Practice Areas and Legal Definitions

Every year, more than 1,000,000 Americans file for protection under Federal bankruptcy laws.  Many hardworking individuals and businesses can succumb to financial difficulty, and face irreparable economic crisis.  Bankruptcy is designed as a legal option to help resolve such a crisis, and act as a financial life preserver for those drowning in debt.  To discuss your bankruptcy options, or other areas of recourse that might be available to you, contact a qualified bankruptcy attorney who can advise you of your legal rights.

New Bankruptcy Laws:

Bankruptcy is a federal court process designed to help individuals and businesses eliminate their debts or repay them under the protection of the bankruptcy court.  Bankruptcies can generally be described as liquidation or reorganization.  Under a liquidation bankruptcy (Chapter 7), a claimant files to eliminate debt through the bankruptcy court. Under a reorganization bankruptcy (Chapter 13), a claimant files a plan with the bankruptcy court proposing how to repay creditors.

As of October 17, 2005, the requirements under which a debtor may file bankruptcy changed with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act.  It has been my experience that, while the procedure is more complicated, most people continue to be eligible for Bankruptcy relief.   However, because the new law is more difficult to comply with, an experienced Bankruptcy Attorney is essential to a successful case.

Chapter 7: 

Chapter 7 cases are commonly referred to as straight bankruptcy or liquidation cases, and may be filed by an individual, corporation, or a partnership.  A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in a Chapter 13.  Instead, the Bankruptcy Code will allow most debts to be “discharged” or wiped out.  In most cases, the debtor is permitted to keep all of his or her assets as long as the equity in those assets is within certain limits.  Those limits are called exemptions.

The purpose of a Chapter 7 is to give people a financial “Fresh Start.”

Chapter 13:

A Chapter 13 bankruptcy enables individuals with regular income to develop a plan to repay all or part of their debts over three to five years.  Chapter 13 permits individuals to keep their property by repaying creditors out of their future income.  It is not available to corporations or partnerships.  After completion of payments under the plan, Chapter 13 debtors receive a discharge of most debts.

Chapter 13 is generally used to stop foreclosures and to allow people to keep their home or other assets, while stopping creditor lawsuits and harassment.  

Foreclosure: 

Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property due to the owner’s failure to comply with an agreement between the lender and borrower called a “mortgage." Commonly, the violation of the mortgage is a default in payment.  When the process is complete, it is typically said that “the lender has foreclosed its mortgage or lien.

A foreclosure ends when a Sheriff conducts an auction of your home.  This auction is called a Sheriff’s Sale.  The only ways to stop a Sheriff’s Sale are full payment of the entire debt, or the filing of a Chapter 13 bankruptcy.  The filing of a Chapter 13 stops the foreclosure and/or Sheriff’s Sale immediately and allows you to propose a payment plan to keep your home or sell your home at a fair price.   

Chapter 11: 

Chapter 11 is typically used for business bankruptcies and restructuring.  It is not commonly used by individual consumers since it is far more complex and expensive to pursue.  However, certain individuals with very substantial debts may benefit from filing a Chapter 11.  It allows businesses and individuals to reorganize themselves, giving them an opportunity to restructure debt and get out from under certain burdensome leases and contracts.  Typically, a business is allowed to continue to operate while it is in Chapter 11, although it does so under the supervision of the Bankruptcy Court and its appointees.

Taxes:

Many people don't know that certain types of taxes can be completely wiped out in bankruptcy.  Additionally, even when a tax debt can't be discharged, it may still be able to be repaid in a Chapter 13 without paying post-petition interest and penalties and without continued IRS collection activity.  This is a complicated area of the bankruptcy law, but for the right person, the results can be spectacular.  The IRS must follow the Bankruptcy Laws!

Credit Report Correction:

Everyone who comes to me for a consultation wants to know the effect a bankruptcy filing will have on their “credit rating”. My answer is pretty simple. “If you have a good credit score now, a Bankruptcy will reduce your score significantly.” Most people look at me, chuckle and tell me that their credit rating is terrible. To those people, I say that a bankruptcy could very well improve their credit score because it will give them the chance to become debt free and to begin re-establishing their credit history.

I recommend that, after your Discharge (when your debts are wiped out), you obtain a free credit report. You are entitled to at least one free report each year from each credit reporting agency. Here is the website to get your free report: www.annualcreditreport.com.

Your bankruptcy should appear on the report and each of your discharged debts should be reported as being discharged. This is important to future lenders. Mistakes should be corrected. If you need assistance I can help you correct those errors and begin the process of improving your credit.

You will be surprised how easy it is to obtain credit after your bankruptcy.

If you or someone you know needs debt consolidation legal counsel or the assistance of an experienced New Jersey Bankruptcy Attorney, call Dean Sutton today at 866-707-0783, or use the contact form provided on this site to schedule your free consultation.  

