Minion & Sherman Northern New Jersey Attorneys
Call Us TodayFree ConfidentialConsultation

Essex County Bankruptcy Law Blog

Consider filing bankruptcy before filing for divorce

Many sources say that money is one of the primary factors in numerous divorces across the nation -- this most likely includes many couples here in New Jersey. If you and your spouse are having money problems that are leading to divorce, it may be beneficial to slow down and consider what to do about your marital finances before going your separate ways. Depending on your circumstances, it may be more advantageous for you and your spouse to file for bankruptcy before filing for divorce.

If your spouse files for bankruptcy either during or after the divorce, you could end up being held responsible for all of the marital debts, including those that your partner agreed to pay during the divorce proceedings. If your name is still on the debts, creditors are under no obligation to honor your divorce settlement. They may come to you for payment of the debts that your ex-spouse has discharged during bankruptcy.

Wells Fargo owes money to some Chapter 13 homeowners

When a New Jersey homeowner is behind on his or her mortgage and is otherwise overwhelmed financially, he or she may turn to the bankruptcy court for help. Filing Chapter 13 bankruptcy often allows homeowners the opportunity to keep their homes while reorganizing their financial lives and paying off their debts under the supervision of the court. In exchange, creditors are also bound by certain rules when dealing with these filers.

For example, mortgage lenders are required to provide Chapter 13 homeowners notice 21 days before adjusting their monthly payments. Failing to notify homeowners of the change, regardless of whether it is up or down, can prevent an accurate accounting of the costs borne by the borrower during bankruptcy. It was discovered that Wells Fargo Bank failed to provide the proper notices to some of its borrowers who are in bankruptcy.

Organization helps stop harassing phone calls from creditors

This week, the country celebrated those who served in the military by observing Veterans Day. Unfortunately, not everyone shows respect for those who risked lives for this country. An auto lender headquartered outside of New Jersey was recently ordered to refund or credit thousands of consumers, including many who are active-duty and former military members, because of its alleged illegal debt collection practices. The Consumer Financial Protection Bureau takes steps to stop harassing phone calls from creditors such as this one.

The CFPB accused Security National Automotive Acceptance Co. of using illegal tactics to collect delinquent auto loans. According to reports, the company would threaten soldiers with demotion, discharge and even the loss of their security clearances if they did not pay their debts. Some were told that their commanding officers would be contacted.

FTC helps stop harassing phone calls from creditors

New Jersey readers may already be aware that last year, the Federal Trade Commission filed a lawsuit against a debt collection company believed to be using illegal practices to collect money from consumers. That suit not only helped to stop harassing phone calls from creditors at the company, but has now led to criminal charges being filed against 15 of the company's employees, including the two owners. So far, four of those employees have decided to enter guilty pleas to conspiracy charges.

According to the U.S. Attorney working the case, employees told unsuspecting consumers that they were with government agencies (some even posed as prosecutors) and threatened arrest, suspension of the victim's driver's license and civil lawsuits. Documents allegedly outlining the debts owed were emailed to consumers that turned out to be falsified. Employees were provided with scripts that were designed to frighten people into paying.

New Jersey mortgage debt makes it number 1 in foreclosures

It has been several years since the housing market crashed and three years since Hurricane Sandy hit New Jersey. However, the amount of outstanding and delinquent mortgage debt in the state has moved it to the number one spot in the nation for foreclosures. Now that certain deadlines and requirements set by the state legislature and courts have passed, the floodgates are opening.

Getting through New Jersey's arduous judicial foreclosure process can take over three years to complete. When this is added to the time non-profit organizations spent working with homeowners, foreclosures moved slowly. That is no longer the case.

Bankruptcy myths may deter consumers from filing

New Jersey consumers who find themselves with mountains of debts may be overwhelmed by the many suggestions by friends and family who are eager to give advice on how to remedy the situation. One of the options -- and possibly the most effective one -- is personal bankruptcy. However, certain myths about bankruptcy may cause procrastination.

Some people may be concerned that filing for bankruptcy may negatively affect a spouse but this is only true if the unpaid debt is in the names of both spouses. In such cases, both spouses are responsible and, if only one files for bankruptcy, creditors can demand full payment from the other spouse. The solution is for the couple to file together. Another myth is that an individual can only file for bankruptcy once. This is also untrue, and, although there are limitations, subsequent bankruptcy filings are allowed.

Chapter 7 bankruptcy might give you a fresh start financially

New Jersey residents encounter financial difficulties from a variety of sources. Some are recovering financially from divorce, long-term illnesses or injuries, or some other life-altering calamities that end up leading to an overwhelming amount of debt. Others simply made ill-advised financial decisions. Whatever caused you to end up under a mountain of debt, Chapter 7 bankruptcy might give you a fresh start financially.

If you qualify for Chapter 7, many debts can be completely forgiven but not all. For instance, student loans cannot be discharged except in extreme cases, but credit card debt, medical bills and other unsecured debt can be. Furthermore, it is possible that any monetary deficiencies left over after a car repossession or foreclosure will also be discharged.

You do not have to go it alone when filing for bankruptcy

Being overwhelmed by debt can cause a great deal of stress, fear and anxiety. Those feelings may be alleviated by making the decision that filing for bankruptcy in New Jersey is your best option. However, the process is paper intensive and complex, which may only bring back those emotions. Fortunately, you do not have to go through the process alone.

Attorneys who have chosen to help individuals and families who are struggling under a mountain of debt can make the process less stressful. The first question many people have is whether they should file a Chapter 7 (liquidation) or Chapter 13 (reorganization) petition, which are the most common consumer bankruptcy alternatives. The best option for you will depend upon an examination of your financial situation.

Filing for bankruptcy while on Social Security

The days of retiring debt free are long gone for many of New Jersey's elderly residents. Now, many worry that their Social Security benefits will be garnished in order to pay their debts. Those benefits may be safe from some creditors, but not all. Filing for bankruptcy could help.

Private creditors and debt collectors may not be able to reach Social Security benefits due to protections given to recipients under federal law. The benefits need to be deposited into a bank account for this to work, however. Fortunately, the majority of people receiving benefits have direct deposit. For those who still receive a paper check, the funds could be in jeopardy.

Some debts are treated differently in a Chapter 13 bankruptcy

When a New Jersey resident files for bankruptcy, the first step is to determine under which Chapter to file. This decision is often less about the individual's preference since income level often drives that choice. If a person's income is above a certain level, he or she will need to file a Chapter 13 bankruptcy, and certain debts are treated differently in such a filing than in a Chapter 7 petition.

In a Chapter 13, a filer is often able to keep his or her home so long as payments outlined in a court-approved repayment plan are kept current. The same is true for car loans. Some debts, however-- such as child support, student loans and alimony (called support debts) -- are generally not discharged in either type of personal bankruptcy.