Can Wages be Garnished for Money Borrowed from a Friend?

There are certain situations in life that call for borrowing money from a family member or friend: if your financial situation is less-than-optimal, and if your credit score is poor. When you’ve exhausted all traditional lenders and “bad credit” lenders, your Hail Mary may be asking someone you know to lend you money.

In these situations, most people make grandiose promises to pay the money back (sometimes with interest). Out of sheer gratitude, it can be easy to make promises you’ll never be able to fulfill. On rare occasions, the friend or family member (especially if it’s one of your parents or grandparents) will wave you off if and when you try to pay them back. Note the use of the word “rare.”

The honest truth of the matter is that, unless they’re abundantly wealthy with cash flowing in faster than they can spend it, your personal lender is going to expect to be repaid the money that you borrowed from them. In all likelihood, they’ve probably dug into a savings account that was specifically earmarked for something important in their own life, like paying for a child’s college education or putting a down payment on a home, in order to help you out of a bind. Failure to repay this ultra-generous favor is frankly very uncool.

Just as you wouldn’t borrow money from a traditional lending company or banking institution if you had no means to pay back the loan (because they wouldn’t lend you the money if you didn’t qualify in the first place) – you shouldn’t take money from a friend or relative if you have a pretty solid hunch that repaying them isn’t in the cards.

What can happen to me if I never repay a debt I owe to a friend?

Just as any debt that you leave unpaid, the lender (in this case, your pal) has every right to collect the money from you. Naturally, most loans of the personal nature tend to start out with the lending party casually mentioning the money he’s owed. This may happen several or a multitude of times, depending on the nature and patience level of the person who loaned you the funds.

You can prevent straining your friend’s patience by making a plan to pay him back the very second his money hits your hand. After all, “it takes many good deeds to build a good reputation, and only one bad one to lose it.” Electing to borrow money from anyone and then ignoring their requests for repayment is a bad deed, indeed.

Your good-natured lending friend is likely to tire quickly of gently asking you for the money he’s owed, and personal relationships are bound to suffer the longer you fail to make good on your handshake agreement. What many people don’t know is that even personal loans between friends and family members can be enforced in the NJ court system.

What started out as a buddy helping a buddy out can end with a nasty court case wherein you’ll be sued for the money owed, and wages can be garnished from your paycheck if you don’t have enough money to satisfy the judgment straight away.

Save yourself the hassle and a relationship that you likely value: start repaying the money you borrowed, even if it’s a small amount at a time. Good faith often goes a long way, especially when life-long friendships are involved.

Advertisements

Divorce Doesn’t Have to Ruin Your Credit Score!

While the act of separating and/or getting divorced from your spouse won’t affect your credit score on its own, it is likely to cause indirect damage to your finances. So, while there won’t be a giant mark on your credit report that says “GOT DIVORCED, automatic 100 point deduction,” your score can and will begin to drop after a divorce if you aren’t hyper-aware of the potential damage.

In order to take proactive steps to maintain a good or excellent credit score during and after a divorce, you first have to know what you’re up against. Some of the biggest factors that cause divorcees financial strife include:

• Suddenly dropping from two incomes to one income
• Joint debt that goes unpaid by your soon-to-be ex-spouse
• Shared bank accounts that can be drained by either party
• Spiteful actions of one spouse, like running up a joint credit card balance
• Lack of an independent financial identity and/or credit history
• Divorce expenses
• Child support and/or alimony

Even if the split is something that will ultimately make you happier, the process of getting to that end goal is undoubtedly going to be stressful. It is much easier to miss a bill payment or make other financial errors when you are stressed to the max.

Why is My Credit Score so Important After Divorce?

Losing a few credit score points shouldn’t make or break anyone, right? In many situations, this may be true. However, for those people who are going through a divorce, maintaining a solid credit score is IMPERATIVE.

You may need to buy or rent, initiate utility services for, and completely furnish a new home. In order to do so, your credit must be fair to good at minimum (ideally in the upper 600s or above).

Additionally, many divorcees seek higher-paying jobs in order to make up for the second income that was lost in the split. These days, it is common practice for employers to check the credit history of all potential hires before extending a job offer. If your score tanks during or after your divorce, it may prove difficult to make even a lateral employment move.

What Can I Do to Maintain a Good Credit Score After my Divorce?

