New Jersey Bankruptcy Blog

NJ Attorney For Chapter 13 Bankruptcy Hearings

There are two bankruptcy hearings in a New Jersey chapter 13 bankruptcy case. The first is called the Meeting of Creditors (MOC) or 341(a) hearing. The second is called the Confirmation Hearing.
The MOC is never held in a courtroom and a judge is not permitted to preside at the hearing. The MOC hearing is conducted in a Newark office building, in connection with Newark filed cases. This hearing is scheduled at the Robbinsville trustee’s office, in connection with the Trenton filed cases, and in a Camden or Northfield office building, for Camden filed cases.
The chapter 13 trustee or his/her counsel conducts the hearing and asks the debtor questions. Although permitted, it is very unusual for a creditor to appear and ask questions. The hearing lasts about 8 to 15 minutes. The hearing is recorded and the debtors must bring a photo ID and proof of their social security number. The questions pertain to the following: identity of the debtors; ensuring accuracy and completeness of the petition; asset values for the bankruptcy filing; prior and future income and expenses.
The second hearing is called a Confirmation Hearing, which is always at the appropriate courthouse. The debtor need not appear at the hearing. Only the debtor’s attorney must appear at the hearing. However, creditors who object to the plan may appear. The purpose of the hearing is to ensure that the debtor’s monthly trustee payments are accurate, which typically requires a payment adjustment.
At the hearing, the trustee or his/her counsel review the following to determine the required amount of the monthly payments: debtor’s bankruptcy plan; creditors’ claims; type of debt; debtor’s asset values; and debtor’s income and expenses. If the debtor or the objecting creditor does not agree with the trustee’s recommendation, any party can request a judge to resolve any issues.
Please contact New Jersey Bankruptcy lawyer Robert Manchel, at 866.503.5655 for a free consultation and explanation as to how chapter 13 or chapter 7 bankruptcy works.

A New Jersey chapter 7 bankruptcy case requires only one hearing, which is called the Meeting of Creditors (MOC) or the 341(a) hearing.
The MOC is never held in a courtroom and the judge is never present. If your case is filed In Trenton, your MOC hearing is held in the courthouse, but not in a courtroom. If your case is filed in Newark, the MOC hearing is typically held in an office building in Newark. If your case is filed in Camden, your hearing is either held in an office building in Camden or Northfield.
The hearing is conducted by the trustee that is assigned to oversee your bankruptcy case. Typically, the trustee sits at a desk facing all of the debtors. When the trustee calls the debtors’ name, the debtor must approach the desk and sit down facing the trustee. There is a recording device on the table that records all testimony. The debtors must show the trustee a photo driver’s license and a social security card to provide proof of identity. There are alternative forms of identification that are acceptable. The debtor’s attorney should put the original signed bankruptcy petition on the table.
The hearing lasts about five to ten minutes depending on the complexity. Although the hearing is called a Meeting of Creditors, it is unusual for a creditor to appear and ask questions. The trustee is mainly interested in eliciting testimony regarding the debtor’s assets, income, expenses, and reason for the bankruptcy filing. The trustee must determine if the debtor has assets with a substantial value that he may sell. Also, the trustee must ensure that the debtor’s household income is less than their monthly expenses. Furthermore, the trustee must ensure that the debtor’s financial hardship is legitimate.
Some of the questions that are asked at the Meeting of Creditors are as follows: Did you review your petition for accuracy prior to signing? Is the information in your petition correct? Do you need to change any information in your petition? Does your petition include all of your assets? When did you buy your house? How much did you pay for your house? How much is your house worth now, if you were to sell your house? Do you own stocks or bonds? Do you have a savings account? Can you sue someone for money, for any reason? What is the reason for filing bankruptcy? Are you working? Has your income changed from the time of the bankruptcy filing?
Please contact NJ Chapter 7 Bankruptcy Lawyer Robert Manchel at 1 (866) 503-5655 to discuss the process for chapter 7 bankruptcy protection.

