Risking the Loss of a Discharge because of Dishonesty

Signing a documentThe bankruptcy laws were put in place to give honest but unfortunate debtors a chance to return to financial stability. When you enter into bankruptcy, you are entering a fishbowl of sorts. All aspects of your financial life will be subject to examination by a trustee, the court or creditors. As a consequence, there are a number of circumstances where you can risk losing a discharge or having your discharge denied because of misrepresentation or dishonesty. As a general rule, once you have been denied a discharge, you may never again be able to pursue a discharge of any debts you had at the time of the denial.

Here’s how you can risk the loss or denial of a discharge.

  • You lie or make a false statement in any document or proceeding during the bankruptcy process. This can include falsification of assets or income, as well as misrepresentation of debts. When you file a petition in bankruptcy, you essentially make an oath that the representations you make during the process will be true and accurate. If it turns out that you made false statements of fact, or that there were material omissions in your filing, your discharge can be denied or withdrawn.
  • You conceal, destroy, alter or intentionally dispose of information relevant to your financial condition. This includes the destruction of documents that would indicate ownership of property or access to assets.
  • You transfer, remove, conceal, alter or destroy property that may be seized by the bankruptcy court to pay one of your creditors. This rule applies to all such acts within one year before the bankruptcy filing and after the filing.
  • You cannot explain the deficiency or loss of any assets.
  • You refuse to comply with any legitimate order issued by the bankruptcy court.

These problems can be solved or avoided through careful attention to detail and qualified, ethical advose of a bankruptcy attorney. Such advice is very important.

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



What is a Discharge of Debt?

Mortgage calculator. House, money and document.In a Chapter 7 or a Chapter 13 proceeding, a debtor is, with rare exceptions, seeking the “discharge” of debts. What does that mean? This blog post looks at what you can expect from a discharge in bankruptcy.

Fundamentally, a discharge means that you, as a debtor, are relieved of any personal liability for the debt. Your creditors can no longer file a lawsuit against you or attempt to collect the debt, by legal action, or otherwise to compel you to pay a debt. There are, however, some caveats:

  • A discharge does not mean that you cannot make voluntary payments to a creditor if you want to do so without being asked. For example, if you have a personal loan from a relative, and you have it discharged in bankruptcy, you no longer have a legal obligation to pay the loan off, but you can choose to do so.
  • A discharge only relieves you from liability for a debt. It has little or no impact on liens and encumbrances, such as mortgages. Accordingly, even though a mortgage lender cannot seek to collect money owed on a mortgage, the lender can still foreclose under the terms of the mortgage. The same principle applies to other types of secured debts, including automobile loans. Even though the lender may not take legal action to collect money from you the lender may still repossess property pledged as collateral, if it is otherwise legal to do so.
  • The discharge does not necessarily end your bankruptcy case or relieve you or your property from claims of a trustee. This is a common misconception. The case may continue, even though certain debts have been discharged, if the trustee is pursuing legal action, or obtaining possession and selling your non-exempt assets to satisfy creditors.
  • The discharge will end the automatic stay. When you file for bankruptcy protection, an automatic stay immediately goes into effect, preventing creditors from calling, writing, or taking any other action to collect a debt, other than through the bankruptcy proceeding. Once your discharge has been granted, the stay is lifted, so that any debts not included in the discharge may now be collected.
  • Not all debts are discharged. In particular, debts that you incur or that first arise from something that happens after your bankruptcy is filed will generally not be discharged. Debts that are not discharged can still be collected from you or your property after a discharge or after the automatic stay is lifted.

This only a summary of what can be more complicated when applied to your situation. An attorney can explain this is more detail.

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



Understanding the Discharge of Debt in Bankruptcy

Pile of billsMost people who have considered filing bankruptcy understand the fundamental difference between a Chapter 7 filing and a Chapter 13 petition. With a Chapter 7 bankruptcy, you may be able to discharge, or permanently terminate any obligation to repay, certain debts. Though discharge will occur in a Chapter 13, how you get there is different. Instead of subjecting assets to sale or liquidation, a Chapter 13 debtor restructures his/her debts, agreeing to repay creditors under new terms. A Chapter 13 Bankruptcy can discharge certain debts that are not dischargeable in Chapter 7 and there are limits and restrictions, though, on your right of discharge in a Chapter 7. Here are some of the debts you can and cannot extinguish in a Chapter 7 proceeding.

