Free Consultation

(856) 988-9055

SCHEDULE CONSULTATION NOW

SCHEDULE CONSULTATION NOW

  • This field is for validation purposes and should be left unchanged.

Bankruptcy on the Rise for Older Americans

by

Senior Citizens Use Bankruptcy to Combat Increased Medical Bills

Bankruptcy on the Rise for Older AmericansAccording to a study from the Consumer Bankruptcy Project, more and more retirees and elder Americans are turning to bankruptcy to fend off financial problems. The study indicates that the number of individuals 65 and older who are seeking bankruptcy protection has tripled since 1991. Over a three-year period from 2013 to 2016, an average of 3.6 bankruptcy petitionswere filed for every 1,000 people over the age of 65. Less than three decades earlier, that number was just 1.2 per 1000.

Researchers found that the primary cause for the increase is the shift over the last 30 years of the financial risks and needs of retirement from the government and employers to individuals, who are bearing more financial responsibility as social safety nets dwindle. Most people must wait longer to collect social security benefits. In addition, employer-sponsored retirement plans, which used to be more or less guaranteed, have been replaced with voluntary retirement options, such as 401(k)s and IRAs.

Increasing Medical Costs the Primary Factor

According to an article in the American Journal of Public Health, approximately two of every three bankruptcy filings in the United States are related to unmanageable medical debt?more than half a million petitions every year. With health costs rising every year, it’s estimated that a couple retiring in 2019 will need nearly $300,000 to pay for medical care in retirement.

How Bankruptcy Filing Can Help Senior Citizens

In a Chapter 7 bankruptcy, you typically can discharge most types of unsecured debt in exchange for transferring certain non-exempt assets to the bankruptcy estate to be liquidated or sold to make payments to creditors. Medical debt is one of the most common types of debt discharged in Chapter 7. In addition, there are exemptions under the bankruptcy code that allow you to keep most, if not all, of your property.

Contact Our Offices

At the Law Office of Andrew B. Finberg, LLC, we offer experienced bankruptcy counsel to individuals in Burlington, Camden, and Gloucester counties in New Jersey. To schedule an appointment, call our office at 856-988-9055 (toll-free at 866-721-7269) or contact us online.

Bankruptcy is Not an Indication of Failure

by

Many Famous (and Ostensibly Successful) People Have Filed for Bankruptcy

Bankruptcy is Not an Indication of FailureThere’s an unfortunate stigma attached to the American bankruptcy laws?that the need to seek protection in bankruptcy is a telltale sign of financial mismanagement, irresponsibility or misbehavior. While those factors have likely contributed to many bankruptcy petitions, the mere fact that you need the protection of the bankruptcy laws is not a sign of failure. In fact, with many potential creditors, it can be perceived positively, showing that, instead of letting your situation get worse, you’re willing to take the necessary steps to get your finances under control.

As a testament to the real purpose of the bankruptcy process?to allow individuals and businesses to get a fresh start, consider some of the “successful” people throughout history who used the bankruptcy process to rebuild their lives:

  • Abraham Lincoln?Our 16th president, considered by many historians to be the greatest, was a small shopkeeper before he became a lawyer. Lincoln and his business partner incurred substantial debt and essentially went bankrupt (there were no federal bankruptcy laws at the time), eventually repaying all creditors over a 17-year period.
  • Walt Disney?Disney formed one of the first motion picture studios in 1920, at the ripe old age of 19. He had a financial back and hired a team of animators. Unfortunately, his back went broke before he could start generating any revenue and he was forced to file for bankruptcy protection just a year into his business career. Disney almost filed for protection again in 1937 when production costs for Snow White and the Seven Dwarfs ballooned to $1.5 million, three times the amount budgeted. At the time of his death, in 1966, he had a net worth of about $5 billion.
  • Dave Ramsey?One of the most famous and respected financial advisors in the world, Ramsey nearly lost his shirt when he over-invested in highly leveraged real estate in his late 20s. After emerging from bankruptcy, he started small, advising couples in local churches. His current estimated net worth–$55 million.

Contact Our Offices

At the Law Office of Andrew B. Finberg, LLC, we offer experienced bankruptcy counsel to individuals in Burlington, Camden and Gloucester counties in New Jersey. To schedule an appointment, call our office at 856-988-9055 (toll-free at 866-721-7269) or contact us online.

Determining Who Gets Paid First in a Chapter 13 Bankruptcy Proceeding

by

The Priority of Creditors

Determining Who Gets Paid First in a Chapter 13 Bankruptcy ProceedingAs a general rule, if you’re seeking protection in a bankruptcy proceeding, it’s because you don’t have enough income or assets to satisfy all your creditors and meet your day-to-day needs. If you did, there would be no need for the bankruptcy filing. Accordingly, one of the basic determinations made as part of any bankruptcy filing is how the available assets or resources will be allocated among creditors. This is generally referred to as the “priority” of creditors.

