Asset Protection in NJ: How We Can Help

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You may find yourself wondering, “What exactly is an asset and why does it need to be protected?” As always, we like to start with the basics when explaining a legal concept or idea so that all of our readers and clients accurately understand the topic at hand.

Assets are anything that you own that has a monetary value now and especially in the future. Typically, assets increase in value with time, and most people invest in (buy) assets expecting that they will be a form of income in the years to come.

Some examples of common tangible assets include: cash, inventory (related to your business), real estate property (buildings, houses or land), vehicles (business, personal and collectible), and equipment (technology, software, machinery, office devices).

Assets that are intangible can be just as valuable as the concrete assets mentioned above. Some intangible assets include: patents, trademarks, royalty agreements, copyrights, licenses, brand names, domains, permits, contracts and various types of investments (bonds, money markets, commercial, stock in other companies).

There are a number of assets not covered here, but for the most part, these are the kinds of assets that most of our clients are interested in protecting. Failure to adequately protect your assets will undoubtedly lead to a very unpleasant financial struggle in your future.

It can often be difficult to look far enough into the future to be able to effectively strategize regarding your valuable assets. The rising popularity of the practice of “mindfulness” encourages us to live in the moment. Terms like “YOLO” (You Only Live Once) are tossed around and used as excuses for poor money decisions.

Without a doubt, being present in all of the moments of your life is something to strive for, but it doesn’t mean you have to empty your bank account on a whim or cash in all of your investments to take an extravagant trip to Fiji.

Finding a comfortable balance between living mindfully, spending wisely and protecting assets for your future is the option that will allow you to fully enjoy life today and tomorrow as well as many years in the future.

When we talk about “asset protection” or “asset management,” we’re referring to ensuring that your investments (both tangible and intangible) won’t be lost as the years roll by. As you enter your later years and begin to look toward retirement, the planning and asset management you do now will allow you to continue providing for yourself and your family.

Foreclosure and bankruptcy are real issues faced by many seniors today. The bottom line is that we can help you avoid these pitfalls by creating an estate plan that incorporates unique asset protection strategies tailored specifically for your life and your goals.

We help our clients feel confident about their futures, and we do it because we care. Veitengruber Law provides reliable asset protection in New Jersey – both in our Wall and Cherry Hill offices and by appointment in Bordentown. As always, we do not charge a fee for initial consultations.

Get informed about your future by working with the legal team that will treat you like family from the minute we meet!

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Can I Lose My Home if I Stop Paying Property Taxes?

4972357447_b5a59a0482_zOne of the many responsibilities that come along with home ownership is paying property taxes. Many mortgage lenders will wrap the amount of your property taxes right into the amount of your mortgage payment every month, so you don’t have to think about it and don’t risk missing a tax payment.

Some people prefer to pay their property taxes separate from their mortgage payment. Doing so requires a great deal of self-control and money mastery. Making your own quarterly property tax payment means that you have to be able to think ahead and set aside enough money to cover your tax bill. Most people who decide to go this route have a set dollar amount  from every paycheck automatically channeled into a separate bank account that is set up specifically for property taxes.

This is actually a solid financial idea for those people who have good control over their money, especially if the account you keep your tax money in generates interest. In a sense, your property taxes can make money for you.

On the other hand, being able to set aside that much of your paycheck can be difficult for some people to do – leading to missed property tax payments. Falling behind on one payment can start a dangerous trend and thought process.

“If I missed one payment and nothing ‘happened,’ I’m sure it’s ok if I miss just one more payment while I use that money to catch up on other bills.”

That line of thinking is dangerous because it is faulty. As soon as you fail to make one of your property tax payments, your mortgage lender will typically make the payment for you. While this may sound like a good thing, you must know that your lender isn’t doing you any favors. They’re simply protecting themselves and their investment.

Failure to pay property taxes gives the government the right to place a lien on your home. The concept of a lien can be confusing, but it simply means that there’s a virtual sign on your home letting everyone know that you owe someone money. Additionally, repeated failure to pay your property taxes can lead to the sale of your home or the lien by the government so they can recover the money you owe. If you attempt to sell your home before the government can sell it, your tax liens will appear on a title search, scaring away any potential buyers.

Property taxes are not something that you can simply ignore. They finance important government services like schools! Failure to pay your property taxes means a blatant disregard for your duty as a homeowner in your community.

