eNewsletter for Morris County Bankruptcy Law Firm

Dischargeable and Non-Dischargeable Debts during Bankruptcy

When considering filing for bankruptcy, it is important for a debtor to understand the types of debt that he or she may have. The type of debt will determine whether bankruptcy can discharge it. If you are considering filing for bankruptcy and would like to learn what debts the bankruptcy will discharge, a Morris County bankruptcy lawyer can advise you of your options. Debts Dischargeable During Bankruptcy Credit card debt Unpaid leases Personal loans – as long as you did not use the loans to pay off non-dischargeable debt. Unpaid car debt after your creditor has repossessed the vehicle Car accident-related judgments against you Older unpaid taxes – those taxes older than three years. Court judgments against you – but, see below, as bankruptcy cannot discharge personal injury judgments against you while you were intoxicated. Medical bills Business expense debts Debts Not Dischargeable During Bankruptcy Student loan debt – a…
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Which Type of Bankruptcy is Right for Me?

A Morris County Bankruptcy Lawyer Explains Your Options Bankruptcy is a complicated procedure with many options available to resolve your debt crisis. Even if you know the basics of Chapter 7 and Chapter 13 bankruptcy, how can you know which one will give you the best chance to eliminate your debt and get a fresh start? Fortunately, you are not alone. You can receive guidance from a bankruptcy attorney and find out which type of bankruptcy is right for you. Should I File for Chapter 7 Bankruptcy? Chapter 7 is a comparatively quick form of bankruptcy that can allow you to keep all or most of what you own. You may lose some property, but if you have relatively few assets, you can get out of bankruptcy with your property intact and a chance to start over. Though Chapter 7 cannot eliminate debt from student loans and recent taxes, you…
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Stripping Junior Mortgages

If you have multiple mortgages and owe more on the first mortgage than your home is currently worth, you may be able to use Chapter 13 bankruptcy to get out from under second or third mortgages with a process known as lien stripping. A qualified Morris County bankruptcy attorney can assist you with the lien stripping process and all aspects of filing bankruptcy. What Is Lien Stripping? When a junior mortgage is “wholly unsecured,” that is, there is no equity available to secure the second mortgage because the first mortgage balance is more than the total value of the property, then you may be able to strip the second lien in a Chapter 13 bankruptcy. By stripping the lien, you essentially eliminate the mortgage creditor’s security interest and get to treat the junior mortgage as a dischargeable unsecured debt. For example, if your home is worth $200,000 and you have…
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Can I Proceed With a Short Sale While in Bankruptcy?

Since home values dropped so dramatically during the mortgage crisis, more and more homeowners want to know if they can complete a short sale after filing for bankruptcy. The answer is yes, you can short sell your home while in bankruptcy. Because a short sale involves a property with no equity, neither the bankruptcy trustee nor your creditors should have any objection to the sale. For Chapter 13 filers, a short sale can mean avoiding a deficiency claim that has to be paid through the plan. For Chapter 7 filers, a short sale might help with qualifying for another mortgage loan faster. If you are behind on mortgage payments, an experienced Morris County bankruptcy attorney can explain the various avenues for keeping or letting go of your home, including all available bankruptcy options. What Is a Short Sale? A short sale is when the proceeds from a real estate sale…
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