The Magic of Bankruptcy

Let’s do some math: You have $50,000 in credit card debt and your interest rate is 20%. This means you pay $10,000 a year in interest. Every month, you would need to pay around $833 to simply break even. On top of this $833, you’ll be paying an additional $700+ a month to pay off your debt within 5 years. Paying $1,500 a month to your credit card bill for five years doesn’t give most people a lot of financial wiggle room.

Bankruptcy could allow you to get rid of that same debt in three months.

Many of our clients balk at the suggestion of bankruptcy. The stigma behind bankruptcy stems from big businesses that are financially motivated to keep you thinking that bankruptcy is shameful. This stigma causes so many people to struggle with debt unnecessarily for years. Our holistic approach to bankruptcy, credit repair, and debt management will provide you with the tools you need to take back control of your life.

After you file for bankruptcy and discharge your debts, you free up a whole lot of money in your budget. Not only that, but we will teach you how to rebuild your credit. The day after your bankruptcy, we can help you sign up for secured cards and give you the knowledge about credit that you need to make informed decisions. Within six months, your credit score can increase by 100 points. You can buy a car again. You can start saving again. Within two years of your bankruptcy, you can qualify for a mortgage.

Simply by filing for bankruptcy, you can go from spending $1,500 a month on slowly clawing your way out of debt to having an extra $1,500 a month back in your budget. Bankruptcy can allow you to change your financial reality and free up your budget to focus on your goals, whether that be homeownership, saving for retirement, or something unique to you.  

Our goal at Veitengruber Law is to move you towards the dream of financial stability. You no longer have to spend your days worrying and anxiously waiting for a magical solution.

Bankruptcy is the solution, and when it’s handled right, it definitely feels like magic.

You are one free consultation away from peace of mind. Call us and let us work our magic for you.

NJ Real Estate Watch: 2022 Home Price Forecast

Minimal inventory and low interest rates kept housing prices high in New Jersey throughout 2021. Many prospective home buyers have one question: have home prices peaked? That question is difficult to answer. While it does depend on your area, in general, real estate experts do expect NJ real estate prices to continue to rise ever so slightly in 2022. Here are three factors contributing to housing prices in the garden state this year.

1.   Housing Stock Remains Low

While the demand for homes in NJ hit a pandemic high in July 2021, it has progressively decreased since. That being said, single-family and townhome properties remain low in stock. This means that even though demand is significantly less than it was prior to the pandemic, the buyers browsing the market will have fewer options. Lower stock can encourage sellers to ask for top dollar. Buyers can even anticipate bidding wars, although not to the extent that we saw in 2021.

2.    Home Values Increase—But Not Drastically

In 2020, home values increased 12%. In 2021, home values increased 15%. And while values are still expected to go up in 2022, experts only expect about a 5% increase. This will create a more stable market with more predictable trends. Homebuyers can expect prices to remain relatively stable throughout 2022. This is good news for buyers with a set budget.

3.   Expect a Sale Over Asking Price

By the end of 2021, the trend of ten bids in one day on one property had died down. Sellers can now expect a handful of offers over a few days or weeks. Homes are still selling for over asking price, but more in the range of 2-5% instead of the gigantic margins we saw last spring. Buyers should expect to pay the list price at the very least, and likely more than the list price if they are looking to quickly secure a sales contract.

The bottom line? New Jersey home prices will likely continue to rise in 2022—but not significantly. We won’t see the meteoric rise in home prices that we saw in early 2021, but home buyers should still be prepared for a solid seller’s market with higher than normal home prices. Still, it can certainly be said that this market has plenty to offer buyers who know what they are looking for and are ready to move quickly. Sellers, on the other hand, should take the time to work with an experienced real estate agent in order to land on a listing price that is just right.

Pandemic Supply Chain Shortages are Still Very Real in the Northeast

Sports drinks. Car parts. Computer chips. It seems like nearly every industry is experiencing a shortage of goods. We have grown accustomed to going to the store only to find a mass of empty shelves where essential items once were stocked. In this world of same-day delivery and online shopping, it can be a shock to find that we are still—two years into this pandemic—grappling with the disruption to the supply chain. Even in heavily populated states like New Jersey, some goods and products are simply impossible to find.

