Bankruptcy Filings in US Healthcare Sector Rise in 2023

Bankruptcy Filings in US Healthcare Sector Rise in 2023https://t.co/5lwbXnV5ch

— Straffi & Straffi Attorneys at Law (@StraffiStraffi) February 28, 2025

from Straffi & Straffi Attorneys at Law https://x.com/StraffiStraffi/status/1895463334885183934

Justice Department and Department of Education Announce Continuing Success of Student-Loan Bankruptcy Discharge Process justice.gov/archives/opa/p…

Justice Department and Department of Education Announce Continuing Success of Student-Loan Bankruptcy Discharge Processhttps://t.co/XETFUs49if

— Straffi & Straffi Attorneys at Law (@StraffiStraffi) February 28, 2025

from Straffi & Straffi Attorneys at Law https://x.com/StraffiStraffi/status/1895460523380183302

This Pin was discovered by Straffi & Straffi Attorneys at Law. Discover (and save!) your own Pins on Pinterest.

This Pin was discovered by Straffi & Straffi Attorneys at Law. Discover (and save!) your own Pins on Pinterest.

from Straffi & Straffi Attorneys at Law https://www.pinterest.com/pin/1097400634207081467/

This Pin was discovered by Straffi & Straffi Attorneys at Law. Discover (and save!) your own Pins on Pinterest.

This Pin was discovered by Straffi & Straffi Attorneys at Law. Discover (and save!) your own Pins on Pinterest.

from Straffi & Straffi Attorneys at Law https://www.pinterest.com/pin/1097400634207093172/

Do Bankruptcies Show Up On Background Checks?

The purpose of filing for bankruptcy is to provide individuals with a chance to reconcile with their creditors and begin anew. Nevertheless, the presence of bankruptcy on your credit report could impede your future plans, such as obtaining a mortgage or reaching specific career objectives.

While bankruptcy is often viewed negatively, it can also indicate that you have taken steps to improve your financial situation. If you are worried that a past bankruptcy might affect your job prospects, it’s worth noting that the Fair Credit Reporting Act prohibits bankruptcies that are over 10 years old from being included in an employee background check.

Your credit report may show a Chapter 7 bankruptcy for a maximum of 10 years, starting from the date of filing. A Chapter 13 bankruptcy will be removed from your report after seven years after the filing date. When the designated period of seven or 10 years has elapsed, the bankruptcy will be erased from your credit report automatically.

Additionally, federal law prohibits government employers from discriminating against job applicants solely based on bankruptcy. This rule applies to federal, state, and local levels. However, private employers do not have the same restrictions, so they are not prohibited from taking bankruptcy into account when making hiring decisions.

If you are planning to file for bankruptcy and are worried about it showing up on your background check, consulting with a skilled bankruptcy lawyer can offer invaluable guidance. An experienced New Jersey bankruptcy attorney from Straffi & Straffi Attorneys at Law can help you understand the different types of bankruptcy in New Jersey and how they may affect your job application. We can also assist in clarifying or addressing other concerns, such as avoiding disqualification of filing for bankruptcy. Contact us today at (732) 341-3800 to schedule a consultation.

Which Background Check Reports Show Bankruptcies?

When it comes to employment screening, employers have a variety of background checks at their disposal, each serving a specific purpose and revealing different types of information about a job candidate. These checks can involve verifying criminal records, scrutinizing academic achievements, assessing employment history, and evaluating credit status.

Criminal background checks are one of the most common forms and are primarily concerned with an individual’s criminal history, if any. They do not, however, reveal a person’s financial status or credit history. Academic verifications ensure that the educational qualifications presented by a candidate are genuine, while employment history checks confirm past work experience and job performance.

Credit checks, which are another form of background check, are particularly relevant when discussing the visibility of bankruptcies to employers. Bankruptcies will appear on a credit report. These reports provide insights into an individual’s financial reliability and creditworthiness, which can be pertinent for roles that involve financial decision-making, handling of money, or access to sensitive financial information.

The decision to include a credit check as part of the pre-employment screening process typically depends on the nature of the job. Positions that do not require handling finances or those without fiscal responsibilities may not necessitate a credit check. Hence, the bankruptcy history may remain undisclosed in such cases.

It’s important to note that employers must adhere to the Fair Credit Reporting Act (FCRA) when conducting credit checks. This means that they must obtain written consent from the applicant before carrying out the check. For individuals with a bankruptcy in their past, being upfront and offering context to potential employers can be a strategic approach to addressing what might otherwise be a point of concern in the hiring process.

Federal Law Surrounding Background Checks

The Fair Credit Reporting Act (FCRA) safeguards the confidentiality of personal information collected, held, and reported by consumer reporting agencies (CRAs), such as background check providers, to protect consumers. The FCRA is enforced by the Consumer Financial Protection Bureau. 

In accordance with 15 U.S. Code § 1681c, the FCRA limits employers who hire for jobs with annual salaries less than $75,000 from reporting tax liens paid, civil lawsuits, civil judgments, and Chapter 13 bankruptcies that are more than seven years old (Chapter 7 bankruptcies can be reported for up to ten years).

If the bankruptcy continues to appear on your credit report beyond the period they are expected to be removed, you have the option to file a dispute with the credit bureaus (Experian, Equifax, and TransUnion) to request its removal.

Before carrying out a background check, employers must also notify the applicant and obtain their written approval.

Moreover, the FCRA regulates an employer’s actions when they find out about an applicant’s bankruptcy or other negative information during a background check. To deny an application based on prior bankruptcy or other adverse findings, employers must follow the adverse action process before making a final decision.

Under 11 U.S.C. § 525(b), private employers are prohibited from discriminating or terminating employees solely based on their bankruptcy filing.

However, private employers can consider an applicant’s past bankruptcy as one of several factors when considering them for employment if it is related to the duties of the job.

Under 11 U.S.C. § 525(a), government employers cannot discriminate or modify an employee’s employment terms based on a bankruptcy filing. Additionally, government employers cannot deny applicants employment solely based on their prior bankruptcy filing.

State Laws on Employer Use of Bankruptcy Records in Hiring Decisions

In New Jersey, the use of bankruptcy records in hiring decisions is governed by specific state laws that align closely with the federal Fair Credit Reporting Act (FCRA). These laws are crucial for both employers and job seekers to understand, particularly in contexts where financial history might impact employment opportunities.

Under New Jersey law, employers considering the use of credit reports or bankruptcy information must first secure the explicit written consent of the job applicant. This requirement helps ensure that applicants are aware that their financial records may be reviewed as part of the hiring process. This consent must be obtained before any such reports are accessed by the employer.

Additionally, New Jersey law mandates that employers provide applicants with a written notification that credit reports can contain personal information, including their character, mode of living, and general reputation. This step is intended to make the implications of such checks transparent to applicants, affording them a clearer understanding of what information the employer will access.

If an employer decides to take adverse action (such as denying employment) based on information found in a credit report, they are legally required to inform the applicant of this decision. The employer must also provide the applicant with a copy of the credit report upon request. This disclosure enables applicants to verify the accuracy of the report and contest any errors.

These regulations highlight New Jersey’s commitment to protecting the rights of job seekers, promoting fair and transparent use of financial history in employment decisions. This approach helps maintain a balance between the employer’s need to assess risk and the privacy rights of the applicant.

Could My Bankruptcy Record Affect My Ability To Rent a Home?

When seeking to rent a home, landlords may consider your bankruptcy history when deciding whether or not to rent to you. Landlords may be more hesitant to rent to individuals with more recent bankruptcy filings. However, if your financial record is sound, the bankruptcy filing occurred more than two years ago, and you don’t have a significant history of evictions, it may not have a significant impact.

It’s a good idea to disclose your bankruptcy history when discussing renting with a landlord and if they mention a background or credit check. If you can demonstrate that you’ll be able to make rent payments and have a stable income, it may outweigh any concerns about your bankruptcy record.

Typically, a responsible landlord will prioritize your income and ability to pay rent over any past bankruptcy. Bankruptcy may even benefit you by freeing you of other financial obligations and making it easier to afford rent payments. If you have a track record of making timely rent payments despite financial difficulties in the past, landlords may be more understanding and willing to rent to you.

Do Employers Check for Bankruptcies?

When applying for a job, you might wonder if your financial history, particularly bankruptcy, could influence your chances of employment. The truth is that employers can indeed check for bankruptcies during the hiring process. This is because bankruptcies are a matter of public record, meaning they are accessible indefinitely despite only appearing on credit reports for a limited period.

In New Jersey, while employers have the legal right to access this information, they are prohibited from discriminating against candidates based on their bankruptcy history. This means that even if an employer discovers a bankruptcy record, they cannot use it as a basis to treat you unfavorably or make hiring decisions solely on this ground.

Employers might review a candidate’s bankruptcy information to gain insights into their financial responsibility and management skills. This is particularly relevant for positions that require significant financial decision-making or handling of sensitive financial information. In such roles, understanding how a candidate has managed their finances in the past can be crucial.