If you or someone you know needs debt consolidation legal counsel or the assistance of an experienced New Jersey Bankruptcy Attorney, call Dean Sutton today at 866-707-0783, or use the contact form provided on this site to schedule your free consultation.

ADDRESS OF THE FIRM:
Dean G. Sutton, Esquire
SUSSEX COUNTY LOCATION
18 Green Road
Sparta, NJ 07871
Telephone: 866-707-0783
Fax: 973-729-6685

MORRIS COUNTY LOCATION
2001 Route 46, Suite 310
Parsippany, NJ
Telephone: 866-707-0783
Fax: 973-729-6685

PASSAIC AND BERGEN COUNTY LOCATION
151 West Passaic Street
Rochelle Park, NJ
Telephone: 866-707-0783
Fax: 973-729-6685

Hours: M-F, 9:00AM-5:00PM

MEMBERS OF THE FIRM:

Dean G. Sutton

EDUCATION:

• Rutgers School of Law – J.D. 1979
• Penn State University – B.A. 1973

JURISDICTIONS LICENSED IN:

• New Jersey
• United States Tax Court
• United States Federal District Court
• United States Federal Court of Appeals for the Third Circuit
• United States Federal Bankruptcy Court

PROFESSIONAL MEMBERSHIPS AND ACHIEVEMENTS:

• Federal Bar Association ( Member Debtor-Creditor Section)
• New Jersey Bar Association (Member Bankruptcy Law Section)
• Morris and Sussex County Bar Associations
• Former Master at the Bankruptcy Inn of Court For the District of N.J.
• Former Adjunct Professor - Bankruptcy Law – Sussex County Community College
• Served on the Lawyer’s Advisory Committee to The Bankruptcy Court for the District of New Jersey
• Member of the National Association of Consumer Bankruptcy Attorneys
• Frequent Panelist, or Speaker on Bankruptcy Law, including Seminars for the Institute for Continuing Legal Education, The Annual New Jersey Bankruptcy Bench-Bar Conferences, The Sussex County Bar Association, and Non-Profit Organizations

PUBLICATIONS:

• Modification of Home Mortgages Under (New) Section 1322(c)(2). Norton Bankruptcy Law Advisor, August 1997.
• Co-Author of materials for several Institute for Continuing Education seminars, including “The “New” Bankruptcy Code – 2005”, “Get Smart! Understanding current issues in Chapter 7 and Chapter 13 Consumer Bankruptcies - 1997", The Bankruptcy Bench-Bar Conferences of 1998, and 1999, and Basic Chapter 13 Practice, 1991.
• Co-Author of the New Jersey Bankruptcy Manual (2nd Edition) published by the New Jersey Institute for Continuing Legal Education, 2006

CERTIFICATIONS:

• Board Certified by the American Board of Certification – Consumer Bankruptcy Law

FACTS:
1. Single mom. Not receiving any child support. Makes about $3,000.00 per month. Has virtually no assets other than personal possessions and an old car. Her debts consist mostly of credit cards and unpaid rent to her former landlord. The landlord has a judgment against her and has just started to garnish her wages. She simply cannot afford to have her wages garnished.

RESULTS:
We filed a Chapter 7 Bankruptcy for her. The garnishment was stopped and her debts were discharged. She got her Fresh Start!

FACTS:
2. Husband and wife recently retired. Their retirement income totals about $50,000.00 per year. They had a home worth about $575,000.00, but they had 3 mortgages totaling over $588,000.00. Their monthly mortgage payments and property taxes totaled about $4,000.00 and they defaulted on their payments. The home was sold at Sheriff’s Sale about one month before our appointment. The first mortgagee now owns the property. The other mortgages which total about $100,000.00 remain unpaid. Other debts include over $75,000.00 in credit cards and personal debts and an old IRS Income Tax debt of about $35,000.00.

RESULTS:
We filed a Chapter 7 Bankruptcy for them. All of their debts were discharged, including their tax debt. They got their Fresh Start!


FACTS:

3. Husband and wife own a home worth about $250,000.00. They owe only about $140,000.00 on their mortgage and have only $8,000.00 of unsecured debt. But their home is scheduled to be sold at Sheriff’s Sale in 3 weeks. Their mortgage arrears exceed $30,000.00 and their monthly budget is tight.

RESULTS:
We filed a Chapter 13 Bankruptcy for him. The Sheriff’s Sale was stopped, and we obtained the Court’s approval to allow him to pay his mortgage plus $200.00 per month. They will need to sell or refinance their home within the next 3 years but hopefully the house will continue to increase in value. During that time, they are safe from their creditors and from foreclosure.

These results are typical, but since every situation is different, the results will vary.