Ocean County Bankruptcy Lawyers explain medical bills debt.

Thursday , 10, March 2016 Comments Off on Ocean County Bankruptcy Lawyers explain medical bills debt.

Bankruptcy Lawyer Jackson NJ. Can I file bankruptcy for medical bills that I cannot afford? The answer to this question, just as with any legal question, starts with “it depends”.

If depends if have good credit and want to preserve it, if you can afford to pay the medical bills with some type of assistance and if you will qualify for Chapter 7 or 13 bankruptcy.

Lets start with your credit. If you are not paying your medical bills for more than 90 days, you will likely result with a collection agency. That agency may start reporting to the credit reporting agencies that you are delinquent on your medical bills. If you don’t settle the debt the medical provider or collection agency you may even get sued and a have a judgment placed against you. None of the above is good for your credit and will take an excellent to good credit score down to a poor one rather quickly. Even worse with if faced with a judgment you are now open to wage garnishment or other collection procedures.

There are options to deal with medical bills and preserve your good credit.

With a skilled Attorney you can workout a settlement with the medical creditor.

If you are insured make sure to coordinate with your provider so that available insurance coverage is applied. If you are uninsured then explore options such as charity care. Hospitals are required to submit all claims for charity care should your qualify. This may result in the medical provider waiving a percentage of the bill. Many hospitals and other medical providers routinely waive or discount bills for patients who are uninsured.

For example, New Jersey’s Hospital Care Payment Assistance Program (HCPAP) mandates free or reduced-charge care to qualifying patients who receive necessary inpatient and outpatient services at acute care hospitals in NJ.
In addition, under the Hospital Care Assurance Program (HCAP), you may qualify for free or reduced hospital care, depending on your level of income. If you qualify, HCAP will partially or wholly cover expenses for medically necessary services. You should contact your hospital’s financial aid counselor to find out more information and apply for HCAP coverage.

Affordable Care Act (commonly referred to as Obamacare)

Most hospitals now operate as tax-exempt entities and in return provide free or low cost care. The ACA added Section 501(r) to the Internal Revenue Code, which contains four new requirements related to community benefits that nonprofit hospitals must meet to qualify for 501(c)(3) tax-exempt status. They are as follows:
• Conducting a community health needs assessment with an accompanying implementation strategy;
• Establishing a written financial assistance policy for medically necessary and emergency care;
• Complying with specified limitations on hospital charges for those eligible for financial assistance; and
• Complying with specified billing and collections requirements.

What this means to you is that each of these nonprofit hospitals must have in place a financial assistance policy that contains basic information on how to apply and what criteria they will accept. In addition, there must be a separate policy that states that the hospital will provide emergency medical care to all individuals, regardless of whether they qualify for financial assistance.

It means that there are limitations on hospital charges for financial assistance policy–eligible patients
needing emergency or medically necessary care, nonprofit hospitals may charge only the amounts generally billed to insured patients for the same services. The amount generally billed may be the Medicare fee-for service amount, the Medicaid amount, or a combination of Medicare and private insurance averages.

It means that these nonprofit hospitals must have billing and collection practices that are fair. Nonprofit hospitals may not engage in extraordinary collection actions before making a reasonable effort to determine if the patient is eligible for assistance under the hospital’s financial assistance policy.

Discharging your medical bills in bankruptcy.

If you are unable to settle your debt or qualify for financial assistance then your delinquent accounts will begin to how up on your credit report. And if the provider sues you and gets a judgment, it can garnish your wages or take other collection action. At this point bankruptcy may be a good option to eliminate the debt.

If your income is not more than chapter 7 allows and have assets with little or no equity, then a Chapter 7 bankruptcy may be the right fit. You don’t need to have a certain amount of debt to file for a chapter 7 and I have had clients file Chapter 7 on a single, but substantial, debt. A medical bill or bills will vanish in Chapter 7 bankruptcy.