However, it’s important to note that while bankruptcy can be reviewed, it should not be the sole determinant in the hiring process. Anti-discrimination laws are in place to help ensure that candidates who have experienced financial difficulties are not unfairly treated or excluded from potential job opportunities.

How Does Bankruptcy Affect Your Job and Future Credit

Bankruptcy can have significant implications for both your employment status and credit score, but it’s crucial to understand the specific effects in each area. Firstly, it’s important to note that simply filing for bankruptcy does not automatically lead to job loss. Employers are legally prohibited from using your bankruptcy filing as a reason to make negative changes to your employment, such as reducing your salary, demoting you, or terminating your position.

However, it’s important to recognize that legitimate reasons for termination, unrelated to bankruptcy, can still apply. Instances of incompetence, dishonesty, or chronic tardiness may lead to job loss regardless of your bankruptcy filing. If you believe your termination was unjust and directly linked to your bankruptcy, you might have a case against your employer for illegal bankruptcy discrimination.

The level of awareness your employer has about your bankruptcy filing can vary depending on the type of bankruptcy you choose. For instance, in Chapter 7 bankruptcy, your employer might not be aware of your filing in most cases. However, if a creditor has taken legal action and started wage garnishment, your employer will be informed about your bankruptcy as they are required to cease the garnishment.

On the other hand, Chapter 13 bankruptcy might make your employer more aware of your financial situation, especially if you have a steady income. The court may order your payments to be automatically deducted from your wages to ensure adherence to the Chapter 13 repayment plan.

In terms of credit scores, the type of bankruptcy you file also plays a significant role. Chapter 7 bankruptcy, also known as “liquidation” bankruptcy, is suitable for individuals who cannot repay their debts. In this process, some assets may need to be surrendered to contribute to creditor payments. While not all debts may be fully covered, eligible debts will be discharged by the court.

However, Chapter 7 bankruptcy can have a more pronounced negative impact on your credit score, as it remains on your credit report for up to 10 years. Financial institutions perceive individuals who have filed for Chapter 7 as having higher credit risks, leading to a more substantial decrease in credit scores, especially for those who had higher scores before filing.

On the other hand, Chapter 13 bankruptcy, also called the “wage earner’s” bankruptcy, involves a repayment plan and is best suited for individuals with regular income. The repayment plan typically spans three to five years. Chapter 13 bankruptcy stays on your credit report for up to seven years, which is shorter than Chapter 7 due to the commitment to repay debts.

Financial institutions may view individuals under Chapter 13 more favorably because of their dedication to repaying their debts. Following a Chapter 13 bankruptcy filing, the credit score may drop by around 150 to 200 points, with a common post-bankruptcy score of approximately 579.

How Does Bankruptcy Affect Your Job and Future Credit	Details
Job Loss and Bankruptcy	Filing for bankruptcy doesn’t automatically lead to job loss; employers can’t discriminate based on bankruptcy, but other valid reasons for termination still apply.
Employer Awareness of Bankruptcy	Chapter 7 bankruptcy might not be noticeable to employers; Chapter 13 bankruptcy may make financial situation more apparent, especially with wage garnishment.
Credit Score Impact of Bankruptcy	Chapter 7 bankruptcy can have a pronounced negative impact on credit score, staying on credit report for up to 10 years. Chapter 13 bankruptcy has a shorter credit report impact, staying for up to seven years; individuals may be viewed more favorably by financial institutions due to commitment to repayment.

Will My Employer Know If I File Chapter 7?

Chapter 7 bankruptcy, often referred to as liquidation bankruptcy, is a legal process that, in most instances, does not directly involve your employer.

However, there are circumstances where your employer might be informed. For instance, if wage garnishment is in effect due to a creditor’s lawsuit, your employer would receive notification to cease the garnishment once you file for Chapter 7 bankruptcy.

Outside of such specific circumstances, there’s generally no reason for your employer to be informed about your bankruptcy filing. While bankruptcy filings are indeed public records, they aren’t readily accessible without a deliberate search. Given the sheer volume of these records, it’s highly unlikely that your employer would inadvertently discover your bankruptcy filing unless they had a pointed reason to investigate.

Importantly, federal law offers protection to employees who have filed for bankruptcy. Your employer is legally prohibited from firing you, demoting you, or reducing your salary solely on the grounds of your bankruptcy filing. This protection, however, does not exempt you from termination for other legitimate reasons unrelated to bankruptcy.

While there are scenarios where your employer might learn about your Chapter 7 bankruptcy filing, in most situations, they will likely remain unaware of your filing. Nonetheless, it’s crucial to consult with a knowledgeable bankruptcy attorney to fully understand all potential implications related to your bankruptcy filing.

Speaking to an Experienced Bankruptcy Attorney in New Jersey

Filing for bankruptcy can give you a new start and allow you to take back control of your finances. You can get help from an experienced bankruptcy attorney to understand which type of bankruptcy is most appropriate for your situation.

A skilled bankruptcy attorney can help guide you throughout the process of filing a bankruptcy. This includes preparing the required paperwork and representing you before the court. You can have your attorney negotiate with creditors in order to stop any harassment you may be facing. A bankruptcy lawyer can also help you create a reasonable payment plan and help you save your home and other assets if your property is being foreclosed.

At Straffi & Straffi Attorneys at Law, New Jersey bankruptcy attorney Daniel Straffi and our team of legal professionals have the experience and knowledge needed to help you explore what options are available to you. We may be able to assist in protecting your assets and the future of your loved ones. Contact us today at (732) 341-3800 to schedule a consultation with a top-rated New Jersey bankruptcy attorney.

from Straffi & Straffi Attorneys at Law https://www.straffilaw.com/do-bankruptcies-show-up-on-background-checks/

Joann Fabrics Closing Six NJ Locations Amid Bankruptcy nj1015.com/ixp/942/p/joan…

Joann Fabrics Closing Six NJ Locations Amid Bankruptcyhttps://t.co/RkvhzwUEfA

— Straffi & Straffi Attorneys at Law (@StraffiStraffi) February 17, 2025

from Straffi & Straffi Attorneys at Law https://x.com/StraffiStraffi/status/1891511549564797101

This Pin was discovered by Straffi & Straffi Attorneys at Law. Discover (and save!) your own Pins on Pinterest.

This Pin was discovered by Straffi & Straffi Attorneys at Law. Discover (and save!) your own Pins on Pinterest.

from Straffi & Straffi Attorneys at Law https://www.pinterest.com/pin/1097400634206584861/

Office fashion retailer Express to close 7 NJ stores. See which ones northjersey.com/story/news/bus…

Office fashion retailer Express to close 7 NJ stores. See which oneshttps://t.co/7wYL6kjSPF

— Straffi & Straffi Attorneys at Law (@StraffiStraffi) February 13, 2025

from Straffi & Straffi Attorneys at Law https://x.com/StraffiStraffi/status/1889990607659258211

Can My Bank Account Be Garnished Without Notice?

When creditors pursue garnishment, they can legally seize funds from your bank account, often without prior notice, to settle debts. This process can significantly impact your financial stability, potentially affecting your ability to cover essential living expenses. However, not all funds are eligible for garnishment; some are protected under state and federal laws. Knowing which of your funds are exempt can save you from undue hardship. 

At Straffi & Straffi Attorneys at Law, our New Jersey bankruptcy attorneys are ready to guide you through the legal measures available to protect your assets. We can assist you in identifying which of your funds are exempt from garnishment and guide you through the process of filing an objection to halt improper levies on your bank account. Our attorneys provide clear, actionable advice and can help you file an objection to any garnishment that may affect your exempt funds.

If you’re facing a bank account garnishment or are concerned about the possibility, don’t hesitate to seek professional legal assistance. Contact Straffi & Straffi Attorneys at Law today at (732) 341-3800 to schedule a consultation and learn how we can help protect your exempt funds and uphold your rights.

Can Creditors Garnish a Bank Account Without Notice? 

Bank account garnishment in New Jersey is a legal mechanism that allows creditors to seize funds directly from a debtor’s bank account to satisfy outstanding judgments. 

The process begins when a creditor, having secured a court judgment against a debtor, seeks to enforce it through a writ of execution. This writ authorizes a court officer, typically a county sheriff, to levy the debtor’s bank accounts. With the levy in place, the debtor’s accounts will be frozen, making the debtor unable to access their funds. Up to this point, providing notice to the debtor is not required.

However, to be able to access the debtor’s funds the creditor must file a Motion for Turnover of Funds with the court, requesting the court to direct the bank to release the seized funds to satisfy the debt. It is at this point when debtors receive notice of this motion and are typically informed of the levy on their bank account. The debtor has the opportunity to contest the levy before the funds are transferred.

