Toms River, NJ - Filing for Chapter 7 bankruptcy provides immediate relief from debt collection through the automatic stay, but the process doesn’t end there. Many individuals are unaware of the legal limitations that take effect once the case is filed. Straffi & Straffi Attorneys at Law (https://www.straffilaw.com/what-can-you-not-do-after-filing-chapter-7/) and New Jersey Chapter 7 bankruptcy attorney Daniel Straffi Jr. are working to inform New Jersey residents about these restrictions and how to avoid mistakes that can jeopardize their financial fresh start.
Understanding what actions are restricted after filing for Chapter 7 is vital to maintaining the protections it offers. New Jersey Chapter 7 bankruptcy attorney Daniel Straffi Jr. frequently advises clients that certain financial activities, like taking on new credit or selling assets, can trigger serious consequences. Daniel Straffi Jr., a seasoned attorney serving clients throughout Toms River and Ocean County, warns that missteps during this time can lead to discharge denial or even criminal penalties.
New Jersey Chapter 7 bankruptcy attorney Daniel Straffi Jr. explains, “A person should be cautious about incurring new credit, making large credit purchases, or transferring estate property without the bankruptcy trustee’s knowledge.” These actions are closely monitored by trustees and the court, and even unintentional violations can result in major setbacks.
Once a bankruptcy case is filed, nearly all assets and financial decisions fall under the scrutiny of the bankruptcy trustee. Selling or transferring property without approval violates federal law. Under 11 U.S.C. § 541, any property owned at the time of filing becomes part of the bankruptcy estate. Failing to disclose or improperly moving these assets may lead to the court reversing the transaction or denying a discharge under 11 U.S.C. § 727(a)(2).
Filing for Chapter 7 also requires compliance with post-filing education requirements. Debtors must complete a personal financial management course from a court-approved agency. Failure to submit the course certificate within 60 days after the creditors’ meeting can result in the court closing the case without issuing a discharge. Daniel Straffi Jr. and his team at Straffi & Straffi Attorneys at Law assist clients in meeting these deadlines to ensure they receive the full benefit of their bankruptcy filing.
In addition to course completion, another common question arises: Can a person take on new debt during bankruptcy? While legally possible, it is discouraged. Any new debt incurred post-filing may not be discharged and may raise concerns of bad faith. For example, large credit card purchases, cash advances, or luxury spending before or after filing can lead to objections from creditors. The law assumes certain debts made within a specified timeframe before filing are non-dischargeable unless proven otherwise by the debtor.
Credit behavior is closely watched, especially during the 70 to 90 days before filing. Daniel Straffi Jr. points out that federal guidelines presume debts are non-dischargeable if luxury purchases exceed $900 or cash advances exceed $1,250 during those timeframes. These thresholds, adjusted periodically, require filers to be transparent and careful with credit use to avoid penalties.
Real estate transactions are another sensitive area. Selling or buying property during an active Chapter 7 case often requires trustee or court approval. While post-filing property, such as a new home purchased after the discharge, is not typically part of the bankruptcy estate, these transactions still require careful planning. Most lenders are reluctant to extend credit during a pending case, and any unapproved sales of existing property can lead to discharge denial or reversal of the transaction.
Chapter 7 can also impact housing. Whether dealing with a mortgage or rent, maintaining payments is critical. Falling behind on mortgage payments after filing could lead to foreclosure if the lender is granted relief from the automatic stay. Renters facing eviction may not benefit from bankruptcy protections if the landlord already has a judgment for possession. Daniel Straffi Jr. works with clients to assess these risks and determine the most favorable strategies to keep their homes or make housing arrangements post-discharge.
Once the discharge is granted, most unsecured debts are wiped out. However, that doesn’t mean financial responsibility ends. Debtors must retain bankruptcy documentation, especially if audited by the United States Trustee Program. In addition, any property received within 180 days of filing — such as inheritances or insurance payouts — must be reported to the trustee and could become part of the estate.
Rebuilding credit after a discharge is possible and encouraged. A Chapter 7 filing stays on a credit report for 10 years, but the impact lessens over time with responsible behavior. Secured credit cards, regular bill payments, and monitoring credit reports are essential steps in restoring financial health. Daniel Straffi Jr. emphasizes the importance of financial planning, advising clients to create budgets, build emergency savings, and gradually rebuild their credit profiles.
If creditors attempt to collect discharged debts, they violate the discharge injunction — a serious legal matter. Debtors have the right to enforce this protection, and Daniel Straffi Jr. often helps clients address such violations. It's also important to avoid reaffirming discharged debts without legal counsel, as doing so may unintentionally create new obligations.
While bankruptcy offers relief, it also brings long-term consequences, including potential challenges in securing credit, housing, or employment. Filers may be asked about their bankruptcy history on applications, but many institutions consider applicants with stable income and a documented effort to rebuild finances.
The rules around Chapter 7 are complicated, and repeat filings have their own restrictions. A second Chapter 7 filing cannot occur until eight years after the first one. However, filing under Chapter 13 may be possible sooner. Multiple filings are reviewed closely for abuse, and protections like the automatic stay may be limited or denied.
Daniel Straffi Jr. and Straffi & Straffi Attorneys at Law urge individuals considering Chapter 7 bankruptcy to get accurate information and legal support. Understanding what a person can’t do after filing helps preserve their discharge and avoid serious legal setbacks.
Those struggling with debt can schedule a free consultation with Daniel Straffi Jr. to discuss their options and learn how to comply with post-filing restrictions. Taking the right steps after filing can lead to lasting financial recovery and peace of mind.
About Straffi & Straffi Attorneys at Law:
Straffi & Straffi Attorneys at Law is a Toms River-based law firm serving clients throughout Ocean County and New Jersey. Led by Daniel Straffi Jr., the firm provides legal representation in bankruptcy matters, including Chapter 7 and Chapter 13 filings. With a commitment to client-focused service, the firm offers guidance on bankruptcy procedures and post-discharge obligations to help individuals navigate financial difficulties with confidence.
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Phone: (732) 341-3800
Address:670 Commons Way
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State: New Jersey 08755
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Website: https://www.straffilaw.com/