In a New Jersey chapter 7 bankruptcy case, the trustee may only sell the debtor’s property if the house has substantial equity in excess of the mortgage payoff. Therefore, if the debtor’s house has substantial equity, he would avoid this issue by not filing a chapter 7 bankruptcy case.
Upon the filing of a chapter 7, the mortgage company cannot commence or continue a foreclosure action against the debtor’s house. However, by court motion, the mortgage will likely be granted permission from the bankruptcy court to commence or proceed with a mortgage foreclosure action if the debtor is in default with the mortgage payments.
The mortgage company’s request to the court for permission to proceed with the foreclosure action is called a Motion for Relief from the Automatic Stay. Typically, the mortgage company would file such a motion about one to two months after the bankruptcy filing. The motion would be granted about 30 days after the filing of the motion.
The bankruptcy filing has absolutely nothing to do with the mortgage company’s right to commence or pursue a foreclosure action. The mortgage company may only commence or proceed with a foreclosure action if the mortgage is in default. A foreclosure action is a state court action, not a federal or bankruptcy type action.
In the event that the mortgage company is permitted to proceed with the foreclosure action, the action commences or continues at the point of the procedure where the action ceased at the time of the bankruptcy filing. After the mortgage company is granted permission to proceed, the bankruptcy case has no impact on the mortgage company’s foreclosure proceedings or the debtor’s your rights regarding the mortgage and possession of the house. This means that the debtor may continue to reside in the property until the completion of the foreclosure action. Additionally, the debtor has the right to work out a loan modification as well.
Please contact New Jersey Chapter 7 Bankruptcy Lawyer Robert Manchel at 1 (866) 503-5655 to discuss the effects of a bankruptcy filing on a mortgage foreclosure. Call to discuss your personal situation and the potential for bankruptcy protection.

In a chapter 13 case, the debtor must make monthly payments to a trustee for 36 to 60 months. The monthly trustee payment is based on numerous criteria. A chapter 13 case is typically comprised of different classes of debt (i.e. priority, secured, unsecured). Certain type of debt such as priority (i.e. child support, certain taxes) must be paid through a chapter 13 bankruptcy plan, no matter the circumstances. The debtor must pay this debt and prove sufficient monthly disposable income to pay such debt. Payment of this debt cannot be eliminated.
A substantial part of the bankruptcy code deals with the various analyses that determine the portion of the unsecured debt (i.e. credit card debt) that must be paid. A debtor must pay no less than their unexempt equity in property towards the aggregate amount of unsecured debt, through monthly bankruptcy installments. In other words, if the debtor has real estate or personal property with a substantial value, the debtor is required to pay towards the total unsecured debt over the plan’s life- the property’s fair market value minus bankruptcy exemptions. It is not typical that any debtor has property with substantial value. However, generally, in the event that a debtor’s monthly trustee payment is based on this criteria, the monthly payment can never be modified to reduce the amount that is to be paid to the unsecured creditors.
Also, the debtor must pay no less than all of their monthly disposable income to the trustee, unless payment of 100% to all unsecured creditors will require a monthly payment of less than all of their monthly disposable income. Monthly disposable income is net income minus necessary expenses- such as mortgage, food, clothing, transportation, utilities, etc. Monthly disposable income is based on two criteria. If a debtors’ payment is based on monthly disposable income and there is a substantial change in circumstances regarding income or expenses, the monthly payment may be modified to the changed monthly disposable income.
A debtor can include a certain amount of secured debt in a chapter 13 bankruptcy case. For example, a debtor may save their house from foreclosure by curing the arrears through the bankruptcy plan, while maintaining monthly payments directly to the mortgage company. A debtor may save their auto from repossession, by paying their auto arrears through the bankruptcy plan. Typically, if a debtor is no longer able to afford the trustee payments that include mortgage or auto finance arrears, he may wish to surrender the property and reduce the monthly payment. However, the debtor must continue to pay all disposable income through the plan.
You may contact Bankruptcy Lawyer Robert Manchel at 1 (866) 503-5655 to discuss your chapter 13 payments in NJ.