New Jersey Bankruptcy Blog

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.

How Are Tax Returns Handled In A New Jersey Chapter 13 Case?

December 16, 2015 by Robert Manchel

New Jersey Attorney Details How Tax Returns Are Handled In A Chapter 13

All tax returns must be filed to proceed with a chapter 13 bankruptcy case. If any return is not filed, the trustee may possibly dismiss the case at the Confirmation Hearing. A case dismissal means that the case is thrown out. It may be possible to reinstate and continue with the same case.
In New Jersey, each creditor files a Proof of Claim (claim) with the court that indicates the details of the debt. All taxing entities, such as the Internal Revenue Service and the State of New Jersey, Division of Taxation, will file a Proof of Claim. The claim indicates whether all of the debtors returns are filed. Sometimes the tax claim will reflect that return for specific years were not filed even though the return was actually filed. In this situation, the taxing entity must file a modified proof of claim reflecting that all tax returns have been filed.
In addition to the non filing of a tax return, there may be many other more complicated tax issues related to the proofs of claim and tax debt. Typically, the State of New Jersey and the IRS are very easy to deal with and will amicably resolve various issues. For simple issues, the matter may possibly be resolved by forwarding the taxing authority the appropriate tax return. However, in a number of circumstances, it may be necessary to file a motion with the court objecting to the taxing entity’s claim. If the matter cannot be resolved, the issues may be argued before the judge, who will make a decision regarding the tax debt.
The NJ. bankruptcy practitioner, Robert Manchel, may be contacted at 866 503 5644.

Can I keep A Motorcycle In A New Jersey Chapter 13 Case?

December 11, 2015 by Robert Manchel

New Jersey Lawyer Explains How To Keep A Motorcycle In A Chapter 13

If a New Jersey bankruptcy debtor is not discharging or eliminating any of his debt and has sufficient disposable income to pay all creditors that must be paid, under the bankruptcy code, the debtor may keep any motorcycle. However, if a debtor is attempting to eliminate debt, such, as credit card debt, a debtor may or may not be permitted to keep his motorcycle. The balance of this blog pertains to a New Jersey chapter 13 debtor who owns a motorcycle and intends to eliminate certain debt.
There are two issues related to whether a debtor may keep a motorcycle in a chapter 13 case.
First issue:
A chapter 13 debtor must pay to the trustee, all of their household disposable income on a monthly basis. The allowable expenses that are used to obtain the disposable income, must be necessary and reasonable to live. The allowable disposable income, typically, does not include a payment on motorcycle financing, unless the motorcycle is necessary for work. In other words, a trustee or judge will likely not permit a debtor to use a $500 motorcycle finance payment as an expense and not use the $500.00 to pay back creditors. The debtor will not likely be permitted to keep a motorcycle, under this scenario. However, depending on the circumstances, the trustee may possibly work out a settlement or the issue may possibly be resolved by the debtor’s attorney.
Second issue:
A debtor must pay to their unsecured creditors (ie. credit card debt), pro rata, no less than the amount of their unexempt assets. The exemption analysis has been explained, numerous times, in other blogs within this website. The exemption analysis is the same in a chapter 7 and chapter 13.
The bankruptcy code has a list of exemptions that may be applied against the equity in assets. If the amount of the exemption that is applied to any asset is less than the asset’s equity, than the difference is the unexempt equity. Depending on the specific asset, the equity and the unexempt amount may be reduced by the estimated cost of sale of the asset.
The bankruptcy code provides a list of exemptions that may be applied toward specific assets. The bankruptcy code allows an exemption of $3,675.00 in any motor vehicle. This exemption is typically applied to a car, but may possibly be applied towards a motorcycle, in certain circumstances. Additionally, another code section permits a person to apply the amount of $11,500.00 in a motorcycle, that is not used or needed for their residence. Additionally, the debtor may apply $1,225.00 in any property. The following is an exemption analysis:
Motorcycle Value       $10,000.00
Financing Payoff         $2,000.00
Balance $8,000.00
Exemption                   $5,000.00 (Assume that $5,000.00 is the maximum exemption that may be applied. In other words, assume that the auto exemption is needed and applied to another automobile and cannot be applied towards the motorcycle. Also, assume that this debtor can only use $4,775.00 of the unused portion of the residential   exemption and the additional $1,225.00 amount.)
Balance                       $3,000.00
The above example results in a motorcycle with unexempt equity of $3,000.00. This means that the debtor must pay at least $3,000.00 towards their total unsecured debt. The amount of any other unexempt equity in any other property must be added to this $3,000.00. The debtor must pay at least the total amount of all unexempt equity toward their total unsecured debt, through their bankruptcy plan. If the debtor does not maintain sufficient disposable income to pay this amount through his bankruptcy plan, he will not be permitted to continue with his chapter 13 case. Therefore, if the debtor does not have sufficient income to pay the total amount of his unexempt motorcycle equity, to his unsucred creditors, he must sell the motorcycle, if he wishes to file a chapter 13 bankruptcy case.
Robert Manchel, the NJ. bankruptcy lawyer, may be contacted at 866 503 5644.

