We are South Jersey Bankruptcy attorneys providing debt relief advice and representation. With 25 years of in-depth experience and board certification, we can help people steer their way out of trouble and obtain debt relief under the Bankruptcy Code and other laws. Especially in these days of financial crisis, skilled, experienced guidance is essential.

First Meetings of Creditors - what is it and why is it important?
First Meeting of Creditors - I cannot come. What do I do?
How do I get to courts or hearings?
Do I need a bankruptcy? Can't I just dig out of debt myself?
Should I use a debt settlement company?
Why shouldn't I settle with my creditors outside of bankruptcy?
What is "debt discharge income"?
Pension, IRA or 401K withdrawal - is it a good idea?
Saving my home - will the lender lower my payments or give me a deal?
Saving my home or car in Chapter 13
Short Sale-should I use a short sale to avoid foreclosure?
Taxes-I owe back taxes
I have large tax liens against me. What do I do?
Will I have to go to Court?
Will my neighbors or boss find out?
What about my security clearance?

What is the First Meeting of Creditors and why is it important?
This is really the formal hearing with the representative of creditors, where each debtor is required to testify under oath and answer questions about assets, finances and provide information. Usually, this hearing is in a hearing room in a courthouse or an office. In Chapter 7 and Chapter 13 cases, the hearing is conducted by the trustee. In Chapter 11 cases, a representative of the United States Trustee presides. Creditors can appear and ask questions but this is rare except in big or hotly disputed cases. Usually their involvement is limited.

For most debtors, this is their first and only appearance at a hearing. If their attorney is knowledgeable and prepared, he or she has already assembled the documents needed to answer the questions likely to come up. Properly prepared, a debtor should have a pretty good idea what these questions will be. In fact, most trustees send out notice ahead of time listing the documents and information needed.

This hearing is very important. Not being prepared can result in complications, more hearings with more time off from work, delays, expense and anxiety. You and your attorney should have supplied the information the trustee needs, or bring it to the hearing.You should prepare by reviewing again your Petition, Schedules and other papers you filed. If there is anything inaccurate in them, you should tell your attorney and be prepared to correct that error, and disclose and explain why it happened. Any type of dishonesty or concealment can have bad side-effects. You could lose your discharge, or your property, or your right to claim property as exempt. You could face civil or criminal action.

DO: Arrive on time with your papers.
DO: Bring your government issued photo-ID and original Social Security Card, paystub with your full Social Security Number, W-2, 1099 or other form of approved original document to verify your Social Security Number.
DONT: Bring any type of weapon. If your hearing is in a courthouse, leave your cellphone in your car or outside.

Directions to First Meeting Hearing Rooms in New Jersey

I cannot come to the First Meeting of Creditors. What do I do?
The answer depends on why you cannot make it. If you have another important commitment that you cannot break, your attorney should call the Trustee in advance to reschedule. You may be required to provide information or documents the Trustee has asked for, in order to be allowed to do this. If you are unable to come because you are ill or disabled, or are going to be out of town for a lengthy period of time, your attorney can arrange for the First Meeting to be conducted by telephone, but this will require a court order. Your attorney should know all this and know how to handle these situations.

How do I get to courts or hearings?

CAMDEN, NJ
From North or South via NJ Turnpike :

NJ Turnpike to Exit 4 (Philadelphia); bear right onto Rt. 73 North. Take Rt. 38 West exit (quick right). Proceed on Rt. 38; stay to right when Rts. 38 & 70 merge. Exit at ramp for 30 West (Admiral Wilson Blvd./Ben Franklin Bridge) Take Mickle Blvd /Campbell Place exit. Follow ramp around to right. At fork in the road, follow the Market Street/Business District sign (bear right) until you come to a stop sign. Make left onto Market Street. Proceed through five traffic lights. The US Post Office and Federal Building will be on right at the corner of Market and Fourth streets. Enter building though front doors; take long straight stairway visible from metal detectors (or elevator) to second floor. At the top of stairs turn right then about halfway down that hallway, turn left onto the bridge to the main courthouse. In the Courthouse, take elevators to the 4th Floor.

