How to Recover from Identity Theft

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Although we strongly believe that the best defense against identity theft is a (virtually) impenetrable offense – if you let your guard down even for a second, your personal information can be stolen.

Some behaviors that will increase your risk for identity theft include: shopping online, using an public wireless internet connection, putting pieces of mail that contain personal info into the trash bin, and giving out your personal information to anyone  you don’t explicitly trust – whether over the phone or in person.

I suspect someone has accessed my personal info. What now?

If you have reason to believe that your private, financial or otherwise personal information has been stolen, there are some things that you can to do lessen the damage to your finances and credit report.

Remember, once someone accesses your personal information, they can then proceed to act as you, making a huge mess for you to clean up. The important thing here is to have a quick reaction time.

In order to stay organized during this stressful time, start writing down  everything you do that relates to the identity theft. Write down phone calls you make, including who you speak to and what was said. Make note of any discussions with the police, your bank(s), and your NJ attorney.

Keep track of all of the time you spend and any money you have to spend in order to clean up the mess, because expenses related to identity theft are tax deductible.

Place a ‘fraud alert’ on your credit report with the three major credit bureaus: Equifax, Experian and TransUnion. This alerts them to the fact that any financial activity that occurs while the fraud alert is in place is not done with your permission.

Just as important as contacting the credit bureaus is talking to your bank and any credit card companies. You must move as quickly as possible to alert your banking institution to cancel your debit or banking card. As soon as your bank knows there has been a theft of your information, you won’t be held responsible for anything the identity theft does thereafter.

If you realize your financial information has been stolen because of strange activity on your credit card or debit card, you once again must act fast to protect yourself. You’ll need to report the fraudulent activity within two business days of the date that it took place. This is why it is always a good idea to stay on top of the activity in your bank account and credit card accounts. If you check your activity online every day, you’ll be sure to spot an identity thief before much (or any) damage is done.

Next, you’ll want to make this event official by creating a report of the identity theft with the Federal Trade Commission (FTC). By reporting the identity theft, you’ll have a much higher chance of getting any negative marks removed from your credit report that were caused by the fraud artist. This action will also stop a company from coming after you for debts that were incurred by your identity thief – not you.

You may also wish to file a police report and contact a local attorney. Your attorney can help make sure that you’ve covered all of the right bases regarding the information breach, and will help you take legal action against any creditors that attempt to collect money from you that was part of the identity theft.

Image credit: Sebastien Launay

 

How Can I Afford to Send My Child to College?

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Helping your high school senior as s/he applies for college is a natural part of parenting. However, when it comes to financing a college degree (especially for parents who have several children or are already struggling financially) – how much help can you give? With the radically rising prices of college these days, along with families who are already dealing with money struggles, it can be next to impossible for some parents to foot their child’s education bill.

In fact, many people are still paying off their own student loans by the time their children are preparing for college. Currently, there is no formal plan in place in the U.S. to help lessen this strain on families, but there may be hope after the 2016 presidential election.

Assuming there are no changes made to the current cost of getting a college education, parents need guidance! A recent study showed that, when it comes to students with parents on the bottom half of the U.S. socioeconomic ladder, they make up only 14% of the undergraduate population at top U.S. universities.

Many students and parents feel that applying to college is a worthless endeavor if they wouldn’t be able to afford it anyway. It’s important for these families to know that there are in fact, many options that will allow your child to attend college (often at an elite university!) at a significantly reduced rate. Often times, students who are high achievers but in a lower economic bracket are given free rides.

The first thing that most high school guidance counselors recommend is to use every resource you can find to look for appropriate college scholarships. Believe it or not, more than $100 million goes unclaimed every year in college scholarships! The reason for that is that many people simply don’t know where to look.

Scholly is an app that can be downloaded via the App Store, Google Play, and can now be  accessed via the web. Scholly was designed to help take some of the burden off of students and their parents when applying to colleges. The app uses an adaptive matching engine that matches students with scholarships that they qualify for, and weeds out things like internships and advertisements.

