Business Disputes and Bankruptcy: Avoiding Creditor Challenges

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Creditors can challenge the discharge of your debts in a bankruptcy case, especially when the bankruptcy is filed after a business shuts down. To avoid these challenges, it’s important to understand why they happen and what can be done to prevent them.

Reasons for Creditor Challenges:

  • Larger debt amounts, making litigation more tempting
  • Personal debtor-creditor relationships
  • Risky behavior by the business owner
  • Creditors may know about the debtor’s risky behavior

Often, former business owners considering bankruptcy feel that a creditor will challenge the discharge of their debts in court. But such challenges are relatively rare, for the following legal and practical reasons:

1. The legal grounds under which challenges to discharge can be raised are relatively narrow. Instead of proving the existence of a valid debt—as in a conventional lawsuit to collect on a debt—the creditor has to prove that the debtor engaged in behavior such as fraud in incurring the debt, embezzlement, larceny, fraud as a fiduciary, or intentional and malicious injury to property.

2. In bankruptcy, the debtor files under oath a set of extensive documents about his or her finances, and is also subject to questioning by the creditors about those documents and about anything else relevant to the discharge of the debts. When these documents, along with any questioning, reveal that the debtor genuinely has nothing worth chasing—as is most often the case—this tends to cool the anger of most creditors. Only the most motivated of creditors will be willing to throw the proverbial good money after bad in the hopes of getting nothing more than a questionably collectible judgment.

In conclusion, a dischargeability challenge can turn a simple bankruptcy case into a complex one. Hiring an experienced bankruptcy attorney can help you avoid challenges and defend against them if necessary. Contact an attorney if you have reason to believe that a creditor may challenge the discharge of your debts.

To discuss options – bankruptcy and non-bankruptcy – in resolving your debt, schedule a free telephone call with New Jersey bankruptcy attorney Jennifer N. Weil, Esq. at this Setmore page or by emailing weilattorney@gmail.com.

Protecting Yourself When Your Business Has to Shut Down

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Protecting yourself when your business has to shut down is important, since you may be personally liable for your business debts, even after you close your small business.

Protecting Yourself When Your Business Has to Shut Down

If you’re considering closing down your struggling business, you may be concerned about personal damage control: how do you end the business without being pulled down with it? If you are responsible for the debts of your former business, your creditors may sue you personally in an attempt to collect on those debts.

Often, business owners are confused as to whether they are personally responsible for business debts since those debts often do not appear on their personal credit report. But debt does not need to appear on a credit report for you to be personally responsible for it. Protecting yourself when your business has to shut down becomes a top priority when you are personally liable for the debts of your former business.

Sometimes a business owner, operating their business as a sole proprietorship, accumulates a lot of personally-guaranteed debt while trying to keep the business operating. Where the business owner has accumulated too much debt, they may need bankruptcy relief.

Let’s look at three options for bankruptcy relief in a situation like this: 1) A no-asset Chapter 7 case, 2) An asset Chapter 7 case, and 3) A Chapter 13 case.

No-Asset Chapter 7 for a Fast Fresh Start

After putting so much effort and hope into your business, once you accept the reality that you have to give up on it, you may want to clean it up as fast as possible. And in fact, a regular Chapter 7 bankruptcy may be the most consistent with both your gut feelings and with your legal realities.

IF everything that you own—both from the business and personally—fits within the allowed asset exemptions, then your case may be fairly simple and quick. A no-asset Chapter 7 case is usually completed from filing date to closing date in about three months. If none of your assets are within the trustee’s reach, then there is nothing to liquidate and distribute among your creditors, a process that can take a long time.

But this assumes that all your debts can be handled appropriately in a Chapter 7 case—the debts that you want to discharge (write off) would be discharged and those that would not are the ones that are not dischargeable under bankruptcy law. Non-dischargeable debts often include certain taxes, support payments, and perhaps student loans.

Asset Chapter 7 Case As a Convenient Liquidation Procedure

If you do have some assets that are not exempt, that alone may not be a reason to avoid Chapter 7. Assuming that those are assets that you can do without—and maybe even are happy to be rid of, if they came from your former business—letting the bankruptcy trustee take and sell them may be a sensible and fair way of putting the past behind you.

That may especially be true if you have some debts that you would not mind the trustee paying out of the proceeds of selling your non-exempt assets. You can’t predict with certainty how a trustee will act, but this is something to keep in mind.

