New Jersey Bankruptcy Court Fears New Bankruptcy Laws Too Confusing

In an unprecedented move, the New Jersey Bankruptcy Court is mounting an informational campaign through the news media to educate the residents of New Jersey of the new bankruptcy laws.

Bankruptcy Filings were down by 39 percent in New Jersey and 37.6 percent nationally in 2006. The New Jersey Bankruptcy Court believes that a widespread misperception among its residents about the availability of bankruptcy has contributed to the continued sag in bankruptcy filings happening still today.

Unfortunately, these common misperceptions about bankruptcy aren’t confined to the residents of New Jersey alone. Nationwide, there are many inaccurate rumors flying around about the new bankruptcy laws. Many people even still believe that the bankruptcy law was completely abolished when the law changed and is no longer available to anyone. This of course is the opposite of the truth.

You have an economic right to file a Chapter 7 bankruptcy once every eight years if you can satisfy the new income requirements which are based on your state’s median income and your household size. In the case where your income is too high to file a Chapter 7 bankruptcy, you still have the legal right to stop all creditor harassment and pay back a reduced percentage of your debt through a Chapter 13 bankruptcy. Consulting with an experienced bankruptcy attorney is a fail-proof way to determine which bankruptcy chapter is a better fit for your specific situation.

Bankruptcy HQ commends the New Jersey Bankruptcy Court for being proactive in attempting to cure this problem and better inform its public.

What Are The Tennessee Bankruptcy Exemptions?

What Are The Tennessee Bankruptcy Exemptions?

TennesseeTennessee law protects all or a portion of your property from being seized by creditors or the bankruptcy trustee in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you are generally allowed to keep all of your assets and property. Certain exceptions may apply, so it’s wise to consult with a Tennessee bankruptcy attorney to find which of your assets will be protected in a bankruptcy filed in Tennessee. In general, the major Tennessee bankruptcy exemptions include:

GENERAL TENNESSEE EXEMPTIONS
Real Estate (the Homestead Exemption)
Up to $5,000 of equity in your homestead can be protected. ($7,500 if property jointly owned).
Automobiles
There is no specific automobile exemption in Tennessee.
Other Property
$4,000 in any personal property; all clothing, pictures, and books.
View the complete list of Tennessee bankruptcy exemptions

Please remember that this page provides general information only, and is not intended to provide legal advice. The information is not a substitute for the advice of a qualified bankruptcy attorney. If you need legal assistance, consult an attorney.

Which state’s exemption laws apply in your bankruptcy?

TennesseeGenerally, the laws of the state in which you lived for the 730 days (2 years) prior to filing a bankruptcy petition will apply in your bankruptcy.

If you have not lived in the same state for the 2 years immediately prior to filing your bankruptcy petition, the laws of the state in which you lived for the majority of the 180-day period preceding the 2-year period will likely apply.

If application of the preceding general rules renders you ineligible for exemptions under any state’s laws, you may be allowed to choose the federal exemptions applicable in your bankruptcy.

Is Tennessee a Community Property State?

No, Tennessee is not a community property state. Because it is not a community property state, you will be responsible for your spouse’s debts only if you voluntarily assumed those debts by, for example, co-signing on a loan given to your spouse. In a non-community property state, one spouse can file for bankruptcy and be eligible to eliminate all of their unsecured debts without the involvement of the other spouse.

How did your senator vote on the new bankruptcy laws?

Following years of intense lobbying by creditors, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). How did your Senators vote on these largely pro-creditor provisions?

Alexander (R-TN) — YEA
Frist (R-TN) — YEA

Tennessee Bankruptcy Court Locations:

Historic U.S. Courthouse
31 East 11th St.
Chattanooga, TN 37402
(423)752-5163

Howard H. Baker, Jr.
United States Courthouse

800 Market St. Suite 330
Knoxville, TN 37902
(865)545-4279

United States Bankruptcy Court
James H. Quillen United States Courthouse

220 West Depot Street, Suite 218
Greeneville, Tennessee 37743-4924
(423)787-0113

United States Bankruptcy Court
Middle District of Tennessee

P.O. Box 24890
Nashville, TN 37202

200 Jefferson Ave. Suite 410
Memphis, TN 38103
(901) 328-3500

111 South Highland Ave.
Room 107
Jackson, TN 38301
(731) 421-9300

Note: You may not have to actually go to one of the above bankruptcy courts. Trustees often conduct your meeting at a local venue.