If your mortgager puts up the tax money you owe so the home isn’t sold out from under them (tax liens take precedence over mortgages), you will then obviously owe even more money to your lender. They will likely bill you for the money they paid toward your property taxes, expecting you to keep current on all monies owed. Failure to stay current with your mortgage company will lead to – you guessed it – foreclosure.

Can you miss a property tax payment or two? You can, but it’s a really bad idea.

Can doing so lead to the loss of your home? Absolutely. If you’re thinking of skipping a property tax payment in order to funnel that money elsewhere, you need our help. We’ll sit down with you and figure out a better way to reorganize your debts so that you can stay in your home, pay all of your monthly bills, and maintain a decent credit score. If you’ve already missed some of your tax payments, we’ll help you negotiate with your lender so you can get back on track with a payment plan that brings your mortgage and property taxes current.

 

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Can I Write My Own Will or Should I Hire an Attorney?

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Just the thought of preparing your last will and testament (also known simply as your “will” or your “estate plan”) is enough to put some people on edge. That reaction is completely understandable given the nature of the information contained in said documents. Being uncomfortable, however, is not reason enough to avoid doing something so important.

A question on this topic that many people ask themselves is, “Can I write my own will or do I need an attorney’s help?” The best answer to this question is that it depends on your specific situation.

Legally binding wills can be drafted without an attorney’s help by using estate planning software to walk you through the process. You may be able to go the DIY route, but only if you need a basic, simple will, you don’t have a lot of assets and you have a small, uncomplicated family.

Anything beyond the most basic wills are best handled by a qualified estate planning professional. Too many people have made seemingly small blunders on their estate planning paperwork, costing surviving family members a significant amount of money, stress and angst.

If you have young children (and/or a complicated family), own your own business (especially if you are a co-owner), have a significant amount of investments, assets, debts or if you think there’s a strong possibility that someone may contest your will, you’ll be better off working with an attorney to come up with the will that works for you and all of your unique life circumstances.

With your estate planning attorney, you’ll work in tandem to create not only a will but a number of other important documents like a living will and a health care directive. Having an experienced professional to guide you will ensure that you avoid making mistakes that would likely end up causing a gigantic amount of trouble for your loved ones after you’ve passed away.

It can be easy to put off setting up your estate planning paperwork because, after all, it doesn’t affect you directly. You must take into consideration the aftermath you’ll leave behind if you die without a will in New Jersey. Your family members will not have the proper time to adequately grieve your passing if they have to spend all of their time figuring out what to do with your assets.

Don’t leave a bunch of questions for your family and friends to puzzle over. If you haven’t done so yet, make a promise to yourself to write down your last wishes as soon as possible. Take that list with you to your NJ attorney meeting. After your estate plan has been completed, you’ll feel a weight lifted off your shoulders – even if you never realized the weight was there.

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Can I File for Bankruptcy if I’m Self-Employed?

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If you are currently employed in New Jersey, you’re either considered a traditional “W-2 employee” or an independent contractor. If you report to the same location every day where you work on tasks assigned to you by your boss or other superior and you receive a paycheck (typically) every two weeks from the payroll department, you’re an employee.

On the other hand, if you provide services for clients without taking direction from anyone and clients pay you directly – you are an independent contractor. Sometimes independent contractors are referred to as freelancers or “1099ers”.

Both categories of workers described above are required to pay income taxes and file yearly tax returns at the state and federal level. Traditional employees will be given a W-2 form by their employers. The W-2 form explains how much of an employee’s salary was withheld and used to pay income taxes. It is very useful when filing taxes, as it tells the employee exactly how much they still owe in taxes for the year, or how much they overpaid, which will be paid back to them in the form of a refund.

If you’re an independent contractor, you don’t have an employer to keep track of your income and tax withholdings. It is your responsibility to maintain accurate income records and make either estimated income tax payments in quarterly installments or one lump sum income tax payment at the time that you file your tax return.

Just as filing income taxes is more complicated if you’re an independent contractor, the same is true if you plan to file for bankruptcy. In fact, a major determinant of whether or not you will qualify to file for bankruptcy is your income. You will be asked to accurately report your income on your initial bankruptcy paperwork regardless of your employment status.