From Camden County or Burlington County:

Take Route 70 or Route 38 West towards Camden. Where Routes 70 and 38 merge, follow signs to exit onto ramp for Route 30 West (Admiral Wilson Blvd/Route 30/Ben Franklin Blvd. Take Mickle Blvd /Campbell Place exit. Follow ramp around to right. At fork in the road, follow the Market Street/Business District sign (bear right) until you come to a stop sign. Make left onto Market Street. Proceed through five traffic lights. The US Post Office and Federal Building will be on right at the corner of Market and Fourth streets. Enter building though front doors; take long straight stairway visible from metal detectors (or elevator) to second floor. At the top of stairs turn right then about halfway down that hallway, turn left onto the bridge to the main courthouse. In the Courthouse, take elevators to the 4th Floor.

From Shore Points:

Take Atlantic City Expressway, North to Rt. 42. Proceed on Rt. 42 and stay right to exit onto Rt. 676 (Camden). Stay on Rt. 676 to Exit 5B which is the last exit before Ben Franklin Bridge/Rutgers University. Make left at light onto Linden St. and make left at light onto Haddon Ave., which is last light before tolls to the B.F. Bridge. Continue on Haddon Avenue to 1st light (Cooper Street) and turn right for Courtrooms/Mitchell H. Cohen Courthouse; stay on Haddon to 2nd light (Market Street)

Parking is available at the following locations:
• On Market Street between 3rd and 6th Streets
• On Cooper Street between 5th and 6th Streets
- Parking lot on 4th Street between Market and Federal (on Market St heading towards river, turn left at 4th Street)
-Parkade on 6th Street next to Rowan/Camden County College (on Cooper St. heading towards river, turn right at 6th Street)

Bankruptcy Courtrooms are located on 4th Floor of the Mitchell H. Cohen US Courthouse directly behind the post office building. If in Post Office Building, go to 2nd floor and take the link-way to the Mitchell H. Cohen U.S. Courthouse. Once in the Cohen building, you will see a bank of elevators on the left. Take to 4th floor courtrooms 4B or 4C. From Cooper Street entrance, proceed into building and elevators are on the left. Take to 4th floor courtrooms.

Clerk's office is on second floor in Post Office. Take elevators to second floor. Clerk's office is directly opposite elevators on the second floor.

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COMING WEST ON ROUTE 70
(FROM MEDFORD, HEADING TOWARDS CAMDEN)

At intersection with Route 73 (Marlton Circle), make a left, towards Olga's Diner. Proceed to the 4th traffic light south of the circle, Ardsley Drive (just past Genuardi's supermarket on left; look for Target on corner). Turn left at Ardsley Drive. Turn into the second driveway on the right hand side, then bear left. We are at the first end of the closest building.

FROM MARLTON BYPASS

Take Marlton Bypass to Route 73 then turn left. Turn left at next traffic light, Ardsley Drive. Turn into the second driveway on the right hand side, then bear left. We are at the far end of the first building.

FROM VOORHEES AREA

Take Evesham Road to Route 73. Turn right onto Route 73 South, then left at the next traffic light, Ardsley Drive. Look for Target on the corner.Turn into the second driveway on the right hand side, then bear left. We are at the end of the first building.

Do I need a bankruptcy? Can't I just dig out of debt myself?

You might be able to, but many people underestimate how much debt they have or how "financially underwater" they are. They also do not know how much it cost to try to pay off credit card debt at very high interest rates. To find out for yourself, go to our bankruptcy resources page for some helpful links and budget worksheets. It is possible that you might be able to settle with your creditors, but only if you have disposable income or a lump sum of cash available. Also See our FAQ below.

