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Paterson Bankruptcy Law Blog

What property is exempt when you file for bankruptcy?

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  • August
    2014

Those facing financial challenges in New Jersey might have to face the reality of seeking debt relief. For some, this could come in the form of bankruptcy. Although it is not uncommon for individuals and families to file for bankruptcy, it is important to address any concern you have prior to filing while also educating yourself on the process and how it could potential affect you and your personal property. A question often posed is -- what property is exempt when they file for bankruptcy?

In order to establish what is considered a bankruptcy exemption during a personal bankruptcy, an individual should establish what type of bankruptcy they are going to file. Whether they are filing for a Chapter 7 or a Chapter 13 bankruptcy, there are some exempt property types. For either type, this often means their vehicle, family home or homestead, clothing, furniture, household items, personal items and jewelry.

Were you recently sick or injured and now struggling with debt due to medical bills?

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  • August
    2014

Many people who have been sick or injured come out of their recovery struggling with medical debt that their insurance companies have not covered.  If you are in that situation, you may be feeling trapped with no options.  Fortunately, bankruptcy is an option that can put you back on your feet.  Medical debt can be discharged through the bankruptcy process.  A bankruptcy discharge can provide you with the fresh start to your financial future that you need.

Contact a Lawyer

If you are considering bankruptcy, contact a lawyer so you can be guided accordingly as to what your options are and what option is best for you. The bankruptcy process can be difficult to navigate, so it is important that you have someone representing you who is familiar with the process to make sure everything goes smoothly.

Dealing with the affects of personal bankruptcy

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  • August
    2014

Residents in New Jersey often encounter difficult choices regarding their finances. For some, dealing financial challenges means making major decisions such as filing for personal bankruptcy. Filing for bankruptcy is not an easy choice to make but might be the only rational route for debt relief. Moreover, bankruptcy could be the cause of unexpected life changes. This often leaves the individual or family members in a very vulnerable position and they might struggle with the emotional affects of the process.

It is common to face emotional issues during the bankruptcy process. In order to reduce the negative impacts that could occur, individuals and family members should consider these four tips.

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The purpose of the Bankruptcy Code is to give honest but unfortunate debtors a fresh start while treating creditors fairly at the same time. In drafting the Bankruptcy Code, Congress sought to ensure that a debtor and a debtor's family was able to maintain at least a minimum level of financial well-being; thus, it exempted specified types and amount of personal property that were free from the grasps of creditors. Both the federal Bankruptcy Code and state law provide exemptions, but a debtor must chose to whether to apply either the federal or the state exemption scheme. Usually, the federal exemptions are more generous and comprehensive.

The federal exemptions are as follows:

Homestead

$20,200 of real property, including co-op or mobile home, or burial plot. The unused portion of the homestead exemption can be used for any property, up to $10,125.

Personal Property

The following personal property may be exempt, either wholly or up to the dollar amount given:

  • $20,200 of personal injury lawsuit awards (not to include pain & suffering or pecuniary loss)
  • $3,225 for vehicle
  • $1,350 of jewelry
  • Health aids
  • Wrongful death lawsuit awards for person the filer depended on
  • The following personal property may be exempt to a per-item limit of $525 and an aggregate total of $10,775: Animals, Appliances, Books, Crops, Clothing, Furnishings, Household goods, Musical Instruments

Insurance

  • $10,775 of life insurance policy with loan value, in accrued dividends or interest
  • Disability, illness or unemployment benefits
  • Life insurance payments from policy for person filer depended on, needed for support
  • Unmatured life insurance contract, except credit insurance policy

Pensions

  • Tax-exempt retirement accounts such as 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs and defined benefit plans.
  • $1,095,000 per person of IRAs and Roth IRAs

Public Benefits

  • Crime victims' compensation
  • Public assistance

Atlantic City casino might be forced to close next month

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  • August
    2014

When a business is no longer able to thrive financially, they often have to take certain actions in order to get their finances in order. In some matters, more drastic measures need to be taken so they can address business debt. This might lead them to undergo business bankruptcy. Filing for bankruptcy might be the best option a business has, especially when their liabilities outweigh their assets and equity.

Residents in New Jersey might be aware that the Revel Casino in Atlantic City has dealt with major financial hardships. The casino's scheduled bankruptcy auction was delayed and it was recently released that Revel has not received any qualifying offers. According to a recent report, if the casino does not locate a last-minute buyer, they will be forced to close on September 10.

What is the difference between Chapter 7 and 13 bankruptcy?

