BANKRUPTCY FREQUENTLY ASKED QUESTIONS (FAQs)

What is a Chapter 7 bankruptcy?
Can my business file for Chapter 7?
What is a Chapter 13 Bankruptcy?
What is a Chapter 20 Bankruptcy?
Will I lose my house in Bankruptcy?
Will everyone know I filed Bankruptcy?
What is the automatic stay?
Can I exclude my favorite credit card from bankruptcy?
Can I exclude anything from bankruptcy?
Can I get rid of tax debt?
Can I keep my car through bankruptcy?
Can I get rid of motor vehicle surcharges in bankruptcy?
Must I stop payments on my pension loan?
Why is bankruptcy good for my credit?
What will happen at the meeting of the creditors?
Will bankruptcy ruin my credit?
Will creditors continue to harass me after I file bankruptcy?
Can student loans be discharged?
Can I modify my home loan while in bankruptcy?
How much does it cost to file for bankruptcy?
I have just been served a summons and complaint from a creditor. Will bankruptcy stop the lawsuit?
After filing bankruptcy, what do I need to do to completely get rid of the house?
Will bankruptcy stop creditors from calling me?
Should I choose a bankruptcy attorney based on costs?
What counties does Ponder Tuck Ponder serve?
What do I say to creditors once I retained your office for bankruptcy?
What should I bring to your office?
What should I do if I have more questions?
Why should I hire Ponder Tuck Ponder?


What is a Chapter 7 Bankruptcy?

A Chapter 7 is essentially a debt elimination solution to financial problems.  By Filing A Chapter 7 bankruptcy, a qualified person may get rid of (“discharge”) most or all of her unsecured debt to get a fresh financial start.  Unsecured debt may include credit cards, bank loans, medical bills, pay day loans, homeowners association dues, credit union loans and old taxes

If the person filing Chapter 7 has assets, as defined by the law, those assets may be sold— liquidated — to pay off debts that can be paid off before the rest of the debts are discharged.  The law does not allow all of a person’s assets to be sold; the person will not be left destitute because certain assets are exempt from the liquidation process.   In most cases, because of the legal exemptions, a person has no assets therefore nothing is sold and all dischargeable debt is eliminated through a Chapter 7.  Learn more about Chapter 7 Bankruptcies compared to Chapter 13 bankruptcies here.

If you want more information or need help determining whether Chapter 7 is the right solution for your situation call Ponder Tuck Ponder at 888.501.2318 or fill out our contact form. We will be happy to help you.

Can my business file for Chapter 7?

Yes, your business can file for Chapter 7. In a Chapter 7, the Trustee oversees and manages the orderly liquidation and closing of the business.

What is a Chapter 13 Bankruptcy?

A Chapter 13 bankruptcy can be viewed as a court-supported “debt repayment” plan.  An individual with”regular income” can create a plan to reorganize her financial life in a 3-5 year period.

A Chapter 13 is a very effective solution in many circumstances where the debtor has an asset, such as a house or car, that she wants to keep but is too far in arrears to reach an agreement to repay the creditor.  If the debtor successfully fulfills the plan she creates with the guidance of her attorney, the trustee and the bankruptcy court, at the end she may achieve other benefits such as the discharge of unsecured debt and the avoiding of judgments against property.

A Chapter 13 Plan has many elements and is a powerful tool for reorganizing your financial life.  How long the plan will last depend on many factors most notably, what you want to achieve, the amount of your disposable income, the value of your property, and the amount of your debt including arrears.

Through a Chapter 13, a debtor can avoid liens, file lawsuits against creditors, reduce second and third mortgages on residences, prevent foreclosures and sheriff sales, apply for loan modification or short sale property for a reasonable price without the lender’s permission.  Chapter 13 is a very powerful solution.

In order for the individual to qualify for the Chapter 13 solution she must not have too much debt or she will need to seek alternative solutions such as a Chapter 11.  Presently, if the debtor has more than $1,149,525.00 secured debt and $383,175.00 unsecured debt, she may not qualify for Chapter 13.