In addition to private scholarships like those that can be found via Scholly, families with financial struggles should know that all colleges are not created equal. If your child is a high achiever, s/he will benefit from attending college with classmates who are also high achievers. Simply because this means considering elite colleges does not mean it is a worthless endeavor.

In reality, students who come from poorer families often either A) Don’t bother applying; or B) Only apply to local, less expensive schools rather than applying to a top university. A great number of high school seniors have a poor understanding of the college financial aid process and assume that their family could not afford the cost of an elite education. The truth is that at some elite schools, families who earn less than $65,000/year do not have to pay anything!

While we admit that our country needs to adopt a better way for all students to receive a higher education, as it stands, there are financial options available for those students who have the grades to be accepted. To learn more, visit Scholarships.com.

 

Image credit: COD newsroom

Mortgage Servicer vs Investor: What’s the Difference?

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When it comes to owning a home, especially one that you’re considering selling through a short sale, it can sometimes be confusing to determine exactly who you need to get permission from.

In previous posts, we’ve explained how New Jersey short sales work, including the general timeline involved and what type of situations allow for short sales to occur. In NJ, homeowners who have experienced significant changes in their lives that have caused financial difficulties can ask their lender to approve a short sale. A short sale is essentially the sale of the home wherein the sale price does not cover the amount still owed by the mortgagee.

A question raised by many people attempting to apply for permission to move forward with a short sale is:

Who is my lender?

While this may seem like a silly question, in reality, it’s a very good one, and one that can be surprisingly hard to answer.

To those homeowners who are humming along, paying their mortgage just fine, it may seem that their lender is of course the company to whom they pay the mortgage bill every month.

Oftentimes, however, the lender who you originally borrowed money from in order to buy your house, sells your loan to a company known as an investor. If this happens, the investor then becomes the official loan owner.

Investors are the ones with the money, but they often don’t want to deal with the minutiae involved in collecting said money from the people. Therefore, the investors then hire a loan servicer to take care of sending out mortgage statements, taking payment, disbursing taxes and HOA payments, etc.

To get even more confusing, many times the investor hires the original lender to service the loan.

If you’re still confused, you’re not alone! The bottom line is that the company to whom you write a check every month for your mortgage may only be handling the paperwork for a bigger investment company that works in the background. If this is true, though, you’ll need to get your investor’s permission before moving forward with a short sale. They have the ultimate say in these types of decisions because they are the official note holder.

Sometimes lenders own and service loans simultaneously. These loans are known as portfolio loans. Basically, lenders need to keep some loans as part of their personal “investment portfolio” so they look good to the public, therefore attracting new customers. People who are approved for portfolio loans typically have very good to excellent credit, because lenders want to keep their overall loss-risk low.

Those borrowers who are granted a portfolio loan will have a much easier time communicating with their lender and will usually experience less trouble negotiating with them when changes to the mortgage are warranted.

If you do not have a portfolio loan, you’ll need to find out who owns the rights to your mortgage in order to make any loan changes (modifications) or to sell via short sale. Many homeowners will discover that either Fannie Mae or Freddie Mac (government entities who work with investors) own their loan. If your loan is not a Fannie Mae or Freddie Mac owned mortgage, it may be owned by a private investor.

If you are considering a short sale but are having trouble finding out who you need to get permission from, the next step is to work with a loan modifications attorney in New Jersey. He or she will be able to guide you toward finding out who owns your mortgage, and can also help you negotiate the short sale itself.

 

Image Credit: Mark Moz

After the Short Sale: What is a Deficiency Judgement?

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For homeowners who have been struggling to make their mortgage payments along with other monthly living expenses, filing for bankruptcy is the best way to either wipe out or reorganize debt that’s become overwhelming.

When filing for bankruptcy, many homeowners give their homes up to the foreclosure process so they can move to more affordable housing.

Another option that’s available to distressed homeowners (whether filing for bankruptcy or not) is to sell the home via short sale. In order to get your lender to agree to a short sale, you’ll have to provide them with proof that you’ve experienced a significant change in life circumstances. For example: job loss, mandatory job relocation, divorce, death of a spouse or disability, to name a few.

