Archives for January 2017

How Condo Fees and Assessments are Treated in Bankruptcy

If you are struggling to meet your financial obligations and you live in a condo or are part of a homeowners association, you need to be careful with respect to any dues or assessments—the bankruptcy may extinguish your personal liability, but the homeowners’ association or condo association may still be able to enforce a lien on the property. Here’s how it works.

If you file a liquidation proceeding under Chapter 7, any HOA or condo dues owing at the time of the petition can be discharged—you won’t have to pay them. But the discharge is only with respect to your obligation to pay the debt. The lien remains and the lienholder has the right to enforce the lien—to foreclose on the property to collect the amount due. If you don’t keep the house and it goes to a foreclosure sale, or is sold to a new buyer, the lienholder will typically collect the amount due at the time of closing or out of the proceeds of the foreclosure sale.

In addition, any fees, assessments or dues accruing after the bankruptcy filing are not discharged. Again, the HOA or condo association may choose to place a lien on the property, hoping to collect out of the proceeds of a foreclosure or other sale. But the lienholder may instead opt to enforce the lien against you.

If you opt not to stay in the house, the HOA or condo association will have little recourse. However, if you do stay in the home, you will want to make arrangements to pay any past due assessments, fees or dues, as the lien that attaches to them will remain in force.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we provide a free initial consultation to every client. To set up a meeting, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

The Vehicle Cramdown Procedure in Bankruptcy

If you have come to the conclusion that a bankruptcy filing is the best way for you to get your finances under control, but you really need your vehicle to be able to work after the bankruptcy, you may want to consider what’s known as a “cramdown,” a procedure whereby you can keep your car, but significantly lower the amount you owe on it.

The bankruptcy laws allow cramdowns because of the distinction between secured and unsecured debt. Under bankruptcy laws, you typically cannot discharge secured debt—debt that is backed up by a lien on property—and still keep the property. Unsecured debt, though, can generally be discharged. When you have a car loan, it’s only the fair market value of the vehicle that’s secured by the lien. Anything you owe above that is unsecured debt and can be discharged.

There are specific criteria you must meet, though, to successfully go through the process:

  • You must owe more on your car than it is worth—This is known as being “under water” on your car loan. You will only be eligible for a cramdown if you are under water. Technically, the purpose of a cramdown is to reduce the principal balance on your auto loan to the fair market value. As part of the process, though, you may be able to negotiate a new, lower, interest rate, or extend the term of the loan, thereby lowering your monthly payments.
  • Cramdowns may only be done in Chapter 13 proceedings—You can only cramdown a car loan in Chapter 13. You can’t exempt your car from the bankruptcy sale in a Chapter 7 petition and simultaneously obtain a cramdown.
  • Cramdowns are generally not available for recent vehicle loans—Under the law, a vehicle loan may only eligible for cramdown if it was signed more than 910 days before your bankruptcy filing—about two and a half years.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we provide a free initial consultation to every client. To set up a meeting, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

The Most Effective Way to Discharge Debt – Be Honest with Creditors

In a Chapter 7 liquidation bankruptcy proceeding, you have the right to discharge certain debts in exchange for the sale of non-exempt property. That right, though, is not absolute. If there’s evidence that you have been less than forthright with the bankruptcy court, or that you have engaged in wrongful conduct, the bankruptcy court has the power to deny a petition for discharge. Here are some of the situations where your Chapter 7 discharge petition may run into problems.

Dishonesty in Obtaining Debt

If you incurred debt through false pretenses, through fraud or misrepresentation, or through illegal acts, that debt may not be subject to discharge. For example, if you embezzled $100,000 from your employer, but spent the money, you cannot file for bankruptcy protection to discharge the restitution requirement. Likewise, if you obtained credit cards or consumer loans through fraud or misrepresentation, including the falsification of income or debt, the creditor to whom you owe that money may ask the bankruptcy court to deny discharge.

Another way to lose the right to discharge debt is to fail to disclose income or debt during your bankruptcy proceeding, or to otherwise mislead or lie to the bankruptcy court. You must fully disclose all information about the assets, debts and income, and ignorance will typically not be an acceptable defense. Hire a bankruptcy attorney, tell your attorney the truth about everything, and you’ll be fine.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we know that the bankruptcy process can be intimidating and confusing. We offer a free initial consultation to every client. For an appointment, call our office at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

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