Chapter 13 Case.

Based on the fact that each debtor’s circumstances are different, please note that the following information is based on my opinions of the “typical” debtor’s circumstances regarding how and when payments should be made in a New Jersey chapter 13 bankruptcy case. The following may not comply with your specific circumstances. Each debtor must ensure that certain creditors are paid on a monthly basis.
Unsecured creditors, such as credit card debt and personal loans are not paid directly. Secured loans, such as mortgages and auto loans, in connection with real estate and autos, that the debtor wishes to keep, must be paid, in some fashion. Also, typically, utilities, in connection with a house that will be kept, must be paid directly, on a timely basis. Specific services, that one wishes to maintain, such as a cell phone and cable, must be paid on a timely basis, as well.
Each month a debtor must make a chapter 13 payment to the trustee. The bankruptcy hearing date, has no effect or relation to when and how a trustee payment is made. Although the first trustee payment is actually due thirty (30) days after the bankruptcy filing, the trustees request that the plan reflect that the first payment is due on the first of the month after the filing. Also, the plan must reflect that all subsequent payments be made on the first of the month thereafter. Based on my experience, it is acceptable to make the first payment within thirty (30) days of the filing, and to make all future payments, within thirty (30) day increments, thereafter. My other blogs explain where and how the payments should be made.
The other payments that must be paid are based on the specific circumstances of the debtor. If the debtor has a mortgage, than the mortgage payments must be paid, each month, on a timely basis. After the bankruptcy filing, the first mortgage payment is due to the mortgage company, when the payment initially comes due after the bankruptcy filing. In other words, if a debtor files his bankruptcy case on the 20th of the month and his regular mortgage payment is due on the first of each month, than the initial post filing mortgage payment must be paid by the first of the month after the filing date.
If a debtor is required to make a regular payment directly to an auto finance or lease company, than the payment must be paid to such company, each month, until the debt is satisfied. Similar to the mortgage payment, the initial post filing auto finance (lease) payment must be paid when the payment initially comes due after the filing. An auto finance or lease payment may come due on any day of the month, unlike a mortgage payment, which is typically due on the first of each month. A particular debtor’s plan may require that the auto finance or lease payments be paid through the trustee payments, Under this scenario, the debtor need not make the monthly auto payments directly to the creditor.
Robert Manchel may be contacted at 866 503 5644 to discuss your questions concerning bankruptcy in NJ.

Can I Get Rid Of A Timeshare In A New Jersey Bankruptcy?

December 31, 2015 by Robert Manchel

New Jersey Attorney Details How To Give Back A Timeshare And Eliminate the Debt In A New Jersey Bankruptcy

There are many people who are very happy with their timeshare purchases. However, there are situations, whereby the enticing and aggressive marketing programs convince people to purchase a timeshare, that results in buyer’s remorse. Typically, a timeshare requires a periodic finance payment, in addition to the ongoing maintenance fees. The maintenance fees appear to be endless. How can someone get rid of the timeshare and the associated finance and maintenance payments. New Jersey Bankruptcy may be your answer.
Chapter 7
A New Jersey Chapter 7 bankruptcy will permit a person to surrender their timeshare and completely eliminate and discharge any and all of the debt and the obligation to make any future payments. This means that the time share company will not be permitted to collect any debt that was due prior to the filing and will not be able to bill the debtor for any payments that come due in the future. Typically, under these circumstances, the timeshare company will ask the debtor to sign a document that conveys the property back to the company.
Typically, under all circumstances, the bankruptcy trustee and/or the bankruptcy court will not take the timeshare or require the debtor to sell the property, unless their is substantial value in the property as a bankruptcy asset. Also, “in theory”, a debtor may keep the timeshare, that does not have substantial value, if he is current and keeps current with all required payments. I write, “In theory”, because any debtor that meets the chapter 7 criteria should not and cannot have sufficient income to make payments on a nonessential timeshare.
Chapter 13
The debt owed to a timeshare company is considered a secured debt as to the timeshare. A debtor must file a plan that reflects how the time share will be treated. The explanation as to whether a debtor may keep a timeshare in a New Jersey chapter 13 is very similar to keeping a motorcycle that is used solely as a luxury item. Please read my blog regarding how a motorcycle and motorcycle financing is handled in a chapter 13. Generally, if a timeshare is surrendered, the debtor may eliminate and discharge any and all associated required payments and debt. Typically, under this scenario, if the plan if artfully drafted, the debtor will not be required to pay any money, whatsoever, through the trustee payment, to the timeshare company.
You may contact Robert Manchel at 866 503 5644 to discuss your timeshare and NJ. bankruptcy law questions.

Manchel
New Jersey
Bankruptcy Law