Should I use a debt settlement company?
Lots of companies promise that they can help you get out of debt, but we recommend that "buyer beware". There are ethical and qualified companies out there, especially the non-profit companies. However many companies charge hefty upfront fees, and then are unable to achieve the promised benefits. The results for people without substantial dispoable income (that is income left over to pay debt after housing, food, transportation, medical and other basic living expenses) are poor. In an April 22, 2010 study by the Government Accounting Office entitled : Debt Settlement, Fraudulent, Abusive and Deceptive Practices Pose Risk to Consumers, the GAO reported that less than 10% of these programs were successful. Before going this route, you should carefully look at your own budget, or better yet, contact us at 856-596-2828 for a consultation so we can review all your alternatives with you. WE DO NOT "SELL" BANKRUPTCY..WE WORK TO HELP YOU FIND THE RIGHT SOLUTION FOR YOU. If we think there are realistic alternatives to bankruptcy we will tell you about them. And some clients hire us or with our help do work out settlements with their creditors.

You should keep in mind that a Chapter 13 Bankruptcy Plan is in fact a court-approved and federally-protected debt payment plan, in which you pay what you can afford over 3 to 5 years. If this is what you want then this may be what you need.

Why shouldn't I settle with my creditors outside of bankruptcy?
There are several risks you have to carefully consider.

First, there is "debt discharge income". If you settle for less than 100% of what you owe you can get hit with a large tax bill. See "What is debt discharge income?" below.

Secondly, not all your creditors may be willing to settle for payments you can afford or lump sum payments you can make. You are left with lingering threats of suit or collection. If you file a bankruptcy this is not a problem in most cases.

Third, your creditors may "smell blood" or ask for and get detailed financial information from you that they can use against you to collect if you do not agree to their terms.

What is "debt discharge income"?

Will I have to pay tax on the debts I can avoid paying? When you file a bankruptcy and get a discharge of debts, the amount you save is not taxable as income to you.

If you settle debts outside of bankruptcy, this is no longer true. Outside of bankruptcy any money you save will be taxed as "ordinary income" to you the same as a salary. You will get a 1099 at the end of the year for the amount the creditor wrote off. This is called "debt discharge income". The tax you owe on this DDI (money you never received) will have to be paid out of your own pocket. And the tax is almost always not dischargeable in bankruptcy.

For example, let's say you owe $50,000 to a creditor and the creditor agrees to settle for $19,000.00 and cancel the rest of the debt. If you are in a 30% tax bracket, you will owe another $7000.00 in tax on the $21,000.00 that is saved.

See your accountant or tax adviser for more details.

IRS CIRCULAR 230 DISCLOSURE: Pursuant to Treasury Regulations, any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used or relied upon by you or any other person, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any tax advice addressed herein.

Should I use a debt settlement firm?
Debt settlement firms actively market their services on the Internet. However, the Government Accounting Office, in a report issued April 22, 2010 found that many of these firms charged high up front fees, had a low success rate, less than 10%, and made false promises to lure customers. As reported by the Washington Post on April 23, 2010, consumer advocacy groups have complained that these firms were "charging hefty upfront fees before calls to creditors are made...misleading consumers in sales pitches and instructing them not to pay bills." Very often, the same or better results can be achieved at less cost with a court-supervised and approved Chapter 13 bankruptcy plan.

Before signing contracts for "debt settlement services" contact us at 856-596-2828 for a consultation so we can review all your alternatives with you. WE DO NOT "SELL" BANKRUPTCY ... WE WORK TO HELP YOU FIND THE RIGHT SOLUTION FOR YOU.

Should I take money out of an IRA or profit sharing plan?
Answer: almost never. In New Jersey and most other states, money that was legally placed into an IRA, pension, 401K or 403B profit sharing plan, including by rollovers, cannot be reached by creditors or a bankruptcy trustee to pay debts. (There are a few exceptions, including the IRS, and to pay child support). For most people in financial difficulty, this money may be the only "nest egg" they will have. And you pay a hefty tax and penalty on an early withdrawal, in most cases. This tax obligation cannot be discharged in a later bankruptcy.

Before thinking of taking an early withdrawal, you should speak to us to understand your options. Call 856-596-2828 to schedule a free consultation.

