Category Archives: New Jersey Bankruptcy FAQ

Does filing bankruptcy stop a foreclosure?

Many people faced with an imminent foreclosure related sheriff’s sale seriously consider filing for bankruptcy. In this type of situation bankruptcy may be an attractive option because a bankruptcy filing delays a foreclose. However, it is important to note that this delay is only temporary.

A bankruptcy has the benefit of this delay because immediately following a bankruptcy filing the Bankruptcy Court issues a court order referred to as an automatic stay. This automatic stay simultaneously notifies the creditors of the party that has filed bankruptcy of the existence of the bankruptcy case and orders these creditors to immediately stop pursuing all collections related activities including a foreclosure itself. This could have the benefit of delaying a previously scheduled sheriff’s sale while the bankruptcy case is pending, which is often three to four months.

While a bankruptcy temporarily delays sheriff’s sales, the bankruptcy is itself only a very temporary solution to a struggling homeowner’s problems. Not only is this brief delay limited to the period in which the bankruptcy is pending, but the homeowner’s lender may in certain situations be able file a motion with the Bankruptcy Court to lift the stay. If granted and the stay is lifted, the lender can proceed to sell the home.

If you are interested in filing a Bankruptcy, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

Do I qualify for a Chapter 13 bankruptcy?

In order to qualify for a Chapter 13 bankruptcy your debts must fall within federal guidelines. As of April 1, 2011 your secured debt cannot exceed $1,081,400 and your unsecured debt cannot exceed $360,475. Secured debt consists of those debts that are secured by collateral. Automobile loans and home loans are both good examples of secured debt. Alternately, examples of unsecured debt include credit card debt and student loan debt.

If you are interested in filing a Chapter 13 Bankruptcy or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

What is a Chapter 13 Bankruptcy?

Chapter 13 refers to the specific chapter of the Bankruptcy Code which provides for the restructuring and repayment of debts. This form of bankruptcy, which is available to qualifying individuals, is often referred to as a wage earner’s bankruptcy because it involves the use of a repayment plan to satisfy the debtor’s obligations, rather than involving the liquidation process seen in the context of a Chapter 7 bankruptcy filing. In a Chapter 13 bankruptcy such repayment of debts takes place over the course of a three to five year term upon the expiration of which the remaining debts of the debtor are discharged.

If you are interested in filing a Chapter 13 Bankruptcy, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

What is the means test?

The means test is a formula applied to determine whether a liquidation pursuant to a Chapter 7 bankruptcy is appropriate, or if the debtor’s debts should be subject to a repayment plan pursuant to Chapter 13 of the Bankruptcy Code. Specifically, in the event that the debtor’s current monthly income exceeds the relevant state’s median income a means test is applied under the Bankruptcy Code to determine whether a Chapter 7 filing is presumptively abusive. If the filing is determined to be presumptively abusive, and such finding is not rebutted, the bankruptcy case will be converted to a Chapter 13 bankruptcy or it will be dismissed.

If you are interested in filing a Chapter 7 Bankruptcy, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

Who is eligible for relief under Chapter 7?

Chapter 7 relief extends to certain individuals, corporations, or other business entities. Relief is available, subject to the satisfaction of the mean test, regardless of the size of the debtor’s debts and regardless of whether the debtor is solvent.
However, in certain situations debtors that would otherwise qualify cannot file for bankruptcy under Chapter 7 if (1) the debtor voluntarily dismissed the previous bankruptcy case after its creditors sought the court’s relief to recover property from the debtor; (2) during previous 180 days a bankruptcy petition of such a debtor was dismissed as a result of the debtor’s failure to comply with the court’s order of failure to appear before the court; or (3) if the debtor does not receive credit counseling from an approved agency during the 180 days preceding the Chapter 7 bankruptcy filing.

If you are interested in filing a Chapter 7 Bankruptcy, or if you have any related questions call us today at (973) 500-8024 or (212) 960-8308, or submit your contact information below and we can contact you directly.

What are the benefits associated with a Chapter 7 filing?

A Chapter 7 bankruptcy provides debtors with a fresh start by allowing debtors to discharge debts without incurring any liabilities in connection with such discharges. Debtor must remember that a right to discharge is not absolute. Further, certain types of debt are not dischargeable. Finally, bankruptcy does not extinguish liens on property.

If you are interested in filing a Chapter 7 Bankruptcy or if you have any related questions call us today at (212) 960-8308 or (973) 500-8024, or submit your contact information by clicking here and we can contact you directly.