eNewsletter for Our Morris County Bankruptcy Law Firm

Keeping Your Vehicle in a New Jersey Bankruptcy

No matter what type of vehicle you own or what condition it may be in, your car provides a vital means of transportation for you on a daily basis. Without the dependable income that comes from holding a job, getting back on one’s feet following a bankruptcy is nearly impossible, and without a car, getting to work is a challenge. It is no wonder that those who consider filing for bankruptcy are often preoccupied with whether the bankruptcy court will allow them to keep their vehicles. The good news is that you do not automatically lose your vehicle when you decide to file for bankruptcy in New Jersey. How you keep your vehicle will depend on whether you file under Chapter 7 or Chapter 13 of the Bankruptcy Code. Chapter 13 bankruptcy is a method of debt reorganization. This type of bankruptcy involves restructuring your debt and working with creditors…
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What are Alternatives to Reaffirmation?

Despite the public perception that Chapter 7 bankruptcy involves losing everything, the reality is far less negative. Firstly, bankruptcy is a sign of improving one’s financial standing and credit history, not going down the hole. Second, a person filing for bankruptcy does not necessarily have to lose all of their assets—in fact, in most Chapter 7 bankruptcies, this does not happen at all. If you file Chapter 7, you can decide to reaffirm certain assets and their associated debts in order to keep the asset. This is most commonly done with automobiles. Reaffirmation consists of a contract between a debtor and lender permitting the former to assume responsibility for an asset and its associated debt. Usually, debtors reaffirm assets pledged as loan collateral, such as motor vehicles. The decision to reaffirm an asset is made at a reaffirmation hearing. The debtor appears before a judge who must ensure that the…
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The Stresses of Asset Protection

When an individual files for bankruptcy protection, one of the main points of stress is the uncertainty of whether certain assets can be kept after the bankruptcy is discharged, or whether these key assets need to be handed over to the bankruptcy trustee for dispersement to creditors. However, under a Chapter 13 repayment plan, there is no need for uncertainty. Any assets, like a home in foreclosure, can be kept by the debtor, because under a Chapter 13 repayment plan, any debts owed are restructured and repaid over a period of three to five years. Certain assets under a Chapter 7 bankruptcy can also be kept by the debtor. However, most big-ticket items under Chapter 7 liquidation must be handed over to the bankruptcy trustee for sale and dispersement to creditors. Debt Consolidation Debt consolidation is a key element of a Chapter 13 bankruptcy repayment plan. A Morris County debt…
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Understanding the Chapter 13 Means Test

In 2005, Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), introducing several new bankruptcy laws. One of the changes BAPCPA brought about was means testing. Now, when consumers want to file Chapter 7 bankruptcy, they must complete a means test to determine their eligibility for a Chapter 7 discharge. Chapter 13 debtors also have to complete a means test, though it does not determine their eligibility for filing Chapter 13 bankruptcy. Bankruptcy means testing is a complicated process best handled by an experienced Morris County bankruptcy attorney. Plan Length One function of the Chapter 13 means test is to determine the length of a debtor’s Chapter 13 repayment plan. The means test compares a debtor’s household gross income during the six months preceding filing with the median income for the debtor’s household size. If a debtor’s household gross income is less than the applicable median income, he…
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