Dischargeable Debts in Chapter 7

A discharge will permanently release you from any obligation to repay a debt. Furthermore, your creditor will have no legal recourse to attempt to collect the debt. Under the bankruptcy code, there are 19 specific types of debts that cannot be discharged—all others generally qualify.

If you owe money for any reason, and that debt is secured by a lien, the discharge of the debt does not discharge the lien, unless the lien is removed in a separate proceeding. Accordingly, you may not owe any more on the obligation, but the creditor can still exercise the right to repossess the property under the lien. This is the subject of another article.

Non-Dischargeable Debts

Certain debts are always not discharged in both Chapter 7 and Chapter 13, and others can be discharged in Chapter 13 only. Here are some of them:

  • Child support or alimony “domestic support obligations”. Always not discharged.
  • Any other debt to a former spouse under a divorce judgment or marital property settlement is not dischargeable in Chapter 7 but can be discharged in Chapter 13.
  • In Chapter 13, or in a Chapter 7 where the Trustee has money to pay creditors, any debts not listed in your bankruptcy schedules
  • Unpaid income taxes, if a non-fraudulent tax return was filed. This is subject to complicated exceptions. Generally, if the return was last due over 3 years before the bankruptcy filing, the tax may be discharged. Note that most tax penalties ARE discharged.
  • Virtually all student loan debt, except in rare circumstances that qualify as “undue hardship” under a very hard test to meet.
  • In Chapter 7, amounts owed to governmental agencies for fines or penalties, except tax penalties for failure to pay or file tax returns. These CAN be discharged in Chapter 13 unless they were part of a criminal sentence.
  • Criminal fines, or restitution ordered as part of criminal sentencing.
  • Drunk driving or driving under the influence, if property damage or personal injury results.

There are also debts that may be discharged unless a creditor successfully object by filing a Complaint with the bankruptcy court. These include:

  • Purchases of luxury items on a credit card within 90 days of the bankruptcy filing, provided the total amount of such purchases exceeds $650
  • Cash advances of more than $925 within 70 days of a bankruptcy petition
  • Debts incurred through fraud, Consumer Fraud, misrepresentation or willful and malicious injury (eg assault or battery).

These rules are complex. The above is just a summary. If this is important to you, you should consult with a qualified and experienced bankruptcy attorney.

Contact Neuner & Ventura, LLP

We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, 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



How Will Bankruptcy Affect Your Present or Future Employment?

Will a Bankruptcy Filing Have an Effect on Your Current or a Future Job?

Paying bills onlineIf you are experiencing financial difficulty, you may be considering a bankruptcy filing. If you are in financial services, or a similar field, you may fear that you will be terminated if your employer discovers that you filed. You may also worry that a bankruptcy filing, as a matter of public record, will disqualify you for certain jobs in the future.

Your Current Job

Under the federal bankruptcy laws, any employer is expressly prohibited from terminating an employee, or from engaging in any retaliatory actions based solely on the employee’s having filed for bankruptcy protection. You cannot be transferred, demoted or denied any work-related benefits because you have filed for bankruptcy protection. This is generally true even if you are required to have a security clearance for your job. Experts say that people who have financial problems are at greater risk of being blackmailed. If you have sought protection through a bankruptcy proceeding, you general lower that risk.

The situation is different, though, if you have already been notified of a termination or any other change in your position, and then file for bankruptcy protection. A Chapter 7 or Chapter 13 petition won’t stop or suspend any employer action that began before the bankruptcy was filed.

Future Jobs

Whether you get hired is a bit different. The impact of a previous bankruptcy filing on your eligibility for future employment depends on whether your employer is a public or private entity. The bankruptcy law prohibits federal, state and local government agencies from using bankruptcy to make hiring decisions. No such rule applies to private employers.

Some firms, such as in the securities industry, have policies refusing to hire people who have filed bankruptcy. However, we know clients even in those fields who have gone back to work in those fields.

Whatever the situation, the important thing is how you deal with your bankruptcy. You still have your skills and abilities. If anything, going through the bankruptcy taught you important lessons. If the bankruptcy was caused by circumstances outside your control, or if you attempted to pay debts before resorting to it, these are factors that should be emphasized. It is also a good idea to bring these matters up and deal with them before the employer finds out. Definitely do not hide or lie about the bankruptcy. Lots of people file bankruptcy for good reasons, and move on to successful lives. You should be able to do so as well.

