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Three types of creditor claims in Chapter 13 bankruptcy

When a person files for Chapter 13 bankruptcy in New Jersey, part of the process is a requirement that the filer, also called the petitioner, submit a repayment plan to the bankruptcy court. Unless the court grants the petitioner an extension, he or she must submit the repayment plan within 14 days after the petition is filed. The repayment plan may be submitted at the same time as the petition. The submitted plan must provide for payments to be made to the bankruptcy court in fixed amounts on a regular basis.

Typically, the plan will set out payments to be made either monthly or biweekly. After each payment is made, the bankruptcy trustee will distribute the funds to the petitioner's creditors according to the plan's terms. In a Chapter 13 bankruptcy, the creditors might not be entitled to collect the full amounts of their debts. There are three different kinds of claim that a creditor may have: secured, unsecured and priority.

Budget and plan for a successful holiday season

Consumers spend billions of dollars on Black Friday and Cyber Monday every year. Most people in New Jersey participate in these sales that offer great deals in advance of the holiday season. To avoid overspending on these popular shopping days, consumers should consider these tips.

Many retailers offer special pricing on Black Friday and Cyber Monday. It could be tempting to take advantage of all of them. However, to avoid going into debt, consumers should set a budget and stick to it. Spending too much could result in Chapter 7 bankruptcy later. After all, many of the deals offered on those two days will be available again.

Bankruptcy offers relief from unexpected mortgage tax bills

Many individuals in New Jersey and around the country who had some of their mortgage debt cancelled or forgiven after losing their homes due to a foreclosure or short sale now find themselves owing tens of thousands of dollars in taxes. For the last 10 years, up to $2 million in forgiven or cancelled mortgage debt was deductible thanks to provisions introduced in the wake of the 2008 financial crisis, but those tax breaks expired at the end of 2017.

Hopes that Congress would act to extend the tax breaks are dwindling as lawmakers turn their attention to impeachment proceedings and other matters, but relief is available under other parts of the U.S. tax code for individuals who are insolvent or going through a bankruptcy. However, individuals who hope to avoid tens of thousands of dollars in taxes by filing for bankruptcy may be wise to act quickly as the rules for discharging these obligations become far more complex once taxes have been assessed.

Individuals may file for bankruptcy separately, even if married

It is possible for one spouse to file for bankruptcy in New Jersey even if the other does not. In cases where the spouses do not own property together and their assets and debts are generally not commingled, the individual filing of one spouse may not be overly complicated. In other cases, however, one spouse filing for bankruptcy under Chapter 7 or Chapter 13 of the Federal Bankruptcy Code might have ramifications for the other spouse. The facts of the case will determine whether one spouse can file without impacting the other.

One factor that can have a major impact on the decision to file is shared debts. If a married couple has shared debts, it may make more sense to file for joint bankruptcy. If there are shared debts and one spouse secures a discharge, creditors may still go after the other spouse to collect the debts. The other spouse may also see negative marks on his or her credit as the bankruptcy and discharged debts might show up on credit reports.

Detailing bankruptcy exemptions

One of the more common questions that those seeking Chapter 7 bankruptcy protection in Hackettstown have is whether o not filing for bankruptcy will force them to forfeit their personal assets. For those facing seemingly insurmountable debts, the appeal of bankruptcy comes from not having to worry about creditors continuing to seek action against them (thus driving them further and further into debt). Yet when faced with the prospect of potentially losing their homes and/or other valuable assets, many might choose to abandon the idea of bankruptcy altogether. 

Whether one will be forced to part with any of their personal property in a bankruptcy case depends on the bankruptcy exemptions available to them. The law allows debtors to exempt a certain portion of the equity they have in their property from being seized by creditors. For example, if a person has $12,000 of equity in their home, and the law allows them to exempt up to $15,000, then that means that their home cannot be sold to repay creditors as part of a bankruptcy case. However, if the law only allows them to exempt $10,000, then they will be given that $10,000 by their bankruptcy trustee, and then the house will be sold. 

How can I save money during the holidays?

The holiday season will be here before you know it. Overspending during the holidays is a real problem for many people, especially if you're already on a tight budget. Fortunately, it's possible to enjoy the holidays without ruining your finances, as illustrated by these tips from Moneycrashers.com

Before spending season starts, take a moment to think about how much money you'll need to get through the holidays. Along with gifts and presents, also consider costs for hosting dinner, traveling, and decorations for your home. Once you have a reasonable figure, set it as your budget and don't deviate from it. Developing a plan for spending will allow you to make better decisions since you'll have time to think them through. It will also allow you to look for the best deals when buying items, which can save money. 

Bankruptcy and other hardships in life

For some people, the decision to file for bankruptcy (as well as the entire process) may be somewhat straightforward and free of concern. Others may have a very hard time due to bankruptcy, whether they are facing uncertainty over their decision to file a bankruptcy petition or they face various difficulties in the midst of a bankruptcy case. Moreover, some of these challenges can be especially difficult for those who are going through different hardships in life, such as a divorce, the loss of a loved one or serious issues involving children and other family members.

If you are facing major hardships in your life that are interfering with your daily schedule and ability to concentrate, it may be smart to postpone bankruptcy for a short period of time. However, you should not procrastinate or become complacent, especially since debt and other financial issues can spiral out of control when left unaddressed. We know that bankruptcy can be a very complex and challenging process for people who are going through certain challenges in life, but you may be able to make your circumstances easier by carefully concentrating on your options and approaching your bankruptcy.

Chapter 11 bankruptcy may be part of drug company settlement

Over many years, drug company Purdue Pharma made billions of dollars manufacturing, marketing and selling opioid narcotics like OxyContin across the United States, including New Jersey. However, with 400,000 people in the United States having lost their lives due to opioid overdose since the year 2000, drug manufacturers are starting to experience pressure from the public in the form of lawsuits and sometimes criminal investigations.

Currently, local and state governments have brought over 2,000 lawsuits against Purdue Pharma alone, alleging that it pressured doctors into prescribing OxyContin while downplaying the risks of patients becoming addicted. Reportedly, Purdue Pharma is currently negotiating a settlement agreement that would put these lawsuits to rest. One of the terms of the agreement would require the company to file for Chapter 11 bankruptcy

How can I stick to my bankruptcy budget?

Chapter 13 bankruptcy allows you to get control of your finances once again. Budgeting is crucial in this case, as you must adhere to the repayment plan provided by the court or your bankruptcy may be revoked. Because sticking with a budget can be difficult for even the most well-intentioned people, The Balance offers the following helpful tips to ensure a bright financial future ahead of you. 

If your budget is too strict you may be setting yourself up for failure. It's unrealistic to say that you're going to stop all non-essential spending, as very few people can actually live a life of such austere means. Instead, occasionally treat yourself to things like dining out or going to the movies as a reward for keeping to your budget. Just make sure that you're not constantly spending money on non-essential purchases, such as a daily cup of coffee. 

What financial issues to business owners face?

Running your own business is extremely fulfilling, but it's not without its challenges. In fact, many small business owners face a myriad of financial issues. If these issues aren't adequately addressed, they may lead to increased debt and instability down the line. To ensure you have the knowledge you need to handle the financial aspects of your business, The Motley Fool offers the following advice. 

First and foremost, you should be acutely aware of your business's incoming flow of cash. Sloppy bookkeeping prevents you from having a good grasp on your financial health. It may also cause you to overdraft bank accounts when invoices go unpaid. When you know how much money is coming into your business at a given time, you'll be able to undertake the proper financial planning to keep your operation afloat. 

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