Although it will be more difficult to accurately prove your income as an independent contractor, it is most definitely within your rights to file for bankruptcy. You simply have to be more diligent about providing proof of your income. Falsely representing your income in a bankruptcy proceeding (even accidentally) is reason for dismissal of your case.

Today, many people work as freelancers all around the world, and technological advances in banking have made documenting your independent income totally plausible. If you have clients who pay you using a variety of payment methods, you can report your income by providing a copy of your bank account statement. It is imperative that you maintain a separate bank account where all of your income will be deposited.

Regardless of how your clients pay you (paper check, PayPal, Square Up, etc) – make sure that you then deposit that money immediately into a bank account that is designated for income. Do not deposit any money into that account that isn’t income from your job as an independent contractor. That makes filing your taxes, and in this case, filing for bankruptcy, much easier because there will be a record of all of your income.

Standard employees and freelancers alike all have to pass the New Jersey Means Test in order to be approved to file for bankruptcy. Filing for bankruptcy as an independent contractor adds a level of difficulty into the process that could easily cause you to make fatal mistakes that can result in dismissal of your case.

Talk to a New Jersey bankruptcy attorney before you file any paperwork on your own. Even if you simply take a free consultation (offered by many attorneys), you will walk away with valuable information and the understanding that, instead of being unable to afford an attorney, you actually can’t afford to proceed without one.

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NJ Foreclosure and the Order to Show Cause

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A frequent topic here on the Veitengruber Law blog, foreclosures in New Jersey are still too numerous to count. Statistics show that the number of new foreclosures within the state are starting to decline, which is good news and tells us that the housing market is beginning to improve.

Since all NJ foreclosures are required to move through the judicial system, many of the existing foreclosure cases (that have been piling up since the Crash of 2008) are still causing long delays. New Jersey courts haven’t been able to get caught up because of the sheer number of foreclosure cases, and because of the many required steps that each case must follow.

Sometimes, because the current NJ foreclosure timeline is excessively long, homeowners can get too relaxed, thinking that they have all the time in the world to make any decisions about ‘life after foreclosure.’ It’s also common to want to ignore it, especially if it seems like nothing will ever happen.

In these cases, when their foreclosure nears the end of the process (Sheriff’s Sale), panic sets in. Properties that fall into foreclosure will be sold at a Sheriff’s Sale automatically if the homeowner doesn’t answer the original Complaint. This is known as an uncontested foreclosure.

In the event that your Sheriff’s Sale is imminent, and you (for whatever reason) left your foreclosure uncontested, the time to make a move is now. To do nothing means that your home will be sold at auction and you will be forced to move out, likely ten days after the date of the sale. Those ten days are known as the redemption period. If you can somehow afford to buy back your home, you can do so within those ten days and retain ownership of your home.

At Veitengruber Law, we’ve helped many clients who waited until ‘the last minute’ to make any decisions regarding their foreclosed home. There are several things we can do to help you save your home as long as the Sheriff’s Sale has not yet occurred – even if the sale is a few days away:

File for bankruptcy – Bankruptcy puts an automatic stay on any and all of your lenders, preventing them from attempting to collect on any of your debts. This includes your home lender, and the foreclosure process is halted until your bankruptcy case is resolved.

Short Sale – An alternative to foreclosure, short sale will still end with you losing your home. The difference between having your home sold at Sheriff’s Sale and selling it via short sale is that homes often sell for higher amounts at short sale. Additionally, your credit score will be much less severely impacted by a short sale instead of a foreclosure.

Order to Show Cause – The Order to Show Cause is a court application that can only be used in absolute emergencies wherein the petitioner (in this case, the homeowner) will be harmed irreparably without the help requested on the Order. In the foreclosure context, your attorney can file an Order to Show Cause if there has been an error in the foreclosure paperwork that will adversely effect the outcome of the case. It’s a long shot, but we’ve had success with this tactic before, gaining an additional 60 days for our clients to sell their home outside of the foreclosure.

We have many more “tricks” up our sleeves that have gotten out clients the results they wanted and needed time after time. If your foreclosure sale is approaching and you need help sorting out the details, call Veitengruber Law today so we can assist.

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My Landlord’s in Foreclosure – Can I Buy the Home?

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As we’ve previously discussed, New Jersey renters have significant rights if and when their landlord falls behind on making the mortgage payment and ends up in foreclosure. There are strict rules in place to prevent landlords from illegally evicting tenants in situations where the property has been sold at foreclosure auction and the new owners wish to live in the home.

