Law Office Of Ronald E. Norman, LLC

Chapter 7 Bankruptcy NJ | Law Office Of Ronald E Norman, LLC

Find out what bankruptcy might do for your situation.
The Law Office of Ronald E. Norman, LLC offers one-time, no obligation consultations to New Jersey Debtors. To get your free consultation,
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What Is A New Jersey Bankruptcy?

When you are in debt, it can be a difficult experience. You are bombarded with calls and letters from creditors and their representatives. It can seem like there is no way to make it all stop. If you do not know your rights, you could become a victim of creditors and their collection practices.

There are solutions when you find yourself in financial difficulty. For many people, personal Bankruptcy can be the answer. Bankruptcy is designed to allow you a fresh start. It can allow you to get your finances in order and put many of your problems behind you. Bankruptcy is governed by federal law. It is your right to take advantage of these laws.

New Jersey Bankruptcy is a legal procedure for dealing with the debts of New Jersey individuals and New Jersey businesses.  To begin a New Jersey Bankruptcy, a New Jersey individual or New Jersey business, called the “petitioner,” files a New Jersey Bankruptcy Case under the Federal Government’s Bankruptcy laws -- one of the Chapters of title 11 of the United States Code (the New Jersey Bankruptcy Code).   

What Is A New Jersey Bankruptcy Debtor?

A New Jersey Bankruptcy Debtor is a person filing a New Jersey Bankruptcy petition seeing relief under the New Jersey Bankruptcy Code in a New Jersey Bankruptcy Court.

What Is A New Jersey Bankruptcy Creditor?

A New Jersey Bankruptcy creditor is an individual or business that is owed money by a New Jersey Bankruptcy Debtor or that the creditor claims owes them money.

Is Bankruptcy Still Available – I Thought The Government Eliminated Bankruptcy?

Yes Bankruptcy is still available!  No, the government never eliminated Bankruptcy!  The Bankruptcy Rules changed but bankruptcy is still available to many people who find themselves in financial difficulty.  Every year, thousands of people file a New Jersey Bankruptcy Case!

Why File For New Jersey Bankruptcy – What Can A New Jersey Bankruptcy Case Do For Me?

Most New Jersey Bankruptcy Debtors filing a New Jersey Bankruptcy Case are looking for a fresh start by seeking to be relieved from or to receive help in paying their debts.  For example, the individual New Jersey Bankruptcy Debtor's main goal in a New Jersey Chapter 7 Bankruptcy Case is to keep certain property and to receive a New Jersey Bankruptcy Discharge Order of debts – a type of release from debt - that covers as many debts as possible.  Many New Jersey Debtors file a New Jersey Bankruptcy case to get a discharge of debts. A New Jersey Bankruptcy Discharge Order is a court Order which prohibits all creditors which were listed in the discharge from collecting the debts.   Under the New Jersey Bankruptcy Code, certain debts of New Jersey Bankruptcy Debtors are dischargeable and if those debts are discharged by the New Jersey Bankruptcy Court, the New Jersey Bankruptcy Debtor has no liability for the New Jersey Bankruptcy discharged debts.  Certain New Jersey businesses - like partnerships and New Jersey corporations - do not qualify for the New Jersey Bankruptcy discharge of debts in New Jersey Chapter 7 Bankruptcy Cases.  But a New Jersey sole proprietor business may qualify for a New Jersey Chapter 7 Bankruptcy Discharge.  There are limits to what debts are discharged under a New Jersey Bankruptcy Discharge and New Jersey Debtors should consult with a New Jersey attorney to learn which type of debts are not discharged by a New Jersey Bankruptcy Court Discharge Order.

Filing a Chapter 7 New Jersey Bankruptcy Case immediately results in the New Jersey Bankruptcy Automatic Bankruptcy Stay being applied to the New Jersey Bankruptcy Debtor.  This New Jersey Bankruptcy Automatic Bankruptcy Stay automatically stops the following:

  • certain types of wage garnishments
  • certain types of evictions
  • lawsuits
  • repossessions
  • sheriff’s sale
  • foreclosure
  • wage garnishments
  • credit card bill collection activity
  • medical bills collection activity
  • most types of civil judgment collection activity
  • other types of collection activity, such as phone calls from bill collectors demanding payment of overdue bills
  • utility disconnections due to nonpayment of bills.   It is common for utility companies to stop providing utility services (such as electricity, water or phone services) when customers fail to pay their bills on time.

A Chapter 7 New Jersey Bankruptcy Case may also help to restore a New Jersey Bankruptcy Debtor’s suspended driver’s license.  There are some exceptions to the protection provided by New Jersey Bankruptcy Cases.  Speak with a New Jersey attorney to learn more about those exceptions.

The New Jersey Bankruptcy Court clerk gives notice of the New Jersey Bankruptcy Case to all creditors whose names and addresses are provided by the New Jersey Bankruptcy Debtor.  There are certain exceptions to what types of activities are stopped by the automatic Bankruptcy stay.  Also, if a New Jersey Bankruptcy Debtor fails to take certain actions as required by the New Jersey Bankruptcy Code, New Jersey creditors may get relief from the automatic Bankruptcy stay.

Will A New Jersey Bankruptcy Case Make It Illegal For Creditors To Keep Harassing Me About Bills?

