Bankruptcy as an Option

Find out if bankruptcy is an option for you.

Thousands of people have been through it.
It's just another form of financial transaction designed to give people a second chance for a fresh start. Don't let financial problems haunt you forever.

October 12, 2014 by Todd Murphy

Car Repossessions Aided By GPS Kill Switches and in-car Payment Alarms

Repo Man Aided by Technology

Recently there has been a lot of discussion in the press about subprime auto loans and how the lenders are taking advantage of consumers – many of whom have recently had their debts discharged in bankruptcy – with high interest rates, excessive fees, and aggressive collection practices. Some have compared this to the sub-prime mortgage market that made consumer loans that were unlikely to be re-paid then packaged them up for sale to unsuspecting institutional investors. When the housing bubble burst in 2008, you know what happened.

Auto loan lenders are making high-interest loans to people who cannot qualify for a conventional loan. These loans come with significant fees in the thousands of dollars which result in very high monthly payments for old, used cars that often become major maintenance headaches.

Worst of all, these loans are made to people who have recently filed bankruptcy and therefore can’t yet qualify for a decent loan and – get this – when they can’t pay, they can’t discharge the debt because they are barred from another bankruptcy for eight years.

Unscrupulous Auto Lenders Prey On Desperate People.

A typical car sale might go like this: Rhonda, who just got a fresh start on her financial life by filing bankruptcy last year, is denied for a car loan at a new-car dealer but she really needs a car to get to work every day and to take her kids to day-care. She winds-up at a local used car deal where they have a sign that reads BUY HERE PAY HERE, NO CREDIT – NO WORRIES. Rhonda finds a used car for with a price of about $5000. She applies for a loan at the dealer and they tell her they can get her a loan, take the car today and we’ll follow-up with you next week with your paper work to sign. When Rhonda returns, they tell her they couldn’t get the loan. Now, Rhonda of course has already fallen in love with the car and, even if she didn’t, she really needs this car to get to work. The dealer tells her he has found someone who can give her a loan but at a higher price. Truth is, the dealer always knew this but lead Rhonda on to get her hooked. Desperate, she says “fine” and signs the papers. The fees for the car loan total $3000 and the interest rate is 21%. Payments for this old, used car come to $600/month. Rhonda has a feeling she won’t be able to make those payments but she believes she doesn’t have a choice so she vows to do what she has to do to make it work.

Several of months go by and Rhoda has had a lot of trouble making those payments. She has been late every month and now she has missed two payments. The dealer is threatening to repo her car. Reluctantly, Rhonda decides to let them come and get the car because she just won’t be able to catch up and continue to make those payments. The dealer resells the car for $4000 and now Rhonda still owes $4000 (the difference between what she borrowed and what they sold the car for). She can’t make those payments either (and doesn’t want to for a car she no longer owns) and she can’t file bankruptcy to discharge the debt so she tries to avoid the calls and threatening letters but the car lender wants to get aid. Ultimately, the car dealer files a lawsuit to get paid. Rhonda can’t afford a lawyer to help her and a default judgment is entered against her for not only the $4000 she owes but another $3000 for attorney fees. The car lender garnishes Rhonda’s wages at 10% of her gross pay every pay check until it gets paid. A sorry story indeed.

Auto Lenders Resort To Technology to Repo Your Car And Get Paid.

Auto loan lenders are now beginning to use in-car GPS systems to disable cars if payments are not made on time along with audible alarm systems warning the driver that payments are due soon, are due today, are past due and ultimately that the car will be disabled for non-payment.

Upon taking possession of her new car, one of my clients, Alyssa, told me that she was advised her car was equipped with an alarm which within three days of her payment being due would remind her. Then as the due date approached and payment had not been received, further alarms would remind her that payment was due and not received. Finally on the day the payment was due and for three days thereafter, the alarm would warn her that the car would be disabled if payment was not received by the third day.

Once payment was not received, the car was disabled remotely until payment was to be received. While in some ways this may help some make their payments on time, it is no solution for a payment the consumer just can’t pay. This just helps the lender repo the car without having to deal with someone hiding the car and making it hard to repo.