Although bankruptcy is federal law, the bankruptcy courts in each jurisdiction have local rules that must be followed. A local bankruptcy attorney will be familiar with the specific rules in your area.

Tennessee Bankruptcy Attorney Locations:

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Chapter 7 Bankruptcy Information

Chapter 7 bankruptcy is one of the most frequently-filed chapters and may be helpful for people in a broad set of circumstances. Consulting with an attorney is the most effective way to discover if Chapter 7 is applicable in an individual case, but knowing a few basic facts about chapter 7 bankruptcy information may be useful in considering personal filing options.

Bankruptcy - Credit Basics

One of the most important aspects of understanding bankruptcy is differentiating between chapters; while some elements of different bankruptcy types may seem similar, different chapters are in fact distinct and have been designed with divergent financial situations in mind.

Why Do People File Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is primarily targeted towards those who have accumulated debt in amounts they’re unable to repay. Credit card debt, unpaid medical bills, and certain types of unsecured debts can be addressed with a Chapter 7 filing, though of course individual circumstances will have an effect on the eventual outcome of a bankruptcy case. A strong draw for many people who file for Chapter 7 bankruptcy is the ability to retain most or all personal assets.

Common Misconceptions

Misconceptions surrounding Chapter 7’s ability to liquidate assets exist, but many people who have completed the process have been able to do so without losing their homes, cars, or other possessions. In some instances, the trustee involved in a Chapter 7 bankruptcy filing may identify certain assets capable of being liquidated and used as repayment to lien-holders or creditors; checking local laws regarding exempt assets and talking with an attorney about any potential losses can lead to a firm idea of how a filing would impact personal property.

Immediate Benefit of Filing Chapter 7 Bankruptcy

The most immediate benefit of a Chapter 7 bankruptcy filing for many people is the relief it affords from debt collection and harassment from creditors. When a filing is successful, a Chapter 7 filer may find that calls and letters regarding collection cease, and that attempts to repossess personal effects are also halted. The trade-off, however, is that a record of the bankruptcy filing remains visible for ten years, making it more difficult for some people to obtain credit.

Though it is not impossible to locate new sources of credit for large purchases after completing a Chapter 7 filing, the record can have a noticeable impact on credit arrangements for the ten-year period. Balancing the potential benefit of a filing with the potential disadvantages can be a difficult process, though legal advice from a bankruptcy attorney can go a long way towards making the decision easier.

The Chapter 7 Bankruptcy Attorney

A Chapter 7 bankruptcy attorney typically leads their client through the required paperwork and helps to prepare for the “341 Meeting of the Creditors,” an event that allows the trustee to determine eligibility for bankruptcy and to identify any assets that are not covered by state or federal exemptions. Once this type of bankruptcy is chosen, many people who file for Chapter 7 find that the process is fairly swift and smooth, and that questions that arise during the filing can be directed to an attorney to ensure personal rights and responsibilities are understood.

What to Tell Your Bankruptcy Lawyer

The relationship between the bankruptcy lawyer and the debtor is just as, if not more, unique as any other attorney-client relationship that the law creates. This is because the legal process of personal bankruptcy is unlike any other field. Instead of litigation, juries, and plea bargains, bankruptcies consist of Chapter 7 and Chapter 13 bankruptcy forms, equations, and detailed financial history of each client. Due to the complexities that bankruptcy brings with it, it is vital to understand how to effectively communicate with your bankruptcy attorney to ensure a successful case. Here are a few items to make sure to tell your bankruptcy lawyer:

