New Jersey Bankruptcy Blog

New Jersey EZ Pass Violations, Registration Suspension, Auto Impoundment and Bankruptcy

May 5, 2017 by Robert Manchel

Bankruptcy Lawyer Explains How New Jersey EZ Pass Violations And The Threat Of Registration Suspension and Auto Impoundment is Handled in Bankruptcy.

New Jersey residents may not realize that relatively minor EZ Pass violations may result in an enormous debt after the New Jersey Turnpike Authority adds their collection fees and costs. I have handled bankruptcy cases, wherein about 92% of the EZ Pass debt represents collection costs and fees. For example, a client’s total debt of $15,500, represents violation fines of $1,240.00 and collection costs of $14,260.00. Unfortunately, the Turnpike Authority does not treat the actual fines differently from the collection fees and costs.
The Turnpike Authority may send unnerving letters advising that if the debt is not paid, they will suspend your registration and impound all of your vehicles. The letters may provide payment options that are financially unfeasible . What can you do, as you need your auto for work and to transport your children, etc? Bankruptcy may be an option.
Immediately upon the filing of any bankruptcy case, the New Jersey Turnpike Authority must immediately cease any and all collection efforts. This means that if a bankruptcy case is filed, there is an automatic stay that prevents the debtor’s registration suspension and vehicle impoundment. If the registration was suspended prior to the bankruptcy filing, the turnpike authority must reinstate the registration, after the filing. However, the turnpike authority may charge reasonable fees and costs associated with the reinstatement.
The EZ Pass debt may be eliminated and is “dischargeable” in a chapter 7 bankruptcy case. Such debt is also “dischargeable” in a chapter 13 case. This means that the debtor need not pay any of the debt, in the event that either the debtor has no ability to pay any portion, and/or has no valuable assets that are not completely exempt.
You may contact Robert Manchel, at 866 503 5644, to discuss how bankruptcy will effect your EZ Pass violations.

Common Reasons Why A New Jersey Chapter 7 Case Could Be Denied

April 28, 2017 by Robert Manchel

NJ Bankruptcy Lawyer Provides The Most Common Reasons Why A Chapter 7 Case May Be Denied.

The denial or rejection of a NJ. chapter 7 bankruptcy case and/or the trustee unexpectedly selling a debtor’s property is unusual. Although there are numerous reasons why a chapter 7 case may be denied, I will discuss the most likely reasons for a denial. Most denials are based on fraud, attorneys lack of attention to detail and mistakes made on petitions.
The attorney must be knowledgeable of the law and understand what is expected by the local trustees and courts. Also, the attorney must be detailed and thorough with the bankruptcy petition information. Additionally, the debtor’s attorney must ask any and all necessary and relevant questions needed for the bankruptcy petition and the case. Any mistakes in preparing the petition and/or improper information on the petition may result in a denial of other related issues.
The main chapter 7 discharge criteria is that the debtor’s household income is less than the debtor’s necessary and reasonable monthly household expenses. In other words, the debtor must show that he is unable to make any monthly payments toward the debt. A clear example of an improperly completed petition regarding such an issue is as follows. A petition that reflects a $2,000.00 monthly food expense for a household of two is excessive. Consequently, the trustee will reduce such expense to the amount that he believes is reasonable and appropriate. If the debtor cannot provide proof of this excessive expense, the adjustment would result in a substantial amount of monthly disposable income. As a result the chapter 7 discharge would most likely be denied.
In order to prevent such issues, the attorney must know the amount that the trustees and courts perceive as a reasonable food expense for specific household member amounts. In the above explained example, the debtor’s attorney should have known that a reasonable monthly food expense would result in monthly disposable income. In this situation, the debtor may have filed a chapter 13, waited to file the chapter 7 or not file for bankruptcy protection.
The petition must include all of the debtor’s assets and the value of each asset. If the value is substantial in relation to the loan payoff, regarding such asset, the trustee may be permitted to sell the asset. The petition must accurately reflect the asset value and mortgage payoff. A problem may arise if the petition reflects a real estate value of $150,00.00 and the trustee realizes that the actual value is $200,000.00. The equity difference of $50,000.00 may result in the unexpected sale of the house. The debtor and attorney must confirm the property value prior to the filing to avoid such issues. Please note that it may be possible to avoid the sale in this situation.
The attorney must ask detailed questions about the debtor’s finances, assets, recent transactions, and any other financial related questions, that are relevant to the bankruptcy case. If specific questions are not asked, the debtor would not know that certain acts will result in serous ramifications. For example, if a debtor is not asked if he sold real estate within the last year, he would not know that the receipt of $80,000.00 from a recent sale, would result in serious discharge issues. By way of another example, unless explained by an attorney, a debtor would not know that the receipt and deposit of a $15,000.00 payment, from his brother in law, would be a problem.
An attorney’s detailed discussion with the client and review of his documents and information should resolve and/or limit the above listed issues. The above issues could possibly have been avoided by waiting to file the chapter 7 to a future date, or by filing a chapter 13 bankruptcy case.
Robert Manchel may be contacted at 866 503 5644 to discuss your New Jersey bankruptcy law questions.