Differences Between Wage and Bank Account Garnishment

While both wage and bank account garnishments are methods creditors use to collect debts, they differ significantly:

• Source of Funds: Wage garnishment involves deducting a portion of the debtor’s earnings directly from their paycheck, whereas bank account garnishment targets funds already deposited in the debtor’s bank account.
• Notification and Timing: Wage garnishment typically requires prior notification to the debtor, allowing time to contest the action. In contrast, bank account garnishment can occur with minimal notice, often freezing funds immediately upon the bank’s receipt of the levy.
• Exemptions and Limits: Wage garnishments are subject to federal and state limits on the amount that can be withheld, ensuring the debtor retains a portion of their earnings. Bank account garnishments may exempt certain types of funds, such as Social Security benefits, but can potentially seize all non-exempt funds in the account up to the judgment amount.

If you believe that the levy is improper or that the funds in your account are exempt from garnishment, such as Social Security benefits, you can file an objection with the court to contest the turnover of funds. Acting promptly is crucial, as there are strict timelines for filing objections. If the court upholds your objection, the levied funds may be released back to you. However, if no objection is filed or if the court overrules your objection, the funds will be turned over to the creditor to satisfy the debt.

Notification Requirements Before Garnishment

In New Jersey, creditors seeking to garnish a debtor’s bank account must adhere to specific notification protocols to comply with legal standards.

Legal Obligations for Creditor Notifications

While creditors are not required to give notice when seeking a levy on the debtor’s bank accounts, the debtor would still be notified of the levy when the creditor files a Motion for Turnover of Funds with the court. As a debtor, it is important to remember that you have the right to object to the turnover motion, particularly if the funds are exempt or if there are procedural errors.

Timeline for Receiving Notice Prior to Garnishment

Once a bank levy is initiated, the funds in the debtor’s account are immediately frozen, rendering them inaccessible to the account holder. This freeze remains in place until the court authorizes the release of the funds to the creditor. New Jersey Court Rules stipulate that no turnover of funds may occur until at least 20 days after the date of the levy, allowing time for the debtor to be notified and to file any objections.

Debtor’s Right to Object

During this 20-day period, the debtor has the opportunity to contest the levy. Upon receiving notice of the levy, the debtor can file an objection with the court, asserting reasons why the funds should not be turned over, such as exemptions for certain types of income (e.g., Social Security benefits) or procedural errors in the levy process. It’s crucial for the debtor to act promptly, as there are strict timelines for filing objections.

Turnover Order and Release of Funds

If no objection is filed within the allotted time, or if the court overrules any objections, the creditor can proceed by filing a Motion for Turnover of Funds. Once the court grants this motion, the bank is directed to release the levied funds to the creditor. The entire process, from the initial levy to the release of funds, typically spans a minimum of 20 days, but can extend longer if objections are raised and hearings are required.

A bank levy in New Jersey results in an immediate freeze of the debtor’s account, with the freeze remaining until the court authorizes the turnover of funds to the creditor. The process includes a mandatory waiting period of at least 20 days to allow for debtor notification and the opportunity to object, ensuring that the debtor’s rights are protected throughout the garnishment proceedings.

What Happens if No Notice is Received?

If a debtor does not receive notice of a bank levy, it may be due to procedural errors or issues with the creditor’s compliance with notification requirements. In such cases, the debtor can challenge the garnishment by filing an objection with the court, potentially leading to the release of the levied funds if the court finds in favor of the debtor.

Exceptions to the Notice Requirement

In New Jersey, while creditors are generally required to provide notice before garnishing a debtor’s bank account, certain exceptions permit immediate garnishment without prior notification.

Situations Where Immediate Garnishment is Permitted

Immediate garnishment may occur in specific circumstances, particularly involving debts such as child support, alimony, and unpaid taxes. In these cases, creditors can initiate garnishment without obtaining a court judgment, allowing for swift action to collect owed amounts.

Garnishment for Child Support and Tax Debts

For child support and alimony obligations, both federal and state laws prioritize these debts, enabling expedited garnishment processes. Similarly, federal and state tax authorities possess the power to garnish wages or bank accounts to recover unpaid taxes without prior notice.

Federal vs. State Exemptions in Notice Requirements

While federal laws provide a framework for garnishment procedures, New Jersey implements additional protections and exemptions for debtors. For instance, certain income sources, such as Social Security benefits and unemployment benefits, are exempt from garnishment under both federal and state laws. 

If your earnings are below 250% of the federal poverty level, only 10% of your gross salary may be garnished. Additionally, the first $1,000 in your bank account is generally exempt from levy under New Jersey law.

Protecting Your Bank Account from Garnishment

Safeguarding your bank account from garnishment is essential to maintain financial stability, especially when facing potential debt collection actions in New Jersey.

Proactive Steps to Take if You Fear Bank Account Garnishment

• Monitor Your Accounts: Regularly review your bank statements to detect any unusual activity that could indicate impending garnishment.
• Communicate with Creditors: Engage with your creditors to negotiate payment plans or settlements, potentially preventing the escalation to garnishment.
• Maintain Separate Accounts: Keep exempt funds, such as Social Security benefits, in a dedicated account to clearly distinguish them from non-exempt funds, reducing the risk of improper garnishment.

If you’re facing persistent threats of garnishment or overwhelming debt, consulting a bankruptcy attorney can be a prudent step. An attorney can assess your financial situation, advise on legal protections, and discuss options such as filing for bankruptcy, which may halt garnishment actions through an automatic stay. 

How to Contest a Bank Account Garnishment in New Jersey

Contesting a bank account garnishment in New Jersey involves a structured legal process that allows you to challenge the seizure of your funds. Here’s how to proceed:

1. Understand the Bank Levy Notice

Upon receiving a “Notice to Debtor,” your bank has frozen funds in your account due to a creditor’s levy. This notice informs you of the action and your right to object if the funds are exempt, such as Social Security, child support, welfare, or unemployment benefits.

2. Prepare Your Objection Documents

To formally object, you’ll need to complete and gather the following:

• Certification in Objection to Levy: A detailed statement explaining why the levied funds are exempt.
• Certification of Service: Proof that you’ve provided copies of your objection to all relevant parties, including the creditor, the bank, and the levying officer.
• Bank Statements: Copies of your bank statements from the three months preceding the levy, demonstrating the source of the funds and supporting your claim of exemption.

3. File Your Objection with the Court

Submit the completed forms and supporting documents to the Special Civil Part Office in the county where your case is filed. There is no fee for filing an objection to a bank account levy. Ensure all documents are accurate and complete to avoid processing delays.

4. Serve Copies to Involved Parties

After filing, promptly serve copies of your objection documents to:

• The judgment creditor or their attorney.
• The bank that holds your account.
• The sheriff or levying officer who executed the levy.

This step is crucial to inform all parties of your objection and the basis for your claim.

5. Attend the Court Hearing

The court will schedule a hearing to review your objection. Attend this hearing prepared to present evidence, such as your bank statements and any other relevant documentation, to substantiate your claim that the funds are exempt from levy.

6. Await the Court’s Decision

After the hearing, the court will decide whether the levied funds are exempt. If the court rules in your favor, the funds will be released back to you. If not, the funds may be turned over to the creditor to satisfy the judgment.

Engaging a knowledgeable attorney can provide invaluable assistance throughout this process. Straffi & Straffi Attorneys at Law, based in Toms River, New Jersey, offer experienced legal representation in bankruptcy and debt-related matters. Our team can guide you through the objection process, help prepare necessary documentation, and represent your interests in court hearings. With a commitment to providing personalized legal services, we can help protect your rights and work towards a favorable resolution of your financial challenges.

Steps	Details
Review the Levy Notice	Check the “Notice to Debtor” for details on the frozen account and your right to object.
Prepare Objection Documents	Complete forms like the Certification in Objection to Levy and gather supporting bank statements.
File with the Court	Submit the objection to the Special Civil Part Office. No filing fee is required.
Serve All Parties	Notify the creditor, bank, and levying officer by serving copies of your objection.
Attend the Hearing	Present evidence to the court to support your claim for exempt funds.
Await the Decision	The court will decide whether the funds are exempt and if they should be returned to you.

Get Experienced and Actionable Guidance From Straffi & Straffi Attorneys at Law

Dealing with the threat of bank account garnishment can be a stressful experience, but you don’t have to face it alone. At Straffi & Straffi Attorneys at Law, our attorneys have a thorough understanding of New Jersey’s garnishment laws and are equipped to assess your situation, identify whether your funds are rightfully exempt, and assist in filing objections to any garnishments that may not comply with legal standards.

If you or someone you know is facing potential garnishment, or if you simply want to understand more about your legal protections, reach out to us at (732) 341-3800. Contact Straffi & Straffi Attorneys at Law today to schedule a free consultation. We are here to provide you with reliable legal support and to help you protect your assets from unjust garnishment. Together, we can work towards safeguarding your financial future.

from Straffi & Straffi Attorneys at Law https://www.straffilaw.com/can-my-bank-account-be-garnished-without-notice/

This Pin was discovered by Straffi & Straffi Attorneys at Law. Discover (and save!) your own Pins on Pinterest.

