For many individuals, student loans are the greatest financial burden to their daily lives. With the rising cost of education and high interest rates, it can be impossible to repay student loan debt. College loan balances in the United States have jumped to $1.4 trillion dollars, with a default rate of over 11 percent. However, the federal government may soon be revising its policies concerning student loan forgiveness in bankruptcy.
With New Jersey in the middle of its winter season, injuries due to ice and snow conditions can occur because of the irresponsible actions of property owners and landlords. Commercial and multi-complex residential buildings commonly fail to exercise reasonable care by promptly removing snow and ice following a snowstorm. A victim of a slip and fall accident may secure valuable compensation for their medical expenses, lost wages, pain and suffering, and ongoing disability.
When an individual files a bankruptcy petition, the automatic stay prevents creditors from trying to collect debt. Generally, this means that a creditor cannot contact the individual, repossess assets, garnish wages, foreclose on property, or sue the debtor. To view which actions are prohibited by the automatic stay, click here.
However, there are limitations to the protections afforded by the automatic stay if an individual previously filed for bankruptcy. Bankruptcy Code Sections 362(c)(3) and (4) were enacted by Congress in 2005 to limit the duration of the automatic stay afforded to serial filers.
When an individual files for bankruptcy protection, they are entitled to exempt certain property from their bankruptcy estate. The exemptions ensure that property that the debtor seeks to retain isn’t liquidated, or that a specific dollar amount is protected from being disbursed to creditors. In other words, if the exemption doesn’t cover the entire value of the property, it may be sold and the debtor will still retain the exempt amount in cash.
It’s common that many clients surrender their real property in Chapter 7 cases, and assume that surrendering the property will alleviate any issues or obligations owed by them. Unfortunately, the term “surrender” does not automatically mean a debtor is free and clear of any responsibility concerning the real property. The act of surrendering collateral simply means that the debtor no longer intends to make the loan payments, or as stated by the First and Fourth Circuit courts “means not taking an overt act to prevent the secured creditor from foreclosing its interest in the secured property.” In re Calzadilla, 534 B.R. 216, 218 (Bankr. S.D. Fla. 2015). However, receiving a bankruptcy discharge does eliminate the debtor’s personal obligation to repay the note and mortgage.
One of the several benefits of filing for Chapter 11 or Chapter 13 bankruptcy reorganization are the “cramdown” provisions. A cramdown occurs when a debtor proposes to pay the secured value of collateral instead of the financed amount. This concept is memorialized by Congress in Section 506(a) of the Bankruptcy Code stating, “[a]n allowed claim of a creditor secured by a lien on property to which the estate has an interest…is a secured claim to the extent of the value of such creditor’s interest in the estate’s interest in such property…and an unsecured claim to the extent that the value of such creditor’s interest…is less than the amount of such allowed claim.” 11 U.S.C. 506(a).
During the course of a Chapter 7 bankruptcy proceeding, a debtor may seek to avoid a lien filed by a condominium or homeowner association against the debtor’s real property for failure to pay maintenance fees. However, it’s important to examine the classification of the lien prior to determining whether the lien can avoidable in bankruptcy.
In general, a proof of claim is a legal document that notifies the debtor, the trustee, and other parties-in-interest that a creditor wishes to assert its right to receive distributions from the bankruptcy estate. Proof of claims are most commonly asserted in Chapter 7 asset cases, Chapter 13, and Chapter 11 bankruptcy matters. It should be noted that the majority of consumer Chapter 7 cases are considered “no-asset” bankruptcy matters and do not require proof of claims.
The death of a loved one will always cause emotional and financial grief to family members. Wrongful death cases are frequently challenging for clients, because they often have to relive tragic events and deal with controversial issues in the case. Common wrongful death cases in New Jersey include car accidents, truck accidents, motorcycle accidents, workplace accidents, medical malpractice, bicycle accidents, defective products, lack of security, and wrongdoing by law enforcement.
Credit Cards and Chapter 7 Bankruptcy
Personal Credit Cards
A common question that many individuals contemplating bankruptcy ask during our firm’s free consultation is whether they can retain a credit card during bankruptcy. In almost all cases, once a credit card institution receives notice of the bankruptcy filing, it will almost immediately cancel the debtor’s credit card.