Yes!  Filing a New Jersey Bankruptcy can stop creditor harassment.  It is a violation of federal law for a creditor to continue efforts to collect a debt after receiving written notification of a Debtor's filing Bankruptcy. Once the automatic Bankruptcy stay is in effect, your creditors must contact your attorney (if you are represented by one) and are forbidden by federal law to contact you except under very specific circumstances.

What is a New Jersey Chapter 7 New Jersey Bankruptcy Case?

A New Jersey Chapter 7 Bankruptcy is the “liquidation” Chapter of the New Jersey Bankruptcy Code.  In New Jersey Chapter 7 "liquidation" Bankruptcy cases, those assets that are not exempt from creditors are collected and liquidated (reduced to money).  New Jersey Bankruptcy Debtors filing for Chapter 7 Bankruptcy in New Jersey ask the New Jersey Bankruptcy Court to sell certain personal property of the New Jersey Bankruptcy Debtors - property that is not exempt from the New Jersey Bankruptcy under the New Jersey Bankruptcy Code - and to distribute sale proceeds to creditors.  

A New Jersey Chapter 7 Bankruptcy is designed for individuals and married couples and individuals conducting a business as a sole proprietorship. Under a New Jersey Chapter 7 Bankruptcy, some debts can be discharged and you do not have to repay the debt. To qualify for a New Jersey Chapter 7 discharge your assets and income have to fall within certain guidelines. A New Jersey attorney can review your situation and advise you as to your options.  The Law Office of Ronald E. Norman, LLC offers one-time, no obligation consultations to New Jersey Debtors.  To get your free consultation, call attorney Ronald E. Norman at 856-374-3100 or send him an email at rnorman@rnormanlaw.com.

Unlike a New Jersey Chapter 13 Bankruptcy Case, under a New Jersey Chapter 7 Bankruptcy Case, New Jersey Bankruptcy Debtors do not file a Reorganization Plan.  Under a New Jersey Chapter 7 Bankruptcy Case, the New Jersey Bankruptcy Trustee collects and sells the New Jersey Bankruptcy Debtor's nonexempt assets and uses the asset proceeds to pay certain creditors as required by the New Jersey Bankruptcy Code.  While certain property of the New Jersey Bankruptcy Debtor is liquidated, the New Jersey Bankruptcy Debtor may be able to keep certain property under the New Jersey Bankruptcy Code’s list of exemptions. 

How Long Do Most New Jersey Bankruptcy Cases Take?

In most New Jersey Chapter 7 Bankruptcy cases, if the New Jersey Debtor is an individual, just a few months after the New Jersey Bankruptcy petition is filed, they receive a discharge that releases them from personal liability for certain dischargeable debts.   Many individual and business New Jersey Bankruptcy Cases are completed in a few months.  Since each case is unique, consult with a New Jersey attorney to find out how long your New Jersey Bankruptcy Case might take to be completed.

When I File A New Jersey Bankruptcy Case, Do I Have To File a New Jersey Chapter 7 New Jersey Bankruptcy Case?

There are options available other than filing a New Jersey Chapter 7 Bankruptcy Case in New Jersey.  Instead of filing a New Jersey Chapter 7 Bankruptcy Case in New Jersey, New Jersey Bankruptcy Debtors with a regular income could qualify to file a Chapter 13 Bankruptcy petition in New Jersey to readjust certain debts.  A reason why many people file a Chapter 13 Bankruptcy petition in New Jersey is to try to save their homes from foreclosure by giving the New Jersey Bankruptcy Debtors an opportunity to pay back overdue payments through a payment plan.  Also, certain New Jersey Bankruptcy Debtors involved in business may want to avoid liquidation and continue their business.  For example, New Jersey sole proprietors could qualify to file a Chapter 13 Bankruptcy petition in New Jersey which provides for the repayment of certain debts.

Who May File A New Jersey Chapter 7 Bankruptcy Case?

The following types of New Jersey Bankruptcy Debtors may be able to file for a New Jersey Chapter 7 Bankruptcy:

  • Individuals
  • Partnerships
  • Corporations; or
  • Other business entities. 

To file a New Jersey Chapter 7 Bankruptcy in New Jersey, individual New Jersey Bankruptcy Debtors must meet the New Jersey Bankruptcy Code’s means test, which is described below.

At least 180 days before filing a New Jersey Chapter 7 Bankruptcy Case, a New Jersey Bankruptcy Debtor must generally first receive credit counseling from an approved credit counseling agency.  If during the credit counseling, the New Jersey Bankruptcy Debtor has a debt management plan developed for themselves, the plan must be filed with the New Jersey Bankruptcy Court.

The New Jersey Chapter 7 Bankruptcy Means Test

To be able to file a New Jersey Chapter 7 Bankruptcy Case, the New Jersey Bankruptcy Debtor must pass the New Jersey Chapter 7 Bankruptcy Means Test to prove that the New Jersey Bankruptcy Debtor's income and expenses satisfy the Bankruptcy Code’s requirements.  Under a New Jersey Chapter 7 Bankruptcy, if the New Jersey Bankruptcy Debtor's current monthly income is higher than New Jersey’s median income, the New Jersey Bankruptcy Code applies a "means test" to the New Jersey Bankruptcy Debtor to see if the New Jersey Chapter 7 Bankruptcy Case is an abuse of the system.  Sometimes, a New Jersey Bankruptcy Debtor may prove that special circumstances allow additional expenses or adjustments of current monthly income.   If the New Jersey Bankruptcy Debtor fails to pass the New Jersey Chapter 7 Bankruptcy Means Test:

  • if the New Jersey Bankruptcy Debtor agrees, the New Jersey Bankruptcy Case may be converted from a New Jersey Chapter 7 Bankruptcy Case to a New Jersey Chapter 13 Bankruptcy Case; or
  • the New Jersey Bankruptcy Court will dismiss the the New Jersey Bankruptcy Case.

