Take Bankruptcy Course 2
The primary goal of filing Chapter 7 in New Jersey is having the court enter your discharge order. This will not happen if you do not take a second course after your case is filed. It is similar to the first credit counseling course, but you have to wait to until after your case is filed to take course 2. It focuses on financial management to set you up with the tools necessary to create and follow a budget that makes sense for you. Again, it is important to go through a company that is approved by the Office of the United States Trustee for the District of New Jersey. If you are in the Cherry Hill area, you can take this course – for free – with one of the Chapter 13 trustees in New Jersey. You can take advantage of this even though you are not in a Chapter 13, but a Chapter 7 bankruptcy in New Jersey because the course is the same for both chapters.
Figuring Out If Youre Eligible For Chapter 13
You may qualify for Chapter 13 bankruptcy if you have a steady income and your debts are worth less than the dollar amounts set by federal bankruptcy law. In 2019, the amounts are:
- $1,257,850 of secured debt.
These amounts are adjusted every few years and set out in 11 U.S. Code, Section 109.
In addition, to qualify for Chapter 13, you must have filed your state and federal income tax returns for the past four years.
Approximately 6 Weeks After Filing
Currently, in New Jersey, it typically takes about 6 weeks after the filing of your bankruptcy petition to have a date set for the meeting of creditors. Seven days prior to this meeting, you are required to provide the trustee with your tax returns for the previous 3 years and proof of your income. Our firm obtains this information prior to filing and provides the trustee with the information within the required timeframe.
Review our page Chapter 7 Court Hearing for more information on the hearing.
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Do You Own Your House Or Your Car Free And Clear
If you have a house or a car on which you do not owe any money, you can protect the property in Chapter 7 using exemptions. Exemptions are an area of bankruptcy law that can be confusing, so talking to an experienced bankruptcy attorney is the best way to find out if you can protect your house or your car in a Chapter 7.
Do not deny yourself the debt relief you deserve out of fear of losing your house or your car. Come talk to our New Jersey bankruptcy attorneys and find out what your options are. We may be able to develop the solution you need to get your finances back on track. With offices in five different locations throughout New Jersey, we make ourselves available to anyone who needs help with debt. Call us today for a free consultation.
Collect Your New Jersey Bankruptcy Documents
Filing bankruptcy in New Jersey takes a lot of paperwork. It is best if you accept that from the outset and start off organized by collecting all the documents you will need. You will need a copy of each paycheck stub you received in the last 6 months. You should also get a copy of your credit report and make sure you have your most recent federal income tax return and bank statement handy. Since your credit report may not be completely up-to-date, go through your recent mail to make sure you haven’t received any collection letters from companies that aren’t reporting yet. Your New Jersey bankruptcy will be much less stressful for you if you take this time to collect and organize everything first. Then, when you’re ready to sit down and take the next step, you’ll have everything you need within reach like an open-book test.
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Can I Keep My Auto
You may keep your auto if you meet the following: 1. The value of your auto is not substantially more than the payoff on your loan 2. You are current with your payments or can bring your payments current, immediately. 3. Your ability to make the monthly payments does not present an undue hardship.
You may keep your auto if you meet the following: 1. You are current with your payments or can bring your payments current, immediately. 1. Your ability to make the monthly payments does not present an undue hardship .
The value of your auto is not substantially more than the payoff on your loan.
Whether leased or financed, generally, you may keep your auto if you are able to make payments on the lease and financing. Bankruptcy may effect the terms and conditions of the payments.
How Chapter 7 Bankruptcy Works In New Jersey
For most people, the goal of Chapter 7 bankruptcy is to wipe out as much debt as possible. In legal terms, this is called having your debts discharged.
In exchange for your bankruptcy discharge, you must be willing to turn over any of your property that is not exempt under bankruptcy law. The bankruptcy trustee in charge of your case will liquidate the property to pay as much as possible to your creditors thats why Chapter 7 is often called liquidation bankruptcy.
This article covers:
- debts you owe under a divorce or separation agreement
- fines, penalties, or criminal restitution payments, and
- any debts related fraud youve committed or injuries youve caused.
In addition, you often cant discharge debts that are secured by a particular piece of property. For example, if you have a car loan, the lender may be able to repossess your car. If you have a home loan and cant show that your home is exempt under bankruptcy law, the lender may have the right to foreclose your mortgage.
