Rebuilding Your New Jersey Small Business After the Pandemic

New Jersey small businesses are the backbone of our communities. Restrictions due to coronavirus and subsequent shutdowns has left a lot of NJ small businesses worse for wear in 2021. If you are a small business owner, you are likely looking towards the recovery process and making a plan for your new normal. Here are five things to think about for getting your small business back on track.

1.    Determine the Financial Damage

Before you take any steps toward recovery, you need to know the impact the coronavirus shutdown and financial unrest had on your business. Spend some time updating financial statements, including your profit loss and cash flow statements. In comparing these numbers to where you were before the pandemic, you should be able to see how coronavirus has affected your small business. Consider also the financial impact to other areas of your business, including cost cuts to employees or advertising as well as lost business.

2.    Revamp Your Business Plan

Despite things getting back to “normal,” this new normal may look drastically different in a post-coronavirus world. This is a great reason to take a second look at your business plan and make some necessary changes. This will include analyzing how your specific industry has been impacted and the ways in which that industry has adjusted to these changes, as well as how your business specifically will need to adjust logistically. For example, if your business relies on in-store shopping and foot traffic, you may want to consider developing a delivery service or an online platform.

3.    Take a Second Look at Your Budget

Recovery may require your business to spend money before it makes money. This means identifying areas you need to spend money to get your business operational again and cutting things that aren’t absolutely necessary. Hiring and training new employees, restocking your inventory, or even starting a marketing campaign to renew interest in your business may take precedence while you are in recovery mode. Keeping your budget lean will allow you to invest in business opportunities as they come along in the future.

4.    Create a Workable Timeline for Recovery

If you go into recovery mode trying to do too much at once, you will likely get burned out. Creating a timeline and prioritizing actions can help you organize your efforts so that you see results. While in recovery mode, you should take the time to check your progress against your finances to see where your actions are making a difference.

5.    Plan for the Next Crisis

We know that the last thing you want to think about right now is the possibility of this kind of thing happening again. But if this pandemic has taught us anything it is that we need to be prepared for the worst. As you rebuild your business, pay attention to what you could have prepared for better now that you have hindsight. Create a contingency plan to weather the next storm. This will look different from business to business. Maybe you need a way to allow employees to work from home, or focus on cutting down debts and building liquid cash. Some out of the box thinking can protect your business from future problems.

The best way to move forward with your small business recovery is to take it one day at a time. This is a very stressful moment in your career as a small business owner, but the way you handle the recovery can define this moment as a success.

5 Reasons to Celebrate National Homeownership Month

If you own your own home, June is the month to celebrate you! June is National Homeownership month. As we were all reminded this past year, a home is more than just a residence. 2020 saw our homes become work spaces, classrooms, makeshift spas, staycation spots, and so much more.

Over 65% of Americans own their own home; owning real estate is continually ranked as one of the best investments you can make. There are so many benefits to homeownership. If you are considering purchasing a home this year, here are some great advantages you’ll enjoy.

1. A Place to Call Your Own
There is a certain pride that comes with owning your home. Your home becomes an extension of yourself and allows you and your family to express your personalities and lifestyle. It’s where you celebrate many holidays with family and evenings with friends. Having a safe environment to return to at the end of the day can provide much needed peace of mind. This security and privacy was never more important than in the last year. When you need a refuge from the rest of the world, your home is your sanctuary.

2. Civic participation
When you own real estate property, you own part of your community. With this comes with a sense of belonging and community pride. Your home can determine where you shop, where your kids go to school, where you work, and the people you spend your life with. Homeownership is proven to increase the chances of community involvement, like volunteering and attending local events.

3. Stability
Homeownership provides more financial stability than other living situations. You have more control over how much your housing costs will be month to month because your mortgage payment is likely to remain relatively steady, whereas rent payments can fluctuate according to your landlord’s whims. This is also true of other bills associated with housing, like utilities. This stability provides peace of mind and also allows you to better prepare for financial emergencies.