Chapter 13 to Deal with the Leftover Consequences

Even if you’d prefer putting your closed business behind you quickly, there may be fallout from that business that a Chapter 7 would not deal with adequately. For example, if the business left you with substantial tax debts that cannot be discharged, non-exempt assets that you need to protect, or a significant mortgage arrearage, Chapter 13 could provide you with a better way of dealing with these kinds of creditors. Deciding between Chapter 7 and 13 when different factors point in different directions is where you truly benefit from having a highly experienced bankruptcy attorney help you make that delicate judgment call.

Schedule a telephone call to discuss your situation with NJ bankruptcy attorney Jennifer N. Weil, Esq. at (201) 676-0722, schedule your own consultation on my Setmore page, or email weilattorney@gmail.com.

2 Ways to Use Bankruptcy To Close Your Business

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2 ways to use bankruptcy to close your business involves leaving your business debt behind so that it does not come back to haunt you personally.

Closing down a business can be messy. Business bankruptcy is often more complicated than a regular bankruptcy case. But in one way, a business bankruptcy may be easier than a consumer bankruptcy case.

If you’ve owned a small business that you have shut down, or that you are about to shut down, you may be afraid of filing bankruptcy because you’ve heard that “business bankruptcies” are expensive and not a good way to wrap up the affairs of a business. However, bankruptcy can be a simple and effective solution.

The Means Test

The “means test” determines whether you may file a regular Chapter 7 case to discharge your debts in a few months, or whether you must file a 3-to-5-year Chapter 13 repayment case. Unless you need some of the other benefits of Chapter 13, many people prefer Chapter 7 because it gets them a fresh start more quickly and cheaply.

In some situations, a former business owner cannot pass the means test and will be required to go through Chapter 13. For example:

    • If, after closing her business, a business owner got a good job before filing bankruptcy, the income from that job may be higher than the “median income” applicable to her state and family size. So she may not pass the “means test.”
    • If the business was operated by one spouse while the other worked an outside job and earned a high income, the other spouse’s income may bump the couple above the “median income” with the result of not passing the “means test.”

But here’s the good news for some former business owners: the “means test” only applies if your “debts are primarily consumer debts.” (See Section 707(b)(1) of the Bankruptcy Code.) So if your debts are primarily business debts—more than 50%–you essentially can skip the “means test.”

Be careful here, because “debts” means all debts, including home mortgages and personal vehicle loans. So your business debts may have to be high to be more than all your consumer debts.

To apply this law, we must be clear about the difference between these two types of debts. What’s a “consumer debt”? The definition may sound familiar: it’s a “debt incurred by an individual primarily for a personal, family, or household purpose.” (Section 101(8).)  For example, if you took out a second mortgage on your home a few years ago to fund your business, the current balance on that second mortgage may not be a consumer debt.

Sometimes the line between consumer and non-consumer debt is not clear, so this is something you need to discuss thoroughly with your attorney if you want to avoid the “means test” under this “primarily business debts” exception.

If you have questions about qualifying for bankruptcy, call to schedule a free telephone appointment with Jennifer N. Weil, Esq. to discuss your situation at (201) 676-0722 or by emailing weilattorney@gmail.com.

Why Bankruptcy Means Test Timing Is Critical

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Waiting just one day to file your Chapter 7 bankruptcy case can make qualifying for it much easier—or much harder!

How could a small delay make such a big difference?

One of the goals behind the change in bankruptcy law in 2005 was to force more people to pay a portion of their debts through Chapter 13 payment plans instead of writing them off in Chapter 7 “straight bankruptcy.” And the primary tool for this is the means test. The rationale behind the means test was to have a financial test that would find out who had the “means” to pay something to their creditors in Chapter 13.

But rules can have unintended consequences. An experienced lawyer will work to turn these consequences to your advantage.

Why bankruptcy means test timing is critical

The means test compares the income you received during the six FULL CALENDAR months before filing bankruptcy to the median income for your state and family size. If your income is at or under the median income, then you can file a Chapter 7 (except in unusual circumstances, which I’m not going to get into here). If your income is higher than the median, you may be able to file a Chapter 7, but you have to jump through hoops to do so. And there’s a risk that you will be forced to go through a Chapter 13 payment plan.  Having income below the median income amount makes your case less risky.

But how can filing the case a day earlier or later matter so much? Because of the means test’s fixation on those six full calendar months. And because the means test includes ALL income during that period (other than Social Security).  All of the money that comes into your hands during that period is counted, not just taxable income.

