How long does bankruptcy take?

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Once a Chapter 7 bankruptcy is filed, it takes a day or two to receive notice of the date and time for the meeting of creditors, which is generally scheduled two to three weeks away from the filing date.

Once the meeting of creditors takes place and assuming there are no complicating factors in your Chapter 7, it’s about 60 days before you receive your bankruptcy discharge of all your dischargeable debts.

Regarding how long it takes from the time your hire an attorney to begin the process up until the time of filing, a lot of it depends on your individual situation. If you have loose ends that need tying up, such as an unfiled tax return from a prior tax year, you will probably need to get these things taken care of before you can file.

Also, it may take people some extra time to gather all of the documentation required for an attorney to complete the bankruptcy papers. And some attorneys may take installment payments for their attorney fees, which can delay the filing date, since all attorneys fees must be paid before a bankruptcy can be filed.

Chapter 13 bankruptcies, on the other hand, can take anywhere from 3 to 5 years to complete, since a Chapter 13 involves making monthly payments over time to your creditors.

If you think you might need a bankruptcy attorney in New Jersey, please call me at 201-676-0722 for a free telephone consultation.

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3 mistakes to avoid when paying credit card debt

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You will see all sorts of advice about “managing debt.” But when it comes to credit card debt, mere “management” can get you into trouble.

Truth is, the best way to “manage” credit cards is not to carry a balance at all. Don’t spend more than you can afford. Pay off the entire balance at the end of every month.

But you will find advice out there about how to pay down credit-card balances and keep ahead of the game, as though everyone were in an equal starting position in a game of Monopoly. Some of this advice may be right for you if you can afford it and if it will successfully lead you to a goal of getting all your credit card debt paid off.

Unfortunately, people often don’t realize, until they’ve made even worse financial mistakes, that the advice they tried to follow to pay down on their credit-card debt or to pay it off just wasn’t right for them.

If you are in a position where you are thinking about getting money from somewhere other than your regular source of income just to pay off your credit card debt or to pay it down “just enough,” you are thinking along the wrong lines.

Here are my personal “do not” rules for paying down credit card debt:

* Do not borrow money to pay off credit cards. “Borrowing money” includes things you might not normally think of as borrowing, like using your checking account’s line of credit or overdraft protection.

* Do not take money out of a retirement account to pay off credit cards. Especially do not cash out, or withdraw any money from, a 401k account – you will not only be cashing out part of your future safety net, but you will also be incurring a huge tax liability in the process. A tax liability that – by the way – is likely not dischargeable in bankruptcy.

* Do not spend money on a debt consolidation company (or a debt whatever company) to pay off credit cards. You would be spending extra money to just to repay money. Some people do this successfully, but the people who manage to pull this off already have sufficient income to pay off their debts eventually. And those people could probably pay off their debt without a debt consolidation company by reducing their expenses and making large enough payments toward their debt to pay it all off – and they can also call up the credit card companies themselves to try and negotiate better payment arrangements.

If you’ve looked at your income and found that you “have to” do one of these three things in order to pay off (or even to pay down) your credit cards over time, stop and consult a bankruptcy attorney. Do not dig yourself into a bigger financial mess by making one of these three mistakes.

Don’t make even bigger financial mistakes! If you are drowning in credit-card debt and can’t dig your way out, call me for a free bankruptcy telephone consultation at 201-676-0722.

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Bank of America drops arbitrations for cardholders

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Bank of America recently agreed to drop the requirement that cardholders resolve disputes in arbitration. The bank did this as part of a settlement of a lawsuit in which they were accused of conspiring with other banks to require credit-card holders to arbitrate disputes instead of going to court.

Other banks are still involved in the lawsuit, which is in Federal Court in New York. These other banks include Capital One, Chase, Citibank, Discover and HSBC. The lawsuit accuses them of violating antitrust laws by requiring cardholders to enter into arbitration for all disputes.

Many believe that credit card arbitrations are biased in favor of the credit card company.

Earlier this year, National Arbitration Forum, a large arbitration company, dropped out of the credit-card arbitration business as a result of a lawsuit against it.

Do I have to go to court when I file for bankruptcy?

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Most bankruptcy filers do not have to go to court.

Instead, every Chapter 7 case will be scheduled for a meeting of creditors, which does not take place in a courthouse. In Newark, New Jersey, the meetings of creditors take place in a downtown office building. Most large creditors (such as credit card companies) typically do not show up for these meetings, which usually only last about 5 minutes.