4. Investing in Your Future
Homeownership is often the biggest investment most of us will ever make. Once you own your own home, your investment will steadily build in value. As you work towards paying off your mortgage, you are also working towards securing housing for retirement.

5. Forced Savings
If you finance your home purchase, every payment you make on your mortgage includes an equity payment. This sum builds and builds over the years and can eventually reach a substantial amount of money. This equity can eventually be used to help you and your family undertake some of your biggest financial goals.

If you are still working towards becoming a homeowner, keep in mind that Veitengruber Law can help. We offer contract review, real estate representation, and closing review. By next June, you can be celebrating this month as a homeowner!

How to Read Your Credit Card Statement

Knowing how to properly read your credit card statement is an important life skill that can help you get ahead of your debt. Errors, unnecessary fees, or fraudulent charges can all impact your bottom line. You should be reading your credit card statement thoroughly every month to ensure it is error free and accurately reflects your account activity. Here are some tips on how to read your credit card statement every month.

What should I look for on my credit card statement?

Each company will have a different format for their statements, but every statement should contain the following:

1. The balance from the previous billing cycle and how much you currently owe.
2. The minimum payment due and the due date for that payment. Some companies also provide a timeline of when you can expect your debt to be paid off if you make minimum payments. You may be surprised at how long it will take you to pay off your credit card debt. This is why whenever possible you should make more than the minimum payment.
3. A detailed list of all transactions within that billing cycle. If you notice a charge is not listed, it will likely appear on the next billing cycle. Look at the dates to see when the billing cycle ended.
4. A list of all credits made to your credit card balance during the billing cycle. This can include payments, cash rewards, or returns.
5. The interest accrued over the last billing cycle, along with your listed interest rate and the (higher) interest rate that will apply if you fail to make the minimum payment on time.

Some credit card companies have also started to include credit scores on their statements. However your company decides to report your information, it is important that you check each statement for all of the above factors.

How long is a billing cycle?

A billing cycle is normally 30 days on average. But just because it is a month long does not mean it begins and ends on the first and last day of the month. The exact start and end date of your billing cycle should be listed at the top of your statement. Keep an eye on the due date to make sure you get your payments in on time.

What is this mystery charge on my statement?

The most important reason to carefully check your credit card statement every month is to scan for any errors. If you see a charge on your account that you do not recognize, you will have 60 days to dispute it with your credit card company.

First, make note of the type of error. Check your receipts to make sure the correct amount is being charged to your credit card. If it is a purchase you did not make, it could indicate your account has been compromised.

Your options for remedying the error will vary from company to company. Some may have online platforms through which to file a complaint and others may require a phone call. Either way, it is a good idea to send a physical letter to the company and keep a copy for your record so you can prove the error was reported in writing.

If you are falling behind on credit card payments and having trouble keeping up with your debt, Veitengruber Law can help you get back on track. We offer customized debt management solutions that are unique to each client’s specific situation.

What is Credit Card Churning and How Does it Impact Your Credit Score?

Credit card churning is the act of opening a new credit card account primarily to reap the benefits of a promotional period or rewards points. For some, it can be a great way to take advantage of attractive rewards. For others, it can lead to a lowered credit score and unmanageable credit card debt. Here are some important facts to know on the topic.

What is the point of credit card churning?

This is the act of choosing new credit card specifically for sign up bonuses, rewards points, or other promotional benefits. The user will use the card enough to take advantage of these benefits before paying off the balance and closing the account. It can be a way to get cash, free travel, and free vacation accommodations. It also allows the user to take advantage of credit card perks in a short period of time without having to pay annual fees or stick with a card that might have subpar benefits for everyday spending.

Is credit churning legal?

Yes, credit churning is totally legal. That being said, credit card companies and the credit industry in general has grown wise to credit churners’ attempts to game the system. This is why spending minimums for bonuses tend to be on the higher side. Some companies are also limiting bonus rewards to one per card user in a lifetime, meaning they can’t take advantage of the same promotion twice. If a credit card company sees you apply for credit cards frequently, it could be a just cause to reject your application.