Would A NJ.Chapter 13 Trustee Sell My Property?

April 24, 2017 by Robert Manchel

Attorney, Robert Manchel, explains the consequences of owning valuable property and the whether a chapter 13 trustee would sell property.

A chapter 13 case is different than a chapter 7, in that a New Jersey chapter 7 trustee would sell a debtor’s personal property or real estate that is not fully exempt. A chapter 13 trustee will not sell a debtor’s property no matter the value. However, the value of the property may effect the amount that the debtor must pay through the bankruptcy plan. As a result, an individual may consider filing for a chapter 13, if he owns property with a substantial value.
If any value of property is not fully exempt, the amount that is “unexempt“, must be paid to towards the unsecured debt, pro-rata. I explained how NJ. bankruptcy exemptions are applied in both chapter 7 and chapter 13 cases. For example, if a house, owned by one person, has a value of $400,000.00, with a mortgage payoff of $330,000.00. $400,000.00 minus $330,000.00 is $70,000.00. $70,000.00 minus $40,000.00 (10% cost of sale of $400,000.0) is $30,000.00. $30,000.00 minus the bankruptcy homestead exemption of $23,675.00, is $6,325.00.
The debtor in connection with the above referenced example would be required to pay at least $6,325.00 toward his unsecured (ie. credit card debt, personal loans, medical bills, etc.). The debtor would be required to pay the $6,325.00 and the New Jersey chapter 13 trustee would not sell the debtor’s property. Please note that based on various other financial issues, the debtor may be required to pay additional funds towards the unsecured debt.
Suppose the debtor’s house is worth $10,000.000.00, with no mortgage or liens? Would the NJ. chapter 13 trustee sell the debtor’s house under such circumstances? The answer is still no. However, the debtor would be required to pay all of his debt, in full, after deduction of his $1,000,000.00 cost of sale expenses and his $23,675.00 exemption. If the debtor is unable to pay the total amount of his debt by any means, including monthly trustee payments, his case would be dismissed, due to the lack of feasibility. Dismissed means the case would be thrown out. If the case is thrown out of court, the chapter 13 trustee would still not be able to sell his house.
Contact Robert Manchel at 866 503 5644 to discuss your NJ. bankruptcy law questions.

What Happens If I Owe A Debt With Someone Who Filed For Bankruptcy In New Jersey?

April 14, 2017 by Robert Manchel

NJ. Bankruptcy Attorney Explains What Happens To A Person Who Owes A Debt With Someone Who Filed For Bankruptcy Protection in New Jersey.