Learn more about Chapter 13 bankruptcies here.  Also read our plain language comparison between Chapter 13 and Chapter 7 bankruptcies here.

If you want more information or need help determining whether Chapter 13 is the right solution for your situation call Ponder Tuck Ponder at 888.501.2318 or fill out our contact form. We will be happy to help you.

What is a Chapter 20 Bankruptcy?

Chapter 20 does not exist in the bankruptcy code.  A Chapter 20 is a solution to financial problems created when a debtor uses a Chapter 13 and a Chapter 7  in succession. Put another way, Chapter 13 plus Chapter 7 equals Chapter 20.

A Chapter 20 essentially means the debtor files for bankruptcy twice in a short period of time.  It is a technique employed most often when a debtor needs to get rid of unsecured debt in a quick fashion without losing an asset such as a home.  By getting rid of the unsecured debt first, a debtor hopes to have the financial means to save a home, get a loan modification or short sell the home despite the lender’s resistance to such solutions.

Since a Chapter 20 is a multiple bankruptcy filing, both the Chapter 7 and Chapter 13 must be done in good faith.

Multiple bankruptcies are discouraged by requiring a waiting period between bankruptcies in order for a debtor to receive the benefit of the discharge in the subsequent bankruptcy.  After you receive a discharge in the Chapter 7, you cannot get a discharge in a Chapter 13 unless you wait four years to file.  However, where a Chapter 20 is used the debtor does not need a second discharge from a Chapter 13 so quickly.  She needs the Chapter 13 for other benefits it provides,

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Will I lose my house  in Bankruptcy?

If your goal is to save your house, it is not likely that you will lose your home.  There are a variety of bankruptcy strategies that can be used to save your home.   For example, if you are behind on your arrears and have the disposable income to pay off the arrearage in 36-60 months, a Chapter 13 plan will allow you to make those arrangements.  Or, if the arrearage is too large and your home underwater, you could attempt to have the loan modified while in bankruptcy.  Similarly, if your debt burden is too large, the more complex Chapter 20 strategy may be appropriate for you.

Also there are non-bankruptcy solutions that may be effective in saving your home. If you are behind on your payments, you may be able to obtain a loan modification through the bank.

Will everyone know I filed bankruptcy?

That’s not likely.  Although your filing is a public court record, your bankruptcy is not likely to be covered by the local or national press unless you are famous.

What Is the Automatic Stay?

The automatic stay, which is granted to a debtor the second he files a bankruptcy petition, is viewed as the most powerful tool in bankruptcy.  The automatic stay halts almost all collection efforts against the debtor’s estate.  The automatic stay stops foreclosures, wage garnishment, judgment collection, litigation actions, appeals, repossessions attachments and liens against property when it is in effect.

Can I exclude my favorite credit card from bankruptcy?

No. Absolutely not. All credit cards must be included in the bankruptcy petition.  Credit card companies will know whether you have filed for bankruptcy and are likely to discontinue your card privileges whether you give them notice or not.

Can I exclude anything from bankruptcy?

No. Everything must be included in the bankruptcy; however, some of those things are exempt from being liquidated in the estate.  Other items, such as your pension, may not be considered to be part of the estate, but still need to be reported.  It is a very bad idea to willfully leave part of your estate out of the petition.  The trustee and the U.S. Justice department do not take kindly to fraudulent filings.

You also need to include your creditors in the petition in order to assure that you receive the maximum benefits of the bankruptcy law.

Can I get rid of tax debt?

 Taxes that are owed to the IRS are a bit complicated to discharge, but it can be done.  The due date for filing the taxes must be three years old, the taxes filed must be two years old, the tax assessment must be at least 240 days, the return cannot be fraudulent or the tax payer cannot be guilty of tax evasion.  If all of these conditions are met, a debtor can discharge taxes in bankruptcy.