The supply chain is something most of us didn’t think about prior to the pandemic. It is the invisible pathway that takes a product from start—where it is mined or grown or manufactured—to finish: in your hands. Lockdowns, quarantines, and sickness have reduced productivity at many levels of production in the supply chain, as well as in transportation. Many industries have found themselves unable to create the goods necessary to keep up with demand, or otherwise unable to transport the goods they do have.

The logistical nightmare of the pandemic will certainly change the way we make and transport goods in the future, but right now companies are simply doing what they can to get through the pandemic. So what can we do in the meantime?

Shop smart. Buy a little extra of the essential products you need regularly – especially the products that are essential to maintaining your health and wellbeing. That being said, don’t stockpile. We all remember the toilet paper hoarding that transpired at the beginning of the pandemic. Over-buying can exacerbate the supply chain problems.

Be patient. This won’t last forever. Keep in mind that the entire world is dealing with these supply chain issues. Shipping might take longer, it may take more time for your grocery store to restock products, and building contractors might require more time than normal on a project. It’s best for your mental health to expect delays and be patient with businesses as they work through the logistics of supply chain chaos.

Shop local. Learn about the businesses in your area of New Jersey and shop local when possible. Turn the challenge of supply chain shortages into an opportunity to try the local farms and other businesses in South and Central Jersey.

Signs that Filing for NJ Bankruptcy Might be Right for You

Deciding to proceed with filing for NJ bankruptcy is a deeply personal choice. It is never anyone’s first choice, but that doesn’t mean it can’t be a great option for you. There are some circumstances—like foreclosure or unmanageable credit card debt—where filing for bankruptcy just makes good sense. Bankruptcy can be an excellent tool to set you up for future financial success. If you are wondering whether or not your circumstances might be helped by filing for bankruptcy, here are some common reasons people file.

1.   Sickness or Injury

Medical debt is one of the leading causes of bankruptcy nationwide. Whether you have insurance or not, your medical debts can quickly get out of control. Especially if your sickness or injury puts you out of work for a significant amount of time, bankruptcy can be a tool to overcome crushing medical debt.

2.   Divorce

Separation from a spouse can have extreme financial consequences on one or both spouses. A substantial decrease in household income, spousal support, child support, and legal fees can all drastically change your financial circumstances in a short period of time. If you are having trouble carrying the cost of running a household on your own, bankruptcy can help you restructure your finances.

3.   Eviction or Foreclosure

If you are facing eviction or foreclosure, bankruptcy will provide an automatic stay to those legal proceedings. Filing for bankruptcy can many times provide a lifeline through which you can maintain residence in your property. In these situations, bankruptcy can be the legal tool you need to ensure you have a say in the legal proceedings concerning your income, debts, and property.

4.   Job Loss

Job loss and chronic unemployment is something many have been dealing with in the last two years. Long-term unemployment can lead to major credit card debt in an attempt to make ends meet, missed payments, late fees, repossession of property, and other legal and financial issues. If you cannot make ends meet until you find new employment, bankruptcy may help you bridge the gap.

5.   You Simply Cannot Make Ends Meet

Sometimes it is not one big life event that leads to bankruptcy; the snowball effect of many little financial mistakes or issues can add up over time. If you find yourself constantly weighing which bills to pay this month, or consistently worried about how you will keep the roof over your head and food on the table, it might be time to think about bankruptcy. Don’t spend years struggling with unmanageable debts weighing you down. The sooner you file for bankruptcy when you need it, the better your outcome is likely to be.

Bankruptcy does not have to be a scary process. George Veitengruber and Veitengruber Law provide compassionate, knowledgeable New Jersey bankruptcy representation. If bankruptcy is the best choice for you, we can help you get through the process smoothly and as stress-free as possible. Want to explore other options to manage debt? We can do that too.

What to do When a New Jersey Seller is Dishonest

A seller is required to disclose any known damage or issues with the property they are selling. But not all sellers are honest and some may even actively try to hide issues in order to avoid a decrease in sales price or the responsibility of fixing the problems. If you find a major issue with the property you are purchasing or have already purchased, you may need to take legal action.

Water damage, fire damage, foundation issues, and other problems can often be covered up or disguised so as to be aesthetically pleasing without actually fixing the problem. With the problem hidden, the new owner is unaware of the problem which then continues to get worse. This can eventually result in further damage, extensive repairs, and thousands of dollars out of the pocket of the buyer.