How does credit churning impact my credit score?

Generally speaking, credit card churning is a hazardous financial move. You can quickly get in over your head and wind up with more debt than you can handle. These are some of the potential ways that credit card churning could affect your credit score:

1. Repeated applications for credit cards can negatively impact you score. Every time a credit card company makes an inquiry on your credit report, your overall score takes a small hit. Too many inquiries over a relatively short period of time can seriously damage your score.

2. If you have to increase your typical spending to reach the minimum usage for the promotion, you could easily wind up with more debt than you can afford. Falling behind on payments can lead to a multitude of financial issues, one of which is bad marks on your credit report which will lead to your credit score dropping.

3. Your credit utilization ratio will also be impacted. While with every successful credit card application you will be increasing the amount of credit you have, credit card churning requires a lot of spending in a short period of time. This can increase your credit utilization ratio, which is bad news for your credit score.

4. Frequently closing older accounts and applying for new credit can make it seem as though you are in financial distress. This makes you look like a risk to lenders. It can also lower the average age of your credit, which will negatively impact your credit score.

If credit card churning has landed you in hot water, Veitengruber Law can help. Ask us about our proven debt management methods and credit repair solutions. Think you’ve got a scenario we’ve never seen? Give us a shot: we LOVE a challenge and we’ve never met one we couldn’t handle!

NJ Credit Repair After Car Repossession

When you are late or go into delinquency on a debt, a lender can seize your assets in a process called repossession. Repossessions on your credit report can negatively impact your score. But even with a repossession on your credit report, you can still improve your credit score – possibly even remove the negative mark from your report. Here are some common questions and answers.

Can I remove a repossession from my credit report?

There are some instances when a repossession can be removed from your credit report; for example: when the report is inaccurate or unfair. If the asset in question has not yet been repossessed, you can first try negotiating with your lender. It costs money for them to repossess and is all around better for them if you pay back what you owe instead. You can offer to settle your debt with them in exchange for removing the repossession from your credit report. If, however, the asset has already been repossessed, your best bet is to file a dispute with the credit bureaus (if there are inaccuracies on your credit report). In this case, the credit bureaus will investigate the creditor in order to determine if the information should stay or be removed from your credit report.

What is the process to dispute a repossession on my credit report?

1.   Review the information on your report to make sure the report is accurate and free of errors. Make sure all the dates and amounts are correct.

2.   Gather any evidence to support your dispute including proof of identity and a list of the incorrect info on your report.

3.   Report the dispute to the credit bureau. The lender will have time to provide their own evidence to substantiate the information on your report. If they cannot, the credit bureau must remove the account from your report. If, however, it is determined that the account is accurately reported, it will remain on your report.

How will the repossession impact my credit score?

The repossession can stay on your report for up to seven years. During this time, it will be more difficult to apply for loans or more credit. You can also expect your score to decrease substantially, not only because of the repossession itself, but because of the late payments or any debt still in collections combined with the fact that a lender was forced to repossess assets to recover money that you owed. While these bad marks remain on your report, lenders will be less likely to extend you credit.

Can I improve my credit after repossession?

Making on-time payments on your other accounts, keeping your credit usage as low as possible, and working on adding new credit accounts can help you improve your score after repossession. Once the repossession falls off your report, you will see your score increase as long as you have been working to better your credit in the meantime.

Veitengruber Law can help you dispute a misreported account on your credit report and help you rebound your credit score after a major hit, like a repossession. Even if you are still struggling and your financial future looks bleak right now, we love a challenge and we thrive on helping our clients turn things around.

Building Credit Without Credit Cards: Is it Possible?

