A Chapter 7 bankruptcy filing will liquidate all of a debtor's assets and discharge most of his or her unsecured debt. For Suleman, it is said to be her best option as she has very limited assets to use to pay back to creditors compared to her large debt. Should she have gone a route that allowed her to keep some assets as a method of paying creditors -- as some other bankruptcy filings may do -- she would still not have the finances available to make those payments. She also has no significant property to hold onto, having her current rented home foreclosed upon for owing $30,000 in back rent.
]]> While Suleman has an erratic career as a celebrity, she holds a potential for significant earnings in the future. Luckily for her, potential future earnings are not a factor in filing for Chapter 7 bankruptcy, or any form of personal bankruptcy. On the other hand, creditors do consider future earning potential, which may benefit Suleman in obtaining credit cards and similar credit after the bankruptcy procedure is over.For the Octomom, as well as New Jersey residents who may be in similar situations of minimal assets and massive debt, Chapter 7 bankruptcy will allow a fresh financial start that will hopefully get her back on track.
Source: TIME, "Octomom Files for Bankruptcy, But is It a Smart Move?" Martha C. White, May 4, 2012
]]>It can be a very complicated process, searching for ways to fight back when foreclosure is on the edge of the horizon for a homeowner. While there are some government programs that are helpful for many homeowners, not all homeowners qualify for the government programs. This leaves many in a rut with seemingly no way to get out.
]]> However, there is another option. While homeowners don't always consider it first, bankruptcy can help stop foreclosure. In some instances, filing for bankruptcy may help free up some money by eliminating debts to actually allow the mortgage payment to become more manageable. Bankruptcy reorganization under Chapter 13 may help prevent additional default interest from accumulating while creating a new repayment plan that is more suitable for the homeowner's current financial situation.There are two types of personal bankruptcy options: Chapter 7 and Chapter 13. An individual or family in debt and on the brink of losing their home to foreclosure may benefit by exploring all debt relief options available to them. Filing for bankruptcy can stop foreclosure and allow some homeowners to keep their home, stop harassing phone calls from creditors, and set the foundation for a more improved financial future.
Source: MortgageLoan.com, "Foreclosures Pick Up Slightly," Kara Johnson, May 2, 2012
]]>Student loans, by the nature of what they pay for and rising tuition rates, often cover a significant amount of money. Unfortunately, the vast majority of people are stuck with it, even if they file for bankruptcy. A 2005 law is part of the reason this problem exists, as it lumped private student loans into the category of debt that is practically impossible to have discharged in bankruptcy, along with child support payments and criminal fines.
]]> In an effort to avoid aggravating the problem, Congress is being called upon to stop a scheduled doubling of loan rates for some federal student loans. This doubling would take the current rate of 3.4 percent and raise it to 6.8 percent for these loans. Intercepting this anticipated rate hike would save 7 million new borrowers nearly $1,000 each per year. Nevertheless, this would not aid those who are currently suffering from private student loans they took out in the past.The Federal Reserve Bank of New York estimates that there are 37 million Americans who currently have student loan debt totaling $870 billion. Out of this, 15 percent is private loan debt that people in New Jersey and nationwide are forced to suffer through even when declaring bankruptcy and working to discharge or resolve other existing debt. While this issue gathers steam, those who cannot wait for Congress to act may consider filing a Chapter 7 bankruptcy proceeding to discharge other debt or a Chapter 13 proceeding to reorganize debt under the court's supervision in an attempt to set aside additional funds to address student loans.
Source: The Sacramento Bee, "Even after bankruptcy, trapped by student debt," Justin Pope, April 25, 2012
]]>In the economic downturn in 2009 alone, the state saw a total of 3,827 foreclosure filings for non-residential properties. In 2011, these filings reached 5,027. While this year is still underway, it appears that the trend will continue to surge. As a result, there's been a scaling back of commercial projects, with many turning toward non-retail outlets such as businesses focused on health and wellness.
]]> Some types of New Jersey businesses, mainly retail businesses, and especially small retail businesses, are having problems with rolling over mortgages and renewing lines of credit. However, for many types of businesses, things are beginning to look up. Industrial properties are seeing their values increase, and office space demand is also growing. As the economy improves, it's hoped that these types of foreclosures will also begin to improve and businesses can see a time of safety again. Debt accumulation is a serious issue for a business, often leading to foreclosures and other dangerous debt conditions that are not only negative for the business but for the people who run the business and work there as well.Much like with individuals and families, when debt spirals out of control for a business, bankruptcy protection may offer a means to solve the underlying financial problems under the guidance of the court. In such a manner, many business entities are able to chart a passage to calmer waters. By coming up with a plan approved by the bankruptcy court, a business may be able to conquer its debt problems while laying the foundation for a return to economic prosperity.