This damage could have made the difference between the buyer agreeing to the contract they signed, renegotiating, or passing on the property completely. If the seller of the home you purchased has misrepresented the property or taken steps to cover up major damage, you need to take the necessary steps to protect your investment.

It should be noted that there are instances in which even the seller may not be aware of certain damage themselves. Even after living in a home for years, some homeowners may not be aware of specific issues with the property. It can sometimes be difficult to prove (in court) whether they were or were not aware of the damage.

If you think a seller has purposely withheld information about a defect to the property, the first step you should take is to enlist the help of an experienced real estate attorney. They can help you go over all of your options, like contacting the seller or their broker with a request for compensation—or seeking further legal remedy if required.

Veitengruber Law can help you determine what the best strategy is to protect your investment.

Do I Still Owe Income Tax if I File for Bankruptcy?

The most common kind of debt owed to the IRS is unpaid income taxes. In most cases, taxes cannot be eliminated through filing for bankruptcy. There are, however, specific instances in which income taxes can be eliminated through Chapter 7 bankruptcy. If you are getting harassed by the IRS for back taxes, filing for bankruptcy can put a stop to it. Here is what you need to know.

Bankruptcy and the Automatic Stay

If you owe unpaid taxes to the IRS, they will begin sending letters, legal notices, and eventually make attempts to collect on the debts, either by seizing a bank account, filing a lien, or even garnishing your wages. When you file for bankruptcy, an automatic stay goes into effect and they are not able to take any of those actions. It doesn’t matter what stage of collection the IRS is in at the time; the automatic stay prevents them from contacting you or trying to collect on the debts. You, however, are allowed to contact them. This allows you or your legal team to take charge of the negotiating throughout your bankruptcy case.

The IRS Rules for Bankruptcy Discharge

There are specific rules pertaining to discharging tax debt. Chapter 7 is able to discharge income tax debt. Almost all other kinds of taxes will not be discharged. You also must meet the following requirements:

1.   You filed your tax returns for the previous two years if you were required to file.

2.  The income tax debt must be at least three years old. It is very important that if you are filing bankruptcy to discharge back taxes that you file AT LEAST three years after the tax day of the debt you are seeking to get rid of.

3.   Your tax assessment can’t be more than eight months old. It can be tricky to know when your taxes have been assessed. A bankruptcy attorney can help you work with the IRS to figure this out.

What About New Income Tax Debt After I File?

After you file for bankruptcy, you are still required to file your tax returns like normal. Because this new debt will not fall under the requirements above, it will not be included in your bankruptcy case. If you anticipate accruing new tax debt that you will not be able to discharge, you have a few options:

1.   Make installment payments. The IRS just wants their money. Once you make an effort to prove you intend to pay them, their harassment will typically subside. If you have the money to do it, making payments in installments can be a way to pay back the debt slowly.

2.   Join the Offer in Compromise Program. While very few people qualify for this program, it is a possible way for you to get rid of your debt. Essentially, you offer to pay what you can and the IRS waives the rest of your debts. A word of caution: the IRS can force you to sell any assets to pay what you can.

3.   Utilize the Automatic Stay. While you will not be able to discharge new tax debts, you can take advantage of the automatic stay to get the funds needed to pay your new income tax debts.

George Veitengruber from Veitengruber Law is an experienced bankruptcy attorney. He can help you determine if your income tax debt can be eliminated in bankruptcy and how to pay back debts that cannot be discharged.

How to Sell NJ Real Property After the Owner Dies

Selling a loved one’s real estate is often part of settling their affairs after their death. Preparing to sell a property for a deceased relative or friend can seem overwhelming, but there are a clear set of steps that can help organize the process.

Step One: Find the Will

If you already have the original copy of the will, perfect! If not, you will need to find the will in order to proceed. Real property that is covered under an existing will is called Testate Estate. In the event that you cannot find a will—or the deceased never had one—the property will be referred to as an Intestate Estate. With an Intestate Estate, the probate court will need to determine how to best distribute the property or who the proceeds of the sale will go to.

Step Two: Get Letters of Administration

If you have a will in hand, you will need to submit the will to the Probate Court in the town the property is located in. They will issue Letters of Administration and a Short Certificate. This documentation will allow the listed Executor of the will the power to move forward with selling the property, from listing the property to negotiating the contract and signing closing documents.

