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Dealing with Income Tax Debts under Chapter 13

A Chapter 13 “adjustment of debts” bankruptcy will allow you to pay off back income taxes over a three-to-five year period, frequently without incurring any additional interest or penalties, and even sometimes paying less of the tax itself. Power Against the IRS/New Jersey Division of Taxation Consumers file a Chapter 13 case instead of a “straight bankruptcy” Chapter 7 one for many reasons. Owing back income taxes is a major one. If you owe a lot of taxes, the significant advantages that it … [Read more...]

What a Straightforward Chapter 13 Bankruptcy Case Looks Like

The Steps of a Chapter 13 Case Under Chapter 13, you and your attorney propose a payment plan based on your ability to pay. Through this plan you usually pay back only part of your debts, and sometimes not much to many of your creditors. Your plan lays out how much you will pay each month in a single payment to all or most of your creditors. That amount is usually much less than you were paying before. You pay that amount for a period usually covering three to five years. At the end of that … [Read more...]

How to Surrender Your Home under Chapter 7 Bankruptcy

Including the Debts on Your Real Estate in Your Bankruptcy Case First, be aware that both Chapter 7 “straight bankruptcy” and Chapter 13 “adjustment of debts” can help you keep your house. Talk to an attorney so that you are well informed about your options, including what it would take for you to keep your home. Believe it or not, under some circumstances you can significantly reduce your monthly payments, and even reduce the debt against your house by tens or even hundreds of thousands of … [Read more...]

How to Save Your Home under Chapter 7 Bankruptcy

If You Are Current on Mortgage and Other Home-Related Debts A Chapter 7 “straight bankruptcy” is generally designed for more straightforward debt situations, including those on your home. If you are current on all obligations legally tied to your home, and you intend to keep your home and keep up on your mortgage payments, your home and your mortgage will very likely sail smoothly through a Chapter 7 case. This means being current not only on your mortgage (and any second or third … [Read more...]

Keeping a Vehicle by “Reaffirming” the Vehicle Loan

Chapter 7 Bankruptcy and Your Secured Debts A secured debt is one in which in which you essentially made two agreements with your creditor, the first involving the debt, the second involving the collateral. 1) You agreed to pay the amount you owe under certain terms, and 2) you agreed to surrender the collateral if you don’t pay the debt under those terms. A Chapter 7 “discharge” (legal write-off) of a debt erases the debt—the first of those two agreements—but does not affect your … [Read more...]

What a Straightforward Chapter 7 Bankruptcy Case Looks Like

A straightforward Chapter 7 case does the following: immediately protects you and your possessions and property from your creditors; enables you to hold onto everything you own; lets you keep or surrender any collateral based on your choice; and discharges (legally writes off) all your debts that you want to discharge. 1) Protects You Right Away The moment your Chapter 7 case is filed, virtually all collection efforts by creditors against you are legally stopped. This … [Read more...]

New Jersey College Loan to Assist State Students (NJCLASS)… A Loan with NO Class at all

Your child is in college and Federal financial aid isn’t enough to pay for tuition. You’re presented with an application for an NJCLASS loan issued by HESAA (Higher Education Student Assistance Authority) which your child asks you to cosign since these loans are based on credit worthiness. Your kid explains to you that their financial aid advisor said these are great loans with low interest rates. You happily sign the promissory note to make your child happy. You go about your business happy to … [Read more...]

Discharging Student Loans in Bankruptcy

Many people know when they come into the office that they won’t be able to discharge their student loans. In New Jersey, in order to discharge your student loans, you have to be able to prove an “undue hardship.” Of course, you’re thinking I have an “undue hardship” because I can’t make the payments on my loans. However, “undue hardship” is a legal term or art. In order to make your case for an “undue hardship” you have to pass what is known as the Brunner Test. The Brunner Test is a … [Read more...]

Bankruptcy, Co-Signers & Private Student Loans

Many people believe that private student loans are treated the same as Federal student loans. This is not true. Unlike Federal loans, which are regulated by the Federal Government, Private loans are based entirely on the terms and conditions included with the Promissory Note you signed. Many private student loan promissory notes contain an acceleration clause. An acceleration clause means that the entire loan defaults, and becomes completely due and payable when certain conditions are … [Read more...]

How does chapter 13 bankruptcy help individuals in debt?

Individuals who are having trouble repaying their debts, whether they live in New Jersey or some other state, have a few bankruptcy options, including filing Chapter 13. This type of bankruptcy is also known as the wage earner's plan because it helps regular-income earners develop financial plans so that they can repay part or all of their debts. With Chapter 13 bankruptcy, individuals have the chance to prevent foreclosure on their homes, whereas Chapter 7 means that the individuals liquidate … [Read more...]

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