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Bill

A 4262

Exempts creditor from paying municipal property registration fee if property is subject to automatic stay under federal Bankruptcy Code.

2024-2025 Regular Session Introduced by Reginald Atkins and 3 co-sponsors

Exempts creditors from New Jersey municipal property registration fees when properties are frozen under federal bankruptcy automatic stay, reducing local government revenue.

Referred to Senate Budget and Appropriations Committee
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Bill Summary · A 4262

Legislative bill overview

Bill A 4262 would exempt creditors from paying New Jersey's municipal property registration fees when a property is subject to an automatic stay under the federal Bankruptcy Code. An automatic stay is a court order that halts most creditor collection efforts once bankruptcy is filed. The bill narrows the financial obligations creditors face during bankruptcy proceedings involving real estate.

Why is this important

Municipal property registration fees represent a revenue stream for local governments, and this exemption could reduce that income during bankruptcy cases. The practical impact affects the intersection of federal bankruptcy law and state/local revenue collection, potentially influencing how municipalities recover administrative costs when properties are involved in insolvency proceedings.

Potential points of contention

  • Municipal revenue impact: Local governments lose registration fee revenue during bankruptcies, potentially shifting costs to other taxpayers or reducing municipal services
  • Creditor fairness: Creditors argue they shouldn't bear registration costs for properties they're forced to hold during automatic stay periods, while municipalities counter they still provide administrative services
  • Scope ambiguity: The bill doesn't clearly define which creditors benefit (secured vs. unsecured, primary vs. secondary mortgage holders) or what constitutes "subject to automatic stay"

Compiled from official sources — confirm details with the bill’s official record.

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