When a chapter 13 bankruptcy is filed the court automatically schedules two hearings. The first is a meeting of creditors. The debtors are required to attend this meeting with the chapter 13 trustee and their attorney. Creditors are invited to come but they rarely do. The other hearing is the confirmation hearing. The debtors' do not have to attend this hearing but their attorney does. In New Jersey the hearing will take place at the Federal courthouse in Camden NJ, Trenton NJ or Newark NJ. The purpose of the hearing is to have the court approve the chapter 13 plan regarding repayment to creditors. Often the confirmation hearing will need to be adjourned to address the claims filed or other issues raised by the trustee. Except in unusual or complicated matters if the Chapter 13 trustee is satisfied with the plan and objections have been addressed the trustee will recommend confirmation and the judge will enter an order approving the chapter 13 plan
1. Arrive early. This will give you a chance to review your case with your lawyer and listen to the trustee ask other people questions that he/she will also ask you.
The Wall Street journal reports that Gymboree is on the verge of filing a bankruptcy with the likely closure of their stores. Locally there are several stores including at the Cherry Hill Mall in Cherry Hill New Jersey, The Promenade at Sagemore in Marlton NJ and the Deptford Mall in Deptford NJ. In Philadelphia Pennsylvania the store at the Philadelphia Mills Mall would be impacted. The bankruptcy will be just another reminder of the difficulties retail chains face today.
The New Jersey Bankruptcy Court, which is part of the Federal Court System has addressed the impact of the federal government shutdown on its official website. Specially the site notes "the Judiciary has continued to operate by using court fee balances and other "no-year" funds. The Administrative Office of the U.S. Courts has revised its original estimate and now is working toward the goal of sustaining paid operations through Jan. 18, 2019." If the shutdown is not resolved by then, the bankruptcy court will not have funds to operate. This applies to the bankruptcy courts in Camden, Trenton and Newark NJ.
A Chapter 13 Bankruptcy can eliminate obligations from a Judgment of Divorce that cannot be eliminated in a Chapter 7 Bankruptcy. Neither will eliminate domestic support obligations such as child support or spousal support. However, if there are other obligations relating to a property settlement agreement or an allocation of liabilities, those obligations can be reduced or eliminated in a chapter 13 but not in a chapter 7. This is because the exception to discharge section that applies to chapter 7 basically makes all divorce related liabilities nondischargeable but the exception section for chapter 13 only applies to domestic support obligations. Because of these differences, if you are filing a bankruptcy after a divorce, it is imortant to discuss with your attorney all obligations under the Judgment for Divorce because it may make more sense to file a chapter 13 when at first blush the case may seem appropriate for a chapter 7.
When a creditor agrees to settle a claim for a reduced amount, the amount of debt foregiven can result in taxable income. For example, if you owe $20,000 on a credit card and a settlement is reached where they agree to accept $11,000 as payment in full, the creditor is foregiving $9,000.00 of the claim. In that circumstance, the creditor will issue a 1099c to you for the foregiveness of debt. That $9,000.00 will count as income to you. There are some exceptions. If you can show you are insolvent you can avoid liability. Bankruptcy is also an exception. For example, if you filed a chapter 7 to eliminate that $20,000.00 credit card, there would not be any tax liability even though the entire $20,000.00 was eliminated. Depending on circumstances debt negotiations may be an option, but be sure to take into account the tax consequences when deciding between bankruptcy and debt negotiation. And since both the IRS laws and the Bankruptcy laws are Federal Laws, the result would be the same whether you lived in New Jersey or Pennsylvania.
USA Gymnastics filed for Chapter 11 Bankruptcy. https://people.com/sports/usa-gymnastics-files-for-bankruptcy/ The Chapter 11 is to allow USA Gymnastics to reorganize and to deal with claims in the wake of the multple sex abuse allegations. USA Gymnastics released a statement indicating as follows:
Sears filed bankruptcy on October 15, 2016. According to Wikipedia, Sears was the largest retailer in the US until 1989 when it was passed by Walmart and was now 23rd largest. Recent financial changes led to the closing of the Sears at the Hamilton Mall in Atlantic County. With the filing of the Chapter 11 Bankruptcy, three more New Jersey locations are being closed: The Sears at the Deptford Mall in Deptford New Jersey, the Sears in Middletown NJ and the KMart in Glassboro NJ on Delsea Drive. The closure of the stores is a major blow for those areas because of the loss of so many jobs.
You can build your credit after bankruptcy. Sometimes clients will come into my office in Cherry Hill, NJ and express concern that if they file bankruptcy they will not have credit again for 10 years. That is not accurate. In fact many times credit scores of clients are already low from missed payments and filing will actually lead to improvement in credit score. If a Chapter 7 Bankruptcy is filed, approximately three months later the individual receives their discharge. If they own a vehicle with payments and they have reaffirmed the debt, they are already on their way to reestablishing credit since their credit report will show the vehicle payments. After the bankruptcy is completed, often in less than one year an opportunity to obtain a credit card will arise. While avoiding credit cards is a good policy, it may be helpful to get a credit card with a low limit, use it for a small purchase like gasoline or groceries, and pay it off each month. At that point, your defaulted unsecured debt will have been eliminated and the current status on car payments and a credit card will have you well on your way to reestablishing credit.
Lil Kim filed for Bankruptcy in Newark New Jersey and now has the same options that anyone filing would have. According to the bankruptcy filing she stopped a foreclosure sale on her house by filing. Generally the bankruptcy will allow a debtor to resume regular mortgage payments and pay missed payments over time. According to papers filed by Rushmore Loan Management she missed a mortgage payment of approximately $10,000.00 due after she filed. They want to foreclose. Because of her circumstances she is going to attempt to do a loan modification which is another option debtors have. Typically the debtor resumes payments but rather than paying the arrears through a separate payment the debtor attempts to restructure the loan so the arrears are added back into the mortgage. Although Lil Kim's assets and income and expenses are more than the typical person, the rights under the bankruptcy law are the same.