Don't forget to take post filing Money Management Course. A lot of people filing bankruptcy are aware of the need to take a credit counseling course before they can file bankruptcy. Typically it is taken on line or by telephone. However, you should be aware of the fact that a second course must be taken, this one after the bankruptcy has been filed. If the money management course is not completed and filed with the bankruptcy court prior to the case being closed, your debts will not be discharged. This means you will still owe the debts that existed when the bankruptcy was filed. There are steps that can be taken to rectify the problem, but that takes time and money.
Whether you are from Pennsauken NJ or Cherry Hill New Jersey or Northeast Philadelphia Pennsylvania, individuals often come into my office and ask the same question. Am I eligible to file bankruptcy? Most times individuals are eligible to file bankruptcy. There are some limits. For example, section 109 of the bankruptcy code provides that to file a chapter 13 bankruptcy you cannot have more than $394,725.00 in unsecured debt or more than $1,184,200.00 in secured debt. If you do, you cannot file chapter 13, but you can file an individual chapter 11. Sometimes the real question is can they receive a discharge. For example, if an individual has filed a chapter 7 bankruptcy within the last 4 years, they are not eligible to receive a discharge in a chapter 13. However, that does not prevent the individual from filing a chapter 13. If they are behind with their mortgage, a chapter 13 can be used to pay mortgage arrears over 3 to 5 years even if they are not eligible for a discharge. Regarding chapter 7, a discharge will not be received if a chapter 7 is filed within 8 years of a prior chapter 7. In addition, the ability to file a chapter 7 and receive a discharge may be effected by other factors such as income compared to expenses. If an individual has too much disposable income, they could be forced to convert to chapter 7 or have their case dismissed. Equity in assets is also a factor in determining whether someone should file a chapter 7 or chapter 13 bankruptcy. Whether bankruptcy is an option and which type of bankruptcy are important issues that should be discussed with an experienced attorney before deciding how to proceed.
As discussed in http://info.legalzoom.com/can-item-added-bankruptcy-discharged-27099.html , Debt incurred after a bankruptcy petition is discharged cannot subsequently be added to the bankruptcy. In no-asset bankruptcies, debts not included in a petition, but incurred prior to discharge are discharged. In bankruptcies where assets were liquidated, a debtor must either re-open a bankruptcy to include a missing creditor or be responsible for the debt in full. An attorney can assist in reopening a case and filing an amendment with the court and a filing fee will need to be paid. If a creditor is not included in a Chapter 13 bankruptcy, the debt is not discharged and must be paid in full.
What do you do if you filed a Chapter 7 personal bankruptcy and received your discharge and then realized you forgot to include a creditor. Prior to 1996 the debtor was required to file a motion to reopen the bankruptcy, pay a court fee, then file an amendment to add the creditor. There was also a court fee involved in filing the amendment. However, in 1996, the Third Circuit Court of Appeals in Judd v. Wolff, in the appeal of a New Jersey case, concluded that in a no asset Chapter 7 bankruptcy case it would be a waste of the court's time to reopen a case to add a creditor when there is not going to be a distribution anyway. As a result, as long as the creditor has not been intentionally omitted from the bankruptcy schedules, the debt is eliminated even if the creditor was forgotten. Often a debtor will have their attorney write a letter to the creditor, citing Judd v. Wolf and advise of the impact of the case and the fact that the debt is discharged. Of course it is always better to list all creditors when the initial bankruptcy is filed. A credit report is a helpful tool in making sure all creditors are listed. However, if a creditor is forgotten, it can still be addressed.
Rebuilding credit after filing a Chapter 7 or Chapter 13 personal bankruptcy and receiving a discharge is an important question often asked by individuals filing bankruptcy. Whether the individuals live in Cherry Hill New Jersey, Blackwood New Jersey, Mount Laurel New Jersey or any of the many cities and towns in the area, years ago when those individuals filed for bankruptcy it was much more difficult to build up credit. However, that has changed to a large degree. In fact often people file bankruptcy at a point where their credit score is low from a number of defaults and the mere filing of the bankruptcy itself can be a huge first step towards rebuilding credit. However, there are other important steps to take in reestablishing credit.
It is important to understand that credit reports are often inaccurate. Consequently a few months after receiving a bankruptcy discharge it is highly recommended that you get a credit report and confirm that it properly states your financial circumstances. Debts discharged in bankruptcy should be reflected in the credit report as having been discharged. Sometimes for whatever reason a credit card may reflect as still being open and in default. In that circumstance you would want to contact the credit reporting company and provide them a copy of your bankruptcy schedules showing that the creditor had been included in the bankruptcy and ask that they correct their credit report. Another way to build up credit is to apply for a credit card or retail card. While the individuals should certainly be cautious especially if bankruptcy was caused by credit card debt, having a credit card where it is used and paid off each month will help build up credit. In addition, opening up a bank account is a good way to help demonstrate you are responsible. Also, it is important to make sure all payments, whether it is utilities, rent or your new credit card, are timely paid. Following these simple steps can help to rebuild credit after bankruptcy in no time.
Contrary to popular belief, student loans can be discharged in bankruptcy in certain circumstances. While most borrowers would prefer to be able to repay their debts, sometimes their financial situation requires another approach. One way to eliminate student loans is to file a Chapter 7 bankruptcy and show a hardship. Under the bankruptcy rules, hardship is difficult to prove, but not impossible. The Brunner Test must be applied. Under the Brunner Test, the debtor must prove three things. The first two are not that difficult. The debtor must show an effort was made to pay in the past. The debtor must also show there is no ability to pay at present. Under the third prong of the test, the debtor must show he or she will not be able to pay in the future. For example, if you are permanently disabled, you would have a very good chance of being able to discharge the debt.