A chapter 13 and a chapter 7 bankruptcy debtor must include on their petition all creditors and debt. After the filing, a debtor may no longer use their credit cards. Generally, even though a creditor is not notified of the bankruptcy filing, every creditor is noticed of the debtor’s filing from the creditor’s own automated computer investigation. In other words, even though the creditor is not listed on the petition or provided with direct notice, typically the debtor is denied use of the credit card.
Typically, the bankruptcy case provides no protection to a debtor regarding debt that is incurred after the bankruptcy filing. For example, if a debtor uses a credit card after the filing, in connection with a pre-filing account, the creditor is permitted to take action against the debtor, as if there is no bankruptcy filing. This is true for all debt that is incurred after the filing, including auto financing.
Debt Incurred After Chapter 13 Filing
Typically, in a chapter 13, the rules regarding after filing debt are similar to a chapter 7. However, under certain circumstances, a creditor of after filing debt may file a Proof of Claim that must be paid through the bankruptcy plan. The State of New Jersey, Division of Taxation, and the Internal Revenue Service may require after filing tax debt, to be paid through the bankruptcy plan.
A creditor that extends credit to the debtor after the filing may be paid through the bankruptcy plan and trustee payment, if the debt relates to property or services that are necessary for the debtor’s performance under the plan and the creditor obtained the trustee’s approval. This may possibly relate to post filing auto financing. Typically, New Jersey auto finance companies obtain the trustee’s approval, prior to providing the financing.
Debt After Bankruptcy is Completed
Any debt incurred after the bankruptcy is complete or discharged, is not included and not effected by the bankruptcy filing in connection with a chapter 13 or chapter 7. This means that any debt that is charged after discharge is due and owed to the a creditor. Also, any contract entered into after the bankruptcy discharge is not effected by the bankruptcy filing. The following contracts entered into after the discharge, is due and owing to the creditor, as if no bankruptcy was filed: auto financing; auto lease; mortgage agreement; apartment lease; etc.
A pre-bankruptcy lien will not attach to any property acquired after the bankruptcy discharge or completion. If a person did not file a bankruptcy case, a prior lien attaches to subsequently purchased New Jersey real estate. Consequently, the individual purchasing the real property must pay the creditor the total amount of the lien, prior to settling on the new house. However, after discharge, an individual that purchases a house, will not be required to pay the lien, in connection with the new house, as the lien does not transfer as a lien on the new house.
Contact a New Jersey Bankruptcy Attorney
If you have questions or concerns about your debt or finances after your bankruptcy case is completed, you should consult with a NJ bankruptcy lawyer. The bankruptcy lawyers at The Law Offices of Robert Manchel will examine your situation and give you straight, honest answers about what to expect. Call (866) 503-5655 now for a free, confidential, consultation.