IRS Circular 230 Disclaimer: To ensure compliance with IRS Circular 230, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein

Can't I just get the lender to lower my interest payments or reduce the balance owed?
We just have not seen this happening yet, but things are changing all the time. Do ask about this, but don't rely on the lenders to solve your problems for you. Consider all your choices, including bankruptcy. In our experience, lenders will only deal with borrowers in trouble if they are convinced that the borrower cannot be convinced to pay, and will only offer something if they are also convinced you CAN pay. One tactic that had worked for us with creditors is to, literally, prepare the bankruptcy, and send the lender the draft bankruptcy schedules, with an explanation how poorly they will do if a bankruptcy is filed! This has worked in some instances. Even then, there are no guarantees and no one should rely on lenders being caring or lenient with them. They are interested in making money and cutting their losses. A Chapter 13 bankruptcy might help you achieve the same thing, with court protection. PLEASE NOTE: while there is presently talk about changing the law to let bankruptcy judges "restructure" mortgages this is not yet the law, and if and when passed, will no doubt require careful and experienced advice.

Chapter 13- Can I save my home using Chapter 13? Can I keep my car? How much do I have to pay?
Yes you can, and you will have legal protection in doing so. Chapter 13 allows most individuals and families to restructure their debts through a simplified form of personal reorganization, under a court approved plan that lasts for 3 to 5 years. This plan can provide for you to bring your mortgage or other car loans current through payments made to the Chapter 13 trustee, in addition to your keeping current on the loans after you file. However, there are several requirements for success. First, you need to be able to afford the payments you will have to make. Secondly, in addition to bringing these mortgages or car loans current you will have to pay any taxes, child support or alimony you owe (and certain other "priority debts"). And depending on your income and assets, you may have to pay something towards your other debts. The starting point is to carefully assess what you can afford and to see a qualified and experienced bankruptcy attorney as soon as possible.

Should I use a "short sale" to avoid foreclosure?
Short sales are where you try to sell your home even though it will not sell for enough to pay off the mortgages and sale costs. We recommend this only if you do not have other debt problems that will require a bankruptcy to deal with, and if you are fully aware of all the problems. On the one hand, not having a foreclosure on your credit record can help you rebuild good credit later, and can make it easier for you to rent another place to live. On the other hand, any such benefit is likely to be minimal if you end up filing a bankruptcy anyway. And most lenders will not pay you any money to move out, and may not even pay all the fees of your broker or attorney. Worse, they will not tell you what they will do for you by way of a deal until you have signed a sale contract. At that point, you have become legally obligated to sell your home, and unless the sale contract is carefully drafted with a clear "escape clause", the lender will have you over a barrel. We have seen many situations where the lender will insist on your paying any balance over time by a new promissory note. Thus, short sales can mean high risk and no benefit! Or they could be your way to avoid bankruptcy.

And if you do not go ahead with a "short sale", you will be able to live in your home literally "rent free" for 6 to 12 months and maybe longer. In that time, by not making your mortgage payments (which the lender will not accept anyway) you can save up thousands of dollars that can be used to move, pay a security deposit to a new landlord, or help you deal with other pressing problems. While this alternative is not necessarily right for everyone, it is something to consider

If you are considering a short sale, we can help you stay out of trouble. Call us at 856-596-2828 for a free consultation.

I owe back taxes. What can I do about them?
Unfortunately, most taxes cannot be discharged in bankruptcy, but a bankruptcy can help nevertheless. First, most tax penalties can be discharged. Second, some older taxes may be dischargeable. And by discharging other debt, you will be left in better financial shape to make payments to pay off the taxes you are left owing. Or you may be able to use a Chapter 13 Plan to pay off taxes in full. The rules can be complex in application.

This is an area where careful planning and knowledgeable guidance is critical. If you need help with back taxes, please call us at 856-596-2828 to schedule a free consultation.

I have large tax liens against me. What do I do?
When you do not pay federal taxes you owe, after giving you notice and a demand for payment, the IRS has a lien for the amount of taxes, penalties and interest on all your property and rights to property. IRC sec. 6321. At that point, the IRS can levy on your property, and can record a “notice of tax lien” in the proper recording office in your state. Filing a bankruptcy can “stay” any levies, further tax liens, or further collection against you for a while, at least while your bankruptcy is ongoing or until you receive a bankruptcy discharge. How a bankruptcy filing affects the IRS’s ability to collect taxes or file tax liens in the future or their ability to collect taxes from you is very much dependent on your facts and the type of bankruptcy you file. In most cases, it is very important to try to file a bankruptcy BEFORE the IRS records their notice of tax lien. For example, while some taxes can be discharged in bankruptcy, once they are included in a tax lien which is filed before your bankruptcy, the IRS may continue to have the right to collect those taxes from you based on the tax lien notice. Also, the IRS has the broadest collection rights of any creditor, and can even collect taxes out of your pension.