Am I Unable To File A New Jersey Chapter 7 Bankruptcy Case Because I Have Too Much Debt?

A New Jersey Bankruptcy Debtor is not disqualified from filing a New Jersey Chapter 7 Bankruptcy Case simply because the New Jersey Bankruptcy Debtor's debts reach a certain dollar amount. 

Am I Able To File A New Jersey Chapter 7 Bankruptcy Case If I Filed A Bankruptcy Case Before?

There are certain limits to repeat New Jersey Bankruptcy Court case filings.  For example, if a New Jersey Bankruptcy Debtor had another Bankruptcy Case before, they cannot file another New Jersey Bankruptcy Case if, during the previous 180 days, the prior case was dismissed due to the New Jersey Bankruptcy Debtor's willful failure to appear before the New Jersey Bankruptcy Court or failure to comply with court orders or if he New Jersey Bankruptcy Debtor voluntarily dismissed the previous case after creditors sought relief from the New Jersey Bankruptcy Court to recover property on which the creditors held liens.

If I File A New Jersey Chapter 7 Bankruptcy Case, Am I Stuck In the Chapter 7 Case Or Could I Change My Case To Another Chapter?

A New Jersey Bankruptcy Debtor may be able to convert their New Jersey Chapter 7 Bankruptcy Case to a Bankruptcy Case under Chapter 11, 12 or 13 if:  (1) the New Jersey Bankruptcy Debtor meets the requirements for filing under the different Chapter that they want to proceed under; and (2) the New Jersey Bankruptcy Case wasn’t previously converted to a New Jersey Chapter 7 Bankruptcy from another Bankruptcy Chapter.  

What is Credit Counseling?

At least 180 days before filing a New Jersey Chapter 7 Bankruptcy Case, a New Jersey Bankruptcy Debtor must generally first receive credit counseling from an approved credit counseling agency.  New Jersey Bankruptcy Debtors who have a debt management plan developed for themselves during credit counseling must file the debt management plan with the New Jersey Bankruptcy Court.

What If I Am Married – Do Both My Spouse And I Have To File For Bankruptcy?

Husband and wife may file one New Jersey Bankruptcy petition – a “joint petition” – or separate New Jersey Bankruptcy petitions. If husband and wife file a joint Bankruptcy petition, they have to follow all document filing requirements for individual New Jersey Bankruptcy Debtors. 

Married individuals filling a New Jersey Bankruptcy Case get together the information asked for by the New Jersey Bankruptcy Court regardless of whether they file a joint petition, separate petitions or if just one spouse files a New Jersey Bankruptcy petition.  When only one spouse files a New Jersey Bankruptcy Case, the non-filing spouse’s income and expenses are given to the New Jersey Bankruptcy Trustee to allow that the New Jersey Bankruptcy Court, the New Jersey Bankruptcy trustee and creditors to determine the New Jersey Bankruptcy Debtor’s household’s financial position.

Where Do I File My New Jersey Bankruptcy Case?

There is a United States Bankruptcy Court t for each federal judicial district in the United States of America and each state has one or more federal judicial districts.  There are 90 United States Bankruptcy Districts across the country.  New Jersey has only one United States District Court – the United States District Court, District of New Jersey – and there are 3 different locations in which United States Bankruptcy Court, District of New Jersey judges hear cases. 

The New Jersey Bankruptcy Debtor’s Bankruptcy petition must generally be filed as follows:

  • if the New Jersey Bankruptcy Debtor is a person, the New Jersey Bankruptcy Court serving the area in which the New Jersey Bankruptcy Debtor lives
  • if the New Jersey Bankruptcy Debtor is a business, the New Jersey Bankruptcy Court serving the area in which the New Jersey Bankruptcy Debtor is organized or where its principal place of business or principal assets are located.

In New Jersey, there are 3 different New Jersey Bankruptcy Court locations:

  • Camden, New Jersey – the United States Bankruptcy Court For The District of New Jersey, Camden Vicinage.  The Camden Vicinage includes Atlantic County, part of Burlington Count (Cinnaminson, Delran, Edgewater Park, Evesham/Marlton, Maple Shade, Moorestown, Mt. Laurel, Palmyra, Riverside and Riverton), Camden County, Cape May County, Cumberland County, Gloucester County and Salem County.
  • Trenton, New Jersey – the United States Bankruptcy Court For The District of New Jersey, Trenton Vicinage.  
  • Newark, New Jersey – the United States Bankruptcy Court For The District of New Jersey, Newark Vicinage.  The Newark Vicinage includes Bergen County, Essex County, Hudson County, Morris County, Passaic County, Sussex County and Union County.

The term “vicinage” means “neighborhood”.   The New Jersey Bankruptcy Court will automatically assign a New Jersey Bankruptcy Case to the correct New Jersey Bankruptcy Court vicinage based on the New Jersey Bankruptcy Debtor’s zip code listed on the New Jersey Bankruptcy petition when the case is first filed.

Are There Filing Fees For A Chapter 7 New Jersey Bankruptcy Case?