Pursuant to bankruptcy laws, creditors are divided into “classes.” As a general rule, the highest class of creditors is paid in full before any subsequent class receives anything. If there are not enough assets to fully satisfy all members of a class, each member takes an even percentage of the assets available. There are specific priorities of distribution in all types of bankruptcy proceedings, including Chapter 7 and Chapter 13.

The Priority of Creditors in a Chapter 13 Bankruptcy Proceeding

In Chapter 13, the priority order of payment is as follows:

  • Administrative claims, including trustee fees and attorney’s fees?Unless you have already paid your attorney (typically unlikely), the trustee first will pay your legal counsel and take out a percentage to cover trustee fees.
  • Secured debts?A secured debt is one for which property has been pledged as collateral, such as a mortgage or car note.
  • Priority debts?Priority debts (or claims) are generally non-dischargeable obligations that receive special treatment under the bankruptcy laws. The most common types of priority debts are family law obligations (e.g., child support and alimony) and tax arrearages.
  • Unsecured debts?Any debt that is neither a priority debt nor a secured debt is considered to be general unsecured debt. Examples include credit card debt, medical bills, and personal lines of credit. These are the last creditors to be paid out of the bankruptcy estate.

Contact Our Offices

At the Law Office of Andrew B. Finberg, LLC, we bring comprehensive bankruptcy counsel to individuals in Burlington, Camden, and Gloucester counties in New Jersey. To schedule an appointment, call our office at 856-988-9055 (toll-free at 866-721-7269) or contact us online.

Preferences in Bankruptcy

by

What Are They? How Do They Affect Your Bankruptcy Filing?

Preferences in BankruptcyWhen you file for protection in bankruptcy, an automatic stay immediately goes into effect, prohibiting creditors from contacting you or taking action to collect the debt outside the bankruptcy proceeding. The stay generally remains in place until your bankruptcy proceeding is finished. But the bankruptcy process is not just forward-looking. The bankruptcy trustee and the court also look back at your actions in the period leading up to your filing. One of the things they look for are what are known as “preferences.”

What Is a Preference in Bankruptcy?

A preference, or preferential debt payment, is the conveyance of property or transfer of funds to a specific creditor within a certain period of time prior to the filing of a bankruptcy petition. If the bankruptcy court concludes that such a payment is preferential, that transaction can be voided and the creditor will be required to return the payment so that it can become part of the bankruptcy estate.

  • Transfers made within 90 days of a bankruptcy filing?The bankruptcy court has the power to void any payments in excess of $600 (in aggregate) to a specific creditor within a 90-day window prior to the initiation of bankruptcy proceedings. However, it also must be shown that you were insolvent at the time of the transfer (i.e., that your debts were greater than your assets) and that the transfer resulted in the specific creditor receiving more than they would have recovered in the bankruptcy process.
  • Transfers to insiders?A different rule applies to transfers to persons considered to be “insiders.” For purposes of bankruptcy law, an insider includes “relatives, any partnership in which the debtor is a general partner, any general partner of the debtor, or any corporation in which the debtor is a director, officer or person in control.” The dollar amount for preferences is the same for insiders as others ($600 in aggregate), but the bankruptcy court can look back as far as one year. A transfer to an insider will be considered a preference only if the debtor was insolvent at the time of the payment and the conveyance resulted in the creditor receiving more than they would have obtained through the bankruptcy proceeding.

Contact Our Offices

At the Law Office of Andrew B. Finberg, LLC, we bring comprehensive bankruptcy counsel to individuals in Burlington, Camden, and Gloucester counties in New Jersey. To schedule an appointment, call our office at 856-988-9055 (toll-free at 866-721-7269), or contact us online.

The Cramdown Option in a Chapter 13 Bankruptcy Filing

by

What Is It and How Can It Benefit You? What Are the Limitations on Personal Property?

An image of a wooden game with the word chapter thirteenWhen you are seeking protection from creditors through Chapter 13 debtor reorganization, one option to consider is what’s known as a cramdown. A cramdown typically allows you to pay less than the actual principal balance on secured debt. The cramdown is most often used for motor vehicle debt but, with some restrictions, also may be used with other property. The application of the cramdown option to mortgage debt is significantly limited.

What Is a Cramdown?

A cramdown is a Chapter 13 strategy that allows a debtor to reduce the principal balance of a secured debt to the fair market value of the collateral. The cramdown option typically is used when a loan is “under water,” or when the principal balance due is greater than the fair market value. A cramdown allows you to pay the reduced amount in equal installments over the term of your reorganization plan. The principal amount due in excess of the fair market value is typically considered unsecured debt and treated like credit card and similar obligations.

Why Should You Cram Down a Debt?

When you cram down a debt, you’ll be able to keep the collateral?e.g., a car or truck?while making reduced payments. In addition, because you’ll pay the reduced balance over the term of the reorganization, you’ll own the property free and clear when your Chapter 13 is completed. You also may be able to negotiate a reduced interest rate for the payments. Depending on where you were in the term of the original note, you also may secure a longer period to repay the debt, further lowering your payments.