State tax liens operate in a similar manner, with a similar effect.

It is possible to “cram down” or reduce the dollar value of tax liens in a Chapter 13 case.

No matter what your situation is, we strongly suggest you and your tax advisers consult with an experienced, qualified bankruptcy specialist as early as possible, to understand the critical details of this process and to plan carefully.

Unfortunately, most taxes (other than real estate taxes) cannot be discharged in bankruptcy, but a bankruptcy can help nevertheless. First, most tax penalties can be discharged. Second, some older taxes may be dischargeable. And by discharging other debt, you will be left in better financial shape to make payments to pay off the taxes you are left owing. Or you may be able to use a Chapter 13 Plan to pay off taxes in full, or to provide help with tax liens. The rules can be complex in application. << For help understanding tax liens, click here>>

This is an area where careful planning and knowledgeable guidance is critical. If you need help with back taxes, please call us at 856-596-2828 to schedule a free consultation.

Will I have to go to court?
Going to court is fairly rare, for most people who file bankruptcy. On the other hand, everyone who files a bankruptcy will have to go to a hearing before some type of bankruptcy trustee. This is called a "First Meeting of Creditors" or section 341(a) hearing. There, the trustee (and sometimes creditors) can ask questions about your bankruptcy and financial matters. Steve Neuner has conducted thousands of these hearings himself as a trustee and knows the questions trustees will need to have answered. If you are represented by an attorney who knows the process and has taken the time to prepare you and prepare himself, these hearings can be predictable, and stress-free.

Although you will most likely not have to go to court yourself to testify, this sometimes becomes necessary. For example, a creditor or a trustee could seek to challenge your right to a discharge. Steve Neuner has filed or defended hundreds of motions and bankruptcy court suits. If you have to go to court, you will want an attorney to guide you who knows the ropes.

Will my neighbors, family or boss find out?
Possibly, but not likely, unless you owe them money. Although a bankruptcy is a public court proceeding, there are so many filed that newspapers of general circulation do not publish them. If you have special concerns, we can help you defuse any harm and deal with them.

Will bankruptcy affect my security clearance?
Whether your security clearance will be affected is depends on several factors and there is no hard and fast rule. However, several sources suggest that if you need bankruptcy and are upfront with your chain of command, the honest debtor filing bankruptcy is not likely to have problems. The US Air Force site says the following: "The status of your security clearance can be affected, but it is not automatic. The outcome depends on the circumstances that led up to the bankruptcy and a number of other factors, such as your job performance and relationship with your chain of command. The security section will weigh whether the bankruptcy was caused primarily by an unexpected event, such as medical bills following a serious accident, or by financial irresponsibility. The security section may also consider the recommendations and comments of your chain of command and co-workers. This is an issue that can be argued both ways, so as a practical matter your security clearance probably should not be a significant factor in making your decision about whether to file bankruptcy. The amount of your unpaid debts, by itself, may jeopardize your clearance, even if you don't file bankruptcy. In that sense, not filing for bankruptcy may make you more of a security risk due to the size of your outstanding debts. By the same token, using a government-approved means of dealing with your debts may actually be viewed as an indication of financial responsibility. Eliminating your debts through bankruptcy may make you less of a security risk. There is no hard and fast answer here, with one exception: it never hurts to have a good reputation with your co-workers and your chain of command."

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We serve all of South Jersey, including Camden County, Burlington County, Gloucester County, Mercer County, Eastern Pennsylvania and Atlantic County, and surrounding areas

*Free consultation for individuals and most small businesses. A follow up meeting may be required. We reserve the right to charge for consultations involving review of existing cases, divorces or litigations.