Imagine that you received a chunk of money, say a tax refund, a few catch-up child support payments, or an insurance settlement or reimbursement.  Not a huge amount, say $3,000, received on July 15 of last year. Your only other income is from your job, where make a $42,000 salary, or $3,500 gross per month. Let’s say that the median annual income for your state and family size is $43,000 (this is just an example – the median income for New Jersey is much higher, thank goodness).

Now we’re getting close to the end of January, your Chapter 7 bankruptcy paperwork is ready to file, and you’re anxious to get it filed. BUT, if your case is filed on or before January 31, then the last six full calendar month period will be from July 1 through December 31 of last year, which includes that $3,000 you received in mid-July. Your work income of 6 times $3,500 equals $21,000, plus that $3,000 totals $24,000 received during that 6-month period. Multiply that by 2 to make that an annual amount, and that equals $48,000, higher than the $42,000 median income. So you’d have failed the income portion of the means test.

But if you just wait to file until February 1, the applicable 6-month period jumps forward by 1 month to the period from August 1 of last year through January 31 of this year. That new period does NOT include the $3,000 you received in mid-July. Now your income during the 6-month period is $21,000, multiplied by 2 is $42,000. You would be under the $43,000 median income. You’ve passed the income portion of the means test, and you can skip the awkward and risky expenses part of the means test. You’re more likely to breeze through your Chapter 7 case.

Last thing: what if that $3,000 was not received almost 6 months ago, but rather 2 or 3 months ago, and you’re desperate to file your case? You need to stop a garnishment or foreclosure and you can’t wait another few months to file. If you file now, you will be over the median income, and you will need to do the expenses part of the means test. You may be OK there. But careful pre-bankruptcy planning is critical. The sooner we start, the more likely time will be on your side.

How To Keep Your Car in a Chapter 7 Bankruptcy

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Chapter 7 bankruptcy gives you a couple of options for your car when you’re still paying on it. Basically, you can either keep paying or you can surrender (i.e., give back) the vehicle.

What’s The Situation?

This is about a vehicle that you still owe on, where your finance company is the lienholder on your vehicle title, and where there’s no more equity (value beyond the debt) than is covered by your available exemptions. In other words, this is not a vehicle that your Chapter 7 trustee is going to be interested in, either because it has no equity (e.g., it’s worth less than the debt against it) or because the equity is small enough to be protected by the exemption. The following options also apply to car leases.

Ch. 7 Options For Your Car

Even if the bankruptcy trustee doesn’t want your car, your car finance company might. But if you need to keep the car, especially for work, there is a certain path that you need to follow.

How To Keep Your Car in a Chapter 7 Bankruptcy

  1. First, if you don’t want to keep your vehicle, you can surrender it to the creditor after your bankruptcy is filed. (Or you can surrender it before you file, but that gets risky—be sure you have talked to your bankruptcy attorney and have a clear game plan beforehand.) If you give back your vehicle without bankruptcy, you’ll owe and you might be sued for the “deficiency balance”—the amount you would owe after your vehicle is sold, its sale price is credited to your account, and all the repo and other costs are added. (The deficiency balance you’ll owe can be crazy high.) But bankruptcy will write off (i.e., discharge) the deficiency balance.
  2. If you want to keep your car through a Ch. 7, you have to be current on your loan. In other words, make your car payments during bankruptcy. So if you aren’t current, you’ll need to quickly get current and stay there. Some lenders will allow you to be a month or so behind on your loan, but I’ve found that when a bankruptcy has been filed, they suddenly change their tune and they want to you be current on your payments. Depending on the lender, you might need to sign a reaffirmation agreeing to legally exclude the vehicle loan from the bankruptcy discharge, but most lenders don’t work that way. I generally don’t recommend a reaffirmation agreement except under certain narrow circumstances. You should discuss this issue with an experienced bankruptcy attorney before your bankruptcy is filed.

The Takeaway

In general, “straight bankruptcy”—Chapter 7—can be the best way to go if your vehicle situation is pretty straightforward: you either want to give back your car, or you want to keep the car and you’re current on the loan or can quickly get current.

If you have questions about how to keep your car in a Chapter 7 bankruptcy  – or about how to get rid of it – schedule an appointment with Bankruptcy Attorney Jennifer N. Weil, Esq. by calling 201-676-0722. Or you can schedule your own appointment online at my Setmore page.