To file a New Jersey Chapter 7 Bankruptcy Petition, New Jersey Bankruptcy Debtors must normally pay fees to the New Jersey Bankruptcy Court Clerk when the New Jersey Bankruptcy petition is filed, which include the following: 

  • a case filing fee
  • a miscellaneous administrative fee
  • a trustee surcharge.

The filing fees for a New Jersey Bankruptcy petition is generally only charged per petition.  Accordingly, New Jersey joint Bankruptcy petitions do not cost more money to file than single New Jersey Bankruptcy petitions.

The New Jersey Bankruptcy Court may make exceptions for certain New Jersey Bankruptcy Debtors whose income is below the poverty level by waiving the New Jersey Bankruptcy petition filing fee.

New Jersey Bankruptcy Court filing fees change.  Before any documents are filed with the New Jersey Bankruptcy Court, it is absolutely necessary to confirm all New Jersey Bankruptcy Court filing fees.

What Happens If I Don’t Pay The New Jersey Bankruptcy Filing Fees When Due?

A New Jersey Bankruptcy Debtor’s failure to timely pay New Jersey Bankruptcy Court filing fees could result in their case being dismissed.  Often attorneys who do not receive payment of fees in advance of filing the New Jersey Bankruptcy petition shall refuse to file a New Jersey Bankruptcy Debtor’s Bankruptcy petition.

What Is A Secured Creditor In A New Jersey Bankruptcy Case And What Is Secured Debt In A New Jersey Bankruptcy Case?

In a New Jersey Bankruptcy case, a secured creditor is an individual or business with a claim against the New Jersey Bankruptcy Debtor secured by a lien on property of the New Jersey Bankruptcy estate. The property that is subject to the lien is the secured creditor's collateral.  The creditor offers credit to the New Jersey Bankruptcy Debtor with the understanding that the creditor may decide to seize the collateral on default of the debt.  In a New Jersey Bankruptcy Case, secured debt is debt supported by a mortgage, pledge of collateral or other lien -- debt for which the creditor has the right to pursue their interest specific property upon default of the obligation.  Common examples of “secured debt” include:  (1) house mortgages; (2) real estate tax liens; and (3) vehicle loans.  Unsecured debt is a New Jersey Bankruptcy Debtor’s debt for which a creditor holds no special guarantee of payment, such as a mortgage or lien, because the New Jersey Bankruptcy Debtor received credit from the creditor based solely upon the creditor's determination of the New Jersey Bankruptcy Debtor's future ability to pay back the debt.  

What Is An Unsecured Creditor In A New Jersey Bankruptcy Case And What Is Unsecured Debt In A New Jersey Bankruptcy Case?

In a New Jersey Bankruptcy case, an unsecured creditor is an individual or business with a claim against the New Jersey Bankruptcy Debtor that is not secured by a lien on property of the New Jersey Bankruptcy estate.  Unsecured creditors hold unsecured debt instead of secured debt.  Unsecured debts are debts for which credit was extended based only upon the creditor’s determination of the New Jersey Bankruptcy Debtor's ability to pay the debt. 

What Is A New Jersey Bankruptcy Estate, Exempt Property And Nonexempt Property In A New Jersey Bankruptcy Case?

A Bankruptcy estate in a New Jersey Bankruptcy Case is all the New Jersey Bankruptcy Debtor’s interests in property when they file a New Jersey Bankruptcy case.  While a New Jersey Bankruptcy Case is active, the New Jersey Bankruptcy Estate is the temporary legal owner of all of the New Jersey Bankruptcy Debtor's property.  When the New Jersey Bankruptcy Debtor files a Bankruptcy Case, all of the New Jersey Bankruptcy Debtor’s property, including property owned or held by another person in which the New Jersey Bankruptcy Debtor has an interest, is part of the New Jersey Bankruptcy estate.  Federal or New Jersey laws (or the laws of other states) may allow New Jersey Bankruptcy Debtors filing for Bankruptcy to keep certain “exempt” property free from the claims of unsecured creditors.  Exempt property may include interest in the New Jersey Bankruptcy Debtor's primary residence and some or all tools the New Jersey Bankruptcy Debtor uses to make a living. If the New Jersey creditors are entitled to payment, the New Jersey Bankruptcy Debtor's creditors are usually paid from the New Jersey Bankruptcy estate’s “nonexempt” property - property able to be “liquidated” or sold to satisfy the New Jersey creditors’ claims.

What Paperwork Is Filed To Start A New Jersey Bankruptcy Case?

A New Jersey Bankruptcy Debtor begins a New Jersey Chapter 7 Bankruptcy Case by filing papers with the New Jersey Bankruptcy Court called a “petition” and by paying a filing fee to the New Jersey Bankruptcy Court.   The New Jersey Bankruptcy petition must generally include the following items:

  • a “schedule” or list of the New Jersey Bankruptcy Debtor’s assets and liabilities
  • a schedule” or list of the New Jersey Bankruptcy Debtor’s of current income and expenditures
  • a statement of the New Jersey Bankruptcy Debtor’s financial affairs
  • a schedule” or list of the New Jersey Bankruptcy Debtor’s a schedule of executory contracts and unexpired leases.