Foreclosure lawyer in Howell NJ.

Our Monmouth County Foreclosure Defense Lawyers are knowledgeable as to how the banks make decisions when deciding what to do with a delinquent mortgage. Because of the foreclosure backlog as explained in this previous post the banks are willing to resolve delinquent mortgages rather than beginning the foreclose process against the homeowner.
It costs the banks time and money in order to go through the judiciary foreclosure process in New Jersey. It cost the banks money to hire a law firm to represent them in the process. It costs them even more money when the homeowner hires legal counsel to fight on their own behalf.
Consequently, the mortgage lenders have been forced to consider other options which just years ago they refused to entertain.
Some of the options that the banks may be open to include:
  • Mortgage Modification of Forbearance. You may be eligible for the Making Home Affordable Program, which is the first loan modification program offered by many banks. If you do no qualify for the Making Homes Affordable Plan, your bank may allow give a forbearance period of time in which you do not have to make payments . The bank may work with you on a payment schedule, temporarily, until you can get your finances healthy again. One of our experienced attorneys can help or you can contact on of New Jersey Citizen Action’s Loan Counselors.
  • Short Sale. By definition, a short sale is when a house is sold for less than what is owed. The difference between these two amounts is referred to as a deficiency. By law, a bank has the right to collect the deficiency, unless the bank agrees in writing to waive that right. If the bank does not agree in writing or if the agreement is poorly written or not enforceable, the lender may come after you at a later date to attempt to collect.We will make certain this agreement is clearly written, enforceable and that any debt in connection to your home loan is in your rearview mirror.
  • Your loan may get sold to an investor.  In some instances banks are eager to just sell your bad mortgage paper so that they can collect some cash and ascertain a specific loss for their books.  How the new investors decide to handle the property may come as a surprise to the homeowner. The investor most likely purchased the mortgage at deep discount and therefore can afford to offer the homeowner better modifications terms.
Our Monmouth County foreclosure defense attorneys office is currently helping many Eatontown, Jackson Township, Old Bridge, Ocean County, Howell Township homeowners resolve their mortgage arrears by working with mortgage lenders with some of these options.

Monmouth County Bankruptcy Lawyer explains the foreclosure process.

Wednesday , 29, April 2015 Comments Off on Monmouth County Bankruptcy Lawyer explains the foreclosure process.

Foreclosure lawyer in Manalapan NJ.

As a Monmouth County Bankruptcy Lawyer here are some common questions I get. How long does it take to foreclose my home? How much time do I have left in my foreclosed home? When is the Sheriff’s sale? All of these are common questions heard by the our Ocean County Foreclosure Lawyers.  When you fall behind on your mortgage payments the bank may begin the the process of foreclosing on your Monmouth County Home. There is common knowledge in today’s real estate marketplace that foreclosures are common occurrences.  That said many homeowner who face foreclosure are curious as to how the process works so that they can try to estimate how much time they have left in their homes or if there is a chance that they can fight it. In New Jersey we have what is call a judicial foreclosure process which makes so that the banks must initiate a lawsuit in court in order to take title and possession back to the property at question.

How the Judicial Process Starts:

Likely you will have missed in excess of two payments before the bank takes action. In some cases payments have not been made for a greater period of time. In most cases the bank will not take action until you have missed at least three payments. Keep in mind that all banks act independently and your banks policy, the number of properties your bank has in its portfolio, as well as, terms specific to your mortgage will influence how quickly your bank moves to begin the foreclosure process. Once your bank does decide to move forward  it will notify you by certified mail 30 days before it initiates any action against you as per N.J.S.A. 2A:50-56. This notice will tell you what you can do to “cure” the default – usually you have to pay the bank everything you owe.