Step Three: Open a Bank Account

Once the property is sold, the money from the sale will need to be divided amongst the inheritors of the estate. This will require you or the executor to open a bank account specific to the estate. When the proceeds of the sale are deposited into the estate bank account, there will be a final accounting along with tax returns prepared. The judge presiding over the settling of the estate will need to approve the final accounting before the funds are divided amongst the inheritors.

Step Four: Closing Without Probate

In the event that you cannot find the will and the estate is a Testate Estate, you can still sell the property. The potential heirs of the estate will need to prepare an Affidavit of Heirship that lists all of the heirs of the deceased. This list as well as the official Death Certificate will need to be submitted to the title company of the property. The title company will perform a risk assessment to determine if you will be allowed to proceed with closing. If the title company allows you to proceed, all of the heirs listed in the Affidavit of Heirship will need to sign the closing documents. If even one heir does not sign the closing documents, you will not be able to close under this method. In this case, you would need to file a petition to begin probate and allow the court to determine what happens to the property.

Step Five: Talk to an Attorney

Your best bet for a smooth and stress-free process is to work closely with an experienced estate attorney. It can be hard to get family members on the same page as well as get all the documentation together. An estate planning attorney can prepare the documents and take some of the weight of the situation off the back of the executor. If the decedent had an estate planning attorney set up their will, it makes sense to work with him or her; in the case of that attorney retiring or not being as helpful as you’d like, reach out to Veitengruber Law. We’re happy to help you through this challenging time.

My Mother Died and Her Will is Missing. What Can I Do?

When a loved one passes away and their will cannot be located, it can leave close friends and family with a stress-induced headache. If there is a disagreement about how to divide assets, that headache can turn into a huge legal battle. Here are some things you can do if you’ve found yourself in a similar situation.

First things first: Beyond searching all of the usual spots for a will, be sure to scour more obscure hiding spots, too. Your loved one could have kept a copy anywhere: under a mattress, between the pages of a book, in a box of keepsakes, in the glove box of their car—you never know where you may find a copy. Bottom line: leave no stone unturned

It is possible that your loved one filed the documents with the court, a lawyer, or even stashed them away in a safety deposit box. Carefully examine their email correspondences and bank statements to see if they have been in contact with or paid for the services of an estate attorney or a financial advisor, both of whom may have copies. If you do discover they possessed a safety deposit box, you may need a court order to gain access to that box. 

Another good idea is to check in with other friends and family members of the deceased to see if they have a copy or know if the location of a copy of the will. Sometimes a close friend or family member will have served as the witness to the signing of the will and therefore may have a copy or know where to find one. Try asking the person your loved one spent the most time with; their closest friend was likely their most trusted confidant and may know where to look.

If you do find a copy of the will, the court will often probate it as long as you can prove the will was signed by the deceased. If you cannot find a copy of the will at all, you will need to seek the help of an attorney to determine how the estate should be settled.

Because it can be very difficult for your loved ones to track down a copy of a lost will after you die, it is important to leave a copy with the executor of your will. A will no one can find is like having no will at all. Working with an estate planning firm like Veitengruber Law will allow you to rest assured your wishes will be carried out after you are gone. We can help you make a plan that eases the burden of the probate process for your loved ones. Allowing your family and friends to expend their energy mourning rather than doing exhaustive searches for your will is something very kind you can do for them now that they will thank you for later.

Bankruptcy Misconceptions

Oftentimes, the biggest barriers to filing for bankruptcy are misinformation and myths. There are so many misconceptions surrounding filing for bankruptcy. Below are five bankruptcy myths: busted.

Myth #1:  My Credit Will Be Destroyed Forever!

A bankruptcy will stay on your credit report for ten years under Chapter 7 and seven years under Chapter 13. However, even with a bankruptcy on your report, many filers will see their credit score increase immediately after a bankruptcy. Because your debts are wiped clean or put into a repayment plan, you will likely see your credit improve in the months and years after a bankruptcy. While it is true that you may have to pay high interest rates for a time after bankruptcy, many lenders will still extend you a line of credit and these high rates will eventually lower over time.

Myth #2:  I Will Lose Everything.

