Bankruptcy expert and writer Daniel Clark looks at some of the key factors to be considered in the case of New Jersey bankruptcy law, but which are also applicable to other jurisdictions too.
Bankruptcy is a legal status of a person or any other entity who cannot repay the debts that is being owned from the creditors. It is usually a process in which the consumers as well as businesses can repay some or all of the debts under the protection of federal bankruptcy court. Thus, while filing for bankruptcy one needs to consider certain things in order to move further with proper proceedings.
So, listed below are some of the important factors by New Jersey Bankruptcy that are considered crucial for any kind of bankruptcy case. Let us have a look on that:
- Self employment:
- the bankruptcy. The important paperwork like the statement of profit and loss, the statement of financial affairs as well as business questionnaire are important for the self employed for filing up bankruptcy.
- It is most probably not true that owning a business would make one ineligible for the bankruptcy. At most of the times, self employment could make a tough case. By not holding the appropriate records of income, the self employment could be considered as a difficult case in
- Tax issues:
- If one is having unfilled tax returns, then one is not eligible for filing bankruptcy case as it may cause problems in bankruptcy. Generally, it is required to provide the lawyer with the previous 2-3 years of the tax returns before filing for any bankruptcy case. If one is having any of the unfilled tax returns outstanding at the time of filing for bankruptcy, one needs to file all overdue tax return in one week before the bankruptcy hearing.
- Student loans:
- The student loans are also considered as dischargeable in bankruptcy. Due to some of the debt limits the student loans could disqualify from many types of bankruptcy while forcing Chapter 13 payback plan harder to fund.
- Child support:
- Any kind of child support payments as well as child support arrears are seen as a debt which is not at all eligible for any kind of discharge in bankruptcy. Along with the recent revision in the law, it has been stated that in the bankruptcy laws it would require the trustee to check any kind of domestic support requirements while providing the information to recipient.
- Large payment to creditors while filing bankruptcy:
- One need not make large payments to any particular creditor before going to file for bankruptcy. This type of cases is known as preferential payment or Preference. Showing preference to any of the one creditor over the other may lead one in trouble.
- Inheritance cases:
- In the inheritance case, trustee could have a chance to pay back creditors and turn the case into a more profitable one. So one has to disclose each and every situation, otherwise it could lead into worse conditions. The attorney would determine as to how much of its assets could be protected by the bankruptcy exclusions.
- Other major considerations:
- If one has transferred the assets, ran up credit cards or the taken cash advances before filing for bankruptcy could make you to face the problems. If there is any issue or the court thinks that one has lied about their assets, then one is liable for their debts as well as the discharge may be denied. In some of the worst cases, one could face the criminal charges.
Thus, these were major considerations that one should keep in mind which could cause problems while facing bankruptcy.
Daniel Clark, is a legal advisor on the bankruptcy and its related issues. Here he is sharing some of the major points listed down by New Jersey Bankruptcy to keep in mind that could cause problems in bankruptcy.