Landlords are legally bound to give their tenants at least 90 days’ notice if the property will be changing ownership and the buyer doesn’t wish to rent the home out to tenants. This 90 days rule will be extended if the renters have a lease that goes beyond the 90 day timeline.

As a renter in this situation, you may very well decide to simply find a different place to live. That is certainly a viable option that works for many people. Additionally, it’s possible that the home’s new owners bought the property fully intending to continue renting it out. In that case, you can continue living in the home – the only change being who you pay each month for rent.

A slightly more difficult resolution to the problem of a landlord in foreclosure involves you (the renter) making an offer to purchase the home. If you discover that the home you’re living in will be sold at foreclosure auction (NJ Sheriff’s Sale), you may actually be able to buy the home yourself.

If you are financially stable with a good credit score, and owning your own home is something you desire, connect with a local NJ attorney who has experience in the foreclosure arena. He will be able to walk you through what you’ll need to do in order to purchase the home.

It is important to keep in mind that the mortgage company or lender has foreclosed on the current owner (your landlord) because the mortgage is currently in default. To be approved to essentially take over the property title, you’ll have to bring the default amount current, which means you’ll need to pay the money that your landlord failed to pay.

The mortgage company’s main goal is to recover as much money as possible, and if you offer them a satisfactory purchase price – this option is a real possibility. It’s not a slam-dunk, and it will require some negotiation between your real estate attorney and the lender, which may take some time; however, if there is a Sheriff’s Sale scheduled, your attorney may be able to have the sale postponed so that your sale can proceed.

This type of transaction often qualifies as a Short Sale, because you likely won’t have to pay the full value of the home. The only other alternative for the lender to recover any money on the home is to sell it at foreclosure sale, which would bring in a much lower dollar amount. However, you must realize that if you really want to own the home, you shouldn’t low-ball the lender, and be open to negotiating if the lender doesn’t approve your first offer.

It is important to work with a New Jersey real estate attorney on matters like this. To go it alone would mean probable failure. For more information on complex real estate transactions in New Jersey, continue reading here.

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NJ Bankruptcy: The Required Forms

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In our last post, we talked at length about the Schedule I form. Our reason for discussing one document in such detail is because Schedule I is where many debtors make significant errors that result in their NJ bankruptcy case being thrown out. To someone who has put all of their hopes into discharging their debts, bankruptcy dismissal can be a heartbreaking defeat.

However, along with the Schedule I form comes a plethora of other paperwork that is required for all bankruptcy types. On the very day that you file for bankruptcy, you must provide the court with a number of documents. These include:

Voluntary Petition for Individuals Filing for Bankruptcy (Form #101)

Statement About Your Social Security Numbers (Form #121)

Creditor Matrix/Creditor Mailing List

Credit Counseling Certificate

Initial Statement About an Eviction Judgment Against You (Form #101A)

Statement About Payment of an Eviction Judgment Against You (Form #101B)

Bankruptcy Petition Preparer’s Notice, Declaration & Signature (Form #119)

Disclosure of Compensation of Bankruptcy Petition Preparer (Form #2800)

Although the following forms can be filed within 14 days after your initial paperwork, it’s best to file everything on Day 1, so that nothing is forgotten or late:

Schedules of Assets and Liabilities (Form #106) with the following attachments:

  • Schedule A/B: Property (Form #106A/B)
  • Schedule C: The Property You Claim as Exempt (Form #106C)
  • Schedule D: Creditors Who Have Claims Secured by Your Property (Form #106D)
  • Schedule E/F: Creditors Who Have Unsecured Claims (Form #106E/F)
  • Schedule G: Executory Contracts and Unexpired Leases (Form #106G)
  • Schedule H: Your Codebtors (Form #106H)
  • Schedule I: Your Income (Form #106I)
  • Schedule J: Your Expenses (Form #106J)
  • Summary of Your Assets, Liabilities & Statistical Information (Form 106Sum)
  • Declaration About an Individual Debtor’s Schedules (Form #106Dec)
  • Statement of Financial Affairs for Individuals Filing for Bankruptcy (Form #107)

Additional forms required for chapter 7 debtors:

Statement of Intention for Individuals Filing Under Chapter 7 (Form #108)

Chapter 7 Statement of Your Current Monthly Income (Form #122A-1)