Many people believe that selling their home through a short sale will look better on their credit report versus having their lender foreclose and sell via Sheriff’s Sale. The truth is that bankruptcies, foreclosures and short sales are all going to appear on your credit report and none of them are going to do your credit score any favors. At least not immediately.

However, if you sell your house through a short sale, it is possible for it to have a bit less of an impact on your credit score if you can get your lender to report the debt as ‘paid.’ Often, lenders will report short sale transactions as ‘settled,’ which indicates a deficiency, which will knock more points off your credit score.

What exactly is a ‘deficiency’ and how is it going to affect me?

You may have heard the term ‘deficiency’ thrown around a lot when referring to foreclosures and/or short sales.

Essentially, when you sell your home via short sale, you (as long as your lender agrees) accept a purchase price that is less than you still owe the bank. The difference between how much you owe and the short sale purchase price is called the deficiency.

Example: You owe $190,000 on your mortgage. Your home sells at short sale for $140,000. The $50,000 difference is the deficiency.

The reason it is important to be aware of the deficiency amount is because lenders in New Jersey are legally entitled to seek repayment of that amount from you – the original borrower.

As you can imagine, after falling behind on your bills, meeting with your bankruptcy attorney to discuss your options, opting for a short sale, and (finally!) breathing a sigh of relief when your house sells – it can be more than a little disheartening to discover that you still owe $50,000. For a home that you are no longer living in, and no longer own.

Here’s the good news: even though New Jersey does not prohibit deficiency judgements, most lenders do not pursue them. To err on the side of caution, however, have your attorney negotiate a release of liability from your lender. This must be in writing so that it will hold up in court.

If your lender isn’t keen on the idea of signing a written release, it may be possible to sway them by negotiating a small fee in exchange for the release. This will make your lender feel as though they are getting at least a small payment, and will allow them to avoid expensive court proceedings that would be required for them to sue you for the deficiency. With a release of liability in hand, you’ll be able to relax and move on after your short sale is completed.

Image credit: Diana Parkhouse

Foreclosure in New Jersey: How Long Does it REALLY Take?

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Of the New Jersey homeowners who are at risk of foreclosure in the near future, most of them need more reliable information about the NJ foreclosure timeline. Just the word ‘foreclosure’ is enough to incite panic in any struggling homeowner. Sometimes, that panic is so profound that it causes people to make less than ideal decisions during the pre-foreclosure time period.

If you’ve fallen behind on your payments and have reason to believe that your mortgage lender may file for foreclosure on your home, the number one thing you need to do is get familiar with how the entire foreclosure process works in New Jersey. You’d be wise, especially if you wish to keep your home, to reach out to a foreclosure defense attorney as well.

Because the foreclosure process in NJ is judicial, mortgage lenders must proceed through the court system. You cannot be “kicked out” of your home until many, many steps have transpired, and every single step will be documented by the court. Also, you (as the homeowner) will receive certified notification via the US mail system every step of the way. Your lender cannot remove you from the home until the entire foreclosure process is complete and the home has been sold via Sheriff’s Sale. Take note: It is within your rights to remain in the home throughout the duration of the foreclosure case.

Keep in mind that the following steps have to happen before you’ll need to move out:

  • Obviously, you’ll have to miss several payments before your lender even thinks about taking any action against you. Typically, banks won’t even consider you for foreclosure until you’ve missed at least three mortgage payments.  That gives you around 90 days before the foreclosure process even begins.
  • Before any lender can officially start a foreclosure against a borrower, they must notify you (the borrower) 30 days in advance. This “notice of intent to foreclose” must be delivered to you at least 30 days before the foreclosure can be filed with the court so that you have time to bring the loan current, if possible. This tacks another 30 days onto the timeline.
  • Within an average of three months of the date that you receive the notice to foreclose, your bank will probably file the official foreclosure ‘complaint’ with the court. The complain will be sent via certified mail to you at your home address.
  • After you are in receipt of the complaint, you officially have 35 days to submit an ‘answer’ to the court. If you want to save your home, you want to submit an answer, with the help of your NJ foreclosure defense lawyer. Your ‘answer’ is a legal pleading that will tell the court your side of the story and how your attorney wants to negotiate with the lender to help you get OUT of foreclosure.
  • If you agree with the information contained in the complaint and want the foreclosure to proceed, you need not file an answer, and your case will move through the appropriate NJ foreclosure channels. Ideally, the rest of the process should take a month or two. If you do not contest the foreclosure, a judge will decide in favor of your lender, which will give them permission to put your home up for Sheriff’s Sale.