At the meeting of creditors, the trustee assigned to your case will ask you a series of questions regarding your bankruptcy while you are under oath.

But sometimes, a bankruptcy case is more complicated than average and a court hearing might be needed. David Harris, a Pennsylvania bankruptcy lawyer, provides a good outline of some instances when a court appearance might be required.

If you are in New Jersey and seeking a Chapter 7 bankruptcy lawyer, call 201-676-0722.

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Will they take my property after I file bankruptcy?

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One reason people find themselves in the position of wanting to transfer their assets before filing for bankruptcy is that they are afraid the bankruptcy trustee will take their stuff after they file. But you might not need to worry about that, especially in New Jersey.

Why not? Because you might be able to declare and exempt all (or most) of your property.

What does it mean to “exempt” your property? Generally, once you file for bankruptcy, a “bankruptcy estate” is created, which contains all of your non-exempt property. The trustee can decide what to do with the property in the bankruptcy estate – such as whether to sell it for the benefit of your creditors.

A bankruptcy “exemption” refers to the legal means of keeping your property outside of the bankruptcy estate.

In order to claim an exemption for property you own, you specifically list the property on the bankruptcy papers, the property’s value, and the specific statute section allowing you to exempt that piece of property. This process should be used for all property – including all personal property, such as furniture – so that the trustee cannot claim it for the bankruptcy estate. If you don’t list it and exempt it, you may lose it.

New Jersey gives you the choice to use either the Federal exemptions or the New Jersey exemptions. And the Federal exemptions are quite generous.

In New Jersey and looking at a 7? Call me at 201-676-0722.

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How to screw up your bankruptcy before it has begun

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Planning on transferring your largest asset to a relative just before filing for bankruptcy so that the bankruptcy court can’t get to it? As a bankruptcy lawyer, I must say – PLEASE DON’T. It’s a bad idea because it can really get you into trouble and it can deny you your ultimate goal of getting your debts discharged.

The Bankruptcy Code contains a section (727) allowing the Bankruptcy Court to deny a discharge to debtors who transferred, destroyed, or concealed their own property within a year before filing for bankruptcy. Debtors also should not mess around with their property right after filing for bankruptcy – wait until the discharge comes through.

The reason why is that, especially since the 2005 change in the bankruptcy law was enacted, the courts have been cracking down on bankruptcy fraud. The court doesn’t like it when you try to hide assets. They don’t think of your moving your property around to avoid losing it in bankruptcy as ‘innocent,’ even if you do.

In fact, if a debtor does enough things that the court doesn’t like, it may see the entire bankruptcy filing as abusive.

Besides, if you really have assets worth so much that you can’t exempt them from the bankruptcy estate, you may be able to save them by filing a Chapter 13 instead of a Chapter 7. Talk with a lawyer about your options – just don’t transfer any property around before doing so!

In New Jersey and looking at bankruptcy as an option? Call a New Jersey bankruptcy lawyer at 201-676-0722.

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How to get your creditors to stop harrassing you

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One way to get your creditors to stop harassing you is by filing for bankruptcy. But how does filing for bankruptcy stop creditor calls and letters? Through something called the “automatic stay”.

The automatic stay in bankruptcy can be a powerful benefit for debtors who feel that they are being hounded by creditor phone calls and letters. It can prevent further harassment from debt collectors.

After a bankruptcy is filed, creditors must stop attempting to collect on debts as a result of the automatic stay, which takes effect just after filing. Practically speaking, you should wait until creditors receive notice of the filing before they know to stop contacting you.

Or, your lawyer may send out letters of representation to your creditors, which can put a stop to the creditor calls and letters for a while prior to your bankruptcy filing. For example, if the credit card companies are really annoying you, have a talk with your lawyer and see whether letters of representation can be arranged.

Exactly what does the automatic stay protect the debtor from? Debt collection calls, wage garnishment, lawsuits, foreclosure sales, and repossessions.

What types of actions are NOT stayed? Actions regarding family support, such as child support or alimony; criminal prosecutions; and tax assessments or audits.

How long does the automatic stay last? Until the debtor’s bankruptcy discharge comes through or until a creditor asks a judge and successfully gets the automatic stay lifted.

What happens when a creditor violates the automatic stay? Then that creditor may be subject to civil penalties, such as the payment of damages.

If you have a question about bankruptcy, feel free to contact the Hoboken Bankruptcy Attorney at 201-676-0722 or at jweil@jenlawyer.com.