  1. All About Your Finances: During your initial consultation with your bankruptcy lawyer you will most likely be answering quite a few questions about your financial situation, and you should be completely forthright with your responses. There is no need to feel shame from your situation. Remember that keeping financial information from your bankruptcy attorney can be, in some cases, detrimental to the outcome of your case.
  2. About Any and All Property: Sometimes debtors get intimidated when they hear that all property and/or debt will need to be listed in the official bankruptcy paperwork so they choose not to tell their attorney about certain property. The truth is, there isn’t much to be scared of. In fact, if you are upfront with your attorney about the property that you own, he/she will be able to tell you immediately what bankruptcies can and cannot protect. If you choose to omit certain information about property that you own, the bankruptcy court will find out about it and fraud charges could arise.
  3. About Any Prior Businesses: Although you might assume that your bankruptcy attorney will ask you all necessary questions, it shouldn’t stop you from voicing anything in your financial history that might be easy to miss like prior business ownership. In many cases prior ownership in a business means nothing on Chapter 13 or Chapter 7 bankruptcy forms but in some cases it does. Just to be safe, be sure and make your bankruptcy attorney aware.
  4. About Expected Post-Bankruptcy Income: Many clients think that once their bankruptcy is over the courts will stop caring what happens to them financially. That is unfortunately not true. For this reason you should tell your attorney about any expected settlement, inheritance, or other large sum of money you expect to receive during or soon after your bankruptcy.

Ultimately the communication you have with your bankruptcy attorney is crucial to the success of your case. Accurately filling out the Chapter 7 bankruptcy forms and the Chapter 13 bankruptcy forms is the job of your attorney, but the job of being completely open about your situation is your responsibility entirely. Purposely neglecting to tell your bankruptcy attorney something about your finances is not viewed well in the court, and in some cases can lead to the overall dismissal of your case if the court feels that you committed fraud. Just remember that your bankruptcy attorney is on your side, and wants to allow bankruptcy to serve its purpose to help you achieve a fresh financial start.

Bankruptcy Alternatives

Bankruptcy is not the best choice for everyone, and you should be aware of all your alternatives before deciding to file for bankruptcy. There are several different options to consider, including home equity loans, debt consolidation loans (balance transfers), credit counseling & debt management plans, debt negotiation programs, reverse mortgages, and various self-help methods.

  • TN - Bankruptcy - Self-HelpCreditors’ internal policies can vary greatly, but many will agree to reduce interest rates or waive penalties upon a consumer’s direct request, particularly if the consumer has a good payment history or is viewed as a bankruptcy risk.
  • TN - Bankruptcy - Debt ConsolidationA balance transfer is a type of debt consolidation loan in which you transfer all or some of your debt onto a new credit card. The new creditor is lending you the money to pay off your existing debt, and usually is willing to offer a low introductory rate to get your business. They obviously are willing to do this for a reason.
  • TN - Bankruptcy - Reverse MortgagesA reverse mortgage allows you to receive money in exchange for the equity in your home without requiring you to make monthly payments. The loan will not have to be paid back until you (or any co-owner) no longer lives in the home.
  • TN - Bankruptcy - Credit CounselingCredit counseling agencies are mostly non-profit. Their primary purposes are to educate consumers about money management and to negotiate debt repayment. Counseling agencies can be a valuable resource in helping you prepare a budget to determine if you have enough income to service your debt, or if you ought to consider filing bankruptcy.
  • TN - Debt NegotiationDebt negotiation/debt settlement companies contact your creditors and attempt to negotiate a settlement of your debt for less than the full balance you owe. In recent years, this form of debt management has grown increasingly popular.
  • TN - Bankruptcy - Home Equity LoansA home equity loan can be one of the most useful bankruptcy alternatives due to its flexibility and tax-friendly consequences. However, it is also one of the riskiest because you must put up your house as collateral. That means that the lender places a lien on your real estate, meaning the lender can foreclose on your home if you fall behind on your monthly mortgage payments.

How to Get Your Finances Back On Track

One of the best times to develop a comprehensive financial plan for managing your finances in the future is immediately after your bankruptcy is discharged. The biggest mistake you can make after a bankruptcy is using the same financial strategy that led you to file bankruptcy in the first place.

Bankruptcy - How to Get Finances Back on Track

A financial plan requires you to develop and stick to a budget that ensures you spend less than you earn – and a budget that provides for emergency funds necessary to deal with unforeseen future expenses. Although there are circumstances beyond your control that may lead to another bankruptcy, a solid budget and a realistic emergency fund drastically reduce your chances of having debt problems again.