In order for your lender to proceed to Sheriff’s Sale, however, they are first required to announce the sale for four consecutive weeks in a newspaper that is local to your home.

If you’ve been counting along, you’ve noticed that each step of the foreclosure process adds significantly more time onto your timeline. Even if you don’t contest the complaint, the bare minimum amount of time from your first missed payment(s) to Sheriff’s Sale is 6-8 months.

We say ‘bare minimum’ with a grain of salt. Due to the astronomical number of New Jersey foreclosures, the court system is experiencing the longest backlog in its history. The current average REAL TIME foreclosure timeline in New Jersey is more than 1,000 days. That’s almost three years!

Although we do want to quell your fears about being kicked out of your home as soon as the word foreclosure is mentioned, we also want you to know that foreclosure can only be stopped if you take action. At any time in the foreclosure process, you and your foreclosure defense attorney have many options that will slow or even halt the foreclosure.

Among others, two ways to stop your foreclosure include: redemption (loan modification or refinance) and bankruptcy. Even if your home is scheduled to be sold at Sheriff’s Sale in a week, it’s still possible for the right attorney to stop the sale and get your home back.


Image credit: Dafne Cholet

What Can I Do About My Non-Dischargeable Debts?

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Unless you’ve been living under a rock, you know that there are some debts that bankruptcy just can’t eliminate. Probably the most well-known “non-dischargeable” debt is child-support. If you’ve been court ordered to pay support funds to the mother or father of your child(ren) and have fallen behind on payments, filing for bankruptcy will not erase that debt.

The same goes for any court-ordered alimony. Rest assured that many people have attempted to find a loophole out of paying their child-support and/or alimony. Let it be said here that we believe in parents paying the child-support they have been ordered to pay.  At the dissolution of your marriage or relationship with your child’s partner, you didn’t dissolve your role as parent. Therein, you are still responsible for the financial support of your offspring.

However, there are cases wherein the “alimony” (spousal support) you’re paying isn’t officially court-ordered alimony at all. You may have fallen behind on helping your ex-spouse in making his/her car payment or house payment – both of which are considered to be property debts rather than alimony arrears. If this is the case, you may be able to discharge those debts in a bankruptcy case.

If you owe back payments on your child-support payments and/or court-ordered alimony payments, it is possible to reorganize your payments with a Chapter 13 bankruptcy. This will allow you to space out payments so they fit into your budget plan. Keep in mind that a Chapter 13 bankruptcy does not eliminate your debts, but rather has the goal of rearranging the money you owe to various people so that you can make the payments without going under.

Another debt that is very hard to escape is student loan debt. Millions of Americans are struggling to make ends meet and cannot manage to repay their student loans, even while working full time jobs. The cost of a college education is quite high – and when loans are taken out (and often times defaulted on multiple times), the interest adds significantly to the amount due. You can discharge your student loans if you can prove past a shadow of a doubt that you will never be able to repay them. To do so is extremely difficult, and those who succeed have almost always been permanently and significantly disabled.

If you have unpaid income tax debt, believe it or not, it is possible to have it completely discharged in a Chapter 7 bankruptcy, including interest and late or penalty fees that may have accrued over the years.

The bottom line is that there are several types of debt that are difficult to wipe out with a basic Chapter 7 bankruptcy, but some of them can be reorganized through a Chapter 13 bankruptcy. If you are unsure whether your debt(s) are eligible for a Chapter 7 or 13 discharge, speak to a bankruptcy attorney to learn more about the different types of debt, and where your particular debt falls.