Case Goes to Court:

At some point in time after receiving the notice pursuant to N.J.S.A. 2A:50-56, an estimated 30 – 90 days, the bank will file its complaint with the Office of the Superior Court Clerk, Foreclosure Processing Services. A copy of the complaint will be served upon you. After receipt and as you will be advised in the summons – you 35 days to answer the complaint.  If you answer and your answer (pleading )creates a dispute requiring a judicial decision, the foreclosure file is sent to the General Equity judge in the county of venue, that is, the county where the property is located. Thereafter, the dispute will be resolved by the General Equity Judge. This is the process a lawyer can use to find legal challenges to the banks right to foreclose and hold off the foreclosure until the challenges are resolved, sometimes in your favor. The lawyer will present your side of the case and any evidence and/or expert reports challenging the legality of the foreclosure. This process usually takes a couple of months, depending on the court’s schedule. If the court finds against you, it will enter a judgment in favor of the bank, giving the bank the right to sell your house. Successful challenges can come in the form of the statute of limitations. “In New Jersey, the statute of limitations is six years. While Judge Michael Kaplan of the Bankruptcy Court in Trenton affirmed a longstanding position he and others had taken during the foreclosure crisis that “No one gets a free house,” he said his court had retreated from that position in November “with a measure of disquiet and chagrin” after dismissing a borrower’s case in November 2014. It remains to be seen whether the dismissal of that case will set a precedent as courts in judicial states seek to clear their backlogs of foreclosure cases amid the consistently declining foreclosure volume four to five years after the crisis peaked.”

If you do not file a written answer the foreclosure complaint, you are admitting the claims of the foreclosure complaint. The lender-plaintiff can seek entry of a default against you and thereafter the lender-plaintiff can seek a default judgment. A foreclosure judgment either orders the sale of a particular property to satisfy a debt or awards title to the property to the plaintiff. A foreclosure judgment is not a money judgment that can be collected by wage garnishments or executions against personal property. However, a mortgagee may seek to recover any deficiency which remains following a foreclosure sale in a separate action filed in the Law Division. For residential mortgage deficiency actions, damages that may be recovered are limited to the difference between the mortgage debt and the fair market value of the property. An unanswered or uncontested matter usually takes about a month for a case to go through this administrative process


After the Judgment

After the Judgment for foreclosure the bank must then take further step to take back title to your home or pass title a 3rd party buyer.  In order to sell your home, it must advertise the sale weekly for four weeks in a local newspaper. That gives you at least another 4 weeks after the entry of judgment against you. If the bank has a number of other foreclosed properties in its portfolio, which many of the larger banks do, there is a higher rate of probability that the bank will not schedule the sheriff’s sale immediately following the judgment, you may have even more time.

More time

As explained above its is estimated that your have approximately four to six months from your first missed payment to a sheriff’s sale. Realistically, taking into consideration all the variables that play into the Foreclosure market you will likely have even more than the four to six months. Foreclosures in New Jersey are still backlogged substantially from the crises period. “New Jersey also took another unfortunate first place, passing New York for the average length of time to complete a foreclosure, at 1,103 days or just over three years, according to CoreLogic.” This of course is the average and each case has it own set of facts and circumstance. Either way it can’t hurt to have an Attorney look at your case.

Foreclosure can be avoided

Many foreclosures can be prevented by calling your mortgage company and asking to speak to someone in the “Loss Mitigation Department” about loan workout solutions, such as, a repayment plan, loan modification agreement, forbearance agreement, loan assumption, or a deed-in-lieu of foreclosure or short sale. You may also be eligible for various State and Federal foreclosure prevention program help. The New Jersey Department of Banking and Insurance http://www.state.nj.us/dobi/division_consumers/finance/foreclose_subprime.html and the New Jersey Housing Resource Center http://www.state.nj.us/njhrc/consumers/foreclosure/ web sites should be consulted. The sooner you ask for help, the easier it is to formulate a plan to save your home.

Until the entry of final judgment against you, you may “cure” your default by catching up on missed payments and late fees. Until the sheriff’s sale, you may “redeem” your property by paying off the loan, refinancing, or participating in a loan modification plan. As mentioned above loss mitigation of workout solutions may be available.