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Can I keep my car through Bankruptcy?

Prior to changes in the bankruptcy laws in 2005, anyone could file bankruptcy and keep their car simply if they continued to make payments. This was called the “pay and ride” option. However, today you could only exercise the pay and ride option with the permission of your lender.

If your lender does not give you the “pay and ride” option you are left with three choices which are not optimal:

1. You can surrender the car to the lender and avoid owing any money or what is called a deficiency when and if the car is sold;

2. You can redeem the car by paying the loan off and the car will be yours; or

3. You can sign written documents to reaffirm the debt, continue to pay the loan to keep the car and run the risk of being stuck owing money if the car is repossessed at any time afterwards.

Options 1 and 2 are often not practical because people need their cars and most people considering bankruptcy don’t have the money to pay off the loan. Personally, I don’t like the reaffirmation option, although courts look at reaffirmation agreements very closely to make sure they are fair. So where the “pay and ride” option is not formally available, the best choice may be to reaffirm the car loan.

Some debtors, ignore the advice of their attorney, and continue to “Pay and ride” without the lender’s permission. This is risky because the lender can exercise its right to repossess the car at any time.

As you can tell, the choices are difficult ones and it would be best to discuss your specific situation with an attorney.

If you want more information or need help determining whether you will be able to keep your car if you file for the bankruptcy solution, call Ponder Tuck Ponder at 888.501.2318 or fill out our contact form. We will be happy to help you.

Can I get rid of motor vehicle surcharges in Bankruptcy?

One of the most frequent problems I find in New Jersey is that individuals are caught in a lose-lose situation because they have a suspended license due to surcharges.  Many of these individuals not only cannot afford to pay the surcharges to reinstate their license, but they also risk either losing their job or remaining without a one because they cannot drive to work.  And of course there are those in New Jersey who risk even more penalties by driving with a suspended license so they can live, survive or take care of their families.

As I said, being unable to pay sucharges is a lose-lose situation for many, but i does not have to be.

In many cases it is possible that filing bankruptcy is a solution to the unaffordable surcharge problem.

A Chapter 7 filing can, in may cases, result in the discharge of surcharges which allows DMV to reinstate your license.  A Chapter 13 bankruptcy can be used to create a payment plan to pay the surcharge over a three to five year period.  The payment arrangement allows you to pay a restoration fee to reinstate your license.

If you need help managing or getting rid of surcharges, call Ponder Tuck Ponder, your new partner to financial security.

Must I stop payments on my pension loan?

No. In 2005, under the “new” bankruptcy laws, payments on pension loans could not be stopped or considered disposable income.

Why Is Bankruptcy good for my credit?

Bankruptcy will wipe away all unsecured debt and allow you to have a fresh financial start.  Although, it will stay on your credit report between 8-10 years, you will still be able to rebuild your credit.

What will happen at the meeting of the creditors?

In most cases, the “First Meeting Of Creditors” is the only time you will need to make an appearance before the judge or trustee.  This meeting is an opportunity for the trustee and any interested creditors to ask you questions about your situation based upon what you put in your petition. The trustee is interested in determining whether bankruptcy is appropriate for you and whether you have been truthful about your situation.  A normal meeting may last 15 to 20 minutes.

Typically, creditors do not show up because it is a waste of their time and money.  However a meeting can be a bit longer if a creditor does show up because it has a limited right to ask questions about your bankruptcy petition too.

Will bankruptcy ruin my credit?

One of the biggest misconceptions about bankruptcy is that it will ruin your credit.   Even people whose credit is horrible without bankruptcy believe that their credit will get worse.  This is understandable because people are told that bankruptcy will be reported for seven or ten years.  However, the notion that you cannot restore your credit after bankruptcy is absolutely false.  In fact, in many cases, the sooner you file bankruptcy the quicker you may restore your credit worthiness.

Will creditors continue to harass me after I file bankruptcy?