Individual New Jersey Bankruptcy Debtors who mainly have consumer type debts must also file the following documents with their New Jersey Bankruptcy petition:

  • a certificate of credit counseling issued to the New Jersey Bankruptcy Debtor
  • a copy of any debt Reorganization Plan developed for the New Jersey Bankruptcy Debtor during credit counseling
  • evidence of payments received from the New Jersey Bankruptcy Debtor’s employers, if any, received 60 days before filing the New Jersey Bankruptcy petition
  • a statement of the New Jersey Bankruptcy Debtor’s monthly net income and any anticipated increase in income or expenses after filing the New Jersey Bankruptcy petition
  • a record of any interest the New Jersey Bankruptcy Debtor has in federal or state qualified education or tuition accounts.

To complete the New Jersey Bankruptcy Petition, the New Jersey Bankruptcy statement of financial affairs and the New Jersey Bankruptcy schedules, the New Jersey Bankruptcy Debtor must provide the following information:

  • a list of all creditors and the amount and nature of their claims
  • the source, amount and frequency of the New Jersey Bankruptcy Debtor's income
  • a list of all of the New Jersey Bankruptcy Debtor's property
  • a specific list of the New Jersey Bankruptcy Debtor's monthly living expenses - food, clothing, shelter/rent, utilities, taxes, transportation, medicine and the like.

The New Jersey Bankruptcy Petition schedules include a schedule of "exempt" property - property that the New Jersey Bankruptcy Debtor asks to keep under the New Jersey Bankruptcy Code or New Jersey law because the New Jersey Bankruptcy Debtor claims it is free from creditors who do not have liens on the property.  There are limits to the property a New Jersey Bankruptcy Debtor may claim is exempt from creditors’ claims.  To learn if specific property of yours is exempt, you should consult with an attorney.  Don’t try to guess what property might be exempt under the New Jersey Bankruptcy Code or New Jersey law because the law is very complex.

Also, the New Jersey Bankruptcy Debtor gives the New Jersey Bankruptcy trustee assigned to their case a copy of the New Jersey Bankruptcy Debtor’s tax return or transcripts for the most recent tax year and tax returns that the New Jersey Bankruptcy Debtor filed during the New Jersey Bankruptcy Case (including tax returns for prior years that were not filed when the New Jersey Bankruptcy Case began).

What Does A New Jersey Bankruptcy Court Trustee Do In A New Jersey Bankruptcy Case?

Once a New Jersey Bankruptcy Case is properly filed, the New Jersey Bankruptcy Court appoints a trustee for the New Jersey Bankruptcy Case - a person who represents the interests of the New Jersey Bankruptcy estate and the creditors. The New Jersey Bankruptcy trustee does the following:

  • reviews the New Jersey Bankruptcy Debtor's petition and schedules
  • liquidates the New Jersey Bankruptcy estate’s property
  • makes distributions to creditors
  • sometimes brings actions against creditors or the New Jersey Bankruptcy Debtor to recover the New Jersey Bankruptcy estate’s property 

If I File A New Jersey Bankruptcy Petition, Will I Likely Have To Go To A New Jersey Bankruptcy Court Many Times During My New Jersey Bankruptcy Case?

Normally, New Jersey Chapter 7 Bankruptcy cases do not require New Jersey Debtors to appear in court and most New Jersey Debtors involved in New Jersey Chapter 7 Bankruptcy cases never see a New Jersey Bankruptcy judge unless an objection is raised in the New Jersey Bankruptcy case.   Most New Jersey Debtors who file New Jersey Chapter 7 Bankruptcy cases have only one formal hearing at which the New Jersey Debtor must appear – the meeting of creditors, also called a “341 hearing” or “341 meeting” because section 341 of the United States Bankruptcy Code requires New Jersey Debtors to attend the meeting so that the New Jersey Debtors can be asked questions about their debts and property and income.  New Jersey 341 hearings are usually held at a New Jersey Bankruptcy Trustee’s office instead of at a New Jersey Bankruptcy Courthouse.

 

What Typically Happens In A New Jersey Bankruptcy Case?

A New Jersey Bankruptcy Debtor begins a New Jersey Chapter 7 Bankruptcy Case by filing papers with the New Jersey Bankruptcy Court called a “petition” and by paying a filing fee to the New Jersey Bankruptcy Court.  

About a month after the New Jersey creditor files their New Jersey Bankruptcy petition, the New Jersey Bankruptcy trustee holds a meeting of creditors, also called a “341 hearing.”   The New Jersey Bankruptcy 341 hearing is usually held in an office building.  Before the New Jersey Bankruptcy 341 hearing, the representative of the New Jersey Bankruptcy trustee’s office conducting the hearing may ask the New Jersey Bankruptcy Debtor or their attorney to give the New Jersey Bankruptcy trustee copies of documents for the New Jersey Bankruptcy Trustee to examine.

At the New Jersey Bankruptcy 341 hearing, a representative from the New Jersey Bankruptcy trustee’s office (which may be the New Jersey Bankruptcy trustee themselves), the New Jersey Bankruptcy Debtor, their attorney (if they are represented by an attorney) and any creditors or their attorneys who are interested in the New Jersey Bankruptcy Debtor’s case appear.  The representative of the New Jersey Bankruptcy trustee swears in under oath the New Jersey Bankruptcy Debtor and questions the New Jersey Bankruptcy Debtor under oath about the New Jersey Bankruptcy Debtor’s financial situation.   After putting the New Jersey Bankruptcy Debtors under oath, the representative of the New Jersey Bankruptcy Trustee’s office who handles the hearing ask the New Jersey Bankruptcy Debtor questions to make sure the New Jersey Bankruptcy Debtors understand what might happen when they ask the New Jersey Bankruptcy Court for a New Jersey Bankruptcy Court discharge,  which could include:

  • how a Chapter 7 New Jersey Bankruptcy filing might affect the New Jersey Bankruptcy Debtors’ credit history.
  • the New Jersey Bankruptcy Debtor’s option to file a New Jersey Bankruptcy Case under a Chapter other than 7 (such as a Chapter 13 New Jersey Bankruptcy Case).
  • what happens if the New Jersey Bankruptcy Debtor receives a New Jersey Bankruptcy Court Discharge
  • what happens if the New Jersey Bankruptcy Debtor reaffirm a debt that the if the New Jersey Bankruptcy Debtor owes a creditor.