This Pin was discovered by Straffi & Straffi Attorneys at Law. Discover (and save!) your own Pins on Pinterest.

from Straffi & Straffi Attorneys at Law https://www.pinterest.com/pin/1097400634206536349/

What Are the Income Limits for Chapter 7 Bankruptcy in 2025?

As we step into 2025, understanding the updated income limits for Chapter 7 bankruptcy in New Jersey becomes crucial for anyone considering this legal relief from debts. These limits have been adjusted to reflect current economic standards, influencing who qualifies to have their debts discharged under Chapter 7. For New Jersey residents, awareness of these changes is the first step toward making informed decisions about managing or eliminating debt.

Filing for bankruptcy is a significant decision, and having accurate, up-to-date information can make a substantial difference in the outcomes. At Straffi & Straffi Attorneys at Law, we are committed to providing clear, professional guidance to help you determine if you meet the income criteria for Chapter 7 bankruptcy. Our team is well-versed in the nuances of bankruptcy law as it applies specifically to New Jersey, offering personalized advice and support throughout the filing process.

If you’re unsure about your eligibility for Chapter 7 bankruptcy or if you’re finding the new income limits confusing, Straffi & Straffi Attorneys at Law is here to help. Our New Jersey Chapter 7 bankruptcy lawyers can assist you in assessing your financial situation to determine if you qualify under the 2025 guidelines. More importantly, our attorneys can guide you in preparing your application and represent your interests, protecting your rights every step of the way. Contact us today at (732) 341-3800 to schedule a consultation and start your journey toward financial recovery with confidence.

Determining Your Income Level for Chapter 7 in 2025

Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” allows individuals to discharge most unsecured debts, providing a fresh financial start. Just like in other jurisdictions, New Jersey debtors are required to complete a means test to determine eligibility. 

This test compares the debtor’s current monthly income to the state’s median income; if the debtor’s income is higher, further calculations assess disposable income to establish qualification for Chapter 7. If a debtor is not qualified for a Chapter 7 filing, they may explore filing under other Chapters or other approaches to manage their debt.

What Counts as Income in Chapter 7 Bankruptcy?

In Chapter 7 bankruptcy, “income” encompasses a broad range of financial sources received by the debtor. According to the Bankruptcy Code, “current monthly income” refers to the average monthly income from all sources that the debtor receives, without regard to whether such income is taxable.

This includes:

• Employment Earnings: Wages, salaries, tips, bonuses, and commissions.
• Business Income: Net income from self-employment or business operations.
• Investment Income: Dividends, interest, and capital gains.
• Rental Income: Earnings from property rentals.
• Pension and Retirement Income: Payments from pensions, retirement accounts, and annuities.
• Alimony and Child Support: Payments received for spousal or child support.
• Unemployment Compensation: Benefits received during periods of unemployment.
• Other Sources: Any other financial contributions or support, such as regular contributions to household expenses from non-debtors.

It’s important to note that certain sources, such as Social Security benefits, may be excluded from this calculation. Accurately reporting all applicable income is essential, as it directly influences the means test, which determines eligibility for Chapter 7 bankruptcy.

The Role of Household Size in Income Calculations

Household size significantly impacts the income threshold for Chapter 7 bankruptcy eligibility. Larger households have higher median income limits, reflecting the increased cost of living for more individuals. Accurately accounting for each member of your household is vital, as it directly influences the median income figure against which your average income is compared.

Understanding these components is essential for accurately determining your income level and assessing your eligibility for Chapter 7 bankruptcy in New Jersey for 2025.

The Means Test Explained

The means test is a pivotal component introduced by Congress to the bankruptcy filing process. Its primary function is to prevent the abuse of the bankruptcy system, ensuring that those who have the capability to pay their debts do not improperly claim the relief provided by Chapter 7 bankruptcy.

What the Means Test Is

The means test works by comparing an individual’s monthly income to the median income of their state. This benchmark helps determine whether an individual qualifies for Chapter 7 bankruptcy, which is designed to discharge unsecured debts for those who truly cannot afford to pay.

How the Means Test Affects Eligibility

The initial step in the means test is straightforward: your average monthly income over the six months prior to filing is calculated and compared to the median income for a household of your size in your state. If your income is below this median, you generally qualify for Chapter 7 bankruptcy without further analysis.

If your income exceeds the state median, the means test becomes more complex. You must then calculate your allowable living expenses—determined by both national and local standards—which include necessities such as food, clothing, and transportation. After subtracting these expenses from your total income, the remaining amount is considered your disposable income. If this disposable income is low enough, you may still qualify to file under Chapter 7.

The means test serves to assess whether an individual has sufficient disposable income to repay debts. 

Common Mistakes to Avoid in the Means Test

• Inaccurate Income Reporting: Ensure all income sources are accurately reported to avoid miscalculations that could affect eligibility.
• Incorrect Household Size Determination: Accurately account for each member of your household, as this influences the median income comparison.
• Overlooking Allowable Expenses: Failing to include all permissible expenses can result in an inaccurate disposable income calculation.

A skilled New Jersey bankruptcy attorney can assist in determining your eligibility for Chapter 7 bankruptcy and how the means test can factor into your filing. At Straffi & Straffi Attorneys at Law, our skilled lawyers can also assist you in collecting documents, meeting deadlines, and avoiding any potential pitfalls. Contact us today to learn more about how we can assist you.

New Jersey Chapter Income Limits for 2025

Understanding the income thresholds for Chapter 7 bankruptcy in New Jersey is essential for determining eligibility. To qualify for Chapter 7 bankruptcy in New Jersey, your household income must be below the state’s median income for your household size. The median income figures for 2025 are as follows:

• 1-person household: $87,010 annually
• 2-person household: $108,065 annually
• 3-person household: $130,324 annually
• 4-person household: $157,479 annually
• 5-person household: $166,379 annually
• 6-person household: $175,279 annually
• 7-person household: $184,179 annually
• 8-person household: $193,079 annually
• 9-person household: $201,979 annually

For households larger than nine members, an additional $8,900 is added per individual.

If your income exceeds these thresholds, you may still qualify for Chapter 7 bankruptcy by passing the means test, which assesses your disposable income after allowable expenses. This involves a detailed analysis of your financial situation to determine eligibility. 

Comparison with National Income Averages

New Jersey’s median income levels are notably higher than the national averages, reflecting the state’s elevated cost of living. For instance, the national median income for a four-person household is approximately $125,700, whereas in New Jersey, it stands at $157,479. This disparity underscores the importance of considering state-specific data when evaluating bankruptcy eligibility.

Factors That Influence Chapter 7 Eligibility Beyond Income

While income is a significant determinant in qualifying for Chapter 7 bankruptcy in New Jersey, other factors also play a crucial role. 

The Impact of Debts and Expenses

In New Jersey, the nature and amount of your debts are critical in the bankruptcy process. Chapter 7 bankruptcy primarily addresses unsecured debts, such as credit card balances and medical bills. Secured debts, like mortgages and car loans, are treated differently. Additionally, your monthly expenses, including housing, utilities, and transportation, are evaluated to determine disposable income. Accurate reporting of these expenses is essential, as they influence the means test calculation and overall eligibility.

Asset Considerations in Chapter 7 Filings

When filing for Chapter 7 bankruptcy in New Jersey, it’s important to understand which of your assets may be subject to liquidation. The state allows you to choose between federal and state exemptions to protect certain property. For instance, New Jersey offers a homestead exemption that can protect equity in your primary residence, and exemptions for personal property like vehicles and household goods. Properly applying these exemptions can help you retain essential assets during the bankruptcy process.

Special Circumstances That Affect Eligibility

Certain situations can influence your eligibility for Chapter 7 bankruptcy beyond standard criteria. For example, if you’ve previously received a bankruptcy discharge within a specific timeframe, you may be ineligible to file again immediately. Additionally, substantial changes in financial circumstances, such as sudden medical expenses or job loss, can impact your eligibility and the evaluation of your case. It’s important to consider these factors when determining the appropriateness of filing for Chapter 7 bankruptcy.

Legal Strategies to Qualify for Chapter 7

For individuals in New Jersey pondering Chapter 7 bankruptcy, understanding and applying specific legal strategies can greatly enhance the likelihood of qualifying. 

Planning Techniques to Pass the Means Test

The means test is a crucial component of the Chapter 7 filing process, designed to determine whether an individual’s income is low enough to qualify for debt discharge under this chapter. For those whose income exceeds New Jersey’s median for their household size, it becomes necessary to demonstrate that they do not have sufficient disposable income to pay off their debts. Effective planning might involve timing your bankruptcy filing to coincide with changes in your financial status, such as a decrease in income or an increase in allowable expenses, which can impact the means test calculations.