As soon as you know that divorce is in the cards, your first move should be getting a current credit report from each reporting agency. This will allow you to know precisely what debts and recurring payments are officially your responsibility as opposed to your spouse’s.

“Knowledge is power, but only wisdom is liberty.” ~ Will Durant

After you have current credit reports in hand, it’s important that you take smart action based on the information contained in your report(s). For example, you may not have realized that your spouse listed you as an ‘authorized user’ on a credit card. If the card’s balance gets maxed out due to extra expenses during your divorce and your ex-spouse stops making payments, you could be held responsible for the balance. In addition to removing yourself from any joint accounts, you should:

• Create an amended budget using your adjusted spending limit.
• Make it a priority to make all of your payments on time.
• Closely monitor any accounts that you’re unable to separate immediately.
• Get educated on the topic of good financial habits.
• Seek the help of a financial advisor or NJ credit repair attorney, if needed.

 

 

 

 

NJ Renters’ Rights: What to do if Your Apartment Floods

With the unwelcome arrival of Hurricane Harvey and Hurricane Irma, whole cities have found themselves under water. The level of destruction unleashed by these two storms is practically unprecedented in the United States, and the damage is comparable and potentially worse than that which was inflicted upon us by Hurricane Sandy and maybe even Hurricane Katrina. While New Jersey renters are likely to escape the severe end of Hurricane Irma, now is a good time to talk about what options you would have in the event of a flooded rental.

Prior to moving into your NJ apartment or rented home, your landlord was required to inform you if the property is located in a flood hazard area, as designated by FEMA (the Federal Emergency Management Agency). {N.J.S.A. 46A:4-7} Landlords who knowingly omit information about the potential for your rental property to flood are in violation of the ‘warranty of habitability.’

What is the Warranty of Habitability?

All New Jersey landlords must provide their tenants with a rental property that is safe and without significant defects. NJ landlords must provide:

• Access to clean running water, both hot and cold
• Trash removal
• Functioning heating and plumbing systems
• Windows and roofs that are leak-proof

Landlords must continue to provide tenants with these basic amenities throughout the entire life of the lease. If, at any time, one or more of the above amenities is no longer available, NJ tenants are entitled to have appropriate repairs made in a timely fashion, so that their property remains habitable.

As a New Jersey renter, if your rental apartment or home becomes flooded while you are actively living there, your first action must be informing your landlord of the damage. A good landlord will immediately begin remedying the situation in order to make your home livable as quickly as possible.

In the event that your landlord fails to take action in a timely manner, you have rights as a New Jersey tenant, because you are entitled to a habitable property. By working with a NJ landlord/tenant attorney who is well-versed in areas of the law relating to real estate, you may be able to:

• Make the repairs yourself (if the necessary skills are in your wheelhouse) – charging your landlord for the cost of said repairs and materials used
• Sue your landlord in small claims court to force your landlord’s hand in either making the necessary repairs or paying you to have the repairs completed
• Withhold rent payments until said repairs have been sufficiently completed (your NJ attorney will be able to advise you about the specific circumstances that make this option valid)
• Vacate your rental property by way of declaring “constructive eviction”

What is Constructive Eviction?

Anytime a NJ landlord fails to take appropriate action after a rental property becomes uninhabitable (due to severe storm, hurricane or other disaster of natural causes), you may be legally permitted to move out and find a new place to live. An experienced NJ real estate attorney will be able to guide you in making this decision based on the legal steps that must be taken to protect your rights.

 

Dear Bankruptcy,

Dear Bankruptcy,

As a follow-up to my previous correspondence with you several months ago, I write you now only to keep you apprised of the situation. I want you to know that I am not deliberately trying to hurt your feelings, but I feel it is my duty as one of your staunchest supporters to let you know the truth.

In an attempt to squelch the initial rumors I shared with you, I have worked tirelessly educating the masses regarding the misinformation that was swirling around. While I strongly believe that those who I am able to work with directly are now getting the right message about you, I have to tell you that through word of mouth I have heard that someone is still spreading rumors about you.

My intention here is to clear the air, as I will post this letter publicly in the hopes of putting a stop to what is being said behind your back. Please feel free to do the same on your end so that we can get the correct information in front of as many people as possible.

Ok, I’ll just dive into the details, then. Here goes.

