New Jersey Bankruptcy Lawyer - Time to File a NJ Bankruptcy

When filing a New Jersey Bankruptcy, it is important to know when to file a chapter 7. The "best" time to file a chapter 7 bankruptcy case will depend on several factors. I consult many clients during the week that are interested in our same-day filing service. This request is made because they want to avoid an appearance at court, prevent a repossession, prevent foreclosure, avoid a wage garnishment, or to simply to calm their nerves. The filing of a New Jersey chapter 7 bankruptcy will prevent all of the above events (except of course the calming of your nerves). Upon filing a chapter 7 bankruptcy, petitioners are awarded the protection of the automatic stay. This bankruptcy protection prevents creditors from pursuing any type of collection efforts. Depending on your particular situation, it may be beneficial to take advantage of this protection right away. Another factor that should be considered when contemplating a New Jersey Bankruptcy filing is whether you are considering selling (shorting) your home. The automatic stay will prevent any kind of movement of the property. You will not be able to sell the property without obtaining permission from the New Jersey Bankruptcy Court. Many clients that consider filing a New Jersey Chapter 7 Bankruptcy have failed to file their previous 3 years taxes. This is an important timing issue because the appointed trustee will require a copy of your tax returns one week prior to the meeting of creditors. If you do not produce this information, it affords the trustee an opportunity to dismiss your New Jersey Bankruptcy Case. Prior to filing, you must ensure that you have filed your previous 3 years tax returns. Apart from the two considerations above, an immediate New Jersey Chapter 7 Bankruptcy filing will help you as a debtor.

New Jersey Bankruptcy Lawyer - Husband and Wife

"If I file for a chapter 7 bankruptcy in New Jersey, will it impact my wife"? "Does my wife have to file with me"? These are questions I hear almost everyday during my consultation with clients. The answer is simple: New Jersey is not a community property state. This means that by virtue of you filing, your spouse will not be affected. Your spouse, however, will still be responsible for debts that they have co-signed for. The creditor can still pursue your spouse for these debts because a chapter 7 bankruptcy only discharges the debt as to the spouse that files. Your spouses credit will not be affected by your filing. Some credit card companies will try to hold one spouse responsible for the other spouse's debt. If this happens, you can contest it with the credit reporting agency. If the credit card company cannot prove that you signed for the debt, it will be removed from your credit report. I encourage my clients to take full advantage of the free annual credit report.

Devalued Homes and Chapter 7

Many homeowners fear filing for chapter 7 because New Jersey does not have a homestead exemption. New Jersey, however, allows debtors to choose between the NJ set of exemptions or the federal exemptions. The federal exemptions allow individuals to exempt $20,200 worth of equity in a home and $40,400 for married couples. Many of my clients rely on a one to two year old appraisal for real estate valuation. This is a mistake. As per the old appraisals, most of these individuals would not qualify because they have too much equity in their home. If they were to file a chapter 7 bankruptcy in NJ, they fear losing their home. Prior to considering yourself ineligible for a chapter 7 filing in New Jersey, you should consider obtaining a new appraisal. This new appraisal will reflect the significant decrease in property values. I recently had a couple in my office who stated their home was valued at $850,000. I asked them to obtain a new appraisal so we can get an idea of the true value. After some hesitation, the couple decided to obtain a new appraisal in hopes of qualifying. The result: their home was valued at $675,000. This was significantly less than my clients had thought. Fortunately, it qualified them for a NJ Chapter 7 filing because they no longer had any equity in the home. Prior to ruling out the possibility of a New Jersey Chapter 7 filing, obtain an appraisal.

Does It Make Sense to File Bankruptcy?

My office receives a lot of calls during the week from potential clients inquiring about a bankruptcy filing. Throughout the conversation, one important question remains in my mind. Does it make sense for this person to file for chapter 7 bankruptcy? This is a very important consideration. Many attorneys fail to keep this in mind. Whether this is attributed to oversight or a fear of losing the legal fees is another topic. The answer to this question is not always clear at first.

The first consideration is the amount of debt a person has. There are countless people that call my office and say "I have one credit card bill for $3000 and I can't afford to pay it. Can you help me file for bankruptcy. I want to get rid of this bill." My answer is always, no. It makes no practical sense to file a chapter 7 bankruptcy for one bill that is $3000. I view this as an abuse of the bankruptcy law. The law is meant to help individuals who have incurred their debt with the mentality that they will repay the debt and have tried to repay it. Although the law does not specify an amount that is necessary to file a chapter 7 bankruptcy, it is senseless to file if your debt is less than $5000. Consider that you will be responsible for the payment of attorney fees, filing fees, and credit counseling fees when filing a chapter 7 bankruptcy.

The second consideration is the type and amount of assets a person has. When filing a chapter 7 bankruptcy, we want to be sure that we protect your assets. Usually, my clients do not have to forfeit any of their assets. We take all measures to protect them. However, you cannot be driving a fully-paid 2009 Mercedes. This will not be exempt under the New Jersey exemption set or the federal exemption set. We have to keep the exemption amounts in mind. It will come as a shock to you if you file for a chapter 7 bankruptcy and you are forced to forfeit your assets. If you have a house that does not meet the exemption amount, I will advise you to file a chapter 13 bankruptcy. Remember, New Jersey does not have a homestead exemption.

The final consideration is the type of debt. You can discharge unsecured non-priority debts in a chapter 7 bankruptcy. These include, but are not limited to, credit cards bills, medical bills, phone bills, utility bills, personal loans, shortfalls on repossessions, and bank overdrafts. You cannot discharge student loans in a chapter 7 bankruptcy (except for a few narrow exceptions). I will evaluate your "debt portfolio" and decide whether it makes sense for you to file a chapter 7 bankruptcy.

I would love to help every potential client that calls my office. However, the above considerations sometimes forces me to turn some away, for their own good. I do, however, provide them with advice on how to repay their debt and get back on their feet.

Welcome to my Bankruptcy Blog

Hello and welcome to my bankruptcy blog. As a consumer bankruptcy attorney, I want to share my experience with readers and provide an insight to chapter 7 bankruptcy law. There are a lot of misconceptions and much confusion surrounding the "new" bankruptcy law. I hope to clear up much of that confusion and paint a more clear picture as to what chapter 7 bankruptcy is and what it is not. If you want detailed information on filing a chapter 7 bankruptcy, I encourage you to visit my bankruptcy website.