Can I Keep A Motorcycle In A New Jersey Chapter 7 Bankruptcy Case?

November 30, 2015 by Robert Manchel

New Jersey Lawyer Explains When A Person May Keep A Motorcycle In A Chapter 7

Over the many years of practicing bankruptcy law, I have noticed that peoples’ motorcycles are their most treasured property. When I counsel a person about their Harley Davidson, there is great concern on their faces. I understand that in some instances their motorcycle may hold more importance than their house or car.
In a New Jersey chapter 7 bankruptcy case, typically, a motorcycle is treated as a luxury item, unless the debtor needs the vehicle for work transportation. I have stated, on numerous occasions, the chapter 7 bankruptcy criteria, in other blogs. The criteria as to whether a motorcycle owner is entitled to a bankruptcy discharge is different than the criteria that is applied to whether the motorcycle owner can keep his motorcycle. In other words, a person may be entitled to a discharge and lose his motorcycle. Also, a person may not meet the criteria for a chapter 7 discharge and be permitted to keep his motorcycle, if they filed a chapter 13.
In New Jersey, a debtor can only keep assets that are fully exempt and that do not have a substantial value. The application of exemptions is explained, in detail, in numerous other blogs. I will briefly explain the exemption process, as follows. If a debtor can fully exempt the value of a motorcycle, the debtor may keep the motorcycle. The bankruptcy code exemptions are listed in 11 U.S.C., section 522(d). Section 522(d)(2) allows a $3,675.00 exemption in one motor vehicle. Typically, this exemption is used for the debtor’s car. However, theoretically, this exemption may be applied to a motorcycle.
A debtor may also apply, in any property, a portion of the exemption that is not used or needed for their house. Each debtor has a $22,975.00 exemption that may be applied towards the equity in their house. Bankruptcy code section 522(d)(5) permits the debtor to use up to $11,500 of the unused portion of this household exemption in any property, in any amount. Additionally, section 522(d) permits the debtor to apply 1,225.00 in any property. By way of example, said $11,500.00 and $1,225.00 exemptions may be applied to: $5,000.00 checking account funds; $4,000.00 of stock; and, a $3,725.00 antique vase.
The debtor may clearly keep a motorcycle, if there is no profit to be earned from selling the motorcycle. For example, a debtor may keep a motorcycle that has a $20,000.00 value, with a $21,000.00 financing payoff amount. The debtor is permitted to keep the vehicle because the bankruptcy code does not permit the elimination of the motorcycle’s financing lien. For example, if the motorcycle’s value is $20,000 and the motorcycle financing payoff balance is $21,000, the trustee will be unable to payoff the $21,000.00 lien with a $20,000.00 sales’ price.
However, a trustee will be permitted to sell the motorcycle, if there are funds available after deducting the motorcycle financing payoff and all of the applied exemptions. Look at the following example:
Auto value: $25,000.00
Financing Payoff: $2,000.00
522(d)(5) exemption: $11,500.00
522(d)(5) exemption: $1,225.00
Balance $10,275.00
Based on the above example, the trustee could sell the motorcycle and receive $10,275.00 from the sale. The debtor would receive $12,725.00, which is the amount of the debtor’s applied exemptions. Please note that the calculations generally include the costs to sell the motorcycle. Also, there may be many other issues that modify the figures that are used.
Contact Robert Manchel at 866 503 5644 to discuss your NJ. bankruptcy law questions.

Manchel
New Jersey
Bankruptcy Law