If you are working towards building your credit, chances are you have been told to get a credit card. While this might work for some, getting a credit card isn’t always the right move for everyone. If you feel like you will struggle to stay within a budget, make minimum monthly payments, or you simply don’t want the temptation, you should probably avoid getting a credit card. The good news is you don’t need a credit card to build credit or to improve your score. Here are four ways to boost your credit rating without having a single credit card to your name.

1.    Report Your Bills

Your regular monthly payments for bills like rent, cable, cell phone, insurance, and other utilities do not have much of a positive impact on your credit score. These accounts will typically only affect your credit score if they end up in collections. So if you are someone who pays your rent and utilities on time every time, you should make those payments work for your credit score by reporting your payments to the credit bureaus. Third party companies like RentTrack.com or RentReporters.com will verify your payments and report them so they are included in your credit profile.

2.    Become an Authorized User

This is a great way for parents trying to help their children (or a spouse) establish credit. Becoming an authorized user on a card can allow you to reap the benefits of the account holder’s good history without having to do anything. Being added to a card with no late payments and a positive payment history can automatically boost your credit without spending a dime.

3.   Get a Secured Card

Signing up for a secured credit card to avoid getting a credit card might sound counterintuitive. A secured card, however, isn’t a typical credit card. When opening a secured card, you put down the collateral that will count as your credit limit. Since you are essentially borrowing from yourself, there isn’t much risk for you or the creditor. Before singing up, be sure the issuer reports payments to the credit bureaus. This is also a great way to practice good credit habits that can lead you to getting a regular credit card in the future.

4.    Get a Credit-Builder Loan

Some financial institutions offer credit-builder loans. These loans work in reverse of a typical loan. The lender will establish a loan amount and payment schedule, typically in the amount of a few hundred dollars. You do not receive the loan amount until you have paid the entire loan, plus interest. The lender will report your payment history to the credit bureaus, which will help improve your score.

It is possible to establish and build your credit without worrying about maxed out credit cards and digging yourself into more debt. The process takes dedication and determination. A good credit score can open the door to many financial opportunities. Doing it right will ensure that you can reap the benefits of your hard work.

Am I Still Responsible for a Zombie Debt?

A debt no longer showing up on your credit report doesn’t necessarily mean you do not owe that debt. If a credit account has been closed for more than six years, that account should automatically be removed from your credit report. This same timeframe applies to accounts closed by the lender and placed into default. You can still be held accountable for this debt even if it has been many years since the closing of the account.

Is Debt That Falls Off My Credit Report Written Off?

In general, debt is considered owed until it is paid in full unless it is settled or discharged through other means (like in bankruptcy). Because of this, you can still be held accountable for debt even after it is more than six years old and has fallen off your credit report. If your debt is under statute barred status, this only prevents creditors from attempting to collect the debt via the courts—they can still pursue the debt through other means.

Outdated contact info

There are a few reasons you might still owe a debt that has fallen off your credit report. A simple, common reason is incorrect contact information. If you have moved, changed your name, or for whatever reason did not receive correspondence concerning the debt, you may have missed requests for payment. Because it is your responsibility to update all lenders with your contact information, you may still be liable to pay the debt.

Another common reason is post judgment remedies. A lender or creditor can go through the courts to get a post judgment remedy issued in order to force you to pay back your debts. These can include an attachment of earnings order, and wage garnishment order, a charging order, or a writ of control. Depending on the terms put forth in these repayment plans, you could end up owing debt after the six year period, at which time the debt would be removed from your credit report. Despite this, you will still need to continue payments until the debt is paid off.

Debt sold to collection agency

Lenders frequently “sell” past-due debt to collection agencies instead of attempting to get payment for the debt themselves. Lenders can do this whenever they want, even if the debt has fallen off your credit report. Once the debt is acquired by a collection agency, you are likely to see the debt reappear as a new record on your credit report as well as renewed efforts on behalf of the collection agency to collect on the debt.

Why does a debt fall off my report if it is unpaid?

It may seem confusing when debt falls off your credit report after six years. Your credit report is meant to help lenders determine your creditworthiness for potential loans, and six years is the designated timeframe to represent your financial health and history. It is generally agreed that information prior to the six year mark is likely not relevant to your current financial situation.

