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 7 Before a Divorce

The Consequences of Filing a Chapter 7 Petition before a Divorce

Distressed manUnfortunately, one of the commoner causes of divorce is financial difficulty. Conversely, divorce is often a contributing factor to a bankruptcy filing. As a consequence, it’s not that unusual that a party to a divorce also becomes a party to a bankruptcy. But which should come first, particularly if you are seeking to discharge debts permanently under Chapter 7? The short answer: it all depends, but making the wrong decision can be disastrous.

A Chapter 7 bankruptcy filing can be extremely attractive to many people, as it allows you to wipe out certain debts, subject to the sale of property with non-exempt value. Whether you want to file a Chapter 7 before or after your divorce will depend on many factors and requires a careful analysis by an attorney working with your divorce attorney. Here are some of the questions that need to be answered:

  • How much debt do you have?
  • How much is joint debt?
  • What are your and your spouse’s income situations?
  • Will there be alimony or support to be paid? Will this be made easier by a discharge of other debts?
  • What property do you own? Who is going to get what as part of any property division?
  • Do you or your spouse have any ability to pay debts over and above support payments and basic living expenses?
  • What are the risks and benefits of a bankruptcy filing to each party? Does it make sense to wait until after the divorce is final?
  • Are the spouses cooperative or antagonistic? Realistic about their financial prospects?
  • Should a joint bankruptcy be filed? (If so, it is likely at least one spouse will have to have a separate bankruptcy attorney involved to review what is being prepared and submitted)

One of the more expensive and time-consuming aspects of a divorce can be the division of marital debts. If you have credit card or similar debt when you file for divorce, you can spend a lot of time and money litigating who will be responsible for what part of that debt.

If there is property with significant value to be divided in the divorce (other than pensions) careful consideration needs to be given to waiting until after the divorce is final. On the other hand, if you file for protection under Chapter 7 before your divorce is final, you may be able wipe out all credit card debt and significantly reduce the expense of completing your divorce. But if this leaves your spouse jointly liable after your bankruptcy discharge, the problems may not go away.

When and how to file a bankruptcy when a divorce is involved is complex. Filing a bankruptcy at the wrong time might easily backfire. A bankruptcy exposes all your financial dealings to scrutiny. Filing in order to get back at a spouse is generally a poor reason to file a bankruptcy; indeed, we have had cases where the spouse’s bankruptcy benefitted our client (the non-filing spouse) greatly.

If there is collusion in dividing property in a lop-sided fashion to avoid paying creditors, a bankruptcy can open up the entire process of negotiations to unwanted scrutiny by a bankruptcy trustee, and possibly a lawsuit to get back property fraudulently transferred. This is one of the considerations that a thorough review by a qualified bankruptcy attorney will deal with.

In a bankruptcy, unpaid alimony, support or other Domestic Support Obligations get highly favorable treatment. These debts cannot be discharged, and once a bankruptcy is filed, you will have to remain current on them.

The best course of action is to consult with an experienced bankruptcy attorney who is also knowledgeable about your state’s divorce laws. (Our office has extensive experience in both areas). The first meeting should not include your spouse or his attorney, but having your divorce attorney sit in may be a very good idea.

Handled properly, a bankruptcy may well ease the difficulty and expense of a divorce, benefitting everyone. Handled wrong, it can make a bad situation significantly worse for everyone involved.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we know the personal challenges 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 Neuner & Ventura 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.

Discharging Non – Support Debts to an Ex-Spouse

Using Bankruptcy to Discharge “Non-Support” Debts to an Ex-Spouse

In a Chapter 7 bankruptcy, you are allowed to discharge certain debts. “Domestic Support obligations”, e.g. child support, alimony and spousal support cannot be discharged in either a Chapter 7 or Chapter 13 case. But what about “non-support” debts to your ex-spouse, such as your obligation to pay money as part of equitable distribution of property in a marital property agreement or divorce judgment?