It is not uncommon for the New Jersey Bankruptcy Trustee’s office to give a handout about what happens when a New Jersey Bankruptcy Debtor files for Bankruptcy. 

At the New Jersey Bankruptcy 341 hearing, creditors of the New Jersey Bankruptcy Debtors or the creditors’ attorneys, if the creditors have an attorney, may ask the New Jersey Bankruptcy Debtors certain questions about debts and property.  

Within 10 days of the meeting, the New Jersey Bankruptcy Trustee sends a report to the New Jersey Bankruptcy Court about whether the New Jersey Bankruptcy Case should be presumed to be an abuse under the New Jersey Bankruptcy means test.

If all of the New Jersey Bankruptcy Debtor's assets are exempt or legitimate liens apply to the New Jersey Bankruptcy Debtor's assets, the New Jersey Bankruptcy trustee normally files a "no asset" report with the New Jersey Bankruptcy Court.  The filing of a “no asset” report means that creditors with claims not secured by property receive no assets from the New Jersey Bankruptcy Debtor’s Bankruptcy. Most Chapter 7 New Jersey Bankruptcy Cases where the New Jersey Bankruptcy Debtors are individuals instead of businesses are “no asset” type cases.

If the New Jersey Bankruptcy trustee thinks there are assets to distribute to creditors from the New Jersey Bankruptcy Debtor’s Chapter 7 case, creditors without secured claims must file their potential claims with the New Jersey Bankruptcy Court within a certain time after the first scheduled New Jersey Bankruptcy 341 hearing. If the New Jersey Bankruptcy trustee recovers assets for distribution to unsecured creditors, the New Jersey Bankruptcy Court gives notice to the creditors and gives them time to file proofs of claim.  In some New Jersey Bankruptcy Cases, secured creditors may file proofs of claim to protect their interests.

If there are assets in the New Jersey Bankruptcy estate for the New Jersey Bankruptcy Trustee to liquidate, the New Jersey Bankruptcy Trustee attempts to liquidate those assets to maximize the return to the New Jersey Bankruptcy Debtor's unsecured creditors.  The New Jersey Bankruptcy Trustee sells the New Jersey Bankruptcy Debtor’s nonexempt property that is not secured by liens or that is secured by liens but that is worth more than any security interest or lien attached to the property and any exemption to which the New Jersey Bankruptcy Debtor is entitled. The New Jersey Bankruptcy trustee may try to recover assets transferred to creditors a certain number of days before the filing of the New Jersey Bankruptcy Debtor’s Bankruptcy Case or that were transferred to avoid creditors or to undo security interests and other property transfers not properly perfected.  If the New Jersey Bankruptcy Debtor is a business, the New Jersey Bankruptcy Court may allow the New Jersey Bankruptcy trustee to run that business for an amount of time to benefit creditors and help with liquidation of the New Jersey Bankruptcy estate.

What is a Chapter 7 New Jersey Bankruptcy Case Discharge?

If a New Jersey Bankruptcy Case is not dismissed or converted to another Bankruptcy Chapter, individual New Jersey Bankruptcy Debtors usually receive a New Jersey Bankruptcy Discharge Order in their Chapter 7 New Jersey Bankruptcy Cases.   A New Jersey Bankruptcy Discharge Order:

  • releases individual New Jersey Bankruptcy Debtors from personal liability for most debts they owe.
  • prevents the creditors owed those debts from taking collection actions against the New Jersey Bankruptcy Debtor.

Because each New Jersey Bankruptcy Debtor’s situation is different and because New Jersey Bankruptcy Laws and Federal Bankruptcy Laws change, receiving a New Jersey Chapter 7 Discharge Order is subject to many exceptions.  There are certain types of debts which cannot be discharged in a New Jersey Bankruptcy Case, such as:

  • Federal and State Taxes which became due within three years from the filing of the Bankruptcy petition many people are under the misconception that taxes are not dischargeable- this is not true. In fact, taxes due from more than three years from the date you file a Bankruptcy petition may be discharged - but only if you filed your tax return on time (April 15); otherwise the taxes will be dischargeable three years after the time allowed to file in the extension.
  • Child Support
  • Support Alimony
  • Student loans. Most student loans are not dischargeable. However, there is a provision under the Bankruptcy code where you may discharge a student loan if not discharging the loan would create a hardship however it is very difficult to meet this standard.
  • Court fines and criminal restitution
  • Personal injury judgments/awards entered against you and caused by driving drunk or driving under the influence of drugs

Accordingly, before filing a New Jersey Bankruptcy Case, New Jersey Bankruptcy Debtors should discuss the scope of the New Jersey Bankruptcy case discharge that the New Jersey Bankruptcy Debtor might receive if they file and successfully complete a New Jersey Bankruptcy Case.