Two people that owe a joint debt to a New Jersey creditor, are both responsible for the entire debt. The creditor may sue each person for the entire debt, or any portion of the debt. However, obviously, the creditor may not receive more than the total amount due.
Lets assume two people owe the same credit card debt, but only one files a New Jersey chapter 7 bankruptcy case. The person that files the bankruptcy case is called a bankruptcy debtor. Pursuant to the bankruptcy Automatic Stay Provision, after the bankruptcy filing, the creditor may no longer collect the debt from the bankruptcy debtor. Immediately upon the bankruptcy filing, the creditor’s action to collect the debt from the bankruptcy debtor must cease, no matter the status of the collection process. This means that if the bankruptcy case is filed after a lawsuit has commenced, the lawsuit must be dismissed as to the bankruptcy debtor, only, after the bankruptcy filing.
However, the bankruptcy filing has no effect on the creditor’s ability and right to continue and/or pursue the collection of the same debt against the non bankruptcy filing joint debtor. This means that after the bankruptcy filing, the creditor may commence and/or continue a lawsuit against the non bankruptcy filing joint debtor, only, without limitation.
However, in a New Jersey chapter 13 case, the bankruptcy laws are different regarding two people that owe a joint consumer debt, when only one debtor files for bankruptcy protection. The Chapter 13 bankruptcy code includes additional protections as to the non bankruptcy filing joint debtor, who owes a joint debt with a chapter 13 debtor. The chapter 13 “Co-Debtor Stay” prohibits a creditor from pursing and/or collecting a debt from the non bankruptcy filing joint debtor, who has not filed for bankruptcy, in connection with a joint consumer debt.
This means that the creditor must cease any and all collection efforts against the both, the non bankruptcy filing joint debtor and the chapter 13 bankruptcy joint debtor, upon the bankruptcy debtor’s bankruptcy filing. Such a stay applies against the non bankruptcy filing joint debtor for the entire bankruptcy case, or until the creditor requests permission from the bankruptcy court to proceed against the non bankruptcy filing joint debtor. Therefore, if the creditor takes no action to proceed against the non bankruptcy filing joint debtor, the creditor may pursue such person for the entire debt balance, after the bankruptcy case is either dismissed or discharged.
A creditor may proceed against the non bankruptcy filing joint debtor by requesting permission from the bankruptcy court to collect the amount that the bankruptcy debtor is not paying to the creditor, through his bankruptcy plan. Consequently, if the bankruptcy debtor is not paying any of the debt, the creditor will likely be granted permission to collect the entire debt from the non bankruptcy filing debtor, while the case is pending. If the bankruptcy debtor is paying back 100% of the debt, it is unlikely that the court will permit the creditor to pursue the non bankruptcy filing joint debtor.
You may call attorney, Robert Manchel, at 866 503 5644, to discuss your New Jersey. bankruptcy law questions.

Will Someone Come To My House If I File For Chapter 7 Bankruptcy In New Jersey?

April 6, 2017 by Robert Manchel

A New Jersey lawyer Explains If Someone Appears At A Person’s House After Filing For Chapter 7 Bankruptcy Protection.

The chapter 7 bankruptcy code is created to allow a person a fresh start. In theory, the fresh start permits a person to keep property that is necessary to live. However, if a person has property that has substantial value, the New Jersey chapter 7 bankruptcy trustee may be permitted to sell such property. Substantial value represents the amount available after subtracting the creditor’s lien payoff, if any, and the bankruptcy exemptions, from the fair market value. The property that a debtor is able to keep is based on bankruptcy exemptions. A person may keep all property that is completely exempt. I explain, in detail, how exemptions are applied in a New Jersey chapter 7 bankruptcy case.
In a chapter 7 case in New Jersey, the debtor must list all of their assets on the petition. All personal property is an asset, including, but not limited to, all furniture, appliances, etc. In over 23 years of experience, I have never filed a personal consumer bankruptcy case, where the trustee came to a debtor’s house to inspect anything. However, it may be possible for a trustee to inspect personal and/or real estate that he believes has substantial value, as explained above. An example of a New Jersey bankruptcy filing where the trustee would inspect property, is a debtor that owed a valuable piece of art, painting or jewelry. However, under such circumstances, the debtor’s attorney should inform his client of the possible inspection, prior to the bankruptcy filing.
Some types of business bankruptcy cases are different than personal bankruptcy cases, in that the business assets are not exempt. This means that, it may be possible for the trustee to sell any business owned property for the benefit of the creditors, as the debtor may not be permitted to apply any exemptions against the equity value of any property. Please note that if the payoff amount due to a creditor, with a lien in property, is more than the value of the property, the the property has no value to the trustee. Consequently, the trustee would not sell such property. However, a trustee may be interested in inspecting any business property, under certain circumstances, with no liens attached to such property.
You may contact Robert Manchel at 866 503 5644 to discuss your NJ. bankruptcy law questions.