How can Bankruptcy Help

The “automatic stay” is the part of the federal bankruptcy law which immediately blocks a foreclosure from happening. The very act of filing your case “operates as a stay,” as a court order stopping “any act to… enforce [any lien] against any property of the debtor…  .” Once you are in bankruptcy is as a forum for debtors and lenders to work on a resolution when a debtor’s residential property is at risk of foreclosure. The LMP facilitates resolutions by opening and maintaining the lines of communication between the debtors’ and lenders’ decision makers. The LMP encourages the parties to finalize a feasible and beneficial agreement with the assistance and supervision of the Bankruptcy Court. Talk to one of Lawyers at Riviere Cresci & Singer LLC today about your home and how we can help.



Student Loan Default: Monmouth County Bankruptcy Lawyer

Tuesday , 13, January 2015 Comments Off on Student Loan Default: Monmouth County Bankruptcy Lawyer

Bankruptcy Lawyer in Marlboro NJ.

Monmouth County Bankruptcy Lawyers breakdown student loans. It is no secret the student loans are growing problem. In fact major media outlets across the board have been releasing articles and such about the growing problem. Adding fuel to this growing fire is the present status of the U.S. Bankruptcy Code and jurisprudence in the U.S. Bankruptcy Courts. It makes it very difficult (although not impossible) to discharge student loan debts. However, with the growing exposure and increased frequency of defaulting student loans the Courts and/or future legislation may start to change.

This change may result from efforts by crafty Lawyers and desperate student loan debtors who begin to challenge the status quo of the present status of the U.S. Bankruptcy Code and jurisprudence in the U.S. Bankruptcy Courts.

One such example, which serves a reference, is the Ninth Circuit recent decision which affirmed the bankruptcy court’s partial discharge of a debtor’s student loan burden. The Circuit Court arrived at its decision by applying a more relaxed application of “undue hardship.”  Hedlund v. Educational Resources Institute, 2013 WL 2232325 (9th Cir. May 22, 2013).  The Ninth Circuit emphasized that a debtor must make reasonable efforts to repay student loan debt rather than show extreme efforts to repay.  Id.  For example, the court concluded the debtor need not be required to move to another city or state due to low pay and underemployment in his area in order to qualify for a discharge of student loan debt.

This decision, as well as others not mentioned in this post, show that there may be a growing tide in which Courts are reassessing the harsh test set forth in Brunner, which is to date the seminal case on student loan discharge.  Although, it is safe to say that student loans are generally not dischargeable, there are certain cases in which it is worth a shot to try for a least a partial discharge. One thing that will not help your case, if the time ever came to try for a discharge, is completely ignoring your student loans (allowing them to default). Student loan debtors should monitor their loans closely. Take advantage of Income Based Repayment or Economic Hardship Deferment programs which may provide relief. Just ignoring your student loans and allowing them to default will put you on the right path to show “undue hardship” in t

Bankruptcy Lawyer in Freehold NJ.

Monmouth County Bankruptcy Lawyers explain the collections process. So, you are behind on your debt payments. Here is how the collections process works in a nutshell.

The Summons

The debt collector cometh when a lawsuit is filed against you and you get a summons and a complaint. The complaint is the legal document stating the factual basis of the debt and the relief the collector is seeking from the Court. The summons advises of when and where you need to file an answer (respond) to the complaint.

Generally, the summons and complaint will be mailed to you as most collections action are based in Special Civil Court.


Ignorance is not bliss! Always best to answer a complaint.  The answer is the legal document in which you state your defense to allegations in the complaint.  In New Jersey, you must submit your answer within 35 days after service of the summons. 4:6-1. If you fail to answer timely you may be subject to default judgment. Default judgement is not a good thing.