(Deep breath, because these may hurt a little)

I think I told you this already, but I’ve recently opened a second office in New Jersey. Bankruptcy help is one of the main services I provide at both offices. As I’ve moved into a new location, I’ve heard some real head-shakers about you. You would never tell someone they can never get a credit card again, right? RIGHT! I mean, obviously, those who need your help will have to reel in their credit card use until you help right their financials, but I have been telling everyone who asks: YES YOU CAN GET A CREDIT CARD AFTER BANKRUPTCY comes into your life.

A friend of a friend came to me (claiming to be “asking for a friend,” sigh) with this question: Will everyone know if I’m involved with Bankruptcy? Again, I am incredulous that there is still such fear at the mere mention of your name. Times have changed, Man! Bankruptcy doesn’t post a public announcement or install a blinking red light in front of your home. However, as I’ve previously been preaching: Needing Bankruptcy’s help is nothing to be ashamed of.

“But we wanted to own a home one day” – I heard this last week from a husband and wife who approached me in town. As challenging as it may be, I continue working to convince people everywhere that an encounter with you is not a life sentence. After all, you aren’t out to attack or harm anyone; you’re here to help.

Even though you and I know that times have changed, it is apparent to me now that I still have more work to do in defending your honor. You have my word that I will continue in earnest to defeat any and all Bankruptcy myths that I encounter. You and I are in this together, friend.

How to Dispute a Debt and Win!

We’ve talked a lot on our blog about how to handle your unpaid debts so that your credit score doesn’t tank, because a low credit score makes it much harder for you to borrow money, buy a house, and purchase a vehicle. Even potential employers today have the ability to find out how you handle money before deciding whether or not to hire you. For the aforementioned reasons, keeping a decent credit score is something that rightfully demands your attention.

Keeping tabs on your ever-shifting credit score and the details contained within your credit report(s) is the easiest way to ensure that you don’t have any long-lost debts doing serious damage without your knowledge. If and when you discover an unpaid debt that belongs to you, it’s important to pay the debt ASAP to avoid losing valuable credit score points. Working with your credit repair attorney in NJ, you can negotiate a debt pay-off schedule that works for you. Remember to check back in with the credit reporting bureaus as soon as you’ve paid off said debt to make sure it has been removed from your credit report.

What happens if you receive a notice from a collection agency for a debt that you have no recollection of owing? While your first instinct may be to toss it in the trash with the rest of the “junk mail,” slow down for a minute. There are two very good reasons why you should NOT ignore any letter from a debt collector.

1. Everyone makes mistakes. It’s possible that you do owe an original creditor money. Bills are be misplaced, mis-sent, and lost every day. The original creditor may have also made a billing error when they originally charged you. The bottom line is that it is possible that you owe money that you forgot about or didn’t know about.
2. Debt collectors can continue to attempt to collect on a debt, even if it was never your debt to begin with, unless you respond to them, in writing, within 30 days. Therefore, even if a collection agency is completely falsifying information in the hopes that you will simply send them some money, do not ignore it.

If you are being held responsible for a debt that you don’t recognize or remember, you can dispute the debt by sending the collection agent a letter via Certified Mail, with return receipt requested. In your letter, state that you are writing to dispute the alleged debt, and that all collection attempts should cease unless they can provide you with all of the following:

• The full amount of the alleged debt
• The name and address of the original creditor
• Proof that you are responsible for the alleged debt
• Documentation showing that the collection agency is licensed to collect debts in New Jersey

If the person attempting to collect money is doing so fraudulently, you should never hear from them again once they receive this letter from you. On the other hand, if there is a legitimate debt that you’re responsible for, you will receive the information you requested. Either way it is advisable to contact a credit repair attorney and/or a consumer fraud attorney in order to get your desired results and to keep your good credit score safe.

Image: “Credit Dispute” by Cafe Credit – licensed under CC 2.0

NJ Foreclosure Redemption: Explained

If you have recently “lost” your home to New Jersey foreclosure, you may be wondering if there is anything you can do to get your home back before it is sold at auction. In fact, there are some very effective, tried and true methods that can be used to prevent your lender from proceeding with the Sheriff’s Sale – as long as you take action before the sale has already commenced.