If necessary, Chapter 7 Means Test Calculation (Form #122A-2)

If necessary, Statement of Exemption from Presumption of Abuse Under § 707(b)(2) (Form #122A-1Supp)

Additional forms required for chapter 13 debtors:

Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period (Form #122C-1)

Calculation of Your Disposable Income (if needed) [Form #122C-2]

Chapter 13 Plan (Form #113, or local plan form)

As you can see, filing for bankruptcy in New Jersey is no walk in the park! Getting rid of those debts that have been preventing you from moving forward in life does make all of this paperwork worth it; however, we advise all NJ debtors to work with a qualified bankruptcy attorney.

Hesitation to hire a certified New Jersey bankruptcy attorney is understandable, especially when you’re already struggling with money. What Veitengruber Law wants you to know is this: we are sympathetic to your situation and we DO NOT overcharge our clients. In fact, we will actually help you work out a payment plan for our own fees! By working with an experienced legal team, your paperwork is guaranteed to be error-free, on time, and without accidental bankruptcy fraud, which can happen when debtors fill out their own paperwork incorrectly.

Beyond all of the forms, there is a lot to learn about the legal side of bankruptcy in order to file a successful case. Things like the means test, exemptions, trustee requirements, the 341 hearing, redemption, foreclosure (if applicable), tax information, child support/alimony obligations (if necessary), and landlord/tenant rules are all details that your attorney will be able to handle for you so that the outcome of your bankruptcy case is optimal.

In addition to your attorney’s wealth of knowledge regarding every step of the NJ bankruptcy process, he will also be able to work with you after your debt has been discharged (erased) to get your credit score back up where it belongs. Defaulting on debt(s) drops your score, as does filing for bankruptcy, but as soon as your debts are gone, you’ll have nowhere to go but up!

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Chapter 7 Bankruptcy: The Schedule I Form

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Being granted a discharge of all (or even most) of your debts is a huge help for those who have fallen too deep into debt to get out on their own. Whether due to financial missteps, unforeseen medical bills or a significant life event (divorce, disability, etc) – getting in over your head does happen, and it doesn’t mean you’re a bad person. In fact, the simple act of reading this post means that you’re ready to climb back out of debt and start fresh.

With all of that being said, filing for bankruptcy is not a simple process, nor is it one that you should ever attempt to go alone. Regardless of your opinion of your ability to file for bankruptcy on your own, doing so is not advisable. It is surprisingly easy to make substantial mistakes on bankruptcy paperwork. This is due to the fact that the required forms, documentation, petitions, schedules, summaries and declarations are quite numerous and detailed.

One of the most important bankruptcy documents in both chapter 7 and chapter 13 bankruptcies is the Schedule I form. Schedule I is where you will list all of your income. You must include income from any and all sources, as well as your spouse’s income (if applicable).

Many people make critical errors when filling out Schedule I, which leads to dismissal of their bankruptcy case. This is only one of many reasons why you absolutely need to work with a New Jersey bankruptcy attorney if you plan to file for chapter 7 or chapter 13.

Although it may seem obvious, lying on any of your bankruptcy paperwork is strictly prohibited and may constitute bankruptcy fraud, which is a punishable crime. A public example of this playing out is Teresa and Joe Giudice, a married couple from NJ who were convicted of bankruptcy fraud and spent time in prison. Their crime? Falsifying documents.

Your NJ bankruptcy attorney will ensure that all of your paperwork is accurate, including the Schedule I form. You must be up front with your attorney when it comes to providing all sources of income. Do not attempt to cover up or hide any form of income from your attorney.

One of the very first documents you’ll file related to your bankruptcy is form 122A-1, the first in a series of 3 forms that will determine if you qualify to file for bankruptcy based on your income from the most recent 6 months. Sometimes confused with Schedule I, Form 122A-1 is filed first and is the initial portion of the Means Test. If your income is determined to fall below the state median income, you will qualify to file for chapter 7. If your income is above the state median income, you’ll move on to form 122A-1Supp and 122A-2 to look more closely at your funds and expenses in order to determine if you qualify for chapter 13.

If you’re approved to file for either chapter 7 or chapter 13 bankruptcy, your next step will be to sit down with your NJ bankruptcy lawyer to fill out the Schedule I form, where you will officially declare all of your current income. It’s likely that the numbers on your Schedule I form will differ slightly from the figures on form 122A-1 for the Means Test, because Schedule I asks for your current income.