In a Chapter 7 case, any debt or obligation incurred as part of a divorce or separation judgment or agreement is not dischargeable, so long as the debt is due or payable to a spouse, former spouse or child. A debt owed to the spouse’s attorney for counsel fees also fits into this category. However, money you owe your own attorney can be discharged.

Frequently, marital agreements will provide that one person will pay or satisfy joint credit card or other debts that are the spouse’s obligation. These provisions can convert what otherwise might be a dischargeable credit card debt (as an example) into a non-dischargeable debt. You can discharge your debt to the credit card lender, but you will still have to pay up to the extent your spouse is also liable on that card.

How are Marital Debts other than Domestic Support Obligations treated under the Chapter 13 “Super Discharge”?

Chapter 13 provides a broader range of relief. Here, only “Domestic Support Obligations” [“DSO’s”] are non-dischargeable. Frequently, this generates disputes in court about whether a particular debt is a DSO or not. Bankruptcy and state family court judges can both make this determination. Labels applied are not conclusive. Courts will also look at the function served by the payment obligation, and other factors.

Note also, that in any Chapter 13 case, you must continue to pay all alimony, spousal support other DSO obligations, and if there are arrears, these must be fully paid through the Plan.

In a Chapter 13 proceeding, non-DSO debts owed to an ex-spouse are considered to be non-priority, unsecured debt, similar to medical bills and credit card obligations. Accordingly, these debts would be pooled with all other unsecured, non-priority debt. When you put together your reorganization plan, the amount that will go toward non-support debt will be based on a number of factors, including:

  • How much you owe on debts that must be paid in full under bankruptcy laws
  • The total amount of unsecured, non-priority debt
  • The length of your plan—anywhere from three to five years
  • The amount of administrative expenses for the bankruptcy
  • How much you can actually afford to pay
  • Requirements of the “Means Test” if applicable

The interplay of divorce and bankruptcy is always complex and requires the advice of an experienced counsel knowledgeable in both areas. At Neuner and Ventura LLP we have substantial experience in both areas. It may be wise for you and your divorce attorney to consult with us early in the divorce process to be guided to the best result possible.

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 bankruptcy? Your bank may freeze your checking account!

Most people filing a bankruptcy have money in one or more bank accounts. Under certain circumstances, and for one bank in particular, a bankruptcy filing could cause the accounts to be frozen by the bank, at least temporarily, despite the protections of the “automatic stay” the prevent creditors for taking control of a debtor’s property after a bankruptcy is filed.

Money in the bank is an asset of a bankruptcy estate which comes under the control of the trustee. But debtors are entitled to exempt a certain dollar amount of that money and keep it. Technically, the exemptions do not receive final approval until at least 30 days after the First Meeting of Creditors is closed, which will not happen for at least 60 days after the bankruptcy is filed.

Most bank loan agreements have provisions allowing the bank to “setoff” a debt in default against money the bank holds. (ie take the money to pay or pay down the debt that is owed). One would think that a bankruptcy filing would make this illegal, but years ago the US Supreme Court said that it was ok for a bank to “administratively freeze” a debtor’s checking or bank account for a short while, as long as the bank acted promptly to get bankruptcy court approval by a motion to lift the automatic stay. Thus, we tell our clients who happen to owe Bank A money to move their money out of that bank before filing bankruptcy.

A few years back, Wells Fargo Bank as a nationwide policy has started a program to check the accounts of any customer who files bankruptcy. If the total amounts on deposit exceeds a certain amount (I am told it is between $3500 and $5000), they immediately freeze the account and notify the trustee. I am told this started because a trustee successfully sued Wells Fargo for letting a debtor empty a bank account after a bankruptcy filing, taking money that was not the debtor’s to keep.

Most, but not all, courts have so far backed Wells Fargo up on this, but the practice is troubling. Supposedly, there is no harm because the trustee will promptly check out the account and authorize a release of the funds if they are properly exempt. Many trustees applaud the practice, citing cases where hidden bank accounts or under-reported account balances were revealed.