Unfortunately, many people who are in similar situations to yours live in denial for a long period of time before taking any action regarding their home’s foreclosure. Burying your head in the sand is common in times like these because this is such an undesirable life event that can be very hard to face. Most people dealing with foreclosure never intended to lose their home and can spend months hoping for a miracle.

This leads to homeowners who finally take action at the last minute (or very close to the last minute). While it is easy to panic if your home is scheduled for Sheriff’s Sale very soon, is not recommended. The same is true if your home has already been sold at Sheriff’s Sale.

Remaining calm is key. If you have not taken action before the date of your foreclosure sale, you have likely already experienced the start of the eviction process. After your home has been sold via foreclosure sale, your last Hail Mary option is to take advantage of the redemption period.

In the State of New Jersey, the foreclosure redemption period is an extremely small window of time during which you may still be able to save your home. The New Jersey foreclosure redemption time-frame is 10 days. Therefore, you have 10 days after your home has been sold at Sheriff’s Sale to redeem the property and take back ownership.

It should be noted that there are no exceptions made during the NJ foreclosure redemption period. If you do not take action within the 10 days immediately following the foreclosure sale, you will have lost the last opportunity to buy back your home.

In NJ, homeowners who are attempting to redeem, or buy back, their previously owned home after it has been sold at a foreclosure sale, must refinance or pay the outstanding balance on their mortgage in full.

Insider Info: Because New Jersey is a judicial foreclosure state, lenders are required to file a lawsuit when they proceed with foreclosing on a home. The entire foreclosure process must be documented within the New Jersey court system. This gives some New Jersey homeowners a second opportunity to buy back their foreclosed homes, but only if their lender files a deficiency judgment after the Sheriff’s Sale.

If your lender files a deficiency judgment after your home sells at foreclosure sale, your New Jersey foreclosure defense attorney can help you bring action for redemption within six months after your lender has filed for deficiency judgment. This is a feat designated for experienced foreclosure and real estate attorneys and should not be attempted with a less-experienced professional.

To learn how to buy back your home via redemption after deficiency judgment, ask your NJ attorney ASAP.

If your home has been sold at a New Jersey Sheriff Sale and you’re interested in redeeming either during the 10 day redemption period or after a deficiency judgment – you must contact an experienced New Jersey foreclosure defense attorney TODAY.

Take action now before your chance to redeem your home truly passes. Be sure to ask your attorney about the new Senate proposal regarding NJ foreclosure stays to find out if it can be of help in your unique situation.

Image: “Keys.” by Linus Bohman – licensed under CC 2.0

Dealing with Surprise Liens on a NJ Title Report

While there are many unknowns when it comes to real estate transactions, when those unknowns become unpleasant surprises, the sale of a property can slow to a halt. One common reason for a stalled or cancelled real estate transaction is surprise liens that the seller wasn’t aware of.

What is a property lien?

“Lien” is one of those terms that gets tossed around all the time in the real estate world, but oftentimes real estate professionals find that their clients don’t fully understand what a lien is.

A property lien, in simplest terms, is a notice that becomes attached to a property (in this case, the home that is listed for sale). The notice states that the current owner of the property (i.e. the seller) is indebted to a creditor.

The reason creditors file liens on real property is because they are of public record. This means that the creditor is more likely to be able to collect the money they are owed.

How does a lien affect the sale of a home?

One of the steps in any real estate transaction is a title search – usually performed by a title company or a real estate attorney. The property up for sale must come back with what is called “clear title” – meaning no liens were found.

If your title search shows a lien on your home that you weren’t expecting, don’t panic. Mystery liens do happen, and as such, most real estate purchase agreements give sellers 30 days to address property liens without significantly delaying the closing.

Do I need an attorney to clear up liens on my property?

While it is possible for some homeowners to reconcile their debt with the creditor in question, many people need to clear up any property liens quickly in order to allow the sale of their home to continue. NJ real estate attorneys who are well-versed in handling surprise property liens can quickly and completely eradicate your lien(s), making their services invaluable at such a time.

Not only will your real estate lawyer help you with any surprise liens, he will also provide legal review of all paperwork surrounding the sale of your home, including the sale contract itself. Working with an experienced real estate attorney in New Jersey will reduce the time it takes to clear up any surprise liens and will ultimately give sellers (and buyers) an optimal result.

