New Jersey Bankruptcy Blog

What Can Bankruptcy Stop? Will Creditors Stop Calling Me?

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The filing of a bankruptcy case prevents all creditors from commencing or continuing any action against the person filing (debtor) regarding all collection claims for money; or, the enforcement of claims against the debtor’s property, due to money that is owed to a creditor. In general, bankruptcy protects people from bill collectors that are attempting to sue for money or take someone’s property due to money owed. Typically, bankruptcy is not the forum to protect oneself for matters that concern property, where money is not involved.
The bankruptcy code states that a bankruptcy filing initially stops an entity from exercising possession or control of the debtor’s property. However, if the entity that is attempting to control the property is acting due to an issue other than money owed, the bankruptcy court will permit the entity to pursue the action. For example, if an individual is violating a local ordinance by housing hazardous materials, the bankruptcy court will allow the town to commence an action against the homeowner for compliance.
The bankruptcy filing stops the ability of a creditor to pursue any action against the debtor immediately upon the filing. Therefore, the creditor must cease all action against the debtor at the time of the filing, no matter what point in the legal process. If a creditor did not file a lawsuit at the time of the filing, the creditor may not file the lawsuit. If the bankruptcy case is filed after the creditor obtained a judgment and is intending to levy on a bank account, the creditor cannot levy on the account.
A bankruptcy filing stops any creditor from:
filing a lawsuit;
contacting the debtor by any means;
foreclosure action;
eviction action;
loss of drivers’ license due to surcharges, only;
utility termination;
bank account levy;
wage garnishment; etc.
Please contact the Bankruptcy Lawyer Robert Manchel at 1 (866) 503-5655 to discuss how bankruptcy can protect you.

How Many Times Can I File For Bankruptcy?

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A person cannot file a subsequent chapter 7 case, within eight years of the filing of the prior chapter 7 case that received a discharge. In other words, if a person received a chapter 7 discharge, the debtor cannot receive another chapter 7 discharge unless the subsequent chapter 7 is filed at least eight years from the date of the filing of the prior chapter 7 case that was discharged.
A debtor that received a prior chapter 13 discharge can obtain a subsequent chapter 7 discharge if the prior chapter 7 case was filed at least six years before the filing of the present chapter 13 bankruptcy case. However, there are exceptions as to when a person may file for a chapter 7 after a chapter 13 discharge. The exceptions are as follows: The debtor paid all unsecured debt through their chapter 13 case, or they paid 70% of the unsecured debt and the plan was proposed in good faith, in addition to applying his best efforts.
A chapter 13 debtor who filed and received a prior chapter 7 discharge within four years of the subsequent chapter 13 filing will not receive a discharge of any debt that is not paid through the present chapter 13 plan. Please note that the debtor can file the chapter 13 case under this scenario, but the debtor will not receive a discharge for debt that is not paid through the subsequent chapter 13 filing.
A chapter 13 debtor who filed and received a prior chapter 13 discharge in connection with the prior case that was filed within two years of the subsequent chapter 13 filing will not receive a discharge of any debt that is not paid through the subsequent chapter 13 plan. Please note that the debtor can file the chapter 13 under this scenario, but the debtor will not receive a discharge for any unpaid debt.
A debtor that files a chapter 13 or chapter 7 case after the dismissal of a prior chapter 7 or chapter 13 case, within one year of the subsequent chapter 13 or chapter 7 filing, may need to meet certain criteria to continue the subsequent case.
The New Jersey Bankruptcy Practitioner, Robert Manchel, can be reached at 1 (866) 503-5655, to discuss whether you can file a subsequent bankruptcy case.

New Jersey Bankruptcy Lawyer Explains How Long A Chapter 13 Case Can Last

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The number of months of a chapter 13 bankruptcy plan depends on numerous factors, including, the value of assets, amount of monthly disposable income, and the reason for the filing. The bankruptcy code requires a debtor to pay no less than all monthly disposable income to a trustee for at least 36 months. If the debtor’s household income for the six months prior to the filing is more than the average income of a household of the same size in New Jersey, most likely the plan will be 60 months. In other circumstances, the length of the plan may be between 36 to 60 months.
If the debtor has property worth a substantial value that is in excess of their bankruptcy exemptions and costs to sell the property, the amount of the unexempt property value must be paid to the trustee over the life of the bankruptcy plan. Although unusual, if the debtor has personal property or real estate that has substantial value, the debtor will likely be required to pay additional funds to the trustee over the life of the bankruptcy plan. Under this scenario, the debtor may require a longer monthly plan to allow for the additional funds that must be paid. The debtor may wish for a plan longer than 36 months to allow for payment of these funds over a longer period.
Also, a debtor may wish to file a chapter 13 case for a number of reasons, such as to cure mortgage, auto, child support, or income tax arrears. The funds that are required to cure certain arrears may require substantial payments that will be reduced by extending the months of the plan. Under this Scenario, assuming that all disposable funds are paid to the trustee on a monthly basis, the debtor may wish to extend the months of a plan, to a period between 36 to 60 months.
The numerous issues related to a chapter 13 are involved and the above explanation is extremely simplified. In fact, the number of months of a plan is affected by numerous factors, and the amount of months of a plan may be modified.
Please contact NJ Bankruptcy Lawyer Robert Manchel at 1 (866) 503-5655 to discuss your chapter 13 bankruptcy questions.

