bankruptcy

Filing for Bankruptcy in NJ

Gathering Paperwork

The first to begin the process of filing for bankruptcy in New Jersey is gathering all of the necessary paperwork that you will need.  A good place to start is to itemize all of your current sources of income, any major financial transactions from the past two years, and all assets and possessions. You should also compile all of your living expenses, debts, tax returns for the last two years, and the the deeds and titles to any real estate or vehicles you own. If you have taken out any loans those documents should be included as well.

Filing Bankruptcy

After gathering the proper information, you should make a figure out which of your property is exempt from seizure. These determinations will be made based the New Jersey exemption laws. In order to file for bankruptcy, you and your attorney will to file several forms and a two page petition at your local New Jersey district bankruptcy court. These forms are commonly referred to as the schedules. The schedules will ask you to summarize any recent financial transactions and your current financial situation, typically within the previous two years. The outcome of your petition could be jeopardized if the judge and/or your creditors feel you have not been entirely truthful in your bankruptcy filing.

It costs $306 to file for Chapter 7 bankruptcy. Although it is possible to pay the fee in installments, the fee may not be waived. The Chapter 13 bankruptcy fee of $281 cannot be waived.

Chapter 13 Requirements

To file for Chapter 13 bankruptcy you must include a proposed repayment plan. How much money will you have left over if you were to pay all of your monthly expenses? How will you divvy up that money among everyone you owe? Priority claims such as child support or taxes must be paid in full, while unsecured debts like credit card debt can be paid in part. The extent to which unsecured debts need to be paid is dependent upon the judgements of those involved in the case.

In addition to all of  the general requirements, the repayment plan must pass these three tests:

1) The repayment plan must be delivered in good faith.

2) Unsecured creditors must be paid at least as much as if you had filed Chapter 7 bankruptcy. This is generally the value of all the nonexempt property you own .

3) Any disposable income must be paid into the repayment plan for at least three years (you may use up to five years in order to meet the second test that you pay at least as much as in a Chapter 7).

You must begin making your plan payments if you have filed Chapter 13. These payments will generally be withdrawn directly from your wages.  You or your attorney should arrange for these payments to be deducted from your wages.

Automatic Stay

An automatic stay will go into effect immediately after filing your paperwork with the bankruptcy court. This is a precautionary measure to make sure creditors are not making direct contact with you or claiming any of your property moving forward. The stay will also put a stop to foreclosures.

Bankruptcy Trustee

The court will assume control of your debts and any non exempt property when you file for bankruptcy. The court will appoint a trustee to your case. The trustee will make sure that your creditors are paid as much as possible out of your remaining monthly income. They will also review all of your paperwork, your property and claimed exemptions in particular, and they can challenge any part of your case.

341 Meeting of Creditors

A month after filing for bankruptcy, the debtor must attend a first meeting of creditors called by the trustee. This meeting, named after the corresponding section of bankruptcy law, is commonly referred to the 341 meeting. Creditors will rarely attend Chapter 7 bankruptcy meetings, and very few may attend a Chapter 13 bankruptcy meeting. Many questions and objections regarding the repayment plan will be resolved by negotiation between the debtor’s council and the creditors. A judge may get involved if both parties can not reach a compromise.  

The creditor meeting does not last long, as most Chapter 7 cases do not involve non-exempt assets. If you do have any non-exempt property, or its cash value,  must be turned over to the trustee. The trustee will then sell the property to pay back the creditors. If the property is not worth selling, it may be abandoned, or returned to the debtor. Creditors or the trustee will have 60 days to challenge the debtor’s right to discharge. If there are no challenges, you will receive notice that within three to six months any debts that are dischargeable have been discharged.