The story often ends just as it did for Rhonda where a default judgment is entered and a consumer finds herself paying for a car through a wage garnishment that he or she no longer owns. And, in the case of someone who just filed bankruptcy to clean up their credit and get a fresh start, all of the effort was now wasted because once again the credit is ruined. This just make it tougher and tougher for these people to get loans that do not have predatory terms.

Recently the New York Times wrote:

Miss A Payment? Good Luck Moving That Car.

And these great videos:

http://nyti.ms/1qwkB8x

http://nyti.ms/1lgctaY

October 3, 2014 by Todd Murphy

Myth Two: You Will Lose Important Assets Like Your House and Car If You File Bankruptcy

Myth Two: You will lose important assets.

One big reason people hesitate to file bankruptcy is the fear of losing important assets. If you’re concerned about your house and cars, it’s time you know the truth.

Let’s dispel Myth Two: You Will Lose Important Assets.

The truth is: Bankruptcy can help you keep your house and your car. In fact, bankruptcy can stop foreclosure, prevent a bank from repossessing vehicles and even get your car back if it has been repossessed.

If you own a home, you can still file bankruptcy. Whether you file a Chapter 7 bankruptcy or a Chapter 3 bankruptcy depends on whether or not you have equity in your home.

If you are at risk of losing your home in foreclosure, you may have tried to obtain a loan modification and been told you do not qualify. Or, perhaps, you were offered a modification you cannot afford. Chapter 13 bankruptcy may give you the edge you need to qualify for a loan modification. Bankruptcy allows you to catch-up on your overdue payments (arrears) over a five-year period and in some cases eliminate a second mortgage. At the same time, you may also be able to eliminate or significantly reduce credit card and other consumer debt.

If you have a car with a loan, you may be able to keep your car if you sign a re-affirmation agreement or are able to redeem your car. You also may be able to force the lender to reduce the principal balance to the current value of the car and/or reduce the interest rate to a reasonable level.

If your car has already been repossessed you have a short time (usually less than 2 weeks but this will depend on the lender and the laws of your state) before the lender sells it to someone else. If the car is sold and title passes to a third party, you normally cannot get the car back. However, if the car has not been sold yet, you still have a chance to get it back because the automatic stay will stop the sale. But you must act quickly and file before the sale if you wish to get your car back.

For other types of assets there are specific exemptions that can allow you to keep those assets. This is where an experienced bankruptcy attorney can make all of the difference.

Don’t be fooled by the myths of bankruptcy. Get good advice form a qualified bankruptcy lawyer in New Jersey before you file bankruptcy.

October 3, 2014 by Todd Murphy

Stars of Real Housewives of New Jersey Bankruptcy Fraud

Real Housewives of New Jersey Bankruptcy Fraud admitted to by Teresa and Giuseppe “Joe” Giudice, the married stars of Bravo’s hit TV show “The Real Housewives of New Jersey.” They both plead guilty in federal court in Newark to several mortgage and bankruptcy fraud charges against them.

This can happen to you just like it can happen to them. Their fraud started when they falsified documents to get some five million dollars in construction home loans and other loans. Later, when they couldn’t pay back the loans, they lied about their income.

Prison time will more than likely be in the couple’s future. Possible 34 to 46 months. In addition, they will have to pay a yet-to-be-determined sum to the court. As of now, the sum of $200,000 must be paid by Joe Giudice before his July 8 sentencing hearing.

This is a perfect example of why one must be perfectly honest with the court when filing for bankruptcy. Bankruptyc fraud is a serious offense that can be avoided. Bankruptcy is readily available to us all and, with careful planning, even the most unfavorable circumstances can be overcome enabling and otherwise unqualified person to qualify.

First, be honest with your lawyer so he or she can help overcome a set of circumstances that may prevent qualifying for chapter 7 without committing bankruptcy fraud.

Bankruptcy fraud is serious and can be prevented

Are Condo Association Dues Dischargeable in Bankruptcy?

In a word Yes. But read on.