 

Debts with Collateral–THE Fixation of Many Bankruptcies

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Your car loan, home mortgage, account at the appliance or electronics store, and maybe a debt that’s resulted in a judgment lien—these debts with collateral are the ones that grab the most attention during a bankruptcy case. And that includes the attention of the creditors, very interested in “their” collateral.

General unsecured debts are pleasantly boring in most bankruptcy cases. In a Chapter 7 case, they are generally discharged (legally written off) without any opposition by the creditors, who usually get nothing. And in a Chapter 13 case, general unsecured debts are often just paid whatever money is left over after the secured and priority debts, and the trustee and attorney fees, are paid. Nice and boring. That’s because the creditors don’t have much to fight about.

But with secured debts—debts with collateral—both sides have something to fight about: the collateral. The creditors know that the vehicle or house or other collateral is the only thing backing up the debt you owe to them, so they can get quite pushy about protecting that collateral.

There are a few basic points to remember that apply to just about all secured debts:

Two Deals in One

It helps to look at any secured debt as two interrelated agreements between you and the creditor. First, the creditor agreed to give you money or credit in return for your promise to repay it on certain terms. Second, you received rights to—and usually title in—the collateral, with you in return agreeing that the creditor can take that collateral if you don’t comply with your first agreement to repay the money.

Generally, bankruptcy will absolve you of that first agreement—your promise to pay—but the creditors’ rights to collateral survive bankruptcy (except in certain rare situations we will highlight later). Your ability to discharge the debt gives you some options, and can sometimes give you a certain amount of leverage. But the creditors’ rights to the collateral give them certain options and leverage, too. You’ll see how this tug-of-war plays out with vehicle and home loans, and few other important secured debts.

Value of Collateral

In that tug-of-war between your power to discharge the debt and a creditor’s rights to the collateral, how much the collateral is worth as compared to the amount of the debt becomes important. If the collateral is worth a lot more than the amount of the debt, the creditor is said to be well-secured. It has a better chance of having the debt paid in full. You’ll want to pay off the relatively small debt to get the relatively expensive collateral free and clear of that debt. Or, if you didn’t make the payments, the creditor will get the collateral and sell it for at least as much as the debt.

If the collateral is worth less than the amount of the debt, the creditor is said to be “undersecured”. It is less likely to have this debt paid in full. You might be less likely to pay a debt only to get collateral worth less than what you’re paying. And if you surrender the collateral the creditor will sell it for less than the debt amount.

Depreciation of Collateral, and Interest

With the value of the collateral being such an important consideration, the loss of value through depreciation is something that creditors care about, a concern which the bankruptcy court respects. Also, secured creditors are usually entitled to interest. So, you’ll see that in fights with secured creditors, this issue about the combined amount of monthly depreciation and interest often comes into play.

Insurance

Virtually every agreement with a secured creditor—certainly those involving vehicles and homes—requires that you carry insurance on the collateral. If the collateral is damaged or destroyed, this insurance usually pays the debt on the collateral before it pays you anything. And, if you fail to get the required insurance—or sometimes even if you simply don’t inform the creditor about having the insurance—the creditor itself is entitled to buy “force-placed” insurance to protect only its interest in the collateral, AND charge you the often outrageously high premium.

Avoid using credit cards before bankruptcy

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Using credit cards to buy holiday gifts could mean that you will have to pay back those credit charges if you file for bankruptcy. This is a possibility even if you intended to pay on the cards when you made those purchases.

The Bankruptcy Code has specific rules about the consequences of using credit to buy “luxury goods or services” during the months before a bankruptcy filing.  One rule is that if you use a credit card—or any other type of consumer credit—to buy more than $500 of consumer “luxury goods or services” through a single creditor within the 90 days before filing bankruptcy, a “presumption” is created that this debt is not dischargeable in bankruptcy.

Don’t let the word “luxury” deceive you – it is used to mean anything not “reasonably necessary” to support you or your dependents. Anything not used for survival is arguably not reasonably necessary. Even modest holiday gifts could be considered luxuries under this rule.

Another, similar rule applies to cash advances, except that the trigger dollar amount is $750 per creditor, and the period of time is within 70 days before filing bankruptcy, with the same presumption that the debt would not be dischargeable.

While it is true that such presumptions can be defeated, it is not likely in practice. This is because coming up with the evidence necessary to overcome the presumption (you’d have to prove that you intended to pay the money back at the time you borrowed it) is usually not easy. And the high cost of showing the evidence to the court during a separate proceeding normally makes trying to do so not worthwhile. The attorney fees it would cost you to fight the issue would likely be more than the original amount you’re fighting over.