Your day in Court

Most cases settle before they reach the point of requiring and trial and judicial determination.  Most creditors want to settle their collections accounts and therefore, may agree to accept a lump sum payment of less than the total amount of your debt.  Either side may offer to settle the lawsuit at anytime. It is best to speak with an attorney to review your settlement paperwork. All cases in the Special Civil Part go to Bar Panel. Bar Panel Program utilizes volunteer attorneys who have practiced and have experience in Special Civil Part matters. All contested (answered) cases are scheduled for trial before a judge. The parties to the suit are required to appear on the scheduled date. Prior to the trial actually starting, the case is assigned to a bar panelist. Each panel consists of one volunteer neutral attorney who will discuss the case with the parties in an effort to settle the case. Should the case settle, the bar panelist will assist the parties in writing agreement/settlement terms as necessary.

If it is a special civil proceeding you will get notice of your Court date in the mail. You can always be proactive and call the Court clerk with your docket number and find out the Court date.

The trial allows both sides to present their evidence proving or disproving the debt. Most trials take no longer than a day or two.


At the end of the trial, the judge will enter a judgment. She or he will determine whether the case was brought within the Rules of the Court and if the debt is valid pursuant to NJ law. If not he or she will dismiss the case.  If there’s no reason to dismiss the case, the Judge will determine whether you owe the creditor anything and, if so, how much.

How Bankruptcy can help

Bankruptcy can discharge the underlying debt which you are being sued upon. This means the lawsuit will not go forward and the debt will eliminated. Of course every case has a different set of facts and requires legal analysis. You should consult with a Bankruptcy Attorney to see what is the best option for your case and your circumstances. We have an extensive Frequently asked questions section on our website. This may answer many of your initial questions about bankruptcy. You can always call us for a free consultation or submit a web inquiry on our contact us page.


Bankruptcy Lawyer in Neptune NJ.

What Happens When a Debtor Forgets to list a debt?  A common telephone call is one from a debtor expressing their concern that they forgot to list a creditor in their bankruptcy petition. Furthermore, they are concerned that they will still owe the debt as a result of their mistake.

Depending on whether the case is a Chapter 13, or Chapter 7, provides for differing results when a debtor forgets to list a creditor. We seek to avoid this mistake by having our debtors pull copies of their recent credit reports to make a forensic check of all of their reported debts. This generally provides us with the most up-to-date debt information.

However, the situation does arise where a creditor is simply omitted. This is nothing to worry about if it is an honest mistake. In cases where a debtor lacks good faith i.e.  the debtor had known about the debt for years, but neglected to amend their petition earlier. Or where the debtor’s omission was the result of fraud, recklessness or intentional design, this can result in the debt not being discharged because it would it would prejudice the creditor’s rights.

So, if you see a debt missing in bankruptcy paperwork bring it to your attorney’s attention. He/she will amend the petition if necessary. In most Chapter 7, cases it will not be necessary. This is because generally most Chapter 7, cases have no assets and the Trustee will furnish a report that he/she made a diligent inquiry into the financial affairs of the debtor(s) and into the location of the property belonging to the estate; and that there is no property available for distribution from the estate over and above that exempted by law, which is available to the listed creditors. In New Jersey there is long standing case law, Judd v. Wolf, that makes it very clear that in a no asset chapter 7 case a debt to an omitted creditor is discharged and the debtor is not obligated to specifically notify the creditor.

That said, the suggestion of sending the omitted creditor a letter letting them know that you filed for bankruptcy, with a copy of your Discharge Order enclosed, is a good idea. This way they will know not to attempt to collect the debt.

Finally, the question arises at what to do if your Bankruptcy case is already closed i.e. you have received your discharge and final decree. In the case of a no asset case the above still applies. In the case of a of Chapter 7, case with assets you should contact Riviere Cresci & Singer LLC to see about reopening your Bankruptcy case to have the forgotten debt included in your original Bankruptcy case and ultimately discharged.