Do I need to disclose older debt to new lenders?

If you are still paying on debts older than six years, you should still disclose this to lenders. Any debt will impact your ability to afford a loan and being honest about this can help you determine what you can afford when taking on new debt.

If you are struggling with debt, Veitengruber Law can help. We have substantial experience dealing with debt collectors, credit card companies, and other financial institutions.

6 Important Facts About Your Rental Security Deposit in New Jersey

Whether you are a tenant or a landlord in New Jersey, you need to be well informed when it comes to your rental security deposit and the laws surrounding it. The Rent and Security Deposit Act was put in place to outline how to collect, make deductions, and return security deposits. Understanding the legalities of these deposits can make the rental process smoother—and ensure both landlord and tenant are on the right side of the law. Here are six things you need to know:

1.    Deposit Limit

In New Jersey, there is a legal limit to the amount a landlord can charge for a security deposit. One and a half month’s rent is the highest a security deposit can be. If the rent is increased, the landlord is allowed to raise the security deposit to match the increase in rent. The security deposit, however, is not allowed to increase more than 10% in any given year.

2.     How to Store the Deposit

NJ landlords must store the security deposit in either a money market fund or an interest-bearing bank account. With a money market fund, the investment company must be based in NJ, registered under the Investment Company Act of 1940, and have a maturity date of less than one year. With both, the landlord must pay the tenant the interest or earnings produced by the deposit. This money can go directly to the tenant or be used towards rent.

3.    Written Notices

Landlords must provide written notices in the following instances:

-Within 30 days of receiving the security deposit (which can be included in the lease agreement).

-If the security deposit is moved to a new bank or money market fund.

-Once a year to report the annual interest payment.

-Within 30 days of transfer of property and account to a new owner.

If a landlord does not provide written notice when obligated to by law, the tenant can provide written notice. If the landlord still does not provide written notice within 30 days, then the tenant can use the security deposit as rent and is not required to put up an additional deposit.

4.    Deductions

A landlord is allowed to keep some or all of the security deposit if the rent is unpaid or there is any undue damage to the property (normal wear and tear does not count towards this). Landlords are not allowed to make deductions from the security deposit until the tenant moves out.

5.    Returns

Under normal circumstances, a landlord has 30 days to return a deposit along with any accumulated interest. If there are any deductions, the landlord has to provide an itemized list. If the tenant has ended their lease due to domestic violence, the landlord must return the deposit within 15 days. If the tenant is displaced due to a natural disaster or because the property has been condemned, the landlord has 5 days to return the deposit.

6.    If the Property is Sold

If a landlord sells the property, they must transfer all of the security deposit accounts to the new owner within five days, as well as notify any tenants.

Keep in mind that your specific town or county may have additional rules that need to be followed concerning security deposits. As a tenant, it is important to know your rights and as a landlord, you need to know that you are acting according to the law. The best way to ensure everyone is on the same page is to include information about the security deposit in the leasing contract. Veitengruber Law can review real estate contracts to ensure they reflect the law.

How Can My NJ Small Business Avoid Bankruptcy?

If you are self-employed or a small business owner, personal bankruptcy could have larger implications outside of your personal finances. If you file for bankruptcy in New Jersey, your ownership interest in your business could be considered an asset and part of your bankruptcy estate. If you are expecting to go through personal bankruptcy and worried about how to protect your NJ small business, here are some things to consider.

1.   What kind of business do you have?

If your small business is a sole proprietorship, you and your business are legally considered one entity. Your personal assets and those of your business are one and the same. This means that any asset of the business is considered your asset and can be sold to pay off creditors (unless it is exempted – more on this below). Similarly, an LLC or “sub S” corporation is considered a closely held business. So while an individual owner cannot be held liable for the debts of the business, the assets of the business can be liquidated in Chapter 7 bankruptcy.