The bottom line is that if  you use consumer credit exceeding these dollar limits this holiday season and then file bankruptcy within the applicable 70 and 90-day periods, you will most likely have to pay for whatever credit charges you incurred during those periods. You can avoid these presumptions by waiting to file the bankruptcy until after those time periods have passed, but that isn’t always possible due to pending wage garnishments or other types of judgment execution. And even if you do wait, the creditor can still try to show that you had a bad intention when you made these credit charges. It’s best to just avoid the problem altogether by not using your credit cards or other lines of credit when there’s even an outside chance that you might need to file for bankruptcy.

Got debt problems? Call (201) 676-0722.

“If Only I’d Gone to See My Bankruptcy Attorney Sooner . . . “

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Those are the words I hate to hear from a new client.

Bankruptcy attorneys are in the business because we want to help people. It’s an emotionally tough area of law, dealing all the time with clients who are financially hurting. Usually my clients are also hurting in other ways that are related to the cause of their financial problems—illness, injury, divorce, a decline in business, or a job loss. What makes my day is to give great news to a client, that they will now get relief from their debts, or that there is a feasible plan to save their home, or to deal with their child support arrearage or their income tax debt.

The information I share with clients is what they are unaware of before they contact me and it is what they need to know. There may be tough choices to make. I am here to arm you with the law and to guide you through the process.

But the most frustrating situations for both me and my clients are when we find out that they have self-inflicted wounds. These wounds are the easily-preventable-but-now-it’s-too-late bad decisions they’ve made, often just a few months or weeks earlier, without getting legal advice beforehand.

Here’s are some of the most common issues:

1) Preferences:  If you pay a creditor any significant amount before filing a bankruptcy—especially a relative you hope not to involve in that bankruptcy—the bankruptcy trustee may well be able to force that relative, through a lawsuit if necessary, to pay to the trustee whatever amount you paid to that relative.  The trustee can then turn around and pay that money to your creditors.

2) Squandering exempt assets:  Many clients tell me that they have borrowed against or cashed in retirement funds in a desperate effort to pay their debts, using precious assets that would have been completely protected in the bankruptcy case they later file.  Unfortunately, these clients use their retirement money to pay debts that would have been discharged in their bankruptcy.

3) Rushing to sell a home:  Bankruptcy provides some extraordinary tools for dealing with debts that have attached as liens against your home, such as judgments and 2nd mortgages. If you hurriedly sell your home to avoid involving it in your bankruptcy case, or for some other reason, you could lose out on opportunities to save tens of thousands of dollars.

As you look at this list, notice that the legally and financially wrong choice is often what seems to be 1) the morally right one, and 2) the common-sense one. Doing what seems right and sensible can really backfire. But nothing takes the place of legal advice about your own unique situation from an experienced attorney. Avoid ever having to say “if only I had gone in sooner.”

Jennifer N. Weil, Esq. offers free bankruptcy consultations by telephone – please call (201) 676-0722.

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Why Not Repay Relatives Before Filing Bankruptcy?

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Why not repay relatives before filing bankruptcy?

Why not repay relatives before filing bankruptcy? This post addresses a situation where you borrowed money from a relative before bankruptcy. Many people do this in an attempt to keep from having to file for bankruptcy. But often, the money borrowed from the relative isn’t enough to prevent the inevitable.

The general rule about repaying creditors before bankruptcy can be stated as follows: If, before you file a bankruptcy, you pay a creditor more than you are paying at that time to your other creditors, then that favored creditor may have to return the money so that it is shared among all your creditors.

This is especially true if you are paying one creditor when you are no longer paying anything to anyone else. The payment to your favored creditor is called a “preferential payment”—you are considered to be paying that creditor in “preference” over your other creditors.

Unfortunately, the good intentions you had in repaying a creditor may backfire, especially if that creditor – the person to whom you owed the money – is a family member. That’s because repaying a relative within the year before filing for bankruptcy can get that family member mixed up in your bankruptcy case. Your relative may have to fork over the money to your bankruptcy trustee—even if that money has already been spent.

The trustee may well sue your family member to get that money, which is something that bankruptcy law allows the trustee to do. And afterwards, assuming that you feel a moral or family obligation to make that person whole, you would be paying that debt a second time after your bankruptcy is done.

The good news is that this problem can be avoided if you get good legal advice before you make the “preferential” payment or series of payments to that favored creditor. Even if you’ve already made that payment or series of payments when you see your attorney for the first time, there are often ways to get around it.