Legal Advice on Managing Your Income and Debts

Proper management of your income and debts prior to filing can also affect your eligibility for Chapter 7. It is important to avoid accruing new debts or making large, unnecessary purchases before filing. Such actions can be viewed as fraudulent by the court, potentially disqualifying you from proceeding with bankruptcy. Legal advice in this area typically covers which debts to prioritize and how to legally manage your finances to remain within the boundaries of bankruptcy law, ensuring that your actions do not inadvertently complicate your filing.

Next Steps After Determining Eligibility

Once you’ve established your eligibility for Chapter 7 bankruptcy in New Jersey, it’s important to understand the subsequent steps. A skilled attorney can provide invaluable assistance during this phase.

Preparing Your Bankruptcy Filing Documents

Accurate and thorough documentation is essential for a successful Chapter 7 filing. An attorney can assist with:

• Document Preparation: Ensuring all necessary forms, such as the petition and schedules, are correctly completed.
• Financial Disclosure: Accurately detailing your assets, liabilities, income, and expenses.

What to Expect After Filing for Chapter 7 Bankruptcy

After submitting your petition, an attorney can guide you through:

• Automatic Stay Implementation: Explaining the immediate halt to most collection activities.
• Meeting of Creditors (341 Meeting): Preparing you for the meeting with the bankruptcy trustee and creditors.
• Asset Evaluation: Providing advice on the status of your assets and any potential liquidation.
• Debt Discharge: Clarifying which debts will be discharged and the timeline involved.

Long-term Implications of Chapter 7 on Financial Health

Filing for Chapter 7 bankruptcy has enduring effects. An attorney can provide guidance on:

• Credit Report Impact: Understanding how the bankruptcy will appear on your credit report.
• Credit Score Rebuilding: Strategies to improve your credit score post-bankruptcy.
• Financial Planning: Developing a plan to manage finances and avoid future insolvency.

Engaging with a knowledgeable attorney from Straffi & Straffi can provide clarity and support, enhancing your prospects of qualifying for Chapter 7 bankruptcy in New Jersey. 

Steps	Details
Preparing Bankruptcy Filing Documents	Complete required forms, including the petition and schedules, with accurate disclosure of financial details.
Filing and Submitting Documents	Submit completed bankruptcy documents to the court, initiating the Chapter 7 process and triggering an automatic stay.
Long-term Financial Planning	Receive guidance on credit rebuilding, understanding the bankruptcy’s impact on your credit report, and planning for financial stability.

When to Consult a Bankruptcy Attorney

Considering Chapter 7 bankruptcy is a significant decision that can impact your financial future. Consulting a bankruptcy attorney is advisable in several situations:

• Uncertainty About Eligibility: If you’re unsure whether you qualify for Chapter 7 bankruptcy, an attorney can assess your financial situation and determine the most suitable course of action.
• Complex Financial Circumstances: Individuals with substantial assets, multiple income streams, or intricate debt structures may benefit from professional guidance to navigate the legal intricacies involved.
• Desire for Legal Representation: The bankruptcy process involves detailed paperwork and adherence to specific legal procedures. An attorney can manage these tasks, ensuring accuracy and compliance with New Jersey laws.

Straffi & Straffi Attorneys at Law, based in Toms River, New Jersey, offers comprehensive legal services in bankruptcy law. Our team is dedicated to providing personalized and clear legal guidance to individuals seeking debt relief. With years of experience in handling Chapter 7 bankruptcy cases, we can assist you in understanding your available options and making informed decisions about your financial future.

Engaging with a knowledgeable attorney from Straffi & Straffi can provide clarity and support, enhancing your prospects of qualifying for Chapter 7 bankruptcy in New Jersey or exploring alternative means of managing your debt. 

Top-Rated Legal Assistance and Representation from Straffi & Straffi Attorneys at Law

With the new 2025 income limits for Chapter 7 bankruptcy now in effect, understanding these changes is crucial for anyone in New Jersey considering this form of debt relief. These updated limits reflect current economic realities and directly affect your eligibility to file.

At Straffi & Straffi Attorneys at Law, we focus on providing clear and practical advice to navigate the bankruptcy process. Our team is here to help you figure out if you qualify under the new rules, prepare your application properly, and represent your interests every step of the way.

If you’re thinking about Chapter 7 bankruptcy and need help with the new income limits, or have any questions about the process, don’t hesitate to get in touch. We’re here to help you make informed choices and support your journey toward financial stability. For personalized assistance, contact Straffi & Straffi Attorneys at Law at (732) 341-3800 to schedule a free consultation.

from Straffi & Straffi Attorneys at Law https://www.straffilaw.com/what-are-income-limits-chapter-7-bankruptcy/

from Straffi & Straffi Attorneys at Law https://x.com/StraffiStraffi/status/1887757442173575497

There are different statutes of limitations in New Jersey depending on the type of debt you have. For most debts including credit card debt, the limitation is six (6) years. For car loans, the limitation is four (4) years. straffilaw.com/what-is-the-st…

There are different statutes of limitations in New Jersey depending on the type of debt you have. For most debts including credit card debt, the limitation is six (6) years. For car loans, the limitation is four (4) years.https://t.co/YWsWYuE1vO pic.twitter.com/PhpqJg1rWJ

— Straffi & Straffi Attorneys at Law (@StraffiStraffi) February 7, 2025

from Straffi & Straffi Attorneys at Law https://x.com/StraffiStraffi/status/1887757360598511845

Quiksilver, Billabong and Volcom to close all US stores amid bankruptcy newjersey.news12.com/quiksilver-bil…

Quiksilver, Billabong and Volcom to close all US stores amid bankruptcyhttps://t.co/r2poSSpJel

— Straffi & Straffi Attorneys at Law (@StraffiStraffi) February 7, 2025

from Straffi & Straffi Attorneys at Law https://x.com/StraffiStraffi/status/1887757238594642003

North Jersey-based Party City auctioning off 26 New Jersey leases amid bankruptcy northjersey.com/story/news/bus…

North Jersey-based Party City auctioning off 26 New Jersey leases amid bankruptcyhttps://t.co/BCJZEuaf26

— Straffi & Straffi Attorneys at Law (@StraffiStraffi) February 5, 2025

from Straffi & Straffi Attorneys at Law https://x.com/StraffiStraffi/status/1887152863341949348

CarePoint bankruptcy statement ‘inaccurate, misleading,’ NJ DOH says; debt at least $300 million nj.com/hudson/2025/01…

CarePoint bankruptcy statement ‘inaccurate, misleading,’ NJ DOH says; debt at least $300 millionhttps://t.co/loZCFxsWUT

— Straffi & Straffi Attorneys at Law (@StraffiStraffi) February 4, 2025

from Straffi & Straffi Attorneys at Law https://x.com/StraffiStraffi/status/1886838818248253905

What Is the Statute of Limitations on Debt in NJ?

Even though consumer debt can seem like a private matter, there are specific laws and regulations that govern when and how they can be enforced or disposed of. An example of such laws includes the statute of limitations on debt in New Jersey. The statute of limitations on debt is a period of time in which creditors can file a suit against you for failing to pay your debt. In some cases, if a creditor wins a lawsuit, they may obtain a judgment lien against your property, which can have significant long-term consequences. Being aware of this statute of limitations can help you avoid being the subject of a complicated lawsuit and being subject to fines.

New Jersey laws regarding consumer debt can prove to be very complicated to understand without the help of an experienced New Jersey debt negotiation attorney. At Straffi & Straffi Attorneys at Law, our team of skilled legal professionals has protected the rights of New Jersey residents from unlawful debt collection practices. We offer quality legal counsel and representation to advocate for our client’s best interests. To learn more about how we can help, contact us today at (732) 341-3800.

New Jersey’s Statute of Limitations on Debt

There are different statutes of limitations in New Jersey depending on the type of debt you have. For most debts including credit card debt, the limitation is six (6) years. For car loans, the limitation is four (4) years. 

The statute of limitations is the time in which the creditor can file a lawsuit against the debtor to compel them to pay their debt. This period initiates at the last interaction the debtor had with the creditor and will reset each time they make contact again. This contact specifically refers to the last time the debtor made a payment or acknowledged the debt in writing. The statute applies to all types of contracts in New Jersey, be it oral or written contracts, open-ended accounts, or promissory notes.

This means that after the statute of limitations has expired, the creditor can’t file a suit against the debtor. If a creditor takes a debtor to court after the statute of limitations has expired, it is up to the debtor to face them in court and have the suit dismissed on those grounds. After the statute of limitations has expired, any legal claim the creditor has to the debt is time-barred. However, this does not mean that the creditor can’t continue using other means to pursue the debtor for payment. These efforts must comply with the Fair Debt Collection Practices Act (FDCPA), which prohibits deceptive, harassing, or unfair practices. 

When a creditor tries to collect on a debt, they may not voluntarily divulge the information that the debt has been time-barred. While the FDCPA requires collectors to avoid false statements, it does not explicitly mandate that they disclose if a debt is beyond the statute of limitations.