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Facts About Bankruptcy The Automatic Stay And The Meeting Of Creditors
The moment you file for bankruptcy, the court puts something in place called the automatic stay. This potent provision of bankruptcy law immediately stops all debt collection efforts by your creditors or the bill collectors theyve hired or sold your debt to. The automatic stay puts the brakes on foreclosures, repossessions, wage garnishments, phone calls, letters, and bill collectors knocking on your door or showing up at your work. The automatic stay is one of the most attractive features of a bankruptcy proceeding, giving you breathing room and peace of mind while you rid yourself of debt. The automatic stay applies in both Chapter 7 and Chapter 13 bankruptcies.
If you are concerned about having to go court, another important fact about bankruptcy is that very few filers ever see the inside of the courtroom. The closest you are likely to get is a meeting in a room in the courthouse or federal building called the section 341 meeting or meeting of creditors. Despite its name, none of your creditors are likely to show up. The meeting itself lasts about five minutes and involves the bankruptcy trustee looking over your paperwork and asking a few questions to make sure you completed all the documents correctly. Your attorney will be with you at this meeting.
Should I Hire An Attorney
Filing for Chapter 7 and Chapter 13 bankruptcy both require a person to accurately fill out several forms, listing all of their sources of income, debts, and property. There are several prerequisites that must be met before filing, and failing to do any of these may result in delays or dismissal of the case. Its also crucial that a person filing for bankruptcy understands what debts are eligible to be discharged and what debts have been deemed non-dischargeable by the rules.
The proceedings themselves will also require at least one court appearance, and potentially more if a creditor objects to the inclusion of a particular debt in the bankruptcy or to a Chapter 13 repayment plan. Knowing how to respond to these objections may make the difference between a debt being discharged or continuing to be owed at the completion of the bankruptcy. There are several more reasons why its best to consider hiring an attorney to help navigate this complex process.
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New Jersey Median Income
If your average monthly income for the past six months is below the New Jersey median income for your household size, below, you meet the requirements of the means test and you meet the first threshold for Chapter 7 bankruptcy.
Note that the means test is just one of several hoops you must jump through to qualify for Chapter 7. Even if your income is low, a judge may block you from filing Chapter 7 if it appears that you have enough income or property to repay a substantial portion of your debts under a Chapter 13 plan.
Contact A Cherry Hill Nj Bankruptcy Attorney
If you believe that your financial situation calls for bankruptcy, it is important to discuss this matter with an effective and experienced attorney. Underwood & Micklin provides quality legal services to clients in New Jersey who need a helping hand through tough times. If you need to file for Chapter 7 bankruptcy, contact Underwood & Micklin for a consultation today.
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What Is Credit Counseling
At least 180 days before filing a New Jersey Chapter 7 Bankruptcy Case, a New Jersey Bankruptcy Debtor must generally first receive credit counseling from an approved credit counseling agency. New Jersey Bankruptcy Debtors who have a debt management plan developed for themselves during credit counseling must file the debt management plan with the New Jersey Bankruptcy Court.
The Chapter 7 Bankruptcy Filing Process
Because the law offices of Oliver & Legg have helped thousands of clients file for bankruptcy, our lawyers are prepared to bring our approach and premier service to help you address the Chapter 7 bankruptcy process as efficiently and effectively as possible. Chapter 7 bankruptcy filing is common, but unique it does not involve the reorganization of unsecured debt into a payment plan.
Instead, it provides people the ability to get a fresh start through the discharge of unsecured debt. Below is a description of the process.
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Alternatives To Filing For Bankruptcy
Not everyone is eligible to file for bankruptcy, and in some instances, it may make more sense to consider an alternative to filing. Some alternatives to filing for bankruptcy include working out a deal with ones creditors, entering a credit counseling program to consolidate debts or settling judgments for a lesser amount than what is owed.
Preparing For Chapter 7 Bankruptcy
Theres some protocol to follow in the months before filing for bankruptcy. Failing to follow these instructions could undermine your efforts.
Dont Pay Creditors It seems counterintuitive and you should definitely make routine payments. But any large or unusual payments could be viewed as preferential transfers. That means one creditor has benefited unfairly over others.
No New Debt A new creditor could claim you took out a loan or ran up the balance on a credit card without intending to pay it back. Legally, thats fraud and it will not be forgiven.
No Unusual Transactions Dont stray from the routine. Dont transfer titles of cars or homes. Dont buy luxury goods. Dont transfer your business or remove your name from it. They can all be classified as fraud.
Be Truthful You are required, while filing for bankruptcy, to provide full and complete information. You must disclose any debt, assets, accounts or other financial information. Failure to comply could lead to fraud and potential criminal charges.
Dont Touch Retirement Funds You are generally allowed to keep retirement plans and accounts, so keep them safe while considering bankruptcy and dont use those funds to pay down debt.