Track your expenses

Your first step in developing your financial plan is to find out where all your money goes each month. Tracking all of your expenses for two months helps to provide a good estimate of your spending habits. You may be surprised at what you find, and may be able to pinpoint unnecessary monthly expenses you can easily eliminate.

Create a budget

After you’ve tracked your expenses for two months, create a budget by deducting your monthly expenses from your monthly income. It’s important that your expenses are realistic and that you allow some room for unexpected expenses. If your budget does not indicate disposable income sufficient to meet your financial needs, you need to determine how to either lower some of your expenses or find additional sources of income.

The biggest mistake you can make after a bankruptcy is using the same financial strategy that led you to file bankruptcy in the first place.Control spending

Sticking to your budget is critical to your financial well being. Consistently spending more than your budget allows is a recipe for debt. “Online banking” offered by most banks makes it easy to set up automatic payments for all of your major fixed monthly expenses (rent, auto payment, insurance, etc.) so you can pay your other monthly bills as soon as you get paid. This way, you know exactly how much money you have for other expenses, and can adjust your budget accordingly.

Create an emergency fund

You need an emergency fund. No matter how well you budget and control spending, there are circumstances for which you can never plan, and they can be devastating to your credit if you don’t have readily-available cash. Your budget should incorporate a certain amount of income to be used for establishing an emergency fund in an interest-bearing savings account. It’s a good idea to set up automatic transfers into your emergency fund each pay period. You should ideally try to save at least three months of living expenses in your emergency fund.

Fund Your Retirement

Once your emergency fund is established, start contributing towards a retirement plan or an IRA. A small percentage of your check can rapidly grow with the tax benefits and compound interest rates offered through retirement plans, especially if your employer matches a portion of your contribution.

North Dakota State Bankruptcy Laws

What Are The North Dakota Bankruptcy Exemptions?

North DakotaNorth Dakota law protects all or a portion of your property from being seized by creditors or the bankruptcy trustee in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you are generally allowed to keep all of your assets and property. Certain exceptions may apply, so it’s wise to consult with a North Dakota bankruptcy attorney to find which of your assets will be protected in a bankruptcy filed in North Dakota. In general, the major North Dakota bankruptcy exemptions include:

GENERAL NORTH DAKOTA EXEMPTIONS
Real Estate (the Homestead Exemption)
Up to $80,000 of equity in your homestead can be protected.
Automobiles
One motor vehicle with up to $1,200 of equity can be protected; $32,000 for a vehicle that has been modified at a cost of not less than $1,500 to accommodate an individual with a permanent physical disability who is the owner of that motor vehicle.
Other Property
All family pictures; one church pew; one burial ground; family Bible and books not exceeding $100; clothing; food and fuel for one year; crops and grain; all other personal property including money not to exceed $5,000.
View the complete list of North Dakota bankruptcy exemptions

Please remember that this page provides general information only, and is not intended to provide legal advice. The information is not a substitute for the advice of a qualified bankruptcy attorney. If you need legal assistance, consult an attorney.

Which state’s exemption laws apply in your bankruptcy?

North DakotaGenerally, the laws of the state in which you lived for the 730 days (2 years) prior to filing a bankruptcy petition will apply in your bankruptcy.

If you have not lived in the same state for the 2 years immediately prior to filing your bankruptcy petition, the laws of the state in which you lived for the majority of the 180-day period preceding the 2-year period will likely apply.

If application of the preceding general rules renders you ineligible for exemptions under any state’s laws, you may be allowed to choose the federal exemptions applicable in your bankruptcy.

Is North Dakota a Community Property State?

No, North Dakota is not a community property state. Because it is not a community property state, you will be responsible for your spouse’s debts only if you voluntarily assumed those debts by, for example, co-signing on a loan given to your spouse. In a non-community property state, one spouse can file for bankruptcy and be eligible to eliminate all of their unsecured debts without the involvement of the other spouse.

How did your senator vote on the new bankruptcy laws?

Following years of intense lobbying by creditors, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). How did your Senators vote on these largely pro-creditor provisions?

