New Jersey Bankruptcy Blog

Experienced New Jersey Lawyer Explains How A Bankruptcy Can Save Your Vehicle

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How can bankruptcy save an automobile from the finance company?
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 NJ consumer bankruptcy lawyer Robert Manchel at (866) 503-5655 to discuss how bankruptcy can save your auto.

How A NJ Chapter 7 Bankruptcy Trustee Prepares For The Meeting of Creditors Hearing

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The chapter 7 trustee’s preparation for the Meeting of Creditors Hearing 341(a) Hearing
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 debtor’s 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 debtor’s 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 debtor’s attorney forwards all of their financial documents to the trustee for his review. This includes: six months of the debtor’s 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 their 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 bankruptcy 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 NJ bankruptcy attorney Robert Manchel at (866) 503-5655 to discuss your chapter 7 bankruptcy questions and the potential for receiving bankruptcy protection.

Benefits For Disabled People Filing Bankruptcy In New Jersey

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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.
Please call the New Jersey bankruptcy lawyer Robert Manchel at (866) 503-5655 to discuss your bankruptcy protection options.

Prohibition of Discrimination of Bankruptcy Debtors

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The bankruptcy code specifically prohibits the government from discriminating against an individual due to the filing of a bankruptcy case or based on a debt that was discharged or included in a bankruptcy case. Also, the government cannot discriminate against someone who is associated with another who filed for bankruptcy protection. More specifically, the government cannot discriminate against a debtor with regard to employment, including termination of employment and denial of employment.
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 NJ bankruptcy attorney Robert Manchel at (866) 503-5655 to discuss your rights.

Cash Advances And Luxury Items Can Be Exceptions To New Jersey Bankruptcy Discharge

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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, a bankruptcy lawyer in New Jersey, can be reached at 1 (866) 503-5655 to discuss how bankruptcy protection could be applied to your personal situation.

Association Fees And Bankruptcy

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Association Fees in Bankruptcy
Typically, if a homeowner files for bankruptcy protection and surrenders their house, any payments connected to the property are 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 the bankruptcy lawyer in NJ., Robert Manchel, at (866) 503-5655 to discuss how association fees are handled in bankrutptcy.

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