Dubiln Packard

Bankruptcy FAQ

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Will Bankruptcy Stop a Sheriff Sale?

Will Bankruptcy Stop A Sheriff SaleBankruptcy will stop a Sheriff sale provided a bankruptcy case filing number is provided to the Sheriff prior to the sale. So, Will Bankruptcy Stop A Sheriff Sale?  Yes.

Sheriff’s sales are the final event in the foreclosure process but sometimes, if an adjournment of the Sheriff sale cannot be obtained, the only way to stop the sale is with a bankruptcy filing.

If the property is placed in bankruptcy through a bankruptcy filing, the Sheriff is not permitted to proceed with the sale until the Sheriff receives further orders from the plaintiff’s attorney. The file is held in abeyance of the Court until the bankruptcy is dismissed or if there is a default on the defendant’s part.

If you have been attempting to get a loan modification and save your home from foreclosure, a chapter 13 bankruptcy may prove to be helpful by stopping the Sheriff’s sale  and obtaining a loan modification. In a Chapter 13 Bankruptcy filing, you will be permitted to catch-up on all of the arrears (missed payments as of the time of filing) over a 60-month period through a Chapter 13 plan and immediately start making your mortgage payments. Provided you have enough income to make those payments, there is no approval required from the bank, rather, your chapter 13 plan is confirmed by the bankruptcy court.  This is often extremely helpful in the case of a self-employed person who has been unable to convince a lender of the ability to pay.

Will Bankruptcy Stop A Sheriff Sale?  Yes.  Contact us to learn more.

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Are Condo Association Dues Dischargeable in Bankruptcy?

Condo fees dischargeable in bankruptcyIn 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.

 

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What Are Median Income and Means Tests?

What are median income and means tests?  These are two different tests used to figure out if you can file for bankruptcy.  Let’s review them one at a time:

The Median Income Test:  This test  is used when your debt is NOT business debt, and is mostly consumer debt.  To find your median income, you add your total monthly income for the past 6 months and divide it by 6.  Then, you compare it to the current median income figures for the same state and family size as yours, published on the U.S. Trustee website (insert link).  If your income is below this number, you can file for bankruptcy.  An attorney can advise you if filing for Chapter 7 or Chapter 13 is best for you.  If your income is more than the published median income for a family size similar to yours in your state, then you must do the Means Test.

The Means Test:  This test is used when your average monthly income is more than the median income for your state published on the U.S. Trustee website.   A lawyer can help you calculate this test.  The Means Test determines if you have money leftover at the end of the month, which affects whether or not you can file for bankruptcy.  With this test you calculate how much money you are bringing in, then subtract your expenses. The problem with this test is that you must use the published IRS numbers for your expenses, like food and transportation.  Sometimes those numbers aren’t the same as what you are actually spending.  Also, you can’t include student loans or retirement account loans when calculating a means test.The means test can show that you have money left over at the end of the month to pay your bills when in reality you don’t.

Speaking with an experienced bankruptcy lawyer can help you figure out where you stand on both types of tests, and help you figure out if you qualify for bankruptcy and if that is the best option for you.

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What to expect from a bankruptcy lawyer

Here is what to expect from your bankruptcy lawyer in New Jersey.

It usually starts with a phone call –

Then a meeting.  At that first meeting, we will explain the process which starts with gathering a large amount of financial information from you.  We give you a questionnaire to take home which asks many important questions.  We will also give you a list of documents we need to complete your bankruptcy case.

Most people take advantage of our payment plans and start making regular payments.

While making payments, you will start submitting documents

Once we have all of your documents and other financial information, we start compiling your bankruptcy petition.

Once complete, we will ask you to review it and sign it.  Then we will submit to court.

In the case of Chapter 13, we will propose a Chapter 13 Plan to the trustee for repayment of your debts over tie.  The trustee will review it and usally make comments which cold require us to amend the plan.

Approx 30 days later, we will go with you to a meeting with the trustee known as the section 341 meeting.  There the trustee will ask you some questions and ask for your identification.  This meeting usually takes no more than 15 minutes and takes place at the Trustee’s office.

Ninety days after submission of your chapter 7 petition, you should be notoied of a discharge.

In the case of a Chapter 13, you will be required to make payments to the trustee right away.

Often at the 341 meeting the trustee will provide some comments that may require an amendement to your plan.  We will submit that amendment.

Confirmation hearing.  No need to attend.  Confirmation.

After confirmation, continue to pay the trustee every month for the duration of the plan.

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Cost To File Chapter 13 Bankruptcy

Cost To File Chapter 13 Bankruptcy

 

 

 

 

 

 

 

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Submit Your Information Above And An eMail Will Be Sent To You Describing The Cost To File Chapter 13 Bankruptcy.

 

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