It is against federal and state law for creditors to harass you regarding discharged debt or debt being repaid subject to a Chapter 13 plan.  Unfortunately, some creditors don’t pay attention to the law.  Fortunately, we do.  If creditors continue to harass you in violation of the law, let us know and we can work with you to end their illegal behavior and possibly secure monetary damages for the harm caused by their illegal behavior.

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Can student loans be discharged?

 Taxes that are owed to the IRS are a little more complicated to discharge, but it can be done.  The due date for filing the taxes must be three years old, the taxes filed must be two years old, the tax assessment must be at least 240 days, the return cannot be fraudulent or the tax payer cannot be guilty of tax evasion.  If all of these conditions are met, a debtor can discharge taxes in bankruptcy.


Can I modify my home loan while in bankruptcy?

Yes, you can try to modify your loans while in bankruptcy.  In fact, debtors in bankruptcy may improve their chances of obtaining a decision regarding loan modification in a timely fashion while in Chapter 7 or Chapter 13 bankruptcy.  After filing a bankruptcy petition, debtors, through their attorneys, may apply for loan modification lenders who participate in a special program which allows the court to monitor the progress of the application.  While the process does not guarantee that a debtor will obtain a loan modification, the oversight of the bankruptcy court insures that the participating lenders are unable to drag out the process indefinitely and in bad faith.  Additionally, the bankruptcy attorney can use wither the Chapter 7 or Chapter 13 creatively to help the debtor rearrange his financial situation so that a loan modification if more likely and appropriate for her financial situation.  For more information about how to improve your chances of getting a loan modification, you may want to read our free ebook entitled 10 Secrets To Loan Modification Success by Rhinold Lamar Ponder.

For more information about the impact of Rising Redefault rates of HAMP Mortgage Modifications and how this is impacting homeowners also read the report by the Special Inspector General for the Troubled Asset Relief Program.


How much does it cost to file for Bankruptcy?

Attorney fees charged vary according to the attorney.  Generally, the attorney fee for a chapter 7 bankruptcy can range from $500 to $2000 depending on the attorney.  The attorney fees for basic services in a Chapter 13 vary also.  In, New Jersey an attorney may charge upwards to $3500 without the courts permission.  In a Chapter 13, an attorney may agree to take a lesser amount prior to filing a petition and to receive the remaining payment as part of the regular payment to the trustee to pay off debt. Put another way, the attorney fee could be included in the plan to make the solution more affordable.

In some instances, a debtor may be able to find an attorney or organization, such as legal services, to provide the service pro bono or for a lower fee reflective of her income.

The attorney fee does not include the filing fee which is a payment that goes to the U.S. Bankruptcy Court.   The filing fee for a chapter 7 is $306 and the filing fee for a Chapter 13 is $281.

There may be additional fees and costs depending on the service provided.  Make sure you sign a contract with your attorney so that you are aware of any potential additional fees costs which your matter may require.  For example, if you do not include all your creditors in the first petition, there may be an additional cost to file amendments to the petition.

At Ponder Tuck Ponder, we not only provide reasonable rates and payment arrangements, but we also communicate with our clients about costs so that they avoid financial surprises.

I have just been served a summons and complaint from a creditor.  Will bankruptcy stop the lawsuit?

The lawsuit will cease once a bankruptcy has been filed.  A creditor can still proceed with the matter if you simply hire an attorney and do not file a bankruptcy petition.

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I filed for bankruptcy and surrendered my house.  We no longer live in the property, but I am still accountable for it.  What do I need to do to completely get rid of the house?

Surrendering the home in bankruptcy does not absolve you of all responsibility. As long as the deed is in your name you may incur legal responsibility for the abandoned home.  In cases, where you paid condo association fees, you will be responsible for the fees accrued after you file for bankruptcy and before the deed is transferred.  This is a difficult situation.  Absentee homeowners may decide to rent the property until the deed is transferred by sheriff sale or she may work out an agreement such as a deed-in-lieu of foreclosure with the lender.  After abandoning the home, you may also advise the municipality that the property is vacant since the law allows the municipality to hold the lender accountable for the upkeep of abandoned property.