Yes, is not the end of the question. Past-Due Condo Association Dues Are Dischargeable in Bankruptcy. BUT, you will continue to owe dues and fees that are incurred after the bankruptcy for as long as you remain in title to the house.

Many people are confused by the question: Are Condo Association Dues Dischargeable In Bankruptcy? Condominium association fees pose a special difficulty in Chapter 7 or Chapter 13 bankruptcy, given the deflated values of many condos in this real estate market, the intent of many condo owners to surrender and safely walk away from terribly underwater condominium properties through the tax-free and collection-free bankruptcy process, and the slowness new of mortgage-holding banks in foreclosing on surrender condominium properties in New Jersey.

The “special difficulty” is with regard to the condominium association fees and dues that come along with the ownership of such properties. First: a bankruptcy surrender of real estate does not “quitclaim” the property back to the mortgage-holding banks immediately. A New Jersey law-based foreclosure is required for the title to transfer from the individual filing the bankruptcy back to the bank after the bankruptcy. Second: while the bankruptcy discharges the filler’s obligation to pay all past-due fees and dues, it does not have any effect on all post-filing dues and fees that become due and owing and continue to become due and owing each and every month until the filer no longer holds title to the property.

Past-due association dues and fees are discharged by a bankruptcy just like any other unsecured debt. However, condominium associations (and homeowners’ associations in planned subdivision situations) have litigated the issue of continuing association fees aggressively in the bankruptcy courts, and they have largely come out ahead on this question.

What does all of this mean?
Even If Surrendering the Condo, Dues Must Be Paid from Date-of-Filing of the Bankruptcy Petition until the property is transferred to another owner or back to the bank.

A homeowner must continue to pay the association fees so long as they remain the titled owner of the property—even after a surrender of the property in bankruptcy.

It is worth repeating for clarity: Bankruptcy will discharge all association fees incurred prior to the date of the filing of the bankruptcy petition BUT the homeowner will be liable for association fees from the date of filing forward, on through the completion of a full foreclosure process by the note-holding bank. In New Jersey, this can mean several months to a year or more of continuing responsibility for these fees, even after a bankruptcy. This is because, until a full foreclosure process as required under New Jersey state law is completed, the surrendering homeowner remains the titled owner of the property.

A full foreclosure process includes a “redemption period” following the foreclosure Sheriff’s sale of the property, generally. If you are not in foreclosure at the time you file your Chapter 7 or Chapter 13 bankruptcy in New Jersey, you can expect to remain the titled owner of the property and to be required to pay ongoing association dues for at least 12 months from the date of filing of your bankruptcy petition. During that period of time after a bankruptcy, you are not required to make any mortgage payment or pay any property taxes, BUT you MUST make your ongoing association dues payments (and keep the property insured, if that insurance payment is not drawn from the association dues, for your own liability protection).

If you are a New Jersey resident and would like to explore your options for a Chapter 7 or Chapter 13 bankruptcy with an experienced New Jersey bankruptcy attorney, please contact us at or click the button to schedule a free, initial consultation.

February 13, 2014 by Todd Murphy

Can a sheriff’s sale be postponed under NJSA 2A:17-36?

New Jersey Statute NJSA 2A:17-36. Adjournments of sale of real estate.

NJSA 2A:17-36. Adjournments of sale of real estate provides that a sheriff or other officer selling real estate by virtue of an execution may make two adjournments of the sale, and no more, to any time, not exceeding 14 calendar days for each adjournment. However, a court of competent jurisdiction may, for cause, order further adjournments.

In New Jersey, a Sheriff’s sale of a foreclosure property can be adjourned (fancy for postponed) twice by the Sheriff at the request of the homeowner for any reason. Each of these adjournment shall be for not more than 14 days. The lender may request an adjournment as many times as it wants without reason. Once the two “free” adjournments have been exhausted, the homeowner may apply to the Court by Motion for further adjournments provided good cause has been shown to the Court.

For assistance in obtaining an adjournment of a sheriff’s sale of a foreclosure home, contact your local Sheriff department or a qualified NJ foreclosure lawyer in New Jersey.

Link To Statute NJSA 2A:17-36.

Link to instructions and a form to adjourn a sheriff sale.

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