New Jersey Chapter 7 Bankruptcy Attorney Daniel Straffi Explains Key Restrictions After Filing for Bankruptcy

March 06, 2025 at 11:26 AM EST

New Jersey Chapter 7 bankruptcy attorney Daniel Straffi (https://www.straffilaw.com/what-can-you-not-do-after-filing-chapter-7/), of Straffi & Straffi Attorneys at Law, sheds light on the critical restrictions individuals must follow after filing for bankruptcy. While Chapter 7 provides a path to eliminating overwhelming debt, it also comes with strict post-filing rules that can impact the success of a case.

“Starting anew after Chapter 7 bankruptcy means getting acquainted with a new set of financial guidelines—one where every decision can influence your long-term fiscal health,” said Daniel Straffi. The New Jersey Chapter 7 bankruptcy attorney emphasizes that understanding these restrictions is crucial to avoiding complications that could jeopardize the case.

Once an individual files for Chapter 7, an automatic stay is put in place, which temporarily halts most collection actions, including wage garnishments and repossessions. However, as Daniel Straffi explains, the actions a filer takes after submitting their petition can significantly impact the outcome of their bankruptcy case. The New Jersey Chapter 7 bankruptcy attorney warns that taking on new debt, making large purchases, or attempting to transfer assets could result in legal consequences.

One of the most common mistakes filers make is accumulating new debt after submitting their bankruptcy petition. Daniel Straffi advises that any debt incurred post-filing will not be included in the bankruptcy case and must be repaid in full. Moreover, if a filer makes charges on a credit card or takes out a loan without the intent or ability to pay it back, they could face allegations of fraud.

The New Jersey Chapter 7 bankruptcy attorney also cautions against making large purchases on credit. Under bankruptcy law, certain high-cost transactions made within 90 days before filing may be considered non-dischargeable, meaning the filer would still be responsible for paying off those debts. Creditors may argue that such expenditures were made in bad faith, leading to additional scrutiny of the filer’s financial behavior.

Additionally, selling or transferring assets after filing for Chapter 7 can be seen as an attempt to shield them from creditors, which could lead to legal penalties. "The bankruptcy process is designed to be transparent and fair to all parties involved. Any attempt to hide or dispose of assets could result in serious consequences, including a denial of discharge," Daniel Straffi explains. If a bankruptcy trustee discovers that a filer has transferred property with the intent to defraud creditors, they can reverse the transaction and bring the assets back into the bankruptcy estate.

Many New Jersey residents worry about the impact of Chapter 7 bankruptcy on their employment and future income. Daniel Straffi reassures filers that the U.S. Bankruptcy Code prohibits employers from discriminating against employees solely based on their bankruptcy filing. However, Straffi advises that individuals should be aware of how salary adjustments, bonuses, or new employment can affect their bankruptcy case.

If a filer’s income increases significantly before their case is discharged, the trustee may reassess their financial situation. In some cases, this could lead to the bankruptcy being converted into a Chapter 13 case, where the individual is required to repay a portion of their debts. "Honesty and transparency with the court and trustee are essential throughout the bankruptcy process," says Daniel Straffi.

For self-employed individuals, bankruptcy presents additional challenges. Business assets may be subject to liquidation depending on their value and whether they are exempt under New Jersey law. The New Jersey Chapter 7 bankruptcy attorney stresses the importance of maintaining clear financial records and consulting with a lawyer to help ensure proper handling of business-related assets.

Another common concern for Chapter 7 filers is whether they can buy or sell real estate after filing for bankruptcy. Daniel Straffi clarifies that all assets, including real estate, become part of the bankruptcy estate once a case is filed. Therefore, individuals cannot sell or transfer property without court approval.

If a filer wishes to keep their home, they must continue making mortgage payments. If they are renting, they can either assume their lease and continue payments or reject the lease and move out without owing additional rent. However, recent bankruptcy filings can make it more difficult to secure new housing, as landlords often review credit histories when considering tenants.

"Filing for bankruptcy does not mean losing everything," Daniel Straffi assures. "New Jersey’s exemption laws protect certain assets, including a portion of home equity, household goods, and personal belongings." Consulting with a bankruptcy attorney can help individuals maximize their exemptions and retain as much property as possible.

Rebuilding credit after Chapter 7 bankruptcy requires patience and strategic financial planning. Daniel Straffi advises filers to start by reviewing their credit reports and ensuring all discharged debts are properly reflected. Applying for secured credit cards, making timely payments, and maintaining a responsible debt-to-income ratio can help improve a filer’s credit score over time.

"Although a Chapter 7 bankruptcy remains on a credit report for up to 10 years, its impact lessens as time passes—especially if filers demonstrate responsible financial behavior," Daniel Straffi explains. While obtaining new loans or credit cards immediately after a bankruptcy discharge can be difficult, options such as secured loans or credit-builder programs can help individuals regain financial stability.

Life after bankruptcy presents both challenges and opportunities. Daniel Straffi encourages individuals to use this fresh start as a chance to develop better financial habits, such as budgeting, saving, and planning for emergencies. Straffi also stresses the importance of being aware of post-bankruptcy legal responsibilities, including reporting any unexpected financial gains to the court if required.

"Bankruptcy is not the end of financial security—it’s a tool that allows individuals to reset and rebuild," says Daniel Straffi. "Understanding the rules and making smart financial decisions can enable filers to move forward with confidence and regain control of their financial future."

About Straffi & Straffi Attorneys at Law:

Straffi & Straffi Attorneys at Law is a New Jersey-based law firm committed to providing comprehensive legal guidance in bankruptcy law. Led by Daniel Straffi, the firm can assist individuals and families in navigating Chapter 7 bankruptcy with clarity and confidence. With personalized legal representation, the firm helps clients achieve financial relief and rebuild their futures.

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Company Name: Straffi & Straffi Attorneys at Law
Contact Person: Daniel Straffi
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Phone: (732) 341-3800
Address:670 Commons Way
City: Toms River
State: New Jersey 08755
Country: United States
Website: https://www.straffilaw.com/

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New Jersey Chapter 7 Bankruptcy Attorney Daniel Straffi Explains Key Restrictions After Filing for Bankruptcy

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