For the hapless but honest debtor, the practice can be traumatic. Suddenly, they have no money. Checks may start bouncing (and of course there are the resulting bank fees!). The trustee may be away or slow to react. Or unwilling to release the funds for one reason or another. Meanwhile, many people have automatic payroll deposits into their account. If the account is frozen this money becomes unavailable. Since earnings from personal services post-petition are not estate property, at least in Chapter 7, this means that the bank freeze has unlawfully seized money that the debtor is unquestionably entitled to. What about joint accounts or convenience accounts? In New Jersey, the money in a joint account generally belongs to the account holder that put it there. So does that mean that the non-debtor spouse has his money frozen too? A convenience account is an account where the debtor is the named account holder for someone else, typically an elderly or infirm relative. Same problem.

One bankruptcy court in New York has ruled that the Wells Fargo freeze violates the automatic stay. I am told this is on appeal.

Until the courts can get this right, people filing bankruptcy need to be aware, fully informed and prepared to avoid these problems.

How Chapter 7 Really Works When Reaffirming a Vehicle

Protecting Your Car When You File For Chapter 7 Bankruptcy Protection

If you face insurmountable debt, you can seek to permanently discharge debt by filing for protection under Chapter 7. The bankruptcy laws limit the type of debt that can be discharged, and also require that reaffirm the debt on any cars or vehicles on which there is a lease or purchase loan. If you own a motor vehicle that you want to keep but which is subject to a auto loan or lease (and assuming it does not have such a large amount of equity that it cannot be fully exempted from sale by a trustee) you still have to take certain steps to prevent a repossession after your bankruptcy discharge.

Reaffirming Your Car Loan in a Chapter 7 Proceeding

A reaffirmation is essentially a new agreement to repay the amount owed on your vehicle. To reaffirm a car loan, you will be required to sign an agreement stating that, in exchange for keeping your car, you agree to continue to make the payments on the car and to remain fully liable on the debt. In essence, this agreement takes the loan out of the debts that will be discharged. The bankruptcy court will review the proposed reaffirmation to make certain that the payment is one you can afford, and that having the car payment will not impose an unreasonable hardship on you and your family. If your attorney, acting as an “officer of the court” can certify to the court that the loan or lease is one you can afford based on your income and expenses, approval typically happens as a matter of course. If your attorney cannot do this, the Court will schedule a hearing to question you about the loan and to determine if it will nevertheless approve the loan.

You can also rescind a reaffirmation agreement within 60 days or at any time before your discharge, and return the vehicle without any further obligation.

If you do not agree to reaffirm the loan and offer to do so, the auto lender will have the right to repossess the vehicle even if you are current on payments. Many auto lenders, especially Ford Motor Credit, are vigorous about this. So to avoid the risk of repossession, an offer to reaffirm, and the signing of a reaffirmation agreement when presented, are necessary.

You want to be careful about entering into a reaffirmation agreement. By doing so, you are essentially agreeing that you will remain fully personally liable for all payments or money due under the car loan or lease without the protection of a discharge in bankruptcy. So, for example, if 6 months after your bankruptcy discharge you fall behind on payments and the lender repossesses then sells the car, it can still sue you for any unpaid balance or deficiency. For a lease, if you owe money at the lease end, you will have to pay up.

Of course, you are protected by the automatic stay, and the lender cannot call, write or take legal action to collect car payments from you until your discharge or until it gets an order for “stay relief”. But once this hurdle is crossed, you could lose your car even if you are remaining current on payments.

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

Heading for bankruptcy? Paying your children’s college expenses could create “clawback” headaches for them and their college

Many parents in financial difficulty still place a priority on helping their children with tuition and other college expenses. While this is entirely understandable, parents who pay colleges for their adult children could be creating problems for both their children and the colleges if they later file for bankruptcy protection.

Recent reports in the Wall Street Journal and elsewhere have exposed a growing trend: bankruptcy trustees are suing colleges to “claw back” money paid by parents in bankruptcy. This has led the colleges to seek payment from the students, or to withhold transcripts until the money is repaid. It has even spawn a proposed bill in Congress to prevent bankruptcy trustees from filing such suits.