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



What Color Is Your Parachute: A Guide for Getting Control of Your Life

What Color Is Your Parachute: Still Relevant after 45 Years

In the aftermath of a bankruptcy, it’s not uncommon to find yourself looking for a new job. Loss of a job, income instability, or lack of income may be the biggest contributing factor to your financial problems. But looking for a job can be a painful, exhausting and “hit or miss” process. There are a lot of self-help books that promise to guide you through the process, but in our opinion, there’s one that stands head and shoulders above the rest: What Color Is Your Parachute, by Richard Bolles, initially self-published by the author in 1970 and now annually updated with the latest information and advice

The Fundamental Premises of the Book

According to Bolles, the traditional method of looking for a job—preparing and sending out a resume, responding to help wanted ads—is “heavily loaded toward failing the job hunter. Instead, Bolles still recommends (as he did in the initial version of the book) that a more successful method is to identify the places you want to work and then approach the people who work in those places that have the power to hire you. He cautions, though, that before you can choose those places, you need to do a lot of personal research and investigation—of yourself—so that you know what you want to do and where you want to do it, both geographically and institutionally.

Even though most of the basic tenets of Bolles’ book have remained unchanged over the last four decades, he has embraced technological changes, such as the Internet and social media. For example, he tells readers in his most recent edition that “Google is your new resume.” He also encourages job seekers to use Twitter, Facebook, LinkedIn and other sites to their benefit, as well as other, more targeted websites, such as Jobs With Friends.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we don’t just “sell” bankruptcies. We try to get our clients back on the road to financial stability and freedom. 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



Why You Shouldn’t Try to File for Bankruptcy Yourself

Why It’s Usually a Mistake to File Your Own Bankruptcy Petition

In today’s world, it’s not difficult to find publications and online resources that promote filing your own bankruptcy. Hiring a lawyer costs money, and lack of money is the reason you are considering bankruptcy. But too often trying to save money this way is “penny-wise and pound-foolish”.

But it’s almost always a bad idea to try to be your own lawyer in a bankruptcy proceeding. Here’s why:

  • You may file for the wrong reasons—you may file because you hope to permanently discharge certain debts, such as child support or alimony, only to discover after you have filed that those debts are not dischargeable.
  • You may file under the wrong chapter—Before 2005, almost anyone could file for discharge of debts under Chapter 7. You must now pass the “Means Test” a complex formula based on your household gross income for the past 6 months. When and how to apply this test has filled up volumes of case law.
  • You may put income or assets at risk—you need to know how to value these, how they are treated in bankruptcy, and what can be claimed for yourself as exempt. There are state and federal exemptions. Some assets do not even need to be exempted as they are automatically excluded from the bankruptcy estate. If you do not do certain things, your car could be repossessed after a discharge even if you are current on all your car loan payments.
  • You could permanently lose your right to a discharge—not making the proper disclosures, spending money you should not have, and many other mistakes could lose you your discharge, forever.
  • You may fail to file required documents, or miss bankruptcy court deadlines—The bankruptcy process requires more than simply filing some papers and discharging debts. You can quickly get in over your head and miss filing deadlines, which can ultimately prevent you from reaping most of the benefits of the bankruptcy process.
  • You could lose valuable rights by making gifts or paying off debts before your bankruptcy.
  • In addition, there are many types of motions that can or should be filed in a bankruptcy proceeding. It’s highly unlikely that you will know what needs to be filed or understand what the court requires.
  • The bankruptcy law requires that you receive credit counseling before you can qualify to file for bankruptcy protection. Without guidance from an attorney, you may seek and pay for advice from someone who does not meet the bankruptcy court’s definition of a credit counselor.
  • In a Chapter 13 case, the risk and complexity go up. Getting through Chapter 13 successfully is even more daunting for the untrained. But Chapter 13 may be just what you need to meet your needs and objectives.

Contact Neuner & Ventura, LLP

We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, 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



Filing Chapter 13 Before a Divorce

Filing Bankruptcy Before or during a Divorce?

Studies regularly show a connection between divorce and bankruptcy. Many people file for bankruptcy because of the financial challenges posed by divorce. Likewise, the underlying cause of many marital breakups is financial instability. If your marriage is in trouble, but you are also facing financial challenges, you want to give serious consideration to the potential benefits of a bankruptcy filing.

We generally counsel against filing a bankruptcy while a divorce is pending, but sometimes this is necessary. Doing this in hopes of “derailing” a divorce judgment or property distribution is usually fruitless or a practice that can backfire.