There are laws in place to prevent debtors from losing personal belongings and even larger assets during a bankruptcy. Depending on how you file, you may be able to keep most or all of your personal property. Chapter 13 will often see debtors losing nothing, while Chapter 7 bankruptcy includes specific sets of exemptions that allow you to save a significant amount of your assets. A bankruptcy attorney can help you determine which assets you can save.

Myth #3:  Filing For Bankruptcy is too Difficult!

In the vast majority of bankruptcy cases, it is a straightforward process. While the documents themselves can be complex and confusing, an experienced bankruptcy attorney can process documentation to ensure the filing goes smoothly. You will personally need to provide your property value, bank statements, tax returns, pay stubs, a list of your debts, and some other common documents, but working with a bankruptcy lawyer means they’ll do most of the tricky parts for you (or with you).

Myth #4:   You Can Only File for Bankruptcy Once.

You can absolutely file for bankruptcy more than once. Chapter 7 bankruptcy allows you to receive a discharge once every eight years and Chapter 13 bankruptcy allows you to reorganize your debts once every two years. You can also file for Chapter 13 bankruptcy six years after discharging under Chapter 7; you may file Chapter 7 four years after a Chapter 13 reorganization. If your previous bankruptcy case was dismissed without any discharge, there is typically no waiting period to file again, unless the case was dismissed with prejudice.

Myth #5:  I am a Failure.

Financial struggles can happen to literally anyone. Filing for bankruptcy IS NOT A SHAMEFUL EVENT. Major life setbacks—divorce, medical events, loss of employment, legal troubles—can all lead to money trouble. Even if you made poor choices that led to unmanageable debt – the good news is that you’re ready to start fresh. Everyone makes mistakes. It is your right to seek discharge under bankruptcy and get the relief you need to chart a successful financial future.

There are certainly downsides to bankruptcy, but even the worst aspects of bankruptcy can be better than struggling through day-to-day life carrying the weight of debilitating debt. Veitengruber Law can provide the information and guidance you need to help make the best decision for your specific situation.

I Can’t Afford to File for Bankruptcy!

Paying to file for bankruptcy can seem like a cruel joke. You don’t have the money to pay your bills, but now you are expected to pay a filing fee as well as legal expenses? Many people face these issues when filing for bankruptcy so you are not alone. Fortunately, there are ways to file for bankruptcy even if you have no money in the bank.

In New Jersey, the filing fee for a Chapter 13 bankruptcy petition is $313.00 and the filing fee for a Chapter 7 bankruptcy is $338.00. Typically, if you do not have the money to pay for these fees up front, the court will work with you. Under Chapter 13 you may be able to pay these fees in four installments or roll the payments into your repayment plan. If you are filing for a Chapter 7 bankruptcy, you can pay in installments or apply to have the fee waived completely.

Hiring an attorney can seem like a huge expense, but it is one expense you should really think about carefully before deciding to file alone. It’s not illegal to file without an attorney. It can, however, prove to be extremely difficult for you to file for bankruptcy on your own. There is a huge potential for mistakes within bankruptcy paperwork. Which type of bankruptcy is best for you? Do you know your state’s exemptions? What paperwork must be filed – and when? There are also various meetings that you must attend wherein there will be a lot of “legalese” that can be very confusing.

An experienced bankruptcy attorney knows the ins and outs of bankruptcy law. They are used to the administrative aspects of filing; they’ll also be familiar with all of the legal language and deadlines. The faster you are able to petition the court for bankruptcy, the less time for your debts to pile up even higher. Working with an attorney also improves your chances of a more favorable outcome, like potentially being awarded a full discharge of debts. Hiring an attorney can actually mean you will save money in the end.

Bankruptcy can also be a time-consuming process. If you are representing yourself, you will need to be present at every meeting, court appearance, and personally file all of the paperwork. This can be difficult to balance on top of a family, a job, and other responsibilities. Missing work to attend to your bankruptcy case can exacerbate an already difficult financial situation. Your attorney will be able to attend meetings and court appearances on your behalf (in many instances).

Filing for bankruptcy isn’t something to be done on a whim – or on your own. While the idea of paying court costs and attorney fees can be daunting when you are already struggling financially, there are ways to move forward even with no money in your bank account. Call to set up a free phone consultation with Veitengruber Law and we will help you get on a better financial track.