Source: WNYC, "Foreclosures Still Climbing For NJ Commercial Properties," Joe Tyrrell, April 9, 2012
]]>One of the real housewives and her husband filed for bankruptcy -- for real. According to news sources, one of the reality show New Jersey housewives and her husband filed for personal bankruptcy when they were unable to keep up with payments on some rental property.
]]> The debt problems allegedly stemmed from the non-payment of rent by the tenants in apartment buildings owned by the couple. They apparently claimed that when the tenants didn't pay, that they could not make the mortgage payments.The news sources do not state the type of bankruptcy filed by the couple; however a bankruptcy trustee is mentioned, so the couple may have been in a Chapter 13 bankruptcy. A Chapter 13 bankruptcy is one in which payments are made to a trustee over a period of time, usually three to five years, and the trustee pays the creditors. At the end of the agreed upon period of time any remaining debts are discharged.
According to reliable sources, the banks that held the mortgages for the apartment buildings sold the buildings, thereby liquidating those financial assets and liabilities for the Jersey couple.
In addition, the bankruptcy trustee charged that the couple was concealing assets, which is a crime. There was no mention made regarding the resolution of that particular issue, although the husband had reportedly pled the Fifth Amendment when asked about hidden assets.
One of the key aspects of any bankruptcy filing is the complete and truthful reporting of all assets as well as debts. It remains to be seen whether this New Jersey couple will emerge from bankruptcy unscathed.
Source: nj.com, "'Real Housewives of New Jersey': Teresa Giudice talks bankruptcy, mean jokes and those stripper rumors," Vicki Hyman, April 24, 2012
]]>A recent TransUnion study examined the patterns among four million people who held at least one credit card payment, one car loan and a home mortgage. Out of those who made late payments last year, 39 percent were late on mortgages and 17 percent were late on credit card payments, while both groups were consistently on time with their car loan payments. Only 10 percent were late on their car loan while being up to date on the other two loans.
]]> This trend makes some sense; in order to maintain a job in most places, some sort of transportation is required to get to and from work or even to find a job in the first place. Being late on a car loan payment might result in the loss of the car, much like being late on mortgage payments could result in the loss of the house. In fact, one man who was surveyed commented that he would rather be late on his credit card payments as he claimed they couldn't take anything away, and are easier to bargain with.Regardless of which payment may be easier to be defer, most New Jersey residents would agree that it is preferable to not be late on any of these important payments. However, in today's economic climate, that is not always an option. When debt becomes too much to handle, bankruptcy is often a viable option.
Source: StarTribune.com, "Americans put a priority on staying current on the car loan, a study finds," Pallavi Gogoi, March 29, 2012
]]>Since the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, many individuals and families have waited until they have enough money to file for bankruptcy. This 2005 law raised the fees involved in bankruptcy filing from an average of $921 to $1,477. The increase in cost was meant to limit bankruptcy to those who are certain it is the right option.
]]> New research by Columbia University's Mailman School of Public Health suggests that many of these families are waiting for tax rebates in order to afford to go bankrupt. According to the research, total bankruptcy filings increased by 2 percent after 2001 tax rebates were issued, and by 7 percent after 2008 tax rebates. Both years had a high number of rebate checks. This jump in percentage suggests that the 2005 act may have played a role in this change.Whether in New Jersey or elsewhere, filing for bankruptcy is often emotionally stressful. An inability to afford the associated fees can make the process even more distressing. Those confronting these decisions will likely benefit from planning ahead by analyzing their specific problems and working to set aside the necessary funds in order to take advantage of the unique protections offered by the Bankruptcy Code.
Source: Forbes, "Tax Rebates Boost Bankruptcies, and Why That's Not So Bad," David DiSalvo, March 22, 2012
]]>As a part of that significant settlement, the five banks who were parties to the agreement committed to reducing mortgages for about one million homeowners. They also agreed to deposit settlement money into a fund that will provide $2,000 to $750,000 to homeowners who already lost their homes due to improper foreclosure practices.