The New Jersey personal bankruptcy attorneys at Riviere Cresci & Singer LLC can answer any questions you may have concerning filing Bankruptcy, or any general bankruptcy questions. If you live in New Jersey, including Howell, Jackson, and Monroe, Manalapan Lakewood call us for a free consultation to find out how we can help you.

Strip-off second mortgage in bankruptcy.

Saturday , 5, October 2013 Comments Off on Strip-off second mortgage in bankruptcy.

Bankruptcy Lawyer in Middletown NJ.

Strip-Off that second mortgage in a Chapter 13

A Cram-down, commonly referred to as a “strip-off,” is when a debtor strips off and avoids the secured status of the second mortgage because there is insufficient value in the property to secure any part of it. This is a great way for an underwater homeowner to dry out their property as will be explained further in this post.
Debtors have the ability to cram down second mortgages in Chapter 13 bankruptcy cases pursuant to Bankruptcy Code § 1322(b)(2). Unfortunately the New Jersey District court has joined a majority of courts, when it ruled in Cook v. IndyMac Bank, that the debtor, Cook, could not use section 506(d) of the Bankruptcy Code (the “Code”) to “strip off” a wholly unsecured junior lien.

It is the Chapter 13 plan which will “strip-off ” the second mortgage. In New Jersey it is not required to file an adversary proceeding to do so. A debtor may modify a secured creditor’s claim and cancel its lien to the extent permitted under 11 U.S.C.S. §§ 506(a),1325 by so providing in a chapter 13 plan without an adversary proceeding, objection to claim, or motion under Fed. R. Bankr. P. 3012. Lee Servicing Co. v. Wolf (In re Wolf), 162 B.R. 98 (Bankr. D.N.J. 1993)

In order to cram down a second mortgage, the house must be underwater to the extent that there is no equity whatsoever covering the second mortgage.  In other words, the value of the house must be less than the balance due on the first mortgage.
The debtor provides evidence of the homes value by supplying the Court with documentation supporting the valuation of the home.  When a mortgagee (lender) challenges the appraisal, which is not common, then the Bankruptcy Court will schedule an evidentiary hearing. At this hearing the Court decides what the value of the property is. The defense of the second mortgagee will most likely be that the debtor’s appraisal is inaccurate, and that the house is actually worth at least a dollar more than the balance due on the first mortgage.
Here is a real example of Lien Stripping in New Jersey*:

A single person was living in her home. Her home had a market value of $200,000. Her first mortgage has a principal amount of $180,000 and her second mortgage had a principal amount of $80,000. The first mortgage was secured by the property value. Initially it appears that the second mortgage does have value in the home that secured its lien.

However, the second mortgage was completely unsecured because even though there was equity of $20,000 remaining after the first mortgage, in New Jersey the debtor can use his/her homestead exemption which protects $21,625 above the first mortgage (for a married couple filing jointly this amount would be doubled).  In this case the debtor was protected for a home value up to $201,625.

So in this Chapter 13, we filed a plan stripping the second mortgage. The second lien was subsequently treated as an unsecured creditor. In this case the 2nd mortgage will received pennies on the dollar. The plan proposed was a 5% plan, the 2nd mortgage holder was to receive $4,000 (5% of $80,000) over a 5 year period and then nothing more. After this bankruptcy is discharged, meaning they stick to and complete the Chapter 13 bankruptcy plan the homeowner/debtor will get to keep her house. At the end of her plan her home would have dried out the second mortgage.

*Numbers, percentages and parties changed for simplicity.

The New Jersey personal bankruptcy attorneys at Riviere Cresci & Singer LLC can answer any questions you may have concerning filing Bankruptcy, or any general bankruptcy questions. If you live in New Jersey, including Howell, Jackson, Monroe, Manalapan and Freehold call us for a free consultation to find out how we can help you.

Military Service and Bankruptcy in New Jersey

Saturday , 5, October 2013 Comments Off on Military Service and Bankruptcy in New Jersey

Bankruptcy in Neptune NJ.