Conrad (D-ND) — YEA
Dorgan (D-ND) — NAY

North Dakota Bankruptcy Court Locations:

Quentin N. Burdick U.S. Courthouse
655 First Avenue North
Fargo, North Dakota
(701) 297-7100

U.S. Courthouse and Federal Building
220 East Rosser Ave
Bismarck, North Dakota
(701) 297-7100

Note: You may not have to actually go to one of the above bankruptcy courts. Trustees often conduct your meeting at a local venue.

Although bankruptcy is federal law, the bankruptcy courts in each jurisdiction have local rules that must be followed. A local bankruptcy attorney will be familiar with the specific rules in your area.

North Dakota Bankruptcy Attorney Locations:

Looking for a North Dakota bankruptcy attorney?
Looking for a Fargo, North Dakota bankruptcy attorney?

Alabama State Bankruptcy Laws

What are the Alabama Bankruptcy Exemptions?

AlabamaAlabama law protects all or a portion of your property from being seized by creditors or the bankruptcy trustee in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you are generally allowed to keep all of your assets and property. Certain exceptions may apply, so it’s wise to consult with an Alabama bankruptcy attorney to find which of your assets will be protected in a bankruptcy filed in Alabama. In general, the major Alabama bankruptcy exemptions include:

GENERAL EXEMPTIONS IN ALABAMA
Real Estate (the Homestead Exemption)
Up to $5,000 in the equity of your home can be protected (a mobile home or similar dwelling constitutes a homestead if it is your principal residence).
Automobiles
There is no specific automobile exemption in Alabama.
Other Property
Personal property valuing up to $3,000 can be exempted.
View the complete list of Alabama bankruptcy exemptions.

Alabama FlagWhich state’s exemption laws apply in your bankruptcy?

Generally, the laws of the state in which you lived for the 730 days (2 years) prior to filing a bankruptcy petition will apply in your bankruptcy.

If you have not lived in the same state for the 2 years immediately prior to filing your bankruptcy petition, the laws of the state in which you lived for the majority of the 180-day period preceding the 2-year period will likely apply.

If application of the preceding general rules renders you ineligible for exemptions under any state’s laws, you may be allowed to choose the federal exemptions applicable in your bankruptcy.

Is Alabama a community property state?

No, Alabama is not a community property state. Because it is not a community property state, you will be responsible for your spouse’s debts only if you voluntarily assumed those debts by, for example, co-signing on a loan given to your spouse. In a non-community property state, one spouse can file for bankruptcy and be eligible to eliminate all of their unsecured debts without the involvement of the other spouse.

How did your senator vote on the new bankruptcy laws?

Following years of intense lobbying by creditors, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Did your Senators vote for these largely pro-creditor provisions?

Sessions (R-AL) — YEA
Shelby (R-AL) — YEA

Alabama Bankruptcy Court Locations:

Frank M. Johnson United States Courthouse Complex
One Church Street
Montgomery, Alabama 36104
(334) 954-3800

George W. Andrews Federal Building
701 Avenue A
Opelika, Alabama 36801
(334) 954-3800

Federal Building and United States Courthouse
100 W. Troy Street
Dothan, AL 36303
(334) 954-3800

U.S. Bankruptcy Court
Southern District of Alabama

201 St. Louis Street
Mobile, AL 36602
(251) 441-5391

1118 Greensboro Ave.
Room 209
Tuscaloosa, AL 35401
(205) 561-1600

1800 5th Avenue North
Birmingham, AL 35203
(205) 714-4000

103 Federal Courthouse
12th & Noble Streets
Anniston, AL 36201
(256) 741-1500

P.O. Box 2748
Decatur, AL 35602
(256) 584-7900

Note: You may not have to actually go to one of the above bankruptcy courts. Trustees often conduct your meeting at a local venue.

Alabama Bankruptcy Attorney Locations:

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Although bankruptcy is federal law, the bankruptcy courts in each jurisdiction have local rules that must be followed. A local bankruptcy attorney will be familiar with the specific rules in your area.

