Bankruptcy Frequently Asked Questions

New Jersey Bankruptcy True or False – Frequently Asked Questions About United States Bankruptcy Laws and the Laws of the State of New Jersey.
CAUTION – The information presented below about the provisions of the United States Bankruptcy Laws is not intended as legal advice to a particular individual. Whether or not filing a bankruptcy petition will benefit someone experiencing serious debt problems and the type of bankruptcy petition which may be of benefit, can be determined only after a detailed review of the income, property and debts of the debtor has been conducted by an attorney who practices in the area of bankruptcy law.
True or False? Filing a Bankruptcy Petition Enable Many People Who Are Experiencing Serious Debt Problems to get a Fresh Start and a Clean Slate, by Eliminating Credit Card Debt, Medical Bills, Wage Garnishment, Bank Levy and other types of collection activities.
True The United States Bankruptcy Court Issues an Order of Discharge at the conclusion of a Chapter 7 consumer proceeding to those who have fully satisfied the requirements of the Court. The Order of Discharge prohibits creditors from attempting to collect debts which have been discharged and imposes penalties on any creditor who violates the Court’s Order. See the New York Times of January 24, 2009, Bankruptcy As a Step to Solvency
True or False? Debtors Who File a Bankruptcy Lose All of Their Property.
False Most people who file Chapter 7 Bankruptcy to clean the slate and get a fresh start do not lose any of their property. In fact the opposite is often true. The Bankruptcy Code allows debtors exemptions which are usually sufficient to prevent the loss of any of their property. Eliminating debt and avoiding New Jersey State Court proceedings such as wage garnishment and bank levy may enable a debtor to prevent the loss of their home, automobile or other personal property by protecting their income.
True or False? Have those who have filed bankruptcy petition been prevented from getting credit again or have they been required to wait 10 years before getting credit again.
False Many people who have filed for bankruptcy have been able to reestablish their credit within a few years of filing and have been able to obtain credit cards, purchase vehicles and homes. In fact, it is the opinion of some that getting a clean slate and a fresh start will actually help a debtor reestablish their credit because they are not subject to the collection of old debt. For example, if a creditor enters a judgment on the docket against a debtor in the Superior Court of New Jersey , the judgment is a public record and the creditor can take legal action to collect the debt for up to twenty years.

It must be noted that creditors are now tightening the availability of credit and therefore the lending practices of creditors in the past cannot be relied upon to predict whether and when credit may be available to those who obtain a clean slate and fresh start by filing a bankruptcy petition.
True or False? Husbands and Wives are generally not responsible for each others’ debts unless they have specifically agreed to pay them and therefore if one spouse files a bankruptcy, creditors cannot attempt to collect from the other spouse.
True Under the Law of the State of New Jersey creditors generally cannot seek to collect from an spouse unless he or she has agreed to be responsible for the debts of the other spouse and the bankruptcy should not be reflected on the non-filing spouse’s credit report. Therefore a non-debtor spouse does not have to file bankruptcy petition to avoid being pursued by the creditors of the debtor spouse.

However, there are exceptions. New Jersey Law makes Husbands and Wives responsible for the reasonable and necessary expenses of a spouse when the expense is essential to their well being. Examples would be for food, shelter and medical attention. This is called the Doctrine of Necessaries which also make parents responsible for such expenses for their dependent children. In addition, the Bankruptcy Code does not permit a debtor to discharge support obligations such as alimony and child support.
True or False? If a Plan to prevent foreclosure by repaying mortgage arrears is approved by the United States Bankruptcy Court, the mortgage lender does not have to agree to the the Plan.
True Creditors are bound by a Chapter 13 Plan Which is Confirmed by the United States Bankruptcy Court. The Plan may provide for the repayment of mortgage arrears over a period of up to sixty months and may also provide for the reduction or elimination the same kinds of debts which can be eliminated by a Chapter 7 proceeding. To be confirmed, a Plan must be feasible; that is, that the Petitioner must show sufficient monthly income to make the payments required by the Plan. Chapter 13 Plans vary greatly depending on the income, assets, and expenses of a petitioner and the payments that must be made under the Plan. Whether a feasible plan can be filed to prevent foreclosure can be determined only after a detailed analysis. If the payments required by the confirmed Plan are made, the New Jersey State Court proceedings are stayed – (prevented from proceeding)

If you are experiencing serious personal or business debt problems, it is in your interest at your earliest opportunity to seek the opinion of an attorney to find out if the provisions of Chapter 7, 11 and 13 of the Bankruptcy Law can benefit you.

For a Free Consultation about the United States Bankruptcy Laws & Laws of New Jersey that may protect you and your property call 1-800-640-1192.

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