Chapter 13 Plan Confirmation

You will need to attend a hearing before a bankruptcy judge if you filed Chapter 13 bankruptcy. The judge will either confirm or deny your repayment plan. If you follow a confirmed repayment plan,it will eliminate the dischargeable debts you owe at the end of your term.

bankruptcy

 

 

 

 

Filing for bankruptcy in NJ

Gathering Paperwork

The first to begin the process of filing for bankruptcy in New Jersey is gathering all of the necessary paperwork that you will need.  A good place to start is to itemize all of your current sources of income, any major financial transactions from the past two years, and all assets and possessions. You should also compile all of your living expenses, debts, tax returns for the last two years, and the the deeds and titles to any real estate or vehicles you own. If you have taken out any loans those documents should be included as well.

Filing Bankruptcy

After gathering the proper information, you should make a figure out which of your property is exempt from seizure. These determinations will be made based the New Jersey exemption laws. In order to file for bankruptcy, you and your attorney will to file several forms and a two page petition at your local New Jersey district bankruptcy court. These forms are commonly referred to as the schedules. The schedules will ask you to summarize any recent financial transactions and your current financial situation, typically within the previous two years. The outcome of your petition could be jeopardized if the judge and/or your creditors feel you have not been entirely truthful in your bankruptcy filing.

It costs $306 to file for Chapter 7 bankruptcy. Although it is possible to pay the fee in installments, the fee may not be waived. The Chapter 13 bankruptcy fee of $281 cannot be waived.

 

Chapter 13 Requirements

To file for Chapter 13 bankruptcy you must include a proposed repayment plan. How much money will you have left over if you were to pay all of your monthly expenses? How will you divvy up that money among everyone you owe? Priority claims such as child support or taxes must be paid in full, while unsecured debts like credit card debt can be paid in part. The extent to which unsecured debts need to be paid is dependent upon the judgements of those involved in the case.

In addition to all of  the general requirements, the repayment plan must pass these three tests:

1) The repayment plan must be delivered in good faith.

2) Unsecured creditors must be paid at least as much as if you had filed Chapter 7 bankruptcy. This is generally the value of all the nonexempt property you own .

3) Any disposable income must be paid into the repayment plan for at least three years (you may use up to five years in order to meet the second test that you pay at least as much as in a Chapter 7).

You must begin making your plan payments if you have filed Chapter 13. These payments will generally be withdrawn directly from your wages.  You or your attorney should arrange for these payments to be deducted from your wages.

Automatic Stay

An automatic stay will go into effect immediately after filing your paperwork with the bankruptcy court. This is a precautionary measure to make sure creditors are not making direct contact with you or claiming any of your property moving forward. The stay will also put a stop to foreclosures.

Bankruptcy Trustee

The court will assume control of your debts and any non exempt property when you file for bankruptcy. The court will appoint a trustee to your case. The trustee will make sure that your creditors are paid as much as possible out of your remaining monthly income. They will also review all of your paperwork, your property and claimed exemptions in particular, and they can challenge any part of your case.

341 Meeting of Creditors

A month after filing for bankruptcy, the debtor must attend a first meeting of creditors called by the trustee. This meeting, named after the corresponding section of bankruptcy law, is commonly referred to the 341 meeting. Creditors will rarely attend Chapter 7 bankruptcy meetings, and very few may attend a Chapter 13 bankruptcy meeting. Many questions and objections regarding the repayment plan will be resolved by negotiation between the debtor’s council and the creditors. A judge may get involved if both parties can not reach a compromise.  

The creditor meeting does not last long, as most Chapter 7 cases do not involve non-exempt assets. If you do have any non-exempt property, or its cash value,  must be turned over to the trustee. The trustee will then sell the property to pay back the creditors. If the property is not worth selling, it may be abandoned, or returned to the debtor. Creditors or the trustee will have 60 days to challenge the debtor’s right to discharge. If there are no challenges, you will receive notice that within three to six months any debts that are dischargeable have been discharged.

Chapter 13 Plan Confirmation

You will need to attend a hearing before a bankruptcy judge if you filed Chapter 13 bankruptcy. The judge will either confirm or deny your repayment plan. If you follow a confirmed repayment plan,it will eliminate the dischargeable debts you owe at the end of your term.