As a result, debtors should consult their personal records to verify the status of the debt. Consulting with your own personal records is important. You may also request verification of when the last activity or payment on the debt happened within 30 days of receiving the notice of the debt.

It is important to remember that the statute of limitations can reset when activity is recorded on the debt and this can reopen the debtor to the possibility of being sued for the debt. Even a statement that you intend to pay the debt or acknowledgment that the debt exists can be considered an activity that can reset the clock, 

Getting the assistance of an experienced attorney can be beneficial in making sure that your rights are protected. If you have been notified by a debt collector regarding a debt you supposedly owe, consulting a skilled attorney can help you avoid any legal complications and help you navigate the situation. Whether you intend on paying the amount as is or would like to negotiate a repayment plan, our team of experienced New Jersey debt negotiation attorneys at Straffi & Straffi Attorneys at Law may be able to help. Call us today to learn more about how we can assist you.

Why Debt Type Matters: Written vs. Oral Agreements

When dealing with debt collection in New Jersey, it is crucial to understand the differences between written and oral agreements. The basic statute limitations period for both types of debt is six years, but the distinction between them can affect how you should handle these debts legally and practically.

Written agreements, such as promissory notes or written contracts, are formalized documents that outline the terms of the debt, including the amount owed, repayment schedule, interest rates, and consequences of non-payment. These documents provide clear, tangible evidence that can be critical if a debt recovery issue goes to court. For creditors, having a written agreement means there is undoubted proof of the debtor’s obligation, which simplifies the process of claiming the debt before the statute of limitations expires.

On the other hand, oral agreements are based on verbal commitments without written documentation. These are legally binding but proving the terms of the debt and the existence of the agreement itself can be challenging. Without physical evidence, creditors must rely on witness testimonies or any recorded communications that can verify the debt’s conditions. This lack of solid evidence makes oral agreements more vulnerable to disputes and can complicate debt recovery efforts.

For both creditors and debtors in New Jersey, understanding these differences is vital for managing legal risks and making informed decisions regarding debt collection or defense. A clear grasp of whether a debt is tied to a written or oral agreement helps in developing appropriate strategies before the six-year limitation period runs out, optimizing the chances of a successful outcome.

Judgment on Debts in New Jersey

One important thing to keep in mind is that creditors are also afforded the same legal means to collect on a debt. Creditors can file a case to obtain a judgment to collect on a debt as long as the statute of limitations has not expired. 

It is crucial that you respond to the lawsuit as not acknowledging it can provide the creditor with a default judgment giving them the legal backing to proceed with the collection. There are a few ways that creditors can use to collect on a debt and the type of collection they use can depend on the circumstances of the case. 

Wage Garnishment

Under wage garnishment, the judgment creditor can take a percentage of the judgment debtor’s wages as repayment until the court-awarded amount the judgment was issued on is paid in full. According to federal law, a judgment creditor can collect the lesser amount between:

• 25% of the judgment debtor’s disposable earnings
• Disposable earnings less than 30 times the federal minimum wage

Disposable earnings in this context refer to wages you earn after the deductions required by law. Also specific to New Jersey law, $48 dollars is exempt from being seized in wage executions and the judgment creditor can only garnish wages not exceeding 10% of the judgment debtor’s income if they earn less than 250% of the federal poverty level for their household size. If the debtor’s income exceeds 250% of the federal poverty level, up to 25% of disposable earnings may be garnished. When this method is used, the judgment debtor’s employer will be required to withhold the wages and pay them to the assigned special civil part officer on the case. 

Any military benefits and wages cannot be claimed in a judgment for wage garnishment.

Bank liens

With a bank lien, a judgment creditor can freeze the judgment debtor’s bank accounts to be able to get payment on the judgment amount through a Motion to Turn Over Funds.

Liens

As with bank accounts, the judgment creditor can also apply a lien on the judgment debtor’s real estate properties or personal properties.

Writs of execution

With the help of law enforcement such as the Sheriff’s Office, creditors can obtain the judgment creditor’s tangible personal property which includes vehicles or other assets as payment for the judgment award. This process does not apply to real property unless specific procedures are followed, such as filing a foreclosure action for judgment liens on real estate.

It is unwise to try and hide any funds you have in an attempt to avoid payment as it can be considered fraudulent behavior and carry additional legal consequences. Once a judgment on the debt is issued, a judgment debtor can be left with few options other than paying the award without the help of a skilled attorney. The statute of limitations on a debt judgment in New Jersey is 20 years.

Methods of Debt Collection in New Jersey	Description
Wage Garnishment	The judgment creditor can collect a portion of the judgment debtor’s wages until the court-awarded amount is paid in full. The amount collected is determined based on federal law, typically the lesser of 25% of disposable earnings or disposable earnings less than 30 times the federal minimum wage. Specific New Jersey exemptions apply.
Bank Liens	A judgment creditor can freeze the judgment debtor’s bank accounts to access funds through a Motion to Turn Over Funds.
Liens	Creditors can place liens on the judgment debtor’s real estate or personal property.
Writs of Execution	Law enforcement, such as the Sheriff’s Office, can help creditors seize the judgment debtor’s personal assets and property (excluding real estate) to satisfy the judgment award.

Debt Collection Statute of Limitations

The debt collection statute of limitation refers to the timeframe within which a creditor can legally compel a debtor to pay off their debt through filing a lawsuit. In New Jersey, the statute varies based on the type of debt. For most debts such as credit card debt, the statute is six years, while for car loans, it’s four years.

This timeframe begins from the date of the debtor’s last payment or acknowledgment of the debt. Any new payment or acknowledgment may reset the clock on the statute of limitations.

It is important to clarify that the statute of limitations only pertains to the timeframe during which a creditor can sue the debtor for non-payment. Once the statute expires, the creditor can no longer initiate a lawsuit. If a creditor attempts to sue after this period, the debtor can have the case dismissed by asserting a statute of limitations defense. However, this does not mean the debt is forgiven. The creditor can still pursue other means to collect the debt, such as sending collection notices or reporting the debt to credit bureaus, as long as these actions comply with the Fair Debt Collection Practices Act (FDCPA).

Under the FDCPA, creditors are not always required to inform the debtor that the statute of limitations has expired. However, New Jersey law prohibits misleading or deceptive practices, including threats to sue on time-barred debt. Therefore, it is crucial for debtors to keep their own records and request verification of the last payment or activity on the debt within 30 days of receiving a collection notice.

What Happens to Your Debt After 10 Years of Not Paying It?

When you haven’t made payments on your debt for a decade, you might wonder about the consequences and your legal responsibilities. Typically, the statute of limitations for most debts expires after 10 years. This legal concept is crucial in determining what happens next.

The statute of limitations is a legal time limit set by law that dictates how long a creditor or debt collector has to initiate legal proceedings against you to recover the debt. Once this period passes, they can no longer initiate a lawsuit to enforce the debt. However, this does not mean your debt is erased or that you no longer owe the money. Legally, the debt still exists.

Debt collectors might still try to contact you to recover the unpaid debt using traditional collection methods like phone calls or letters. However, if the statute of limitations has expired, they cannot legally sue you over the debt. It’s important to note that any acknowledgment or payment towards the debt can potentially reset this clock, making it possible for creditors to sue for recovery once again.

Understanding your rights and the relevant laws is crucial. If you are approached about a debt that’s over 10 years old, consult with a legal professional to discuss your options and ensure that your actions do not unintentionally renew the debt’s legal enforceability.

Consulting an experienced New Jersey debt negotiation attorney is crucial to avoid any potential issues. Our team of legal professionals at Straffi & Straffi Attorneys at Law can help you understand your rights under the law and fight for your best interests. We understand the toll financial vulnerability can have on a person and work hard to help our clients have a chance at a new start. Contact us today at  (732) 341-3800 to schedule a consultation.

from Straffi & Straffi Attorneys at Law https://www.straffilaw.com/what-is-the-statute-of-limitations-on-debt-in-nj/

What Is The Difference Between New Jersey Bankruptcy Chapter 7 And Chapter 13?

Difficult financial situations like job loss, divorce, business problems, and illness can be made worse by the existence of debt. It is easy to be overwhelmed with debt, especially in circumstances where a source of income is not readily available. It is even more stressful trying to find ways to seek relief from this financial crisis when you have creditors hounding your every move and seeking to acquire your assets for repayment.

Even with careful planning, when the unexpected happens, you can still find yourself in financial difficulty. Exploring bankruptcy or debt relief can be a viable option for many individuals. If you find yourself in the position of having to file bankruptcy, it is important to consult with an experienced New Jersey bankruptcy attorney. At Straffi & Straffi Attorneys at Law, our attorneys are well-versed in the nuances of bankruptcy law and can guide you through the process, helping you make an informed decision about the most suitable chapter for your specific situation. Contact us at (732) 341-3800 for a confidential consultation and let us help you towards a brighter financial future.