]]> Last April, the government separately demanded that 14 banks, lenders and servicers reimburse homeowners for wrongful foreclosure procedures, and some 4.3 million borrowers who were at risk of foreclosure in 2009 and 2010 were sent letters detailing the potential for reimbursement. The latest Federal Reserve fines are in addition to any previously issued by the government.Losing a home is understandably frightening, especially when the debt causing the foreclosure seems unmanageable, and it is even worse when you know a home foreclosure was issued as a result of improper lender practices. Luckily, for those who may suspect they have are victims of these unfair actions, relief in the form of a financial reimbursement may be available. Additionally, those who are at risk of foreclosure may benefit from understanding all of the debt relief options they have at their disposal in order to avoid the devastating loss of their home.
Source: The Los Angeles Times, "Fed fines 8 banks for alleged foreclosure abuse," March 19, 2012
]]>In the last three years alone, nearly six million borrowers nationally have benefited from this type of counseling to modify their mortgage rates and terms to be more manageable. Three million of these were borrowers that benefited in 2010 alone. Additionally, a recent study reveals that nine in 10 families that have received foreclosure counseling have remained in their housing 18 months later and are no longer in the same danger of debt.
]]> Debt, by its nature, piles up when there is not sufficient income to support it. For those individuals and families overwhelmed by financial obligations that have rocketed out of control, bankruptcy protection may offer the debt relief they need. But many are often unfamiliar with the laws and procedures to enable themselves to fight their way back to solid financial ground again. These financial counseling agencies in New Jersey and across the country, combined with related strategies, are often able to help families sort through their debt to put their finances in order so as to avoid the stress and difficulty that foreclosure can bring.Source: Philly.com, "PA. gets money to help reduce foreclosures," Alan J. Heavens, March 17, 2012
]]>What does this mean for New Jersey residents who are saddled with student loan debt? Most of these people are unable to meet the federal hardship criteria that allows people to discharge student loans through bankruptcy proceedings, however, student loan debt can often lead to hardship when it comes to paying other bills. If debt beyond student loans becomes unmanageable, bankruptcy may be an option.
]]> While a student loan related debt crisis may not be on par with the home mortgage crisis, tuition continues to increase significantly, meaning the long-term effects of student loan debt may be grave as people who are seeking higher education may be less likely to take out a loan. The fact that, in the past three years alone, there has been a 50 percent spike in student loan debt shows how much of a factor this debt is becoming.Student debt can feel overwhelming and often become a burden for those who are juggling other bills on top of it. When debt outside of student loans becomes too much to handle, it may be helpful to consider filing for bankruptcy.
Source: The New American, "Bankruptcy Attorneys Predict a Student Loan 'Debt Bomb'," Brian Koenig, March 13, 2012
]]>In New Jersey, home improvement scams topped the list of consumer complaints, but complaints involving credit cards and debt collection practices were not far behind.
]]> Unfortunately, debt collectors often go too far when trying to get consumers to pay debt. Sometimes their tactics are even illegal. Consumers who have been harassed by debt collectors should know that such inappropriate practices should and can be reported.Sometimes it can seem like there is no end to the manner in which dishonest people and companies seek to separate unsuspecting consumers from their hard-earned money. For those New Jersey residents who have been victimized, the consequences are sometimes life-changing. Any individual or family who believes they have been subjected to fraudulent behavior would do well to immediately notify the authorities, as well as take stock of their financial plight. To that end, some may find that bankruptcy often offers a way to stop creditor harassment and provide a path to a fresh start by confronting nagging financial obligations.
Source: NBC New York, "Top 10 Consumer Frauds in NY, NJ in 2011," March 6, 2012
]]>At issue was the precise information required by lenders in their notice of intent to foreclose under the New Jersey Fair Foreclosure Act. The issue arose because it was not always easy to determine who actually owned a mortgage that had been repackaged as part of a group and resold to investors. Lenders had taken to inserting only the name of the servicing company, a practice that was challenged in the pending court case.
]]> Indeed, the Supreme Court has ruled that the name and contact information for both the mortgage holder and the servicer must be provided in the notice of intent. But in the same decision, the court also reversed a separate appellate court ruling that had determined that a foreclosure that had an improper notice of intent should be dismissed. Rather, the new ruling dictates that the trial court can exercise discretion by ordering that a corrected notice be served, that other appropriate action be taken or by dismissing the lawsuit outright. Some estimate that the number of unprocessed foreclosure matters in New Jersey may be as high as 100,000.Now that the court has decreed what information in a notice of intent complies with the Fair Foreclosure Act, observers expect the unprocessed matters to now make their way through the court system. As such, homeowners in financial trouble who have been hoping for a resolution to their mortgage problems will now need to step up their efforts to stop foreclosure. Some may benefit by seeking the protection of the bankruptcy court through Chapter 7 liquidation or a Chapter 13 reorganization of debt. Each option has its advantages in helping those victimized by the economic crisis to devise a strategy for achieving a fresh financial beginning.