The interplay of bankruptcy and divorce is extremely complex and fact-sensitive. However, early review and consideration of the bankruptcy alternative for one or both spouses is a very good idea. That said, there are a few points that are generally valid.

First, unless you and your spouse have already worked out all the terms of an agreement, an ethical bankruptcy attorney will not represent both of you. Even where a joint bankruptcy filing is anticipated, separate counsel may be needed. Of course, one could do the primary and major work with the other providing independent review.

Second, a bankruptcy will not stop or protect the debtor from ongoing support or alimony obligations. It will not stop the entry of a judgment of divorce, or a family court’s deciding issues of custody or visitation.

Third, arrangements with your divorce attorneys for payment of their fees are fraught with difficulties and problems. This will need careful review.

Fourth, in a Chapter 13 case, equitable distribution obligations that involve payment of money (as opposed to distribution of property) can be discharged. In Chapter 7, this is not the case.

Fifth, timing is critical. A bankruptcy filing before a divorce is filed can potentially alter the outcome of a later property distribution, for good or ill depending on your point of view.

Sixth, the terms of a property settlement agreement or divorce judgment may end up taking certain debts out of discharge.
If you are in this situation, it is never too soon to consult with knowledgeable bankruptcy counsel. We recommend that you and your divorce attorney (if you have hired one) come in together to review the issues and strategies. If it then appears that a cooperative approach between husband and wife makes sense, those arrangements can be made.
At Neuner and Ventura LLP, we are in the unique position of having years of experience with both bankruptcy and divorce matters.

Contact Our Office

At Neuner & Ventura, LLP, we work hard to alleviate the stress, anxiety and confusion that come with a potential bankruptcy filing. We offer a free initial consultation to every client. We do, however, reserve the right to charge a fee to review any work done by another attorney. For an appointment, call us at 856-596-2828 or send us an e-mail. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey



Losing the Automatic Stay in Bankruptcy

When you file a petition in bankruptcy, whether in Chapter 7 or Chapter 13, (and if you are not disqualified as a “repeat filer”) you are immediately entitled to the protection of the Automatic Stay. The Automatic Stay is contained in the US Bankruptcy Code, and prohibits creditors from writing, calling, suing or continuing suits or collection action, or taking any other action (outside of the bankruptcy proceeding) to collect a debt. The automatic stay remains in effect until your bankruptcy discharge, with some exceptions. Here are the ways you can lose the protection of the automatic stay.

A Creditor Successfully Asks the Court to Remove the Stay

A creditor can always file a motion the bankruptcy court to lift the automatic stay “for cause”. The most common reasons are a default or arrears in payment. Also, if the lender can show that it is not “adequately protected” by its collateral, that may suffice. The most common circumstance for individual debtors is a failure to maintain insurance on a vehicle or other property where this is required under the loan documents.

If the Court vacates or “lifts’ the automatic stay, the creditor is then free to repossess or foreclose on the property and otherwise protect its interest. However, the creditor is generally not permitted to sue a debtor personally (except as a defendant in a mortgage foreclosure or similar legal action aimed at recovery of collateral). It can only proceed to recover its property.

Filing a Repeat Bankruptcy Within a Year of a Prior Petition

If you had a prior bankruptcy proceeding that was dismissed (other than because of disqualification under the Means Test or “substantial abuse “ provisions of Code section 707(b)) within a year of the current filing the automatic stay only lasts for 30 days. To keep it in place for longer than that, you must file a motion to extend it, and that motion needs to be heard and granted within 30 days. In other words, if you are in this situation, you and your attorney had better work fast.

If you had more than one such case dismissed in the preceding year, or if the dismissal was because you did not comply with a court order or the terms of a confirmed Chapter 13 plan, it is even tougher to get the protection of the automatic stay. First, the stay does not go into effect at all until the court orders it. Furthermore, the burden is on you to show that court that you are now acting in good faith deserve the automatic stay as being in the best interest of creditors. The bankruptcy court may extend the period of the stay under limited conditions, if it determines that the current filing is in good faith.

Missing Deadlines for Filing Statement of Intention

If you have secured debt in the bankruptcy, you must prepare and present to creditors a Statement of Intention, which advises creditors what you plan to do with the collateral. You must file the Statement of Intention within 30 days of filing your bankruptcy petition. If you do not, the automatic stay may be lifted.