Credit Counseling Requirement Can Prevent Same Day Filings

One of the many changes to the Bankruptcy Code in 2005 was the implementation of two mandatory financial education courses that Chapter 7 bankruptcy and Chapter 13 bankruptcy filers are required to take.

The first course, often referred to as the “Credit Counseling” requirement, must be completed within 180 days beforethe filing of a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. The second course, called the “Debtor Education” or “Financial Management” requirement, must be completed depending on your jurisdiction within 28 days to 60 days after one’s 341 Meeting of the Creditors. Recently, there has been a national trend of rulings amongst bankruptcy judges regarding the former Credit Counseling course and effectively preventing “same-day filings”.

“Same day filings” occur when a with a client hires a bankruptcy attorney the same day that attorney files their Chapter 7 or Chapter 13 bankruptcy case for them. This situation occurs often when a client has an urgent financial matter. Such urgencies typically include pending real-estate foreclosure sales, vehicle repossessions, body attachments, judgments and garnishments. The bankruptcy judges’ ruling that is becoming all-the-more common is the interpretation of the time-frame of when a filer’s Credit Counseling course must be completed.

The Bankruptcy Code states that a filer’s Credit Counseling course must be completed within “180 days before” the filing of their bankruptcy case. More and more bankruptcy judges are now interpreting this language to mean that a filer’s Credit Counseling course must be completed within 180 days literally before the filing of their Chapter 7 or Chapter 13 bankruptcy, and not including the actual day of the bankruptcy filing.

The consequences of filing a case where a Credit Counseling course has been completed on the same day of a bankruptcy filing is in most cases complete dismissal of the filer’s Chapter 7 or Chapter 13 bankruptcy. The bankruptcy filing is void as a matter of law, as if it was never filed. Unfortunately, the only practical course of action for the victims of this situation is the refiling of their bankruptcy and the repaying of the requisite filing fee.

In most situations when a client with an urgent financial matter seeking a same day filing walks into a bankruptcy attorney ‘s office, they have not yet completed their pre-filing Credit Counseling Course because they were unaware they needed to do so. Even with their bankruptcy attorneys’ direction to complete their Credit Counseling Course immediately, the fastest a client in this situation could get their bankruptcy filed would be the next calendar day. Often times this can be one day too late.

Debts Bankruptcy Won’t Eliminate

Credit cards, medical bills, repossessions, utility bills and most other unsecured debts are dischargeable in a Chapter 7 bankruptcy . Secured debts, like mortgages or auto loans, usually can be discharged only if you are willing to surrender the property that was used as collateral. Otherwise, you can typically keep the property if you are current and continue making timely monthly payments.

However, a handful of debts cannot be eliminated in a Chapter 7 bankruptcy. These include Student Loans, some IRS or State Income Tax Debts, Child Support or Alimony Obligations, Government Fines, and some debts ordered by a divorce decree. Congress drafted the bankruptcy laws and in their own interests made it very difficult to file bankruptcy on any government debt.

What bankruptcy options do you have if you are burdened with these non-dischargeable debts?

Individuals who have non-dischargeable debts are also often facing other financial difficulties and are in a cycle of debt that includes credit cards, loans, and other unsecured debts. One option is to file Chapter 7 bankruptcy to eliminate any unsecured debts and legally stop making any more payments to your unsecured creditors; this will free up some disposable income and allow you to focus on repaying any debts that survived the bankruptcy. Although the non-dischargeable debts will not be eliminated, the broad protection of the automatic stay may give you some protection from government creditors during the bankruptcy, absent a court order lifting the stay from the bankruptcy judge.

A second option is to file a Chapter 13 bankruptcy and include your non-dischargeable debts in the court monitored repayment plan. It is possible to repay only a portion of your non-dischargeable debts back while you are in the bankruptcy, but you’ll still be liable for the percentage that wasn’t paid back after the bankruptcy. The advantage is that the bankruptcy laws prevent even government creditors from garnishing your wages or harassing you while you are actively in a Chapter 13 bankruptcy. With a little breathing room from your creditors and the ability to eliminate a portion of your unsecured debts, you have sufficient opportunity to increase your income or make other arrangements for repaying the non-dischargeable debts after the bankruptcy

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