Bankruptcy is defined as a legal process initiated by those who cannot repay their debts in order to seek relief from some or all of the debt. Filing for bankruptcy can either discard the debt or facilitate repayment through the creation of a payment plan. Aside from debtors being able to start fresh after availing of debt relief, bankruptcy also allows creditors to obtain repayment depending on the kind of bankruptcy filed.

A bankruptcy petition can be filed by individuals, by spouses, and by corporations, or other entities. Under the US Bankruptcy Code, all petitions for bankruptcy are handled at the federal level. 

The Bankruptcy Code allows for different types of bankruptcy, each referred to by its chapter in the Code. Two of the most common types available to common people, that is, individuals and small businesses are Chapter 7 and Chapter 13 Bankruptcy.

Different Types of Bankruptcy

Filing for bankruptcy indicates that you are incapable of settling your current debts. Successfully filing for bankruptcy leads to the cancellation of your outstanding debts, giving you a chance to rebuild your financial situation and move forward. Different types of bankruptcy filings are available, each tailored to specific circumstances.

• Chapter 7 Bankruptcy: Commonly known as liquidation bankruptcy, enables the discharge of a majority of debts within a period of four to six months. While many debts can be canceled, certain obligations like family support, certain tax debts, or penalties for criminal actions cannot be discharged.
• Chapter 11 Bankruptcy: Known as business bankruptcy, Chapter 11 offers corporations, and sometimes individuals, an opportunity to reorganize their debts while keeping their operations running. As a “debtor in possession,” the business must create a repayment plan, which is then voted upon by creditors and stockholders. Some businesses may successfully recover and continue operations, while others may dissolve after filing for Chapter 11.
• Chapter 13 Bankruptcy: Referred to as wage earner’s plan, Chapter 13 allows for the discharge of debts at the end of the process. Both unsecured debts like credit cards and secured debts like mortgages or car loans can be included. If your home is at risk of foreclosure, Chapter 13 may help you save it by incorporating delinquent payments into the plan, while keeping current with monthly mortgage payments. Similarly, a car in danger of repossession can be protected, and better terms with the lender may be negotiated. Additionally, delinquent family support payments can be rolled into the plan under Chapter 13.

In New Jersey, these are the three most common types of bankruptcies. However, businesses may also explore other types of bankruptcy claims, including:

• Chapter 9: Designed for municipalities seeking bankruptcy protection.
• Chapter 12: Intended for farmers or commercial fishermen aiming to reorganize their finances.
• Chapter 15: Pertains to jurisdiction and is usually associated with foreign entities filing for bankruptcy.

Exploring the different types of bankruptcy can be daunting, but with the help of a New Jersey bankruptcy attorney, you can navigate this challenging process with confidence. At Straffi & Straffi Attorneys at Law, our team of skilled and compassionate attorneys can provide you with personalized guidance, helping you choose the most suitable bankruptcy option for your specific circumstances. Contact us for a consultation and take the first step towards a fresh start.

Chapter 7 Bankruptcy 

Chapter 7 Bankruptcy is commonly referred to as liquidation bankruptcy. The court assigns a bankruptcy trustee to sell any nonexempt assets owned by the debtor to be used to repay all or some amount of debt.

To file and complete the Official Bankruptcy Form and petition the court for Chapter 7 bankruptcy, the debtor must submit the following details to the court:

• A list of their creditors and how much the debtor owes each one
• The debtor’s source and amount of income
• An inventory of all of the debtor’s property
• A list of their monthly living expenses

The debtor would also have to pass a means test. The purpose of the means test is to ensure that the debtor is not abusing Chapter 7 bankruptcy law to avoid paying their debts, even though they can afford it. The Chapter 7 Means Test in New Jersey takes your average household income for the last six months and compares it to the median income of households of a similar size in the state. If you fall below the threshold, you can proceed with filing for Chapter 7 bankruptcy. 

If you don’t meet the requirements, the Bankruptcy Court will look more closely at your income and expenses. The court can also convert your case to Chapter 13 bankruptcy if you have a significant amount of disposable income left over each month that you could otherwise use to pay debts.

What Happens After Filing Chapter 7 Bankruptcy?

Filing a petition for Chapter 7 Bankruptcy automatically stays any collection orders or lawsuits from creditors to the debtors. The expected timeframe to get your debts discharged is 6 months after the conclusion of your debt counseling, as required by the court.

The court will assign a bankruptcy trustee responsible for discharging the debtor’s nonexempt assets. Nonexempt assets may include a vacation home, any valuable collections, and jewelry, among others. Exempt property is assets considered necessary for living. This usually includes a primary residence, tools of a trade, personal possessions, and a car (provided that it is not in equity).

Any funds gathered from the sale of nonexempt assets will be used to pay off a portion of the debtor’s unsecured debt (ie. credit card bills, medical bills, etc.). In New Jersey, it is possible to protect certain nonexempt assets from liquidation and bankruptcy trustees can also forego selling nonexempt assets if they are not worth much in value or would be too difficult to sell.

It is important to remember that not all debt can be discharged through bankruptcy. Debt from child support, income taxes, alimony, and federal student loans are not dischargeable under the US Bankruptcy Code.

Chapter 7 will remain on your credit score for 10 years from the date the petition was filed. You will also be unable to file another Chapter 7 bankruptcy for 8 years after a prior discharge or Chapter 13 for the next 4 years. Due to this, it is important to get the help of a qualified New Jersey bankruptcy attorney to evaluate your financial situation. Your bankruptcy attorney should help you in exploring your options before applying for bankruptcy and assist in preparing your requirements in petitioning the Bankruptcy Court.

What Assets Do You Lose in Chapter 7?

In Chapter 7 bankruptcy, also known liquidation bankruptcy, many of your assets may be sold to pay off creditors. This process involves a bankruptcy trustee who oversees the sale of your assets to settle your debts. Not all assets are treated equally in this scenario. Typically, non-exempt assets that can be sold include items like non-primary residences, additional vehicles, investments, and valuable collections such as art or jewelry.

Primary residences can sometimes be exempt, especially if the equity in the home does not exceed state or federal exemption limits. Similarly, essential personal items such as clothing, household goods, and tools necessary for your occupation are typically protected to some extent. However, luxury items, secondary properties, and stocks or bonds are likely to be liquidated.

Business assets are also vulnerable in Chapter 7 filings. If you own a business, equipment, and other assets that are not essential to your personal life or basic operations may be liquidated. The specifics can vary greatly depending on the set of exemptions you select when filing a Chapter 7 bankruptcy and the particular details of your financial situation. It is important to remember that while you can select either the federal or state exemptions, you may not mix the exemptions and can only use all the exemptions from either set. 

Consult with an experienced New Jersey bankruptcy attorney to understand which of your assets are at risk in a Chapter 7 bankruptcy. Contact Straffi & Straffi Attorneys at Law today to schedule a consultation.

Bankruptcy, Chapter 7 vs 13

Chapter 7 and Chapter 13 Bankruptcy are two distinct forms of bankruptcy that serve different purposes and contain different processes.

With Chapter 7 Bankruptcy, a bankruptcy trustee is assigned by the court to sell any nonexempt assets belonging to the debtor to repay part or all of the debt. The debtor’s eligibility for Chapter 7 is determined by a means test, which ensures that the debtor is genuinely incapable of paying their debts. If the debtor has substantial disposable income, their case may be converted to a Chapter 13 bankruptcy. After filing for Chapter 7, a stay is automatically placed on collections and lawsuits from creditors, and the bankruptcy trustee is tasked with liquidating nonexempt assets to pay off unsecured debt. However, not all debt can be discharged, such as child support, income taxes, alimony, and federal student loans. Chapter 7 bankruptcy stays on a credit report for 10 years.

On the other hand, Chapter 13 Bankruptcy, often referred to as a wage earner’s plan, involves the reorganization of the debtor’s finances under court supervision. In this type of bankruptcy, the debtor must create and adhere to a repayment plan spanning 3 to 5 years. Chapter 13 is a common choice for those with an income exceeding the state’s median income. Unlike Chapter 7, a Chapter 13 bankruptcy doesn’t involve asset liquidation, which allows debtors to keep their assets and potentially avoid foreclosure on their homes. The trustee’s role in Chapter 13 is to collect monthly debt payments rather than liquidate assets. Chapter 13 bankruptcy permits debtors more flexibility in repaying their debts, as long as they can meet the monthly payments mandated by the court. Chapter 13 Bankruptcy remains on a credit report for up to 7 years.

Both Chapter 7 and Chapter 13 are tools that can help individuals navigate financial difficulties, but they serve different purposes and operate differently. Which one is most appropriate will depend on the debtor’s specific circumstances.

Chapter 13 Bankruptcy

A Chapter 13 bankruptcy, or a wage earner’s plan, refers to the reorganization of the debtor’s finances under the supervision of the court. In a Chapter 13, debtors must draft and adhere to a plan to pay outstanding creditors within 3 to 5 years. The plan must allow repayment to the creditors of at least equal to what they will receive if a different kind of bankruptcy was petitioned. A debtor may also be required to use 100% of their disposable income to repay the debts, if necessary.

