While electronic filings and online services have made some aspects of filing for bankruptcy simpler, the process is still complex and usually time-consuming. Unfortunately, many people are under the mistaken impression that they do not need a lawyer to file for bankruptcy. In reality, lacking proper representation during bankruptcy filings can have devastating consequences, including the loss of valuable assets, delayed proceedings, and in some cases, even charges of bankruptcy fraud.

REORGANIZATION PLANS

Anyone filing for Chapter 11 or Chapter 13 bankruptcy is required to submit a reorganization plan to the court. These plans are extremely complicated and must usually include at least some or all of the following types of information:

• A designation of certain types of claims;
• Whether any of the filer's property will be transferred;
• Whether any liens will be modified;
• Whether any part of the estate will be sold or distributed;
• Whether the debtor will retain any of the property; and,
• How and when creditors will be paid.

If the court refuses to approve a reorganization plan, a filer will not be able to reclaim his or her filing fees. Furthermore, creditors can resume actions to collect what they are owed.

THE MEANS TEST

New Jersey residents who wish to file for Chapter 7 bankruptcy may need to satisfy the Means Test if their monthly income is more than the median income for a household of their size. Generally, this process requires filers to calculate their current monthly income, which is their average income over the previous six months, and then deduct certain monthly expenses. The total is considered to be the debtor's disposable income, which if the court considers to be overly excessive, will bar the debtor from proceeding in a Chapter 7 bankruptcy. Although bankruptcy is a federal system, states and counties often have different rules regarding what is considered an allowable deductible expense.

If, after all this, a debtor does not pass the Means Test, he or she will be limited to filing for Chapter 13 bankruptcy, which requires monthly payments made over three to five years according to a strict Plan.

VALUING ASSETS

To begin the process of bankruptcy, debtors must declare the value of all of their personal property, including vehicles, jewelry, antiques, and real estate. The law also requires debtors to value personal property at its retail replacement value, which is the price a retail seller could charge for property of the same age and condition. However, determining retail value can be very difficult, especially for unique items that require multiple appraisals. Failing to value a piece of property or valuing it improperly can have serious consequences aside from delaying proceedings. In some cases, when an omission is particularly grave, a debtor could even be charged with bankruptcy fraud.

CONTACT AN EXPERIENCED NEW JERSEY BANKRUPTCY ATTORNEY TODAY

Although retaining an attorney is not required to file for bankruptcy, it is certainly advisable. Hiring an experienced attorney can save a debtor both time and money in the long run, as well as a significant amount of worry and stress, so if you live in New Jersey and are considering filing for bankruptcy, please contact the Kridel Law Group at (973) 470-0800 to speak with an experienced bankruptcy attorney.