Except in cases in which a party in interest files a complaint objecting to the New Jersey Bankruptcy discharge or a motion to extend the time to object to the New Jersey Bankruptcy discharge, the New Jersey Bankruptcy Court usually issues a New Jersey Bankruptcy Discharge Order fairly early in the New Jersey Bankruptcy Case – as soon as 60 to 90 days after the date first set for the New Jersey Bankruptcy 341 hearing.

An individual receives a New Jersey Bankruptcy Discharge Order for most of his or her debts in a New Jersey Chapter 7 Bankruptcy Case. A creditor may no longer initiate or continue any legal or other action against the New Jersey Bankruptcy Debtor to collect a New Jersey Bankruptcy discharged debt. But not all of an individual's debts are discharged in Chapter 7 New Jersey Bankruptcy Cases. Debts not discharged include debts for alimony and child support, certain taxes, debts for certain educational benefit overpayments or loans made or guaranteed by a governmental unit, debts for willful and malicious injury by the New Jersey Bankruptcy Debtor to another entity or to the property of another entity, debts for death or personal injury caused by the New Jersey Bankruptcy Debtor's operation of a motor vehicle while the New Jersey Bankruptcy Debtor was intoxicated from alcohol or other substances, and debts for certain criminal restitution orders.11 U.S.C. § 523(a). The New Jersey Bankruptcy Debtor will continue to be liable for these types of debts to the extent that they are not paid in the Chapter 7 Bankruptcy Case. Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for willful and malicious injury by the New Jersey Bankruptcy Debtor to another entity or to the property of another entity will be discharged unless a creditor timely files and prevails in an action to have such debts declared nondischargeable. 11 U.S.C. § 523(c); Fed. R. Bankr. P. 4007(c).

Under certain circumstances, the New Jersey Bankruptcy Court has the power to “revoke” a Chapter 7 New Jersey Bankruptcy Discharge Order on the request of the New Jersey Bankruptcy trustee, a creditor, or the U.S. trustee, such as if the New Jersey Bankruptcy discharge was fraudulently obtained by the New Jersey Bankruptcy Debtor or if the New Jersey Bankruptcy Debtor made false statements.

What Does It Mean When A New Jersey Bankruptcy Debtor “Reaffirms” A Debt?

Many times even though a debt can be discharged, a person may want to reaffirm the debt.

In a New Jersey Bankruptcy Case, secured creditors might retain some rights to seize property securing an underlying debt even after the New Jersey Bankruptcy Court enters a New Jersey Bankruptcy Discharge Order.  In certain situations, if a New Jersey Bankruptcy Debtor wants to keep certain secured property – like a car, boat or business equipment – the New Jersey Bankruptcy Debtor may "reaffirm" the secured debt. A reaffirmation agreement is simply a negotiated Reorganization Plan with your creditor.   Reaffirmation agreements are commonly signed in New Jersey Chapter 7 Bankruptcy cases, such as where a New Jersey Bankruptcy Debtor purchased a Home or a car and would like to keep it after the New Jersey Bankruptcy case is completed.  Other New Jersey Bankruptcy Debtors want to maintain a credit card so that they can begin to reestablish their credit.   Reaffirmation agreements are completely voluntary. The reaffirmation agreement is an agreement between the New Jersey Bankruptcy Debtor and the creditor.  In the reaffirmation agreement, the New Jersey Bankruptcy Debtor is responsible for paying all or some of the money owed on a debt that might otherwise be discharged in the New Jersey Bankruptcy.  In exchange for the New Jersey Debtor’s agreeing to repay some or all of the debt, the creditor agrees not to repossess or take back the property if the New Jersey Bankruptcy Debtor still pays the debt (and performs any other conditions required under the reaffirmation agreement.  New Jersey Bankruptcy Debtors sign reaffirmation agreements before the New Jersey Bankruptcy Court enters a New Jersey Bankruptcy Discharge Order and the reaffirmation agreement gets filed with the New Jersey Bankruptcy Court. A creditor cannot harass or force you into entering into a reaffirmation agreement. In order for a reaffirmation agreement to be effective, it must be:

  • voluntary.
  • not place a heavy burden on you or your family.
  • in your best interest.

A reaffirmation agreement can be cancelled anytime before the New Jersey Bankruptcy Court issues your discharge or within 60 days after the agreement is filed with the New Jersey Bankruptcy Court, whichever gives you the most time.  In some situations, such as if the New Jersey Bankruptcy Court believes that there is not enough money to pay the debt to be reaffirmed, there is a presumption of undue hardship and the New Jersey Bankruptcy Court may decide against approving the reaffirmation agreement. 

Should I Try To Handle My New Jersey Bankruptcy Case Myself?

