Camden NJ Bankruptcy Law Blog

what is a chapter 13 confirmation hearing and does the debtor have to attend.

When a Chapter 13 bankruptcy is filed in New Jersey a notice is sent by the court to schedule two hearings. The first is the meeting with the trustee that the debtors and their attorneys must attend. Creditors are also invited but rarely attend. The other hearing scheduled is the Confirmation Hearing. Typically only the attorney attends although occasionally the debtors will need to attend. In New Jersey the hearing will take place in Camden NJ, in Trenton NJ, or in Newark NJ. The hearing is to determine whether the court will approve the Chapter 13 plan that was filed. The trustee will consider the amount of the claims filed by the creditors, the income of the debtors, the equity in the assets of the debtors and the feasibility of the plan to determine whether or not to recommend confirmation to the judge. It is important that payments are made each month leading up to the confirmation so that the trustee can see you actually have the ability to make payments. Once the case is confirmed the creditors and the debtors are bound by the plan.

Toys R Us Bankruptcy Closing New Jersey and Pennsylvania Stores

Toys R US, which is in a Chapter 11 bankruptcy, announced Tuesday that they are closing up 182 stores, according to a story on USA Today at https://www.usatoday.com/story/money/business/2018/01/24/toys-r-us-plans-close-up-182-stores/1060674001/

What happens at a bankruptcy meeting of creditors.

 When you file a bankruptcy you are required to attend a meeting of creditors. If you file a bankruptcy in South Jersey that meeting will occur in either Cherry Hill New Jersey, Camden NJ or Northfield NJ. The meeting generally is held about 30 days after filing. Most of the time no creditors come and your meeting is with just you, your attorney and the trustee. The trustee's job is basically to confirm that the information contained in your petition and schedules is accurate and to sell any nonexempt assets. Prior to the meeting your attorney will send numerous documents to the trustee which support the information contained in your bankruptcy. Your attorney will also review with you your petition and schedules prior to the meeting. As long as you have been straightforward with your attorney and your attorney has done what he is supposed to do the meeting of creditors should be relatively simple

Chapter 12 Bankruptcy for Farmers and Fisherman

Chapter 12 is a type of bankruptcy that can be filed by a family farmer or a family fisherman. In order to qualify for chapter 12 at least 50% of income must be derived from farming it fishing operations. 50% of debts of the farmer must come from farming operations while 805 of debt must come from fishing operations. Chapter 12 is similar to Chaper 13 although there are elements in it like a chapter 11. There are certain advantages to chapter 12 over other chapters. One of the most significant advantages is the ability to extend secured debt over a longer period of time. If a family farmer or fisherman is having financial difficulties, it makes sense to consult with a bankruptcy attorney with experience in Chapter 12.

Chapter 11 for Toys R Us with Cherry Hill and Deptford NJ Locations

Toys R Us, which has locations in Cherry Hill New Jersey and Deptford NJ filed a Chapter 11 bankruptcy to reorganize its debts. Even though they have not yet obtained a court approved plan, the executives of the company have now asked the bankruptcy court to approve millions of dollars in bonuses for those executives. Not surprisingly, the US Trustee's office opposes the payment of such bonuses and filed an objection. The bankruptcy judge will now consider the documents submitted and the arguments of the lawyers and then render a decision. It is also possible that the attorneys will reach an agreement, for example, agreeing to a lower bonus, and then they would ask the court to approve the compromised amount.

Where Should Bankruptcy be Filed

Let's say you have a home in Northeast Philadelphia Pennsylvania and a vacation home in Margate New Jersey or a commercial property in Cherry Hill New Jersey. Should you file in Philadelphia Pennsylvania or can you file in New Jersey as well. 28 USC section 1408 says you can file where your domicile is located or where you reside or where your principal assets are located. So the answer can be either state, depending on circumstances. While the basic bankruptcy law is the same, there are differences in how certain sections are interpreted so it makes sense to consult an experienced Bankruptcy attorney to see what is best in your particular circumstances

Bankruptcy Trustee Suing College to Recover Tuition Paid By Debto

Bankruptcy trustee suing college to recover tuition.  What happens when you pay your child's college tuition and then file a chapter 7 bankruptcy within the next couple of years? Some bankruptcy trustees are suing the colleges to get the money back to pay the creditors in the bankruptcy. The theory is the parent did not have a legal obligation to pay the tuition and received no benefit so the payment was a fraudulent conveyance and therefore must be returned. Some courts have agreed with this argument and required the college to return the money. In that case the student now owes the unpaid tuition. Some courts more recently have determined that the college does not need to return the money because the parent is receiving a benefit such as making child independent so parent does not have to support. However, there is certainly a risk at this point when a bankruptcy is filed after tuition payments were made.

Defending Preference Claims in Bankruptcy

When a business files for bankruptcy, the trustee will sometimes sue creditors to get money back from them if they received a payment within 90 days of the filing of the bankruptcy. This is known as a preference action since the idea behind it is to avoid a debtor that is about to file bankruptcy from preferring certain creditors over others. However, there are defenses that can be used that may allow the creditor to retain the money they received within 90 days. For example, if the payment was made in the ordinary course of business such as within 30 days of invoicing, that may be a valid defense. If, after receiving payment, the creditor extended new credit, to the extent the new credit extended is not repaid, an offset will be allowed. There are other defenses as well. If a demand is received from a debtor or a trustee, it is important to immediately consult with an experienced attorney as there are time limits in responding once the complaint has been filed.

Risk for Cosigner When Bankruptcy is Filed

At one time or another, most people have been asked to cosign a loan. The request is made because the credit of the borrower prevents that borrower from getting credit on their own. When someone agrees to cosign a loan, they are doing more then just lending their credit. They are putting themselves at financial risk in the event the borrower does not pay. For example, if you cosign on a credit card and the borrower files a Chapter 7 bankruptcy and eliminates their own liability, the cosigner remains responsible for the entire debt. In certain circumstances, such as the cosigning of a car loan, if the borrower files bankruptcy but decides to keep vehicle and continue to pay, the cosigner is ok as long as payments are made. However, if payments are not made and the car is repossessed, you are liable for the deficiency. Before you cosign a debt for anyone, know the risks. 

Bankruptcy Requirement of Filed Tax Returns in Pennsylvania

In order to proceed with a bankruptcy, federal, state and local tax returns that were required to be filed must be filed for the last four years in a Chapter 13 and for the last year in a Chapter 7. In other words, if you did not make enough income to file a tax return then you do not need to file that return just for the bankruptcy. If you are a Pennsylvania resident, you must file a PA tax return if you had income of more than $33.00. While this is a nominal amount, not all money received counts as income, such as social security. Pennsylvania law lists eight classes of income, including compensation, net profits from business, income from rents, dividends, interest and gambling losses among others. Consequently, if a bankruptcy is being considered, make sure tax returns are filed

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