Watch out – the law about preferences is complicated. Section 547 of the Bankruptcy Code, while by no means the most confusing one in the code, is still unclear. It’s about 1,318 words long, containing 56 sub-sections and sub-sub-sections. If you look at it, I think you’ll agree that this is NOT a do-it-yourself aspect of bankruptcy law.

So IF there is a chance that you will need to file a bankruptcy, BEFORE you pay anything to a relative or any other kind of special creditor that you feel duty-bound to pay, FIRST talk to an experienced bankruptcy attorney. Do so even if—in fact especially if–you don’t consider the person you’d like to pay a “real” creditor, because, for example, the debt was never put in writing, or nobody knows about it.

And most importantly, if you HAVE made such a payment before you see your attorney, be sure that you disclose this information to the attorney at the beginning of your first discussion. It may well affect the timing of your bankruptcy filing. Preferences are mostly a problem when they are discovered AFTER the bankruptcy is filed. That’s what you want to avoid most. Avoid that and it’s possible that preferences will not be a problem for you.

If you’re thinking about filing for bankruptcy in New Jersey, call Jennifer N. Weil, Esq. at (201) 676-0722.

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How long does bankruptcy take?

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217183023_b3c20b9d5a_zHow long does bankruptcy take? Most people just want to get their bankruptcy over with so that they can move on with their lives, free of their burdensome, bad debts.

But what many people don’t realize is that so much of the timeline depends on them – how long it takes them to get the paperwork requested by their bankruptcy attorney, how long it takes them to pay off the attorney fees and the court’s filing fee, and whether it might be best to wait for a period of time before filing to avoid a bankruptcy disaster.

How Long Does Bankruptcy Take: The Paperwork

Your bankruptcy attorney works for you, but she cannot prepare the bankruptcy paperwork without the information required to complete that paperwork. This means you’ll need to give your attorney the items that she asks for, such as your pay stubs and/or other income information, tax returns, bank statements, etc. Here is a link to a list of several things that your bankruptcy attorney may need to prepare your case.

You can help expedite the bankruptcy process by gathering all of the information that your bankruptcy attorney needs to prepare your case. The most important thing in any bankruptcy case is the careful evaluation of the case facts and careful preparation of the bankruptcy paperwork. If something might go wrong during your bankruptcy case, your bankruptcy attorney will want to know about it (and handle it, if possible) before your case is filed, not after!

How Long Does Bankruptcy Take: Paying Off Attorney Fees and Court Fees

Chapter 7 bankruptcy, which is the most common type of bankruptcy filing, requires that attorney fees and the court filing fee be paid in full, in advance, prior to filing. Not all clients have the entire fee available all at once. I can’t speak for other bankruptcy attorneys, but I will take payments over time before filing while working on a client’s case. Then, once the fees are all paid off and the bankruptcy paperwork has been prepared, checked over, and signed by the client, the bankruptcy case can be filed.

By contrast, Chapter 13 bankruptcy allows for an attorney fee to be paid over time through the bankruptcy plan, which allows for payments to be made to creditors over 3 to 5 years.

How Long Does Bankruptcy Take: Waiting to File to Avoid Bankruptcy Disaster

Sometimes, a client might need to file bankruptcy fast to avoid wage garnishment or a bank levy. But sometimes, a client might need to wait for some time before filing the bankruptcy case in order to avoid what I’m calling “bankruptcy disaster.”

A bankruptcy disaster can happen when a bankruptcy case is filed and something goes wrong that could have been handled before filing if only the bankruptcy attorney had known about the problem. An example of a pending bankruptcy disaster is where the client took out a cash advance on a credit card before, but close to the time of, the bankruptcy filing. In such a case, the credit card company can file a motion against the client arguing that the cash-advance debt should not be discharged in the bankruptcy because it was taken out close to the time of filing. This type of situation causes the client far more in extra attorney fees and worry than it would have if it had been handled before filing.

Answering the question, how long does bankruptcy take, requires careful evaluation of all facts by an experienced attorney. There are other types of situations where it would help to wait to file a bankruptcy case in order to handle a potential bankruptcy disaster waiting to happen – every case is unique, so it’s smart to give your bankruptcy attorney all the facts for them to evaluate and to make recommendations for you.

If you have bankruptcy questions in New Jersey, call (201) 676-0722 or schedule your own phone consultation at my Setmore page.