Military service presents a unique opportunity to serve our country. However, sometimes while performing those duties which call during times of service, difficult financial stresses may appear on the home front. Our Country’s representatives have enacted laws to help those in the military who are overwhelmed by debt in the United States.

Here in New Jersey we have many military bases including McGuire Air Force Base, Fort Dix, Fort Monmouth, Picatinny Arsenal, Loran Support Unit, Training Center Cape May, Naval Air Engineering Station and Naval Weapons Stations Earle. Generally speaking if you have more income those households the same size in the same county in New Jersey, there is a presumption that you cannot file a Chapter 7 bankruptcy.

As a bankruptcy lawyers in New Jersey we have filed numerous Chapter 7 bankruptcies for individuals and families alike who were beyond the income limits of the means test by working the test’s numbers downward to get our debtors under the presumption. Those same debtors went on to receive a discharge of their debts.

Veterans and Active duty military have unique set of exemptions to help them with the means test. The means test (income test) does not apply to certain Disabled veterans. If your disability is rated at least 30% and more than half of your debt was incurred while you were on active duty or performing a homeland defense activity, you don’t have to take the means test. This means you get to file for Chapter 7 bankruptcy regardless of how much income you make. For our reservists and national guardsmen, Congress has made a special exemption from the bankruptcy means test.  For members of the Reserves or National Guard, who file bankruptcy while on active duty, or within 540 days after release from active duty, they are excluded from all forms of means testing. Active duty servicemen and servicewomen are not excluded from the means test. However, active duty personnel serving in a combat zone are also excused from completing pre-bankruptcy credit counseling. Furthermore, active duty personnel receive protection under the Service members Civil Relief Act (SCRA).  The SCRA protects active duty military personnel from default judgments and evictions, and can even reduce the service member’s interest rates.

The New Jersey personal bankruptcy attorneys at Riviere Cresci & Singer LLC can answer any questions you may have concerning filing Bankruptcy, or any general bankruptcy questions. If you live in New Jersey, including Howell, Jackson, and Mount Holly, Browns Mills, Willingboro call us for a free consultation to find out how we can help you.

Discharging taxes in bankruptcy.

Saturday , 5, October 2013 Comments Off on Discharging taxes in bankruptcy.

Bankruptcy Lawyer in Long Branch NJ.

Can I Discharge my Taxes in Bankruptcy?

Can I Discharge my Taxes in Bankruptcy?
The answer to this question is time sensitive. Most often debtors come into our offices seeking advice on their back income taxes.  As you will read below, they can be discharged if you meet the criteria outlined.  Most other types of taxes cannot be eliminated in bankruptcy.

What Taxes Are Dischargeable In Chapter 7 Bankruptcy?

There is a series of inquires that must be made about taxes in order to determine whether income taxes can be eliminated in a personal bankruptcy filing. Finding the answer can be quite confusing and you should consult an attorney to find if and when your taxes might be dischargeable.  If you made a fraudulent return or willfully attempted in any manner to evade or defeat a tax this would subject your taxes to the exceptions to a discharge provided in 11 USC § 523. An exception from the discharge simply means that it is not discharged (eliminated). The IRS can object to efforts to discharge tax debts if they feel that the taxpayer filed fraudulent returns, willfully attempted to evade taxes, or engaged in a pattern of tax evasion.

First Inquiry: More than three years must have elapsed from the date that the tax return was “last due”. The 3-year period commences from the most recent date the tax return was due, including any extensions to file. For example, if the taxpayer filed an extension to August 15, the 3-year period starts on that date. Otherwise, if no extension was filed the date to use to calculate the 3-year period would be April 15, of the year proceeding the tax year being considered.