Some people can and do successfully handle New Jersey Bankruptcy Court cases, from filing the first paperwork to the entry of a New Jersey Bankruptcy Court Discharge Order.  However, many other people also make mistakes that lead to the dismissal of their New Jersey Bankruptcy Court cases or that result in the entry of money judgments against them.  Since so much can be at stake in a New Jersey Bankruptcy, you should seriously consider using the services of a competent attorney licensed to practice law in New Jersey to handle your New Jersey Bankruptcy Court case.  The following are reasons to use an attorney to handle your New Jersey Bankruptcy Court case:

  • New Jersey Bankruptcy Court fees often change
  • New Jersey Bankruptcy Court rules often change
  • New Jersey Bankruptcy Court employees cannot give you “free” legal advice and a judge may refuse to let you claim that you were right in taking an action (or in deciding not to take action) because you relied on advice from such employees
  • New Jersey Bankruptcy Court forms available on websites may not cover every situation you may face in court
  • each New Jersey Bankruptcy Court case has its own particular legal issues and therefore, its own challenges
  • it is very common for people to file inadequate or incorrect New Jersey Bankruptcy Court petitions that result in problems with the New Jersey Bankruptcy Court Case because of procedural or other deficiencies.  
  • it is not uncommon for New Jersey Bankruptcy judges to get very frustrated by an unrepresented party’s lack of preparation or ignorance of the facts or law of the New Jersey Bankruptcy Court case. 
  • a court has the power to punish unprepared parties, such as by fining them, throwing their New Jersey Bankruptcy Court case out of court or limiting what they can present to the New Jersey Bankruptcy Court. 
  • Federal and New Jersey law includes many published cases, laws, regulations, court rules and rules of evidence that can be very tricky to understand and that can be used to prevent you from doing much of what you want to do in New Jersey Bankruptcy Court. 
  • it is very common for  New Jersey Bankruptcy Courts to refuse to allow a party to use or refer to documents or items at the New Jersey Bankruptcy Court. 
  • without the proper preparation, items and documents may never be considered by the New Jersey Bankruptcy Court.  Also, if there are any legal issues to be dealt with at the New Jersey Bankruptcy Court hearing or trial, you must be prepared to argue them, which may require you to refer to court rules, evidence rules, laws, regulations or published cases. 
  • you cannot show up at the New Jersey Bankruptcy Court expecting the judge hearing your New Jersey Bankruptcy Court case to explain court rules, evidence rules, court procedure or the details of the law that applies to your New Jersey Bankruptcy Court case.  The judge hearing your New Jersey Bankruptcy Court case is not permitted to give you legal advice.

It is important to remember that even if you have an attorney, you could lose your New Jersey Bankruptcy Court case.  Hiring an attorney to handle your New Jersey Bankruptcy Court case does not guarantee your success.  However, it may provide what is needed to successfully complete your New Jersey Bankruptcy Court case or to avoid certain mistakes.

Does The Law Office of Ronald E. Norman, LLC Have Experience Handling New Jersey Bankruptcy Cases?

Yes.  The Law Office of Ronald E. Norman, LLC is dedicated to protecting the rights of consumers. We handle Bankruptcy cases only in the State Of New Jersey. We take Bankruptcy cases from anywhere in the State of New Jersey.  The Law Office of Ronald E. Norman, LLC is designated as a Federal Debt Relief Agency.  The Law Office of Ronald E. Norman, LLC has performed the following tasks:

  • handled New Jersey Bankruptcy Cases for people and businesses across New Jersey, including representations of individuals and businesses.
  • filed thousands of New Jersey Bankruptcy Petitions
  • settled New Jersey debt disputes for New Jersey creditors and New Jersey Debtors.
  • prepared and filed many New Jersey Bankruptcy Petitions
  • personally appeared in all 3 of the New Jersey Bankruptcy Courts - Camden, New Jersey – the United States Bankruptcy Court For The District of New Jersey, Camden Vicinage,

Trenton, New Jersey – the United States Bankruptcy Court For The District of New Jersey, Trenton Vicinage and Newark, New Jersey – the United States Bankruptcy Court For The District of New Jersey, Newark Vicinage

  • appeared at New Jersey Bankruptcy 341 hearings – New Jersey Bankruptcy first meeting of creditors’
  • successfully argued New Jersey Bankruptcy Court motions
  • represented New Jersey Debtors in New Jersey Bankruptcy Court
  • represented New Jersey Debtors in New Jersey post judgment collection proceedings

The Law Office of Ronald E. Norman, LLC Offers To Handle New Jersey Bankruptcy Cases For New Jersey Individual Debtors And New Jersey Business Debtors Located Across New Jersey

The Law Office of Ronald E. Norman, LLC offers to handle and help individuals living and businesses located in North Jersey, Central Jersey and South Jersey, including individuals living and businesses located in the following New Jersey counties:

Atlantic County, NJ

Bergen County, NJ

Burlington County, NJ

Camden County, NJ

Cape May County, NJ

Cumberland County, NJ

Essex County, NJ

Gloucester County, NJ

Hudson County, NJ

Hunterdon County, NJ

Mercer County, NJ

Middlesex County, NJ

Monmouth County, NJ

Morris County, NJ

Ocean County, NJ

Passaic County, NJ

Salem County, NJ

Somerset County, NJ

Sussex County, NJ

Union County, NJ

Warren County, NJ

 

How Do I Learn More About What A New Jersey Bankruptcy Case Can Do For Me?

Find out what bankruptcy might do for your situation.
The Law Office of Ronald E. Norman, LLC offers one-time, no obligation consultations to New Jersey Debtors. To get your free consultation,
call attorney Ronald E. Norman at 856-374-3100,
send him an email
at rnorman@rnormanlaw.com
or
click
here to fill out a free evaluation form.

LAW OFFICE OF RONALD E NORMAN, LLC
WASHINGTON PROFESSIONAL CAMPUS II
901 ROUTE 168, SUITE 407A
TURNERSVILLE, N.J. 08012
TEL. 856-374-3100
EMAIL: 
rnorman@rnormanlaw.com

 

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