NJ Bankruptcy Lawyer Explains What Bankruptcy Fraud Is In Regards To Credit Card Use

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Typically, if a debtor meets the criteria for a chapter 7 bankruptcy, all unsecured debt is dischargeable, including credit card debt. However, if a creditor, such as a bank in connection with credit card debt, believes that certain debt was incurred by fraud, the bank may object to the discharge of such debt.
Although unusual, a creditor may contest the discharge of such debt by filing a “Complaint for the Non-Dischargeability of Debt”. The complaint is a lawsuit within the bankruptcy case, which is generally settled by agreeing to pay back a certain amount, on a monthly basis, over a reasonable time period. Please note that typically, with the exception of the settled amount, all other debt that is due to other creditors is discharged.
What facts will a creditor focus on, when deciding whether to object to the dischargeability of debt? Typically, the creditor will rely on the following facts: 1. did the debtor have sufficient income to pay for the charge; when was the charge, the day prior to the filing or five years prior to the filing; number of payments made on the debt; what was the money used for, a vacation, or food; etc.
Under the bankruptcy code, in the event that a debtor incurs over $500.00 of debt for luxury items, within 90 days of the filing, to any one creditor, the debt is presumed to be nondischargeable. Also, cash advances in excess of $750.00, within 90 days of the filing, is presumed to be nondischargeable. However, a “presumption” does not mean that is was fraud.
Also, if credit card debt that was incurred by fraudulent means, such as forging a person’s name, would be nondishcargeable.
The Law Offices of Robert Manchel is experienced in counseling individuals about possible fraud issues prior to filing, so as to prevent disastrous results with the courts of NJ. Please contact bankruptcy attorney Robert Manchel at 1-866-503-5655 for help and how bankruptcy protection and laws apply in your individual case.

How Does Bankruptcy Affect My Business in NJ?

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In connection with a personal bankruptcy, a person’s business and/or the business assets are considered an asset of the individual. However, only the individual debtor’s ownership interest in the business and assets are the debtor’s asset.
In a chapter 7, if the individuals’ business interest has substantial value, in excess of its bankruptcy exemptions, the trustee can sell the business and disburse the proceeds to the creditors. Also, if the debtor’s interest in the business assets is substantial and in excess of his exemptions, the chapter 7 trustee may be permitted to sell the assets. If the value of the business and business’ assets are insignificant, the chapter 7 trustee will not sell the business or business assets. The value of the business and its assets are based on the value as of the time of the bankruptcy filing.
In a chapter 13 personal bankruptcy filing, the debtor’s business and business assets are considered assets, the same as in a chapter 13. However, in a chapter 13, the trustee will not sell the business and/or its assets. However, in the event that the personal debtor’s business interest and/or interest in assets is substantial, and in excess of exemptions, the debtor will be required to pay additional funds to the unsecured creditors. The amount that is paid to the unsecured creditors in a chapter 13 may not be less than the amount that a chapter 7 trustee would have received, if the same debtor had filed a chapter 7. If the value of the business and business’ assets are insignificant, the amount paid to unsecured creditors, if any, through a chapter 13, will not be effected.
If you wish to obtain information as to how a business can impact a personal bankruptcy, please contact New Jersey bankruptcy lawyer Robert Manchel at 1-866-503-5655.

New Jersey Bankruptcy Lawyer Details How Bankruptcy ffects Child Support

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In 2005, the bankruptcy code was modified. A portion of the code was modified to include additional protections for creditors that are due child support from bankruptcy debtors. The bankruptcy code requires trustees to provide additional notice of the bankruptcy filing to such creditors. Also, the code was modified to reflect that child support recipients are the first creditors to be paid from any proceeds that are obtained by a chapter 7 trustee from the sale of a debtors’ assets.
A New Jersey chapter 7 bankruptcy filing does not effect or change the obligation to pay child support and will not eliminate the debt. In other words, if the debtor owes child support, the same amount that is due prior to the filing will be due after the chapter 7 is complete. Also, if the debtor filing a chapter 7 owes child support, the bankruptcy filing will not stop the spouse, who is entitled to the support, from filing court papers requesting to enforce or modify the child support.
A New Jersey Chapter 13 requires the debtor to pay through the monthly plan (trustee) payment the total amount of the pre filing child support arrears. In addition, the debtor is require to pay the regular monthly and ongoing support payments to the recipient. The only exception is when the child support recipient agrees to the payment in another fashion.
The support arrears must be paid through the chapter 13 plan, no matter why the case was filed. In other words, a debtor may file a chapter 13 to save their house without any thought of their child support arrears. Under this scenario, in addition to payments on their mortgage arrears, the debtor must also pay the support arrears, through the monthly plan payments, and maintain sufficient income to pay the plan payments. If the debtor cannot afford the plan payments that include the support arrears, the case will likely be dismissed.
Additionally, a chapter 13 debtor is not entitled to a discharge after completion of all monthly plan payments, if the debtor is not current with all child support payments that were due from the date of the filing to the date of the completion of the plan.
If you are interested in learning more about how bankruptcy effects child support, you many contact the experienced New Jersey Bankruptcy Lawyer, Robert Manchel at 866.503.5655.

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