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How lien stripping may save your home from foreclosure

Sometimes, having a good job and a solid income is not enough to keep a person in New Jersey afloat financially. In fact, if you are struggling to pay all your bills every month and still have enough left for the necessities of life, you are not alone. We at William H. Oliver, Jr. & Associates often advise our clients about how lien stripping may be the solution to their debt problems.

Lien stripping is something that can occur when you file Chapter 13 bankruptcy if you owe more than your house is worth. There are many benefits to lien stripping, the most obvious being that you can prevent your second mortgage holder from foreclosing on your property. Lowering the amount of your monthly debt can also help you get control of your financial situation.

Should I choose Chapter 7 or Chapter 13 bankruptcy?

When you decide to file bankruptcy in New Jersey, you must first decide whether you will file Chapter 7 or Chapter 13. This choice will affect many aspects of your case. You could preserve your assets or lose them all. You could wipe your debt clean quickly or have to make repayments and not end your case for years. This decision needs to be made carefully, so you ensure you make the correct move.

The American Bar Association explains that Chapter 7 is the quickest option. Plus, it allows you to remove your debts without having to repay them, but your assets may be taken to repay your creditors. However, you must meet a means test, which means you cannot have a significant amount of income. You also cannot have filed a Chapter 7 bankruptcy within the last eight years.

Unpaid vendors demand compensation as Sears declares bankruptcy

When a company is facing an uncertain financial future, they have a couple of options to consider in revitalizing their structure and recovering from the restraints of debt. Struggling companies in New Jersey may be able to develop a plan for consolidating their debt, renegotiate contracts with creditors to extend their payment period or file for bankruptcy to try and recover as many of their assets as possible. 

In a story that has taken the nation by storm, the once popular retail giant Sears has recently announced its decision to file for Chapter 11 bankruptcy protection. While their decision does not come as a surprise to some, it has still led many to question the brand's leadership in years past that ultimately led it to its demise. Recent reports detail how the company's supply chain is falling apart as more vendors express their dissatisfaction with not receiving the payment they were promised in exchange for product shipments. 

How long can I stay in my house after foreclosure?

When you fall behind on your house payments, your lender will start the foreclosure process. While you will not have to leave right away, you should be aware that eventually you will likely be forced out of the home. It is best to know ahead of time how long you will have so you can find a new place to live and be ready when the time comes to leave.

According to New Jersey Courts, you do not have to leave the home until after the sheriff's sale. This can be some time after the foreclosure process begins. The process begins when your lender files the foreclosure with the court. Then, you will have 35 days to file your answer. The court will take time to review your answer and the information filed by your lender. During this process, it can take weeks or months for the court to make a determination on whether your case will go on in the process.

Don't be shortsighted about a short sale

Some people who are mired in debt and can't afford to continue paying their mortgage think that unloading the property in a short sale will be to their benefit. What many fail to understand is there are financial implications, both tax and otherwise, that can adversely affect the sellers after a short sale.

If you don't want to run afoul of the Internal Revenue Service (IRS), you should learn all that you can about the potential repercussions for your tax situation before moving forward with a short sale.

What should I not do before filing bankruptcy?

There are many things that you may do that could lead you to having to file bankruptcy in New Jersey. However, once you make the decision to file, there are things you should absolutely not do. Some moves you make could lead to further trouble for you. It is a good idea to be aware of these things so you do not end up causing more issues for yourself as you try to file bankruptcy.

According to the Huffington Post, one thing you should avoid doing is incurring more debt. This can be looked as being devious and considered fraud. The court may not allow you to discharge new debt in your bankruptcy. Also, avoid transferring or selling any assets. The court may see this as trying to avoid paying your debts and consider it fraud. It could demand those items back. Any fraud charge could end you up in criminal court, along with hurting your bankruptcy case.

How does Chapter 11 differ for a small business?

Chapter 11 bankruptcy is reserved for businesses. It is a restructuring of debt. While all sizes of businesses can file under the chapter, things may be different for a small business than for a larger one. One of the important parts of Chapter 11, according to the U.S. Courts, is the creditors' committees. This committee is a group of the seven largest unsecured creditors. They investigate your business and finances and help to formulate the bankruptcy plan.

The tricky part when it comes to a small business is that there may not be enough creditors to form a committee. In this case, your business will be under more oversight from the U.S. trustee than cases that have the committee. The trustee will conduct the investigation that the committee would usually handle.

Preventing foreclosure by planning ahead

When homeowners in New Jersey are informed that their house is in foreclosure, many of them immediately panic and all realistic thoughts go flying out the window. While the thought of foreclosure is daunting to many, and rightfully so, people who plan ahead may have the chance to halt the process of foreclosure to allow themselves enough time to reassess and recreate a better agreement. 

According to the U.S. Department of Housing and Urban Development, there are several helpful programs that struggling homeowners may consider in an effort to stop the process of foreclosure. Some of these include the following:

  • Principal Reduction Alternative
  • Home Affordable Refinance Program
  • Home Affordable Modification Program
  • Second Lien Modification Program

Steps to take after bankruptcy

If you’ve recently filed for bankruptcy in Monmouth County, you may be wondering what steps to take next. Getting your finances back on track can take some time, but it is possible provided you have the right information, such as tips on how to create a viable budget. U.S. News & World Report offers the following advice in this case.

Review Your Financial History

Could your marriage fail because of your student loans?

In case you need another reason to get your debt problem under control, there is an additional issue plaguing consumers in New Jersey and elsewhere.

SunTrust Bank studied the effect of student loan debt on relationships, specifically, marriages. While it was no surprise that financial stressrs of all types create tension between spouses, researchers discovered that student loan debt was cited in 13 percent of respondents as the reason for their divorces.

Get A Free Lawyer Consultation

With offices in Toms River and Neptune, attorney William H. Oliver is ready to answer your questions and help you find the right debt relief solution. Evening and Saturday appointments are available. Call local: 732-988-1500 or fill out our contact form.

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