Image credit: Steven Depolo

Sometimes Bankruptcy isn’t the Answer

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We’re always going to give you our honest opinion regarding your circumstances so that you can get the results you need in the most effective manner. Sometimes that means we’ll tell you that you don’t need to file for bankruptcy, even if you think you do, or even if you really want to.

Filing for bankruptcy can seem like a magical, “get out of jail free” card. Fill out some papers and voila! All of your money troubles will be gone.

There are several things wrong with that line of thinking.

First: A bankruptcy discharge is not the way to go if you need help paying for every day bills and expenses. It’s a common misnomer that filing for bankruptcy will get you out of paying for your living expenses indefinitely. The truth is that a bankruptcy (if granted discharge) only has the power to wipe out debts you’ve accumulated before and up to the date of your filing.

If you are granted a Chapter 7 bankruptcy discharge, your case will be assigned a bankruptcy trustee. The trustee is not working for you or against you; s/he will simply work to liquidate as many of your assets as possible in order to pay off your creditors. Luckily, you will not have to give up anything that is considered “exempt.”

As soon as you are granted a bankruptcy discharge, all debts (and day to day expenses and bills) acquired after that are your responsibility. A bankruptcy only helps with past debts. Once you file for bankruptcy, you’ll need to make some significant life changes so that you are able to pay your bills rather than have them continually turn into overdue debts. It’s smart to work with an attorney who specializes in bankruptcy and credit counseling in order to build a better financial plan for the future.

Second: Although carrying a significant amount of debt will ultimately drag your credit score through the mud, filing for bankruptcy is not the answer to raising your credit score. In fact, filing for bankruptcy will substantially lower your credit score even further, because ultimately, it means that you were unable to make good on money you owed.

While it’s true that you can slowly build your credit score back up again after a bankruptcy, if your main goal is credit repair, there are many other solutions that will be a much better fit for your needs.

Third: Bankruptcy is reserved for those who have significant debt. If you’re simply looking for a way to make your life a little easier or to free up some of your money – you might not even qualify to file. You’ll have to prove that you actually need to file for bankruptcy by providing the court with statements of your monthly income and expenditures. The court may decide that you just don’t have enough debts (or you have too much income in comparison to your debts) to qualify for bankruptcy. If this happens, your case can be thrown out or you might be required to repay your debts through the legal system.

Remember: as soon as you file for bankruptcy and are granted a discharge, you won’t be able to file again for eight years. If your discharge goes through and the next day you have a medical emergency and no health insurance – that debt will be yours to pay.

If you’ve found yourself struggling to pay your bills, you may have considered filing for bankruptcy. In order to know if it’s the right choice, seek the advice of a NJ bankruptcy attorney near you. Our office will consult with you about your financial troubles free of charge, as will many bankruptcy lawyers in New Jersey. Additionally, you can educate yourself about filing for bankruptcy by reading as much information as possible here on our bankruptcy blog.

 

Image credit: sboneham

Negotiated an Agreement with Someone? Put it IN WRITING.

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It can sometimes be all too tempting to trust people at their word. Depending on a verbal agreement that you simply shook on is risky business, especially if the matter at hand is of substantial value – either sentimental or financial.

An example is a client we recently had the pleasure of meeting. Having struggled financially, this client was previously at risk of losing his home to Sheriff’s Sale. Foreclosure had occurred and his lender’s next move was to put his property up for sale to recoup some money. Desperate to save his home, this client begged and pleaded with his lender to hold off on the Sheriff’s Sale so he could figure out a way to make the payments. His lender agreed not to proceed with Sheriff’s Sale.

The only problem with the above agreement is that nothing was put into writing. Even if the lender at one point meant what they said and didn’t intend to proceed, nothing was holding them to that. Because of that, the lender in question did, in fact, go through with the Sheriff’s Sale, leaving the homeowner in utter despair and confusion about what to do next.

Until he came to see us, that is. Believe us when we say that we wholeheartedly do not recommend relying on verbal agreements of any kind – especially when it comes to something as important as your home. With that being said, even if you have entered into a verbal agreement that went south, we want you to know that it is almost never “too late” to fix things.