Second Inquiry: Second Inquiry: In order to qualify for dischargeability the taxpayer must have filed his/her tax return more than 2 years before filing the bankruptcy, pursuant to §523(a) (1)(B). If the IRS has filed on behalf of the taxpayer, because the taxpayer failed to file, this does not qualify as a “return.”

Third Inquiry: Third Inquiry: More than 240 days must have elapsed since the date that the IRS “assessed” the tax obligation. Tax assessments can be confusing! Obtain a copy of your tax transcripts and review them with your attorney to determine tax assessment dates

If you answered yes to all three of the above inquires your taxes are dischargeable.
Liens may still be in place after taxes are discharged: Even if you are able to discharge federal tax obligations that you owe to the Internal Revenue Service, they may still have a lien on your assets if the IRS obtained a federal tax lien.
What about Discharging New Jersey Income Taxes?
The same bankruptcy rules that apply to the IRS also apply to state tax obligations.
What Taxes Cannot Be Eliminated in Bankruptcy Filings?
Most other types of taxes cannot be discharged in a bankruptcy proceeding.  These include withholding taxes, fiduciary taxes, excise taxes, and sales taxes.  On a final note the burden is on the IRS to object to the discharge of a debtor’s income taxes. However,  if the income taxes are in fact non-dischargeable based on the basic rules, the failure of the IRS to object does not make the taxes dischargeable.

The New Jersey personal bankruptcy attorneys at Riviere Cresci & Singer LLC can answer any questions you may have concerning filing Bankruptcy, or any general bankruptcy questions. If you live in New Jersey, including Howell, Jackson, and Monroe, Manalapan Lakewood call us for a free consultation to find out how we can help you.

Bankruptcy Attorney Fee Payment Plan.

Saturday , 5, October 2013 Comments Off on Bankruptcy Attorney Fee Payment Plan.

Bankruptcy Lawyer Wall NJ.

How can I pay my Bankruptcy Attorney?

Here a question that is probably on your mind, “If I’m going bankrupt, how can I afford to pay an attorney?”  Here is an answer you will be happy to hear: Here at Riviere Cresci & Singer LLC we flexible and easy payment Bankruptcy Attorney Fee Payment Plans.  We will set up a plan that allows you to pay what you can afford, over a period of time which is convenient for you.  Still wondering how you will make any kind of payment plan? Keep in mind, once you have made the decision to file bankruptcy, you may be able to stop making payments on most of your unsecured debt like credit cards, medical bills, personal loans, etc. Eliminating these payments from your budget will free up some of your income, which can then be used to help pay for your bankruptcy fees.

When filing a Chapter 7, the Bankruptcy Code requires that your attorney fees be paid in full before your bankruptcy petition is filed, otherwise the lawyers’ fees are discharged along with the rest of your dischargeable debt. This is set up this way to ensure that you truly have a fresh start and the your attorneys don’t take money out of the bankruptcy estate to the detriment of the creditors.

When filing a Chapter 13, the courts will allow the attorneys to collect only a portion of the fees and have the remainder of the attorneys fees paid in the Chapter 13 bankruptcy plan. This makes it financially easier to get your Chapter 13filed and pay the attorneys over a 3 to 5 year period.

Everyone’s financial circumstances are different and you may be facing deadlines. You may be facing circumstances that prevent you from taking your time to pay (and file). You may have a pending foreclosure, repossession, and/or judgment/writ of execution. These types of creditor actions make timing an issue. With such a timing issue you may have no choice but to get your bankruptcy filed before a specific deadline, and in that case, you will have to pay in full when filing a Chapter 7, in order to get your bankruptcy filed so it protects you and your assets. Otherwise a Chapter 13, can still be paid a reduced and paid through a plan.

The New Jersey personal bankruptcy attorneys at Riviere Cresci & Singer LLC can answer any questions you may have concerning filing Bankruptcy, or any general bankruptcy questions. If you live in New Jersey, including Lakewood, Howell, Marlboro, and East Windsor, call us for a free consultation to find out how we can help you.