2.   When can a bankruptcy trustee NOT sell your business?

If you are the sole owner of your business, your bankruptcy trustee can look into selling the business to liquidate assets to pay off debts. This may not be a viable option if:
(a) The debtor/owner can use state or federal exemptions to exempt the business assets
(b) The cumulative debts of the business exceed the assets
(c) The assets have no value outside of the business
(d) Co-owners of the business exist, who are not filing for bankruptcy, and do not consent to a liquidation of the business.

3.   Is your business still profitable?

If your business is failing and you see bankruptcy as a way back to financial security, making your business part of the bankruptcy estate may not make a difference to you. If, however, your business is thriving and you still derive significant income from it, filing for Chapter 7 bankruptcy could put you in a more precarious financial position.

4.   Can you afford Chapter 13 bankruptcy instead?

Chapter 13 bankruptcy allows the debtor to pay back debts over a designated period of time under an agreed upon plan to reorganize their debts. Your debts, assets, and potential sources of income will be taken into account. As a small business owner, you will be able to exempt certain assets and property to protect them from being included in the bankruptcy estate—which can include assets from your business. Any non-exempt assets of the business will be used to determine how much of your debt should be paid to creditors.

There are many ways filing either Chapter 7 or Chapter 13 bankruptcy can impact your small business. Even filing for Chapter 13 can be complicated and will require significant planning. Veitengruber Law can help you explore all of your options and find the best ways to protect your NJ small business and your personal finances.

Tips for Buying a NJ Home in a Seller’s Market

Right now, the real estate industry is experiencing a very strong seller’s market. Limited inventory has seen many properties sell for more than the listing price, driving home prices up and creating an extremely competitive market for buyers. If you are currently looking for a home in New Jersey, you need to be prepared to act quickly. It should go without saying that working closely with an experienced NJ real estate professional is crucial right now. There are a few things you and your real estate agent can do to improve your chances at successfully buying a NJ home in a seller’s market. Our tips below are gleaned from the close relationships we have with some of the top real estate agents in New Jersey.

1.    Make Your First Offer Your Best Offer

In today’s seller’s market, multiple offers for one home can happen within hours of each other. Hence, it is important to make your first offer with the assumption that you are competing against multiple offers from other buyers. With this in mind, there are a few ways to make your offer more enticing:

Price: In a seller’s market, you NEVER offer less than the list price. In fact, you may consider offering more than the asking price so your offer stands out. Even so, you should never offer more than you can afford.

Deposit: The amount of money you submit up front with your offer can show a seller you are serious and have the funding to purchase their home. Putting more money down in the beginning can make your offer look more attractive than a minimum down payment.

Don’t ask for concessions: In a competitive market, you want to make an offer that puts little strain on the seller. Leave out the requests for cosmetic fixes or appliances, or help with closing costs.

Submit your pre-approval letter with your offer: This is a good rule of thumb in any market, but is essential for a seller’s market. If you have not received your pre-approval letter yet, ask your mortgage lender for proof that you’ve been approved.

2.    Get Insider Info When Possible

Ask your agent to contact the listing agent with the goal of learning exactly what kind of offer the seller is looking for. This can remove some guesswork as well as save the listing agent time fielding bids that don’t meet the seller’s expectations. If you know what the seller is looking for from the beginning, you have a better chance of having your first offer accepted.

3.    See a Home You Like? MOVE QUICKLY.

It may seem difficult to schedule home viewings during the busy work week, but in a competitive market, the home you are interested in may very well be under contract if you wait until the weekend. Try to see homes you are curious about as soon as you can. Similarly, don’t wait too long after seeing a home to make an offer. In this market, ANY delays will almost certainly lead to another buyer swooping in and making an offer.

In today’s market, an experienced and efficient real estate agent is a necessity. If you’d like a referral to a great New Jersey agent that we recommend, give us a call or drop us an email any time! We have a strong professional network and we are happy to help you find the right agent near you.