The coronavirus ( COVID 19 ) has had an impact on bankruptcy and the bankruptcy courts just like it has had an impact on all aspects of life. However, bankruptcy remains a viable option to deal with its impact on financial circumstances both during and after the virus is gone. Both the Bankruptcy Courts and some bankruptcy attorneys are adjusting to the crisis. While some hearings are being rescheduled, the Bankruptcy Courts are also currently scheduling telephone or video conferencing instead of in person hearings. Attorneys are adjusting and also offering alternatives. While clients can still come into our offices in Maple Shade, Cherry Hill, Willingboro and Sicklerville New Jersey , we can also schedule telephone meetings or video conferences. In the event an in person meeting is required, for example to review and sign the bankruptcy petition and schedules, our large conference rooms allow for social distancing. If you are having financial issues during the coronavirus outbreak, you should contact an attorney.
When a business files a bankruptcy, under certain circumstances the bankruptcy trustee can assert a preference claim against certain creditors and take back from those creditors money previously paid to the creditor by the debtor. For example, if within 90 days of the filing of a Chapter 11 bankruptcy a payment is made on a past due invoice, in certain circumstances the trustee can assert that the creditor received a preference which is unfair to the other creditors and therefore, even though the money was owed, they must give it back to the debtor so the money can be redistributed to treat creditors equally. Trustee's would take advantage of this power by filing suit in order to try and get a settlement even though there may be valid defenses such as new value or contemporaneous exchange. In addition, if a company in, say Maple Shade NJ files a chapter 11 and the the debtor paid a company in Bozeman, Montana within 90 days before filing, the company in Bozeman could be forced to litigate in New Jersey. Under the new law, a trustee must do reasonable due diligence and consider defenses before they can file a suit. In addition, all lawsuits for less than $25,000.00 must be filed in the District where the defendant business is located. Both changes were badly needed.
Where you file a bankruptcy in New Jersey depends on where you live. Unlike the state courts, where there is a court house in each county, there are only three (3) Federal Bankruptcy courts: Newark, Trenton and Camden NJ. As a result, some counties are split as to where you file. For example, Burlington County residents file in Trenton, NJ except for the cities in the southern part of the county of Cinnaminson, Delran, Edgewater Park, Marlton, Maple Shade, Moorestown, Mount Laurel, Palmyra, Riverside and Riverton. The other counties that report to Trenton NJ are Hunterdon, Mercer, Middlesex, Monmouth, Ocean, Somerset and Warren. Any further North report to Newark, NJ. The Southern Counties file in Camden, NJ.