The underlying legal theory for such “claw-back” suits is not that novel. Trustees have the right and indeed the obligation to pursue getting back money or property that a debtor in bankruptcy has “fraudulently” transferred, so the money can be made available to pay creditors (and to pay the trustee and his attorneys). The payment need not have been done with actual intent to defraud creditors. It is sufficient if it was made without the parent/debtor getting “reasonably equivalent value” in return for what is paid, and if the payment was made at a time the parent was insolvent or unable to pay current or anticipated debts.

In essence, the trustees argue, the parents paying the college education expenses of an adult child are making a gift to that child. Gifts are by definition not made for “reasonably equivalent value”. They take away money that could have been used to pay the parent’s creditors.  Love and affection are not considered “reasonably equivalent value”.

If the parent takes out a loan or co-signs a student loan for the child but all the money goes to the child or her college, the effect is the same. It is still an avoidable gift.

Ironically, if the parent making the payment is required to do so under a divorce settlement incorporated into a divorce decree, the problem disappears. Why? Because the parent has a legal duty to pay that is enforceable by the divorcing spouse, and by making the payment the parent is relieved of part of that obligation. This is no different than when one pays a debt that is owed. The corresponding reduction in debt creates reasonable value in exchange.

Generally, in New Jersey, parents do not have a legal obligation (absent a divorce situation) to support their children after they achieve the age of majority or become “emancipated”.

There are ways around this problem for parents in financial difficulty. One option is to file bankruptcy first, then pay the college expenses out of future income or assets that are protected in bankruptcy (such as pensions or profit sharing plans),  after the bankruptcy is over. But for most people in this situation, they and their children need to have a sober and honest discussion about what is practical and in every one’s best interests in the long run.

Careful planning and advice of qualified professionals is a must. These are difficult decisions and should be thought through carefully as part of a broad based plan for getting a “fresh start”. With years of trustee and bankruptcy experience, we have the ability to help distressed parents sort it all out.

Filing Bankruptcy Without Your Spouse

You may have personal financial issues that you brought into a marriage, or that really have little or nothing to do with your spouse. You can file a petition in bankruptcy without including your spouse, but how the two of you will be treated will depend in part on where you live and what property or debt you have together.

Selling Jointly owned property

In New Jersey, Pennsylvania and most states outside the western United States, Florida and Louisiana “community property” between a husband and wife does not apply. This means that unless a divorce has already been filed when the bankruptcy is filed, any property that titled exclusively to you, as well as your rights and interest in jointly owned property becomes part of your bankruptcy estate.

A bankruptcy will generally not remove the claims or interest of your spouse in jointly owned property. However, if the property has enough equity or value that your interest in it cannot fully be protected by exemptions available to you in bankruptcy, it can be subject to sale.

In New Jersey, even property that is held as “tenants by the entireties” (ie as husband and wife) can be sold by a bankruptcy trustee over the spouse’s objection. If that were to occur, the non-debtor spouse has certain rights and protections. First, the trustee has to show the court that the benefit to creditors from a sale outweighs the harm to the non-debtor spouse. If the value is high enough, this will commonly be the case. Secondly, the spouse is entitled to his/her share of the net proceeds after paying costs of sale and any mortgage or valid secured debt. Third, the spouse can outbid the proposed purchaser to buy out the debtor’s interest in the property.

This is a situation that absolutely requires careful consideration and advice from an experienced, knowledgeable bankruptcy attorney.

No Discharge of Joint Debt

If you do file for protection under Chapter 7 without your spouse, any discharge of joint debts will only affect your obligation. Even though your debt is discharged, your spouse will still be required to repay his or her portion.

The flip side of this is that your household income will still have to be used to pay your non-filing spouse’s debts and joint debt. If there is not enough money to do this, a joint bankruptcy filing may be needed.

These are situations that need careful and detailed review by an experienced bankruptcy attorney knowledgeable about both bankruptcy and divorce issues, as well as the process of trustee sales of assets. At Neuner and Ventura LLP, we have that background.

Contact Neuner & Ventura, LLP

To schedule 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. There is no cost or obligation for your first meeting.

Representing Clients across South Jersey

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