A Chapter 13 bankruptcy is the common option for those who make an income higher than the median income for the state. As of June 2022, New Jersey allows for a combined debt limit of up to $2.75 million for both secured and unsecured debt.

The list of requirements submitted to the Bankruptcy Court in Chapter 13 is similar to Chapter 7 aside from the additional submission of a repayment plan. Instead of being in charge of the liquidation of the debtor’s assets, in Chapter 13, the court-assigned bankruptcy trustee is only assigned to collect a monthly debt payment.

As there is no liquidation of assets involved in Chapter 13, a debtor can avoid the foreclosure of their home and keep their assets.

What Happens After Filing Chapter 13 Bankruptcy?

Like in Chapter 7, however, all forms of legal action and collection efforts from creditors will be halted once Chapter 13 is filed. The trustee will act as an intermediary between the debtor and the creditor and while under Chapter 13 protection, creditors will have no direct contact with the debtor. 

Chapter 13 allows debtors more wiggle room in terms of repaying their debts. Even though there is no debt discharged in Chapter 13, debtors have more time to find alternative sources of income and may be able to keep their assets instead of liquidating them like in Chapter 7. These conditions apply as long as the debtor can meet the monthly payments. 

When completed, Chapter 13 bankruptcy remains on your credit report for up to 7 years from the filing date. The monthly payments required by the court are mandatory and monitored by the court.

Side By Side Comparison: Chapter 7 Vs. Chapter 13

	Chapter 7	Chapter 13
Type of Bankruptcy	• Liquidation	• Reorganization of finances
Who can file?	• Individuals, spouses, and business entities	• Individuals and spouses only (sole proprietorships included)
Cost to file	• $338.00 (Inclusive of $78 Misc. Administrative and $15 Trustee Fee) • Can be waived depending on circumstances	• $313.00 (Inclusive of $78 Misc. Administrative Fee)
Eligibility	• Must pass a means test • No Chapter 7 discharge for the past 8 years or Chapter 13 in the past 6 years • No dismissed Chapter 7 or 18 petition from the last 180 days	• Cannot have more than  $2.75 million secured and unsecured debt combined (New Jersey) • Must have regular income and have up to date tax filings • No Chapter 13 filing from the past 2 years or Chapter 7 from the past 7 years • No dismissed Chapter 7 or 18 petition from the last 180 days
How long it takes to receive a debt discharge	• Three to six months	• Upon completion of repayment plan (3 to 5 years)
How long the bankruptcy affects a credit report	• 10 years from filing date	• 7 years from filing date
Benefits	• If the debtor is eligible, Chapter 7 is one of the quickest ways to get debt relief •Halts collection orders and lawsuits to debtor from creditors	• Allows debtors to schedule repayments to creditors while retaining assets • Halts collection orders and lawsuits to debtor from creditors
Drawbacks	• Nonexempt property assets can be sold by a bankruptcy trustee • Does not apply for secured debt (foreclosures, repossession, etc.) and undischargeble debt (alimony, federal student loans, child support, etc.)	• The court can require the use of up to 100% of the debtor’s disposable income in debt servicing • Repayment plan can be challenging for some debtors • Does not apply for undischargeble debt (alimony, federal student loans, child support, etc.)

How Much Does It Cost to Convert from Chapter 13 to Chapter 7?

The conversion from Chapter 13 to Chapter 7 bankruptcy is a legal procedure that offers an alternative for those struggling to meet their restructured debt obligations. This process is governed by the Bankruptcy Code, which allows conversion “at any time,” however, it’s highly recommended to consult with a bankruptcy lawyer to ensure that this is the optimal path for your financial situation.

The primary cost associated with this conversion is a nominal fee. When converting your case, you are required to file a “notice of conversion” and pay a conversion fee of $25. This is calculated as the difference between the Chapter 7 filing fee ($338) and the Chapter 13 filing fee ($313). Typically, this process does not require a court hearing and can be completed in a very short time frame.

However, it’s important to note that not everyone is eligible to convert from Chapter 13 to Chapter 7. There are certain restrictions as per federal bankruptcy law. For instance, if you’ve filed a Chapter 7 case and received a discharge in the past eight years, you will need to wait until this eight-year period has passed to be eligible for another discharge.

Furthermore, if you’ve previously converted your case, you’ll need the bankruptcy court’s approval to convert again. This process isn’t as straightforward as filing a notice of conversion and may incur additional costs. Thus, understanding these conditions and costs is crucial when considering conversion from Chapter 13 to Chapter 7.

How Non-Dischargeable Debts Impact Your Bankruptcy Strategy

When filing for bankruptcy in New Jersey, understanding the impact of non-dischargeable debts is crucial for formulating an effective bankruptcy strategy. Non-dischargeable debts are financial obligations that bankruptcy cannot eliminate, requiring you to repay them even after completing the bankruptcy process.

Common non-dischargeable debts include certain types of taxes, child support, alimony, student loans, and debts stemming from personal injury caused by driving under the influence. Since these debts must still be paid, they directly influence the overall effectiveness of filing for bankruptcy and can guide which chapter you choose to file under.

In a Chapter 7 bankruptcy, also known as liquidation bankruptcy, most unsecured debts, including credit card balances and medical bills, are eliminated through discharge. However, non-dischargeable debts remain unaffected, leaving you responsible for their repayment. While Chapter 7 can free up income by discharging other obligations, it may offer limited financial relief if a significant portion of your debt is non-dischargeable.

In contrast, Chapter 13 bankruptcy involves reorganizing your debts into a manageable repayment plan that lasts three to five years. This option can be particularly strategic for handling non-dischargeable debts because it allows you to incorporate these debts into your repayment plan. Chapter 13 allows payments to be spread over an extended period, making these debts more manageable while also addressing other financial commitments.

When planning your bankruptcy strategy, consider how much non-dischargeable debt you have. If these debts make up a large portion of your financial burden, Chapter 13 might provide a more practical solution by allowing for extended payment terms under court protection, avoiding the immediate financial strain that might persist after a Chapter 7 discharge.

Consulting with a bankruptcy attorney can help clarify which debts can be discharged in your case and assist in developing a bankruptcy strategy that addresses your unique financial situation, maximizing the relief obtained through the bankruptcy process.

Filing For Bankruptcy In NJ

Filing for bankruptcy in New Jersey can be a challenging process. To avoid making any mistakes, such as transferring assets to friends or family members or paying off the wrong creditors, it is critical to consult with an experienced New Jersey bankruptcy attorney.

After you speak with a lawyer, you will have to gather all of the necessary paperwork, including your state and federal tax returns for the past two years, proof of income from the previous six months, recent bank statements, valuations or appraisals of any real estate you own, a list of all your assets, and budget information, as well as any additional information as advised by your attorney. Furthermore, you may have to take a credit counseling course from a Department of Justice-approved credit counseling agency within 180 days of filing for bankruptcy.

Once you have collected all the necessary documents and completed the credit counseling course, your lawyer will prepare the bankruptcy petition, which is a detailed account of your financial status, including your assets, income, and outstanding debts. When the petition is submitted to the bankruptcy court, the automatic stay takes effect, providing instant relief by halting all collection efforts, such as phone calls, wage garnishment, lawsuits, and vehicle repossessions. You will then attend a 341 meeting with the Bankruptcy Trustee, where you will testify under oath about your financial situation. Finally, before your debts are discharged, and you are freed from any obligation on qualifying debts, you must finish a debtor education course.

Upon completion of the process, your debts may be discharged. Discharge of a debt entails a permanent release from any obligation to pay it. Bankruptcy erases your eligible debts and relieves you of the responsibility to pay them.

Determining the Bankruptcy Type for Your Financial Situation

While bankruptcy can sound like a great solution to debt, it should be noted that bankruptcy should only be explored as a last resort. Having a bankruptcy on your credit score can greatly affect your finances for the foreseeable future.

If you are considering filing for bankruptcy, it is important to seek the advice of a qualified New Jersey bankruptcy attorney. A bankruptcy attorney will be able to determine your best option and strategy when filing for bankruptcy. Your attorney should be able to determine if the benefits of filing for bankruptcy outweigh the costs in your situation.

At Straffi & Straffi Attorneys At Law, we provide qualified legal counsel and representation to those seeking to file bankruptcy in the Toms River, New Jersey area. We understand the importance of starting afresh. We can help you explore your options and navigate the complicated process of petitioning for bankruptcy. 

To learn more about our services, contact Straffi and Straffi Attorneys At Law today to speak with a qualified New Jersey bankruptcy attorney.

from Straffi & Straffi Attorneys at Law https://www.straffilaw.com/what-is-the-difference-between-new-jersey-bankruptcy-chapter-7-and-chapter-13/