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  • August
    2014

Dealing with financial troubles could be life altering for some. New Jersey residents attempting to regain control of their financial world might consider certain debt relief options. For some, this means filing for bankruptcy. Although it is a common step taken by those seeking a fresh financial start, it is important to understand the process and what options they have. Becoming educated on Chapter 7 and Chapter 13 bankruptcy could help them determine what route they should take when it comes to filing for personal bankruptcy.

When deciding on what type of bankruptcy to file for, an individual must not only consider what types they qualify for but also what their end goal is. For most debtors, they often prefer to file for Chapter 7 bankruptcy because it allows for most of their unsecured debt to be eliminated. Furthermore, in some cases the process is much easier. So long as the debtor's average income for the past six months is equal to or below the median income in their state, they can qualify for Chapter 7 bankruptcy.

Are You Facing Repossession on your Vehicle and Looking for Options?

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  • August
    2014

If you are in this situation, a chapter 13 plan may be a good option for you. Even if your car has already been re-possessed, once you file for bankruptcy protection the creditor will need to return your car to you unless it has already been sold. Through the chapter 13 plan, you can do what's called a "cramdown" where you only become obligated for the value of the car at a reasonable interest rate, if you have owned the car for more than two and a half years. Even if you have not owned the car for two and a half years, then you can still reduce the interest rate to a reasonable amount through a chapter 13 bankruptcy.

Contact a Lawyer

If you are considering bankruptcy, contact a lawyer so you can be guided accordingly as to what your options are and what option is best for you. The bankruptcy process can be difficult to navigate, so it is important that you have someone representing you who is familiar with the process to make sure everything goes smoothly.

Understanding when to use a credit card

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  • August
    2014

Dealing with debt and struggling with debt are very different things. Residents in New Jersey often utilize credit cards for various reasons, but if an individual fails to use them rationally, this could lead to serious financial problems. While using credit cards is a convenient and often safe way to make purchases, it is also a payment method that could lead to bad habits and even serious financial problems.

It is clear that racking up credit card debt is not a good option due to high interest rates and the potential issues it could present. Misusing credit cards could mean high monthly payments, missed payments, creditor calls, collections and other serious financial challenges. Moreover, this could really damage the debtor's credit score and prevent them from purchasing a home, car or even obtaining financial aid. Although it is never advisable to rack up the charges or max out a card, a recent report noted four situations where it might make sense to do so.

Rate of foreclosures still highest in New Jersey

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  • August
    2014

Dealing with financial issues could lead to bigger issues. It is not uncommon for individuals and families in New Jersey to have some debt, but sometimes that debt becomes excessive or they are unable to make payments on loans due to financial hardships. Struggling with debt on its own is challenging, but this could lead to even more devastating issues. Falling behind on a loan, especially a home loan, could result in foreclosure. Facing a foreclosure is a challenging event to go through, and those dealing with this issue should understand ways to halt the process.

A recent study reported that while the rate of foreclosures fell in the state of New Jersey in the second quarter of this year, the state still has the highest rate of foreclosures in the nation, followed by Maryland and Florida. Although the rate dropped from 1.06 percent to 0.9 percent, the rate of loans in any stage in the process remained at 8.10 percent of the total loans in the state.

Filing a Bankruptcy Requires Listing of All Creditors

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    2014

When you file a bankruptcy, it is extremely important that you list all creditors. If you do not list a creditor, then their debt will not be discharged. Most debts will show up on your credit report, which allows an attorney an easy way to obtain the identities of most of your creditors. However, it is important for a debtor to think about debts or potential debts that may not show up on a credit report such as a potential civil claim or a personal guaranty prior to filing a bankruptcy. 

Contact a Lawyer

If you are considering bankruptcy, contact a lawyer so you can be guided accordingly as to what your options are and what option is best for you. The bankruptcy process can be difficult to navigate, so it is important that you have someone representing you who is familiar with the process to make sure everything goes smoothly.

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Scura, Mealey, Wigfield & Heyer, L.L.P. Attorneys at Law

John Scura of Scura, Wigfield, Heyer & Stevens, LLP, serves clients in New Jersey communities including Wayne, Hoboken, Jersey City, Paterson, Elizabeth, Edison, Camden, Clifton, Passaic, East Orange, Newark, Union City, Bayonne, Irvington, North Bergen, West New York, Bloomfield, Paramus, Fair Lawn, Ridgewood, Saddle Brook, River Edge, Emerson, Englewood, Ramsey, Tenafly, Glen Rock, Teaneck, and Hackensack, and in counties including Bergen County, Essex County, Middlesex County, Hudson County, Union County, Passaic County, and Morris County.

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