Additionally, if your property liens were placed by the IRS because you failed to pay your taxes properly, working with an attorney is in your best interest because of the possibility of tax fraud charges.

What are my options to contest a lien?

In the rare occasion that a lien is found on your property and you feel confident that it was placed in error, it’s possible that the debt was in fact repaid but the lien was simply never removed. While this may sound like an easy problem to resolve, it actually presents sellers and their attorneys with a challenge. Your NJ attorney will have to locate the original lienholder in order to obtain official lien release documentation.

If you refuse to make good on a lien that exists on your property (that has not been paid off already), you will be found in breach of contract. It is rare that a buyer decides to handle paying of a seller’s lien(s), but it does happen if a buyer is very motivated to purchase your property. Upon your refusal to clear up any liens, your buyer is more likely to simply walk away from purchasing your home.

 

 

 

 

Understanding a NJ Home Inspection Report

For those who are looking to buy or sell a home, the home inspection is a crucial part of the process.Whether you are the buyer or the seller of a property, you must have a solid understanding of all of the details found in your New Jersey home inspection report. This report will ultimately determine the overall condition of the property in question, and will specifically itemize any problems, both large and small.

Typically, the home inspection is ordered by the home buyer after they have signed a purchase contract. It is important to work with a professional, licensed and well-respected home inspector to ensure that nothing substantial is missed.

While the seller is required to disclose any and all existing issues with the house, they can only disclose problems that they are aware of. The job of the home inspector is to dig beneath the surface to find problems that may not be visible to the untrained eye, such as damage to any area of the home including: the foundation, pipes and plumbing, HVAC system(s), electrical systems, roof, walls, attic, ceilings, floors, doors and windows.

After he has inspected your potential future home, your NJ home inspector will provide you with a detailed report. This report will explain any and all findings of the home inspection. Some home inspection reports can run upwards of 30 pages, which can be a little bit intimidating to the novice home buyer.

Understanding Your Home Inspection Report

Home inspection reports can also come in different formats. Some home inspection teams report with a checklist, while others use a summary along with a longer narrative portion explaining the summary in detail.

Typically, home inspection reports will include a table of contents for ease of navigating through each portion of the report. Professional home inspection teams will include an introductory portion that provides important industry definitions along with details about the report, including: date completed, home address, age of the home, weather conditions during the report, and people who were present during the inspection.

Following any introductory sections will be the meat of any home inspection report. This portion of the report should be divided into areas of the home or home components that the inspector evaluated. Here, notes will be made and details will be listed about the condition of each home area/component (roof, plumbing etc.) along with suggestions, recommendations and any applicable photos and or videos that the home inspection team acquired during their review of the home.

Is a Home Inspection Really Necessary?

It is extremely important that anyone looking to purchase a home invests in a home inspection during the contingency period of the home purchase. Any New Jersey real estate contract/purchase contract is conditional until the home inspection has been completed. This means that the contract is not official until after the home inspection and can be terminated if there are significant issues discovered by the home inspector.

Many times, minor issues can be negotiated between the buyer and the seller, allowing the sale to proceed. Aesthetic changes, such as fresh paint or minor kitchen repairs can be added to the contract as the seller’s responsibility. Before closing, the buyer will have a final walk-through of the home, at which time they can determine whether or not all of the requested repairs have been made as agreed to in the contract.

 

Image by Andy Piper – licensed under CC 2.0

How the New Jersey Senior Freeze is Making a Difference

Property taxes are defined as taxes that are collected by the local jurisdiction in which a real property is located; the amount of property taxes any homeowner owes is based on the assessed value of the home(s) they own multiplied by the current tax rate in their local jurisdiction. New Jersey’s average property tax rate is one of the highest in the United States.

Owning a home in the Garden State has a lot of benefits, and those of us who are living and raising a family here wouldn’t dream of doing it anywhere else. We may have to grit our teeth every time the quarterly tax bill makes its appearance, but pay it we do. Life in New Jersey is worth it – offering tight-knit neighborhoods, reputable public schools, and, of course, the Jersey Shore! However, as NJ homeowners reach retirement age, many have begun struggling to keep their homes, in many cases because they’ve fallen behind on their property taxes.

