Patrick Moscatello, Attorney at Law
Debt Solutions - Foreclosure Prevention - Bankruptcy
How The Bankruptcy Process Works- Chapters 7 And Chapter 13
You can retain me when you come in for your initial consultation or when you return the completed worksheets. Once I receive your initial retainer, my office will do a number of things including:
The Initial Consultation.
The process of filing a Chapter 7 or a Chapter 13 begins with an initial consultation in my office. When you call my office, my staff or I will gather some initial information and schedule an office consultation with me at my Long Branch or Toms River office. During the initial consultation, I will go over your financial situation in detail, go over the process of Bankruptcy with you and go over the information and forms we need in order to prepare your Bankruptcy petition. There is never a charge for your initial in-office consultation with me.
· Prepare the petition.
· Allow you to refer creditors who are calling you to my office.
· Assist you in setting up your initial credit counseling session.
· Provide you with a current credit report
You are required to complete two credit counseling sessions. One has to be completed before your Bankruptcy petition is filed and one after your petition is filed. Your credit counseling sessions can be done at home on the telephone or on the internet. When you complete each credit counseling session, you are issued a certificate. We need your first certificate to file your bankruptcy and your second for you to receive your discharge.
Preparing And Filing The Petition
Your Bankruptcy begins by filing a petition with the Bankruptcy Court.
The first step in preparing the petition is for my office to work with you to gather the information required to complete the petition. When you meet with me I will go over the worksheets that need to be filled out, and the documents that need to be submitted to the Trustee.
Once we receive all of the required information, my office will prepare the petition for my review. We work with you to make sure we have complete, up to date information. Help is available from me or one of my staff every step of the way.
After the petition is completed we can mail the completed petition to you for you to review and sign, or schedule a time for you to come into our office to review and sign the petition.
Once the petition is signed, we electronically file the petition with the Bankruptcy Court.
The moment the petition is filed with the Court, an Automatic Stay goes into effect. The Automatic Stay means that all civil law suits and all collection efforts are automatically stopped. If a creditor is about to sue you, it is prevented from doing so. If there is a lawsuit in progress, it is halted. Even if the suit has resulted in a judgment, the creditor is prevented from doing anything to enforce the judgment. If a garnishment is in effect it will be halted.
Meeting With The Chapter 7 Trustee
When you file a Chapter 7 bankruptcy, a Trustee is appointed from a panel of Trustees to administer your case. The Court also schedules a meeting conducted by the Trustee, which you need to attend. The meeting is held in Trenton, Newark or Camden, depending on where you live. Your meeting with the Trustee is not a Court hearing. No judge will be present. An attorney from my office will be with you at the meeting. Meetings with the Trustee usually take less than five minutes.
At the meeting, the Trustee will ask you a number of questions, under oath, about the contents of your petition. My office will provide you with the kinds of questions debtors are usually asked at their meeting. Part of the Chapter 7 Trustee's job is to make sure your bankruptcy petition is accurate and complete. One of the Chapter 7 Trustee's other jobs is to see if you have any property outside of the limits you are allowed to keep in a Chapter 7.
The Bankruptcy Code includes a number of exemptions which allow you to keep a great deal of property and still get out of your debt. The policy behind the bankruptcy law is to allow you to obtain a "fresh start," so you are permitted to keep a great deal of property including some equity in a home, household possessions and even cash. The exemption rules are complex. My office will go over your petition to make sure that your possessions are exempt.
After You Meet With The Trustee
Approximately two to three months after you meet with the Chapter 7 Trustee, you should receive your discharge.
During that time, you need to complete your second Credit Counseling session (called Debtor Education). My office will obtain the certificate from you or the counseling agency and submit it to the Bankruptcy Court.
Otherwise, your other debts will be discharged, which means you are no longer legally responsible to pay them.
Discharge And Closing Your Case
Once we receive your discharge, my office will forward it to you. A discharge means that you no longer owe your debts. There are some debts which you cannot discharge in a Chapter 7, including most student loans, some taxes, and child support and alimony. I will go over your debts with you to advise you if any of your debts may be nondischargeable.
Generally, most Chapter 7 cases are closed shortly after you receive your discharge. The Court enters a final decree and your case is closed. My office will notify you when we are notified of the Final Decree.
Click Here for a flow chart of how Chapter 7 works.
Chapter 13 is a process different from a Chapter 7 in a number of ways.
The initial process of meeting with me and preparing the petition and completing your credit counseling are essentially the same.
The main difference between a Chapter 7 and a Chapter 13 is that in a Chapter 13 you are paying one or more of your creditors over a period of time, usually from 36 to 60 months. So, in addition to filing a petition, we also file a document called a Plan. The plan explains who you are paying, how much you intend to pay and for how long.
There are many different reasons why you would file a Chapter 13 instead of a Chapter 7.
For example, if you are behind on your mortgage, you can go into a Chapter 13 and force your mortgage company to accept a repayment plan to pay back your mortgage arrearages over a period of up to 5 years. Your foreclosure - and all other lawsuits - are stopped and you may qualify to discharge all of your other debts, such as credit cards and medical bills. For example, if you were $5,000.00 behind on your mortgage, your plan might call for payments of $100.00 per month to pay back your mortgage arrearages.
Another example of using a Chapter 13 instead of a Chapter 7 is when you have assets, such as a home, which have too much value for you to go into a Chapter 7. If, for example, you owed $30,000.00 in credit cards and your house, after applying all available exemptions, was worth $5000.00 too much for you to go into a Chapter 7, we would place you in a Chapter 13. You would make payments of a little over $100.00 a month. Your creditors would receive $5,000.00 and you would discharge the remaining $25,000.00 of credit card debt.
Chapter 13 can be used to pay taxes and freeze the interest and penalties as you pay. It can also be used to put you into a payment plan with your creditors when your income is too high to file a Chapter 7.
Making Your Trustee Payments
You begin making the payments called for under your Chapter 13 Plan beginning on the first of the month following the filing of your plan. So, for example, if your plan is filed on May 15th you would make your first monthly payment to the Trustee on June 1st. My office will provide you with complete instructions on how to pay the Trustee.
Meeting With The Chapter 13 Trustee
Approximately a month after your Chapter 13 is filed, you meet with the Chapter 13 Trustee.
Your meeting with the Chapter 13 Trustee is different from a meeting with a Chapter 7 Trustee. The Chapter 13 Trustee focuses on going over your plan to make sure you are making the correct payment and that you have the income to make your monthly payment. The meeting is brief and an attorney from my office will accompany you, as in a Chapter 7.
After The Meeting With The Chapter 13 Trustee
You should complete your second credit counseling session as soon as possible after you meet with the Trustee.
A few weeks after your meeting with the Trustee, there is a Court hearing called a Confirmation Hearing at which the Court decides whether or not to approve your plan. My office handles the confirmation hearing. You do not need to attend. When your plan is confirmed, the Court issues an Order confirming your plan. My office will make sure you are provided with a copy of the Order for your records.
After that, you simply continue to make the monthly payment to the Trustee called for in the order.
Discharge And Closing
When your plan is complete, you receive a discharge from the Court and your case is closed, just as in a Chapter 7.
Click Here for a flow chart of how Chapter 13 works.
Contact us for a free case evaluation.
Patrick Moscatello, Attorney at Law
|Long Branch Office
90 Washington Street
Long Branch, NJ 07740
| Toms River Office
189 Rt. 37 West
Toms River, NJ 08753
|Phone: (888) 332-8247