In a case of foreclosure and Sheriff’s Sale, if you’re in need of help in saving your home at a very late date (or even after the sale has occurred), we have the experience needed to assist.

While it may seem impossible to save a home that’s already been foreclosed upon let alone sold at auction, working with a qualified foreclosure defense team means you’ll still have options. A federal program intended to help struggling homeowners, called HAMP (Home Affordable Modification Program) can come to the rescue if put to use by the right foreclosure team.

HAMP is intended to help ensure that struggling homeowners don’t lose their homes in a slow economy or when they’ve had difficult situations arise in their personal lives. HAMP’s main goal is to make sure that your mortgage payment is no more than 31% of your gross income.

Not every foreclosure defense attorney in New Jersey is equipped to deal with difficult and unusual circumstances like late date loan modifications. Even if your home has been foreclosed on and been sold at Sheriff’s Sale, Veitengruber Law’s experience with the redemption period and foreclosure time extensions is the kind of experience you need.

Do yourself a huge favor and call our office now before it really is too late. Your consultation with us is absolutely free, with no obligation to retain our services, but we have a feeling you’ll be really glad you called.

Image credit: Tim Pierce

1/3 of Sandy Victims are Still in Desperate Need of Help

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With Hurricane Joaquin baring down on us, we are coincidentally approaching the three year mark since Hurricane Sandy whipped through the Northeast in October 2012. What you may be surprised to learn is that a full 30% of homeowners affected by the 2012 storm are still in dire financial straights. Many are not yet able to live in their homes and are paying both the home mortgage and the cost of a rental so they have somewhere safe to stay.

The reason so many homeowners are still displaced this long after Sandy? Many insurance companies offered up piddly settlements and told homeowners to “rebuild.” The advice of NJ governor Chris Christie was to “rebuild now.” Because of the low ball insurance pay outs and a desire to get back into their homes, many homeowners dug into their savings and retirement funds to repair the damage done by Hurricane Sandy.

As if that weren’t bad enough, when FEMA finalized their new flood maps for the area, many of the homes that had been repaired were required to be elevated due to their proximity to the ocean. At that time, many homeowners threw up their hands with no idea how to pay for additional renovations.

These homes needed serious work in order to meet FEMA flood guidelines, so homeowners who did invest in the elevation renovations had to once again vacate their homes. The extended timeline for getting homes “up to par” after Sandy has caused missed mortgage payments as homeowners were forced to live (and pay for) rentals. Consequently, many of these homes’ lenders are moving toward foreclosure.

Of those people who are still dealing with severe financial distress, foreclosure (and potential bankruptcy) due to Hurricane Sandy, many are single parents, retirees, and economically challenged families who were struggling before Sandy hit.

There are two proposed bills (in Assembly and Senate) that are slated to be voted on by the end of 2015. These bills are aimed at banks and lenders who are foreclosing on vulnerable homeowners made even more vulnerable by a natural disaster. The goal of these bills is to keep banks from filing for foreclosure on Sandy affected homes that are enrolled in the RREM (Reconstruction, Rehabilitation, Elevation & Mitigation) program for at least 60 days after homeowners are able to move back in.

These proposed bills (if passed) will give homeowners a chance to bounce back – a full two months of “only” paying for one living space rather than a mortgage and a rental. If, after 60 days of moving back in, the homeowner is still delinquent on their mortgage, banks may then resume the foreclosure proceedings.

Although the bills are on the right track, there are still many homeowners who are not enrolled in RREM or LMI (Low & Moderate Income) programs. For example, in order to be enrolled in either of those programs, the property in question must be the homeowner’s primary residence. There are a plethora of damaged rental homes along the Jersey shore whose owners who can’t afford to make the necessary repairs, and because they don’t qualify for RREM or LMI, any new legislative acts won’t help them either.

If you’ve been affected by Hurricane Sandy or another natural disaster and your lender is attempting to foreclose on your property, know your rights. Don’t lose your home if you don’t want to! Find out how the right New Jersey foreclosure defense team can make all the difference in your quest to keep your home.

Image credit: DvidsHub (The damage shown was caused by Hurricane Sandy.)