Source: NJ.com, "State Supreme Court decision could unlock foreclosure floodgates in New Jersey," Sarah Portlock, Feb. 28, 2012
]]>JoJo Productions operated The Little Gym of Jersey City franchise as a children's gym in Hudson County. Unfortunately, like many smaller companies still adrift in the sluggish economy, the company was apparently not able to keep current with its obligations. To that end, the New Jersey franchise shut its doors and filed for Chapter 7 relief on Feb. 6.
]]> JoJo Productions requested bankruptcy liquidation under Chapter 7, meaning that its assets will now be liquidated to satisfy outstanding obligations. Its petition listed approximately $50,000 in assets as against debts between $100,000 and $500,000. Parents who paid tuition for future classes were not listed as creditors in the petition and that issue may be addressed before the bankruptcy court. Meanwhile, the franchisor, The Little Gym, indicated that parents could enroll their children at other franchise operations at no expense as long as there was sufficient space available.While it remains to be seen what the result of the bankruptcy filing will be, the procedure will allow for the business to address its financial problems under the supervision of the court. The court typically determines which creditors are entitled to payment from the petitioner's assets, as well as the designated amounts. By proceeding in this manner, the New Jersey company will gain some much-needed breathing space as it strives to close its business in an orderly fashion while also creating a path to a brighter future.
Source: The Jersey Journal, "Surprise closing at gym leaves kids upset and parents losing fees already paid," Summer Dawn Hortillosa, Feb. 21, 2012
]]>Mortgage lenders were accused of something called robo-signing, which is basically the execution of documents that had not been properly verified. As a result, the entire process came to a halt, and many homeowners were able to stop foreclosure, at least for the time being. Now, however, banks are set to begin anew, and it is estimated that a backlog of up to 100,000 cases will start to work their way through the system.
]]> New Jersey is said to rank second in the nation, behind only Florida, for the greatest number of homes currently in foreclosure. It is estimated that some 6.4 percent of mortgaged homes in our state are in some stage of the process of foreclosure. That figure is almost double the national average of 3.4 percent, tabulated as of December 2011.With a glut of foreclosures expected to hit the courts going forward, a principal question on the minds of many facing legal action will be what steps they can take to stop foreclosure. There are a variety of alternatives available to homeowners as they fight to stave off repossession. While the current foreclosure process takes an average of more than 2.6 years to complete in New Jersey, the fact remains that some individuals and families may find relief by filing for bankruptcy protection. In doing so, debt relief can often be obtained in a manner that also provides for a fresh financial beginning.
Source: Bloomberg, "NJ has backlog of up to 100k foreclosures," Stacie Servetah, Feb. 8, 2012
]]>The long-time actor, once nominated for an Oscar for his starring role in "The Buddy Holly Story," filed a Chapter 7 petition on Feb. 7. The 67-year-old actor has listed assets of less than $50,000 against debts totaling up to $1 million. Among the creditors listed were the UCLA Medical Center and the Internal Revenue Service. Additionally, Busey listed a claim filed against him by a woman who accused him of assaulting her in May 2011.
]]> Busey is far from the first well-known person to seek Chapter 7 relief. Individuals generally have a choice between filing for Chapter 13 reorganization or straight bankruptcy liquidation by opting for Chapter 7 protection. The wide disparity between the actor's stated assets and his outstanding liabilities may explain why he apparently chose to file for Chapter 7.In such proceedings, a trustee is typically appointed by the court to process the matter under its supervision. Assuming that the relevant law and procedure is followed, Busey will likely be able to look forward to a date when he can emerge from bankruptcy. Once that occurs, he will be able to look forward to a return to prosperity absent many of the obligations that had spiraled out of control. Given the financial calamity that many have faced as a result of the ongoing economic crisis in New Jersey and nationally, there is no shame in taking advantage of laws designed to help individuals and families recover from circumstances beyond their control.
Source: New York Daily News, "Gary Busey files for bankruptcy," Feb. 8, 2012
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