Bankruptcy Notice of Proposed Abandonment
- November 15, 2013
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Chapter 7 bankruptcy petitioners in New Jersey may receive a notice of proposed abandonment in the mail from the bankruptcy court, although this may seem foreboding, it may actually be something positive for the debtor. In New Jersey, a debtor filing for bankruptcy under Chapter 7 is advised that this process involves the liquidation of virtually any asset as a means to discharge the debts that are serving as major a impediment to his or her life. Unfortunately, and much to the chagrin of many debtors, this includes their house. Very often, mortgage payments represent one of the largest debts that a petitioner faces. In addition, an individual’s house is usually the most valuable piece of property that he or she owns. Therefore, one of the first properties that a bankruptcy trustee will look to sell to satisfy major debts is a debtor’s home. During the bankruptcy proceedings, a trustee will perform a liquidation analysis to ascertain whether or not there is enough equity in the home to warrant the sale of the property. Further, if through this analysis the trustee discovers that the home does not have any value or only has a nominal value, she must alert the court to his fact. When the trustee notices the court of the fact that she has decided to abandon her interest in the property at issue, she will issue a notice of proposed abandonment. If the trustee decides to abandon the property, it means that she does not want to exert the court’s right to sell the property to satisfy bankruptcy debts and therefore ownership and control over the house returns to the debtor. Therefore, receiving a copy of a notice of proposed abandonment could prove to be a very good thing for the debtor. It is important to note that the issuance of a notice of proposed abandonment does not mean that the debtor automatically receives control over his or her house again. Any creditor or party has the right to file an objection to the court’s abandonment of the property and receive a hearing before the court to voice an objection, although this is very rare. If no interested party voices an objection with the court by a specified date, the property abandonment takes place before the scheduled court date. In New Jersey, bankruptcy laws are very complicated, therefore it is strongly advised that a potential debtor seeks out the advice of an experienced bankruptcy attorney to assist him or her with bankruptcy matters. For more information regarding, Chapter 7 bankruptcy, Chapter 13 bankruptcy, foreclosure, or other consumer debt issues in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.