The Automatic Stay is one of the most important and fundamental protections that a bankruptcy affords. There are many other situations where it may be at risk. Protecting yourself and the protection of the Automatic Stay requires the advice and representation of a qualified, experienced and diligent attorney.

Contact Neuner & Ventura, LLP

We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, 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



Avoiding the Means Test in Bankruptcy

When Can You Avoid the Means Test in Bankruptcy?

To qualify to discharge your debts under Chapter 7 today, you must typically submit to the “means test,” a formula designed to determine whether you have the resources to repay your creditors rather than simply ridding yourself of the debt. There are, however, certain conditions where you don’t have to take the means test.

The Business Debt Exemption

Referred to by some as the “business debt loophole,” this provision (set forth in Section 707 (b) of the Bankruptcy Code) states that the means test only applies to debtors with “primarily” consumer debt.

Unfortunately, when Congress enacted the new bankruptcy law in 2005, it did not provide a definition for the term “primarily.” As a practical matter, most courts have simply defined that as a simple majority. Accordingly, if more than 50% of your debts were incurred in a business or for business expenses, you don’t have to qualify under the means test.

Furthermore, the rules are not always crystal clear on what constitutes “consumer debt.” Some obligations, such as your mortgage for a primary home, are almost always considered consumer debt. But other real estate may be for your personal use or it may be considered an investment. Additionally, if a car was used exclusively or even primarily for work, it can be exempted from consumer debt. Credit card debt is customarily viewed as consumer debt, unless you can show that the credit card was used to further a business venture. Many courts hold that taxes are not a consumer debt.

The Disabled Veteran Exemption

You can waive the means test if you are a disabled veteran, under certain conditions. Your disability must be rated at least 30%, you must have suffered the injury in the course of your military duty, and you must have been discharged because of the disability.

The Reserve / National Guard Exemption

If you have been a member of the National Guard, or a reserve soldier in any branch of the U.S. military, and you were called up after September 11, 2001, you may seek an exemption from the means test so long as your debt did not predate the period of your service or arise more than 18 months after it ended.

Needless to say, the Means Test is complex and how it applies to you depends on your circumstances. The above discussion is necessarily general and may not exactly apply to you. Seek qualified legal advice.

Contact Neuner & Ventura, LLP

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



Addressing Student Loan Debt with a Chapter 13 Bankruptcy

Restructuring Student Loan Debt in Chapter 13

If you’ve accumulated substantial student loan debt, but don’t have the income to pay it off, you may be considering bankruptcy as a way of managing your obligations. Student loan debt can, in limited circumstances, be discharged in Chapter 7, but the requirements are strict. For more information, see our blog on the hardship discharge of student loans. In most instances, a Chapter 13 bankruptcy can provide partial relief, by holding off collection of student loans in default while these loans get partially paid.

In a Chapter 13 bankruptcy, you have the opportunity to use a court sanctioned repayment plan over 3 to 5 years. In exchange, for the entire 3 to 5 year period, you get the benefit of the automatic stay, which prohibits creditors from calling, writing, filing legal action or taking any other measures outside of the bankruptcy to collect a debt from you. The automatic stay goes into effect immediately upon filing your petition. It is fully applicable to student loans. It continues as long as you are in bankruptcy, and for Chapter 13, as long as you are making payments according to your approved plan.

While any unpaid balance on such loans will still be due at the end of the plan, you will have hopefully paid down the loans based on your actual ability to pay, and not based on what a student loan debt collector or collection attorney demands of you.

With a Chapter 13 filing, you can get immediate relief from attempts to collect on your student loans. In addition, student loans are considered unsecured debts in a Chapter 13 proceeding, similar to medical expenses or credit card bills. Accordingly, they don’t have priority and do not have to be paid off in full as part of the petition. The amount you will be required to pay monthly will be based on how much income you have left after payments to secured creditors.

The specific benefits of a Chapter 13 when you have unmanageable student loan debt include:

  • The ability to stop aggressive student loan debt collectors for a period of time.
  • The ability to pay on your loans based on your income and ability, while you pay off other obligations, so that, once your bankruptcy is complete, you can better afford to make student loan payments

Contact Our Office

At Neuner & Ventura, LLP, we work hard to alleviate the stress, anxiety and confusion that come with a potential bankruptcy filing. We offer a free initial consultation to every client. We do, however, reserve the right to charge a fee to review any work done by another attorney. For an appointment, call us at (856) 596-2828 or send us an e-mail. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey



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