Cramdown Restrictions on Personal Property

There are two limitations on cramdowns of personal property:

  • For motor vehicles, the 910-day rule means that the cramdown option may be used only if the purchase of the vehicle was made at least 910 days before the filing of your bankruptcy petition.
  • The one-year rule applies to all other personal property and prohibits cramdowns of debts secured by assets owned for less than a year.

Contact Our Offices

At the Law Office of Andrew B. Finberg, LLC, we bring comprehensive bankruptcy counsel to individuals in Burlington, Camden and Gloucester counties in New Jersey. To schedule an appointment, call our office at 856-988-9055 (toll-free at 866-721-7269), or contact us online.

Happy Veterans Day 2019

by

Happy Veterans Day 2019

“We remember those who were called upon to give all a person can give, and we remember those who were prepared to make that sacrifice if it were demanded of them in the line of duty, though it never was. Most of all, we remember the devotion and gallantry with which all of them ennobled their nation as they became champions of a noble cause.” — Ronald Reagan

Saving Your Home from Foreclosure with a Bankruptcy Petition

by

Is It Possible? Is It in Your Best Interests?

Saving Your Home from Foreclosure with a Bankruptcy PetitionThough mortgage debt is not the most common cause of a bankruptcy filing, it’s not unusual for a bankruptcy petition to include property that is in or near foreclosure. If you are struggling to meet your financial obligations and you have a substantial mortgage, you may be wondering if you can get the protection of the bankruptcy laws and still keep your home. While it may be possible, a better question to ask may be whether it’s in your best interest to keep your home.

Using a Bankruptcy Filing to Avoid Foreclosure

It’s important to understand that a bankruptcy proceeding won’t necessarily make a foreclosure proceeding go away. Technically, it will only suspend the process. There’s an “automatic stay” that goes into effect when you file for bankruptcy, prohibiting creditors from calling, writing or taking legal action (other than through the bankruptcy proceeding) while the stay remains in effect.

It’s also important to understand that if you’re far behind on your mortgage, you cannot discharge the mortgage debt in Chapter 7 and keep your home. While you may be able to exempt your home from inclusion in the bankruptcy estate (which means it can’t be sold by the court to satisfy your creditors), the lien on the property will not be extinguished by the bankruptcy proceeding. Your lender can still execute the lien and seek to repossess the property, unless you work out new payment arrangements.

Typically, the best way to use bankruptcy to avoid foreclosure is through Chapter 13. This allows you to reorganize your finances while giving you up to five years to repay the mortgage arrears. You must, however, make all agreed payments in a timely manner or the Chapter 13 may be terminated.

Before you file a bankruptcy petition, though, ask yourself if it’s in your best interest to keep the house. Can you really afford it? How much equity do you have in the house? If you think you think a Chapter 7 or Chapter 13 is right for you, contact our office for a free consultation.

Contact Our Offices

At the Law Office of Andrew B. Finberg, LLC, we bring comprehensive bankruptcy counsel to individuals in Burlington, Camden and Gloucester counties in New Jersey. To schedule an appointment, call our office at 856-988-9055 (toll-free at 866-721-7269) or contact us online.

Fraudulent Transfers in a Bankruptcy Proceeding

by

What to Do When You Have Been Accused of Wrongfully Disposing of Assets

Fraudulent Transfers in a Bankruptcy ProceedingThe bankruptcy laws were enacted to give debtors a “fresh start”, and to ensure that petitioners were not rendered destitute. Accordingly, even in a Chapter 7, where you can permanently discharge debt, you are allowed to keep a certain amount of your property. You may have a desire to minimize the impact of a bankruptcy filing by giving or transferring property to another person immediately before or even after you file your petition. It’s rarely a good idea, unless you can show that you sold the assets for fair market value. Otherwise, it will be considered a fraudulent transfer.

If the trustee or a creditor suspects that you wrongfully transferred assets for the purpose of keeping them out of your bankruptcy estate, you may face legal action within the bankruptcy, through what’s known as an adversary proceeding. If that happens, here’s what you should do:

  • Recognize that it’s a serious matter?Hire an experienced attorney to protect your rights. Gather any documents you have relating to the transaction, showing when the transfer was made, why it was made and what the fair market value of the item was when you sold it.
  • Understand that fraud requires intent, so a fraudulent transfer must have been done with knowledge (or reason to know). Look for evidence that show that you didn’t know of the transfer, that you didn’t know it was wrongful, or that you had no intent to keep assets away from your creditors.

Contact Our Offices

At the Law Office of Andrew B. Finberg, LLC, we bring comprehensive bankruptcy counsel to individuals in Burlington, Camden and Gloucester counties in New Jersey. To schedule an appointment, call our office at 856-988-9055 (toll-free at 866-721-7269) or contact us online.

Map Image

Main Office

525 Route 73 South Suite 200 Marlton, NJ 08053

Call The Firm

PHONE: (856) 988-9055 FAX: 856-988-9678

E-mail

andy@sjbankruptcylaw.com

SOCIAL MEDIA

© 2020 The Law Office of Andrew B. Finberg, LLC.
All Rights Reserved. Sitemap | Privacy Policy | Disclaimer