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How to choose which debts to list in your bankruptcy papers

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Which debts should you put in the bankruptcy and which ones should you leave out?

Answer: You are required to list all of your debts in your bankruptcy papers! It is a common notion that you are allowed to keep some debts out of your bankruptcy by not listing them – but this could not be further from the truth.

Don’t forget, you are signing your bankruptcy papers under penalty of perjury, which means that you could be criminally prosecuted if you fail to disclose information on those papers. These papers require you to list complete information, including “all” of your debts.

What if you accidentally leave out some piece of information? Then you should tell your lawyer as soon as you realize your mistake, because you may be able to amend the filed bankruptcy papers. You may be required to pay an extra fee to the Bankruptcy Court.

And don’t forget to list all debts you may owe to friends and relatives. Many people do not think about listing debts to friends and relatives, because they don’t consider them to be the same type of debt as the credit card debt they are so worried about. And it’s true – debts owed to friends and relatives are different, but that does not mean they shouldn’t be listed in your bankruptcy papers.

If you are seeking bankruptcy advice in northern or central New Jersey, call Jennifer Weil at 201-676-0722 or send an email to: weilattorney@gmail.com.

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How to recognize an abusive bankruptcy filing

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What is an abusive bankruptcy filing? When does a bankruptcy court consider a debtor’s Chapter 7 filing to be an abuse of the bankruptcy process?

A bankruptcy court will look at whether the person filing the bankruptcy acted in bad faith and at the entire circumstances surrounding the debtor’s financial situation.

A Florida court addressed this issue in a recent case. Not only were the debtors living what the court considered to be “an extravagant lifestyle” both before and after their filing, but they also failed to disclose all relevant information in their bankruptcy filing.

Among other factors, the court found the following to be especially significant – the debtors:
1) Initiated a lease on a luxury car – an Infiniti – the month before filing for bankruptcy;
2) Timed the filing to be right before a significant raise in income;
3) Had excessive withholding of their Federal taxes and increased 401(k) contributions;
4) Transferred property and/or money right before and after filing for bankruptcy;
5) Tried to hide cash from the bankruptcy court; and
6) Spent a lot of money on day trading, brokerage fees, restaurants, and non-essential purchases.

The court also examined whether the debtors were able to pay their unsecured debts. With disposable income of over $3000 per month left over after monthly expenses, the court found that yes, these debtors would be able to pay back about 54% of their unsecured debts over about 60 months.

Primarily because the debtors could repay a significant portion of their unsecured debt, the court found that it would be an abuse of Chapter 7 to give them relief under that chapter. But the court took other factors into account, such as:
1) One of the debtors was experienced in financial matters and they both had experience with Chapter 7;
2) The debtors timed their filing to take place just before a raise in income;
3) They transferred money and/or property before and after their bankruptcy filing;
4) They made no effort to reduce expenses and live “a luxurious lifestyle”;
5) They decided to keep and pay on 3 luxury vehicles that had no equity;
6) They make large mortgage payments on a house that has no equity;
7) The debtors increased their monthly vehicle obligations right before filing;
8) The debtors provide a rent-free home to two relatives, whose utilities they also pay; and
9) Their bankruptcy filing was not the result of an unexpected or catastrophic event.

The debtors’ Chapter 7 case was dismissed and they were given time to convert their case to an appropriate chapter of the Bankruptcy Code.

The factors listed above, taken together, are enough to probably make any bankruptcy court sit up and take notice – in a bad way. The existence of just one of these factors might not be enough to lead to dismissal of a Chapter 7 case, but it really depends on the individual facts of each case.

This post is based on In re Ricci, Case No. 6:09-bk-00914-ABB, (Bankr., Middle Dist. Fla., Orlando Div. 2009).

If you are looking for a New Jersey bankruptcy lawyer, please call (201) 676-0722.

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Getting to know your NJ bankruptcy lawyer

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This post may not be about bankruptcy, but you can call your time spent reading this post “getting to know your New Jersey bankruptcy lawyer.”

So anyway, I just had a pretty cool experience – an old teacher of mine from high school connected with me on Facebook. Haven’t seen him since high school. He’s got a website featuring books he’s written about various aspects of the Scriptures. (Yes, I went to a Catholic high school.)

Believe me, when you are my age, you do not in a million years expect to grow up and discover that a high school teacher of yours went out and put up his own website featuring his own business and line of books. Oh, how the times change….

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