Who Can File For Bankruptcy In New Jersey

March 17, 2017 by Robert Manchel

NJ. Attorney Explains Who Can File For Bankruptcy Protection.

Virtually anyone can file for bankruptcy protection in New Jersey. Typically, the issue is not if one can file, but rather which bankruptcy chapter is applicable based on the debtor’s financial situation and goals.
The following information pertains to a New Jersey chapter 7 case.
A person, corporation, partnership, limited liability company and a small corporation may file for chapter 7 bankruptcy protection.
A New Jersey Chapter 7 bankruptcy does not require a person to make any payments and lasts about four months. In approximately four months, after the filing, a person is completely out of the bankruptcy case, with certain debts discharged. There is no maximum or minimum debt amount required to file. The bankruptcy code does not require that a debtor amass a specific amount of debt to file for chapter 7 bankruptcy protection.
However, in order to obtain a discharge, a debtor(s) must meet the chapter 7 criteria. The general chapter 7 criteria is as follows:
1. The debtor does not own any assets with a substantial value, unless he understands that the trustee may sell the asset;
2. The debtors’ monthly average gross household income, for the six months prior to the filing, is less than the average monthly gross income of a household of that size, in New Jersey; However, in the event that the debtor’s household income in more than the average, he may still meet this criteria, if his allowable necessary and reasonable household expenses, exceed his household’s income.
3. The debtor’s projected household net monthly income is less than the household’s reasonable and necessary monthly expenses.
4. The reason for the debtor’s financial situation must have been unintentional
The following information pertains to a New Jersey chapter 13 case.
Only a person may file for chapter 13 bankruptcy protection in New Jersey. A person, corporation, partnership, limited liability company and a small corporation may not file for chapter 13 bankruptcy protection. Chapter 11 is the appropriate reorganization chapter for such entities in New Jersey. Additionally, a chapter 13 debtor must earn regular income, that is sufficient to make the monthly trustee payments.
A New Jersey Chapter 13 bankruptcy has a debt limit that is distinguished from a chapter 11 bankruptcy case. A debtor can file for New Jersey chapter 13 bankruptcy protection, if their unsecured debt is less than $394,725 and their secured debt is $1,184,200. Please note that said figures periodically change. Unsecured debt is debt that is not connected to any property, such as a personal loan, credit card debt, and medical debt. Secured debt is debt that is attached to property, such as a mortgage and a car loan.
Although extremely unusual, if a person’s debt is in excess of the above stated amounts, he may be able to reorganize through a chapter 11 bankruptcy case. Please note that an experienced attorney can argue that certain debt may be secured and/or unsecured based on various circumstances.
A New Jersey chapter 13 case requires a person to make monthly payments to a trustee. The amount of the payment, depends on the person’s household income, expenses and the reason for the filing.
The most typical reasons for a chapter 13 bankruptcy filing are as follows:
1. Pay funds to creditors as a result of not meeting the chapter 7 criteria;
2. Saving a house from foreclosure by paying back the arrears, or seeking a loan modification;
3. Saving an auto from repossession, by paying the arrears, or otherwise making payments on the auto.
4. Avoid eviction by paying the rental arrears through the bankruptcy plan;
5. Paying a debt that is not “dischargeable” in a chapter 7 case.
Contact the NJ. Bankruptcy lawyer, Robert Manchel at 866 503 5644.

Manchel
New Jersey
Bankruptcy Law