Remember: you must include all forms of income on Schedule I, even sources of income you think “no one would ever know about” and your spouse’s income.

Your bankruptcy attorney will be able to assist you in filling out Schedule 1, along with all other paperwork throughout your bankruptcy case. For more information about filing for bankruptcy in New Jersey, visit our bankruptcy blog home page and search for answers to your specific questions.

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How the Business of Debt-Buying Affects Consumers

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Collectively, American consumers are currently over $12 TRILLION in debt. Out of that $12 trillion, more than $400 billion has been deemed ‘seriously delinquent.’ Outside of a library fine I once racked up because a book that fell into the crack of my couch, I get pretty panicked if someone tells me I’m seriously delinquent. Just the sound of the phrase rolls off the tongue in a negative way, doesn’t it?

As it should: debts don’t get earmarked as seriously delinquent until they are 90 days or more overdue. That may not seem like a long time in the grand scheme of life, but in the world of debt, three months of failing to make a payment is long enough for lenders to get good and fed up.

What is debt buying?

Because of the whopping trillions of dollars of consumer debt in this country, an entirely new industry has spontaneously developed, and it’s more than a little shady. Lenders don’t want to wait to get paid. Seriously delinquent debts are often sold by lenders to companies whose sole purpose is to buy debt for pennies on the dollar in order to make at least a tiny bit of money rather than none at all. This process is part of the dubious debt buying industry – where debt is bought and sold, bought and sold ad infinitum, potentially transferring hands a veritable profusion of times.

Astoundingly, debt buyers can collect on the full amount of an original debt, even though they will have paid a supremely small fraction of that amount when they purchased it from the lender.

What does this mean for indebted consumers?

The debt buying blitz in the United States is problematic for several reasons. Firstly, many original lenders don’t supply debt buyers with much information about the debts that are switching hands. Compounding this issue is the fact that debt buyers are often unscrupulous about whether or not the debts they purchase are even valid. That means that they may purchase debts with missing or incorrect data that can lead to them harassing you for money you don’t even owe.

Ruthless debt buyers and collectors typically don’t care whether they’ve got the right person on the phone or whether the debt has been discharged via bankruptcy. They don’t even check to see if the statute of limitations to collect on a debt has passed. They’ve got a list of names and contact information, and often times millions of dollars they can potentially pocket if they can convince enough people to fork over the money.

Fueled by a strong desire for money, when debt buyers set out on their mission to collect, they’ll frequently go to unimaginable lengths in order to get you to pay. Threats, lies, scare tactics, cursing, impersonation, degradation, and humiliation are just a few of the strategies employed by people in the debt-buying and debt-collecting industry.

If you’ve experienced any of the above and feel that 1) you don’t owe the debt in question; or 2) a debt collector has acted illegally – you have recourse. Veitengruber Law helps people like you every day, and we’ve grown quite adept at dealing with distressing debt collectors. Want to find out if we can help you? Call us now: (732) 852-7295. We will not overcharge you and we’ll consult with you for a full hour free of charge. Best of all – we’ll put an end to your debt problem once and for all.

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Help! I Haven’t Made a Mortgage Payment for 5 Years!

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If you haven’t paid your mortgage bill in a long time, even years, it may be hard to believe that you’re not alone. Shockingly, stories of homeowners living in homes without making any payments aren’t hard to find at all. Commonly referred to as  ‘foreclosure limbo,’ ‘living rent-free,’ and ‘strategic default,’ what some people don’t realize is that there are often complex stories behind how this can happen.

The Adjustable Rate Mortgage/Loan: In this situation, a homeowner often purchases a home with what is known as an ARM (Adjustable Rate Mortgage). ARMs have interest rates that change according to the ‘index rate.’ This means that borrowers’ monthly payments will change as the interest rate goes up or down. Typically, ARM rates are low initially, to entice buyers into agreement. As index rates fluctuate, homeowners can be stuck with a mortgage payment that is more than they can handle – sometimes significantly more. When this happens, borrowers stop making payments because they simply can’t afford them any longer. While they wait for the lender to approve a modification, they often continue living in the home while not making any further payments.

The Financial Crisis/Housing Collapse: Prior to 2008 or so, many business owners were doing quite well for themselves