As New Jersey’s real estate market continues to take hits, lawmakers are now taking steps to help struggling seniors so they don’t have to leave the state in order to afford to own a home. The Property Tax Reimbursement Plan, commonly called the “Senior Freeze,” is one of the programs that is making a real difference.

Under the Senior Freeze, or the PTRP, New Jersey seniors who meet a list of requirements will be eligible for reimbursement of the cumulative increase in their property taxes since the first year they became eligible, which is called the base year.

In order to qualify for property tax increase reimbursement under the Senior Freeze program, New Jersey seniors:

• Must have lived in New Jersey for at least ten consecutive years – either renting or owning their own home
• Have resided in the home they currently own for a minimum of the last three consecutive years
• Should be at least age 65 or have a spouse who is at least 65 year of age – ALTERNATIVELY – those who do not meet the age requirement but are receiving Federal SSDI (disability) benefit payments can also qualify
• Must meet specific income requirements

The year in which New Jersey seniors are able to meet all of the above eligibility requirements is considered their base year. The base year is essentially the year in which their property taxes will be “frozen,” so to speak. Any increase in their NJ property taxes that they have paid out since the base year will be repaid to them.

Ex: Ruth turned 65 in the year 2010. She has lived in and owned her current New Jersey home with her husband for 20 years, and she also met all of the additional requirements in 2010. Ruth will be reimbursed using this formula: The property tax amount she paid in 2017 (current year) minus the amount she paid in property taxes in her base year (2010). The difference equals her reimbursement amount.

Every year forward, Ruth’s property taxes will remain frozen at the amount she paid in her base year of 2010. Combined with assistance from the Homestead Benefit Program, New Jersey senior citizens have a better chance at maintaining their standard of living into retirement, and they can continue to enjoy the wonderful Garden State for many years to come.

 

 

 

 

What to Expect When You’re Expecting to Close

Now that you’ve invested extensive time and energy into the process of buying a home in NJ, it can feel a bit overwhelming to realize that you still have one hurdle to clear – the closing. Most people have at least a vague, general knowledge of the fact that you have to “close” on a property before it officially becomes yours. But what exactly does this mysterious “closing” entail?

The How (to prepare):

To ensure that your closing (or settlement, as it is often called) goes smoothly, it’s best to be fully prepared in advance. Because contract language can be confusing and lengthy, it is in your best interest to have an experienced New Jersey real estate attorney review all of your loan statements and the purchase contract during your three day attorney review period, which is required by law to begin within three business days of your official closing date.

Along with having your attorney carefully review all of your paperwork, you should be allowed to do a last walk-through of the home 24 hours before the closing. This walk-through has two main purposes: to ensure that everything is in the condition that the seller agreed to in the contract, and to make sure that the seller has fully and completely vacated the premises (unless it has been otherwise negotiated in the contract).

The Who:

State laws dictate who must be present at a real estate closing. In New Jersey, the buyer(s) must be present to sign all of the official paperwork and final loan documents. The buyer’s attorney can be present if there are any questions still left unanswered, but your NJ real estate attorney is not required to attend the closing. Your real estate agent and/or title company representative will typically handle all of the closing details.

Other people who may attend the closing include: the seller, the seller’s real estate agent and occasionally, a representative from your lending institution.

The Where:

New Jersey real estate closings most often take place at the buyer’s attorney’s office or at the buyer’s realtor’s office. The location is negotiable so that it is as accommodating as possible for everyone involved.

The What (to bring):

On the day of your closing, you’ll to bring proof of your identity, proof of your homeowners insurance policy, any home inspection reports and a copy of the contract that you have reviewed with your attorney. You’ll need this copy to verify that no changes have been made to the official contract that you will be signing.

This is also the time to fork over your down payment and closing costs. You cannot make these payments with a personal check, so be sure to verify with your closing agent beforehand what form of payment is preferred. It will likely be a cashier’s check or, in some cases, a wire transfer. If there are any smaller surprise fees that need to be paid at closing, you should be able to pay for those with a check.

The What (to expect):

Once you arrive at your closing or settlement meeting, you can expect to do a lot (and we mean A LOT) of signing your name on all of the closing documents and final loan paperwork.

The transaction will be recorded by a representative from the title company, who will then file the deed with the appropriate township/municipality.

Just as your hand starts to cramp uncontrollably from all of the signing you have to do, it will be over and you’ll be handed the keys to your new NJ home!