Never think you can get away with something sneaky or dishonest. Your bankruptcy lawyer is always a good resource for what you should and shouldnt do.
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Joint Debts Are Not Completely Discharged
Joint debts are debts that are entered into by both spouses. For example, if you and your spouse have your names on the loan for a luxury vehicle, this debt will not be eliminated when one spouse files for bankruptcy individually. Instead, the portion of debt owed by the petitioner will be discharged, and the other spouse will still owe the remaining debt.
If the name of the petitioner is the only name on a debt that would be discharged in bankruptcy, creditors cannot pursue the petitioners spouse to recover compensation.
Do You Owe Money On Your House Or Your Car
Home mortgage loans and car loans are secured debts, which means they are debts secured by collateral. When you borrowed the money, you pledged the property as security for the loan. If you do not pay the debt, the creditor can take the property.
If you file a Chapter 7 case and owe money on your house or car, you can keep the house or car if you agree to repay the underlying loans, and:
- The monthly payment is reasonable
- The property is necessary to support yourself and your dependents
- You are current on the payments and
- You can afford the payments and still support yourself and your family.
If you are behind on your house or car and file Chapter 7, you can use the bankruptcy as a chance to walk away from the debt and start over, which may be the best choice for someone who cannot afford to pay back such loans. Chapter 13 is also an option to save your house or your car if you are behind on payments contact Jenkins & Clayman to find out more.
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Debts You Can Discharge
While your plan is in force, creditors must stop collection efforts. And after you make all the payments under your plan, the court will officially discharge manybut not allof your debts. Here are some of the most common kinds of debts discharged through Chapter 13 plans:
- criminal fines or restitution payments
- any debts related fraud youve committed or injuries youve caused, and
- some long-term debts that are secured by collateral.
How To File For Chapter 13 Bankruptcy
If bankruptcy sounds like it may be the right solution for you, learn more about the process in How to File for Bankruptcy in Howell, New Jersey.
Or you may want to jump right into a more in-depth resource like Nolos book, Chapter 13: Keep Your Property and Repay Your Debts Over Time, which walks you through the process step-by-step, including how to fill out and file your bankruptcy forms.
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Figuring Out If Youre Eligible For Chapter 7
To qualify for Chapter 7 bankruptcy, your bankruptcy forms need to show that you dont have enough income to repay your creditors a certain amount. You can accomplish this by either:
- proving that your income is below the New Jersey median income for your household size, or
- comparing your income to expenses under a complex formula called the bankruptcy means test calculation to show that youre not able to pay.
If your income is above the median income for your state and family size and the means test shows you have enough disposable income to make reasonable payments to your creditors, the bankruptcy court may dismiss your caseor you may be allowed to file bankruptcy under another chapter of the bankruptcy code, like Chapter 13.
Our free means test calculator can do the math for you, so you can figure out whether you’ll qualify for Chapter 7.
Rebuilding Credit After Bankruptcy
Most people shy away from filing a chapter 7 bankruptcy because they fear the negative impact on their credit. A bankruptcy filing will remain on your credit report for 10 years. This, however, should not prevent you from obtaining credit and rebuilding your financial health. Most debtors that have unsecured debt will have a positive effect on their credit score post-bankruptcy. The positive impact results from having a clean slate and from the fact that creditors are aware of the 8-year ban on you refiling a bankruptcy. This will make you more creditworthy. Our firm obtains credit reports from www.cinlegal.com which includes an estimated 12-month post-bankruptcy credit score. This will give you an indication on what to expect after receiving a chapter 7 bankruptcy discharge.
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New Jersey Bankruptcy Eligibility
Filing bankruptcy is an important decision, and one that you want to make only once you have received expert counsel and have a clear understanding of the options and opportunities available to you. While we are ready to help you if you have already determined that filing bankruptcy is the direction you need to go, we are also here to make sure that you choose the right option . We also want to ensure we evaluate with you if there is a better option for your situation.
How do I know if I should file bankruptcy?
If you can no longer keep up with the payments on your credit cards, it may be the time to consider filing bankruptcy. If your wages are garnished after a judgment, it may be time to consider a bankruptcy. If you are in foreclosure and behind on your mortgage payments, it may be time to consider filing bankruptcy. If you have overwhelming debt of any kind and it just does not look like there is any way to pay, it may be time to consider bankruptcy. If any of these describe your current situation, it would be helpful to contact us and let us help you assess if filing bankruptcy is the best answer for you.
Contact us directly at 973-870-0434 or schedule an initial consultation with a New Jersey bankruptcy lawyer. We can give you a FREE bankruptcy consultation on the phone so we can discuss your options.