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Creditors keep on calling me at home and at my job.  They keep on harrassing me at my job and I am afraid that I will loose my job.  Will bankruptcy stop the credit collections?

As a debtor, you have a right to request debt collector to stop calling your place of employment.  Retaining an attorney for bankruptcy should stop creditor calls.  Filing bankruptcy will eradicate debt collection.  Please refer to  http://www.ftc.gov/os/statutes/fdcpa/fdcpact.shtm for more information on the FDCPA.

Should I choose a Bankruptcy attorney based on cost?

The basis one chooses an attorney is very personal; however it is not advisable to choose a legal service provider based on costs alone.  Attorney fees charged are not the best measure of whether an attorney is good or will be good for you.  Research and referrals are very helpful when searching for legal assistance.  You should make sure that the professional will treat you with respect, be communicative about your matter and will listen closely to fully understand and address your concerns.

When you consider the benefits of bankruptcy, such as getting rid of thousands of dollars worth of debt, the relative difference in costs becomes less important than how effective the process is in giving you a new start financially and psychologically.

At Ponder Tuck Ponder our fees are reasonable and we accommodate our clients with reasonable payment arrangements. We treat our clients as partners in the task of creating and executing solutions to address their problems

What counties does Ponder Tuck Ponder serve?

Although our office is located in Princeton, we service clients in north, central and south Jersey.  We appear in bankruptcy courts in Trenton, Camden and Newark.

We try to make it as convenient as possible for our clients to work with us no matter where they are.  Technology allows us to communicate with our clients and exchange documents and fees electronically without them coming to our office.  Additionally, we make “house calls” and are willing to meet clients, who reside over 60 minutes away from our office, at their home or a predetermined mutually beneficial venue for an in-person meeting.

No matter where you are, we will make it work for your benefit.

What do I say to creditors once I have retained your office for bankruptcy?

I have retained an attorney for filing bankruptcy.  His name is Rhinold Ponder, Esq. and you can reach his office at 609.897.0430.  You can also send them a letter in writing to inform them not to refer all matters to your attorney.  If they persist in contacting you, they are in violation of the law.  Let us know and we will take care of the matter and possibly obtain monetary damages for their actions.

What should I bring to your office?

The list of documents we require can be found here.  For our first, meeting you should bring us as much as you can, but do not let your inability to find anything deter you from getting the help you need.  Keep in mind that what we need is proof of your identity and address. We also need information about your assets, debts and other liabilities, income and expenses.  You should also begin to gather the addresses of all of your creditors which can be provided by giving us copies of the latest bills. Where real estate issues are concerned we will need arrearage and payoff amounts, the value of property and the amount of debt and evidence of the status of any lawsuits against you.

The best way to think of your first visit, is for you to come with as much documentation as possible to show the specifics of the problem you want to solve.    For the bankruptcy as a whole refer to the communication we send to you requesting a variety of docs.


What should I do if I have more questions?

If you have more questions or a suggestion regarding a question and answer to add to this FAQ Contact Us?


Why should I hire Ponder Tuck Ponder?

At Ponder Tuck Ponder, we are passionate about improving the lives of our clients and treating them as partners in designing and executing the solutions they need.   Our first objective is to understand the needs and desires of the client by listening with an open and empathetic ear.  As indicated by client’s testimonials, not only are we competent and aggressive problem-solvers, but we care about the people we work for.   We would love to help you regain control over your life.

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FIVE EASY WAYS TO CONTACT US

1. We are available by phone at (888) 501-2318.

2, You can reach us by e-mail at info@pondertuckponder.com.

3. Complete a contact form on this website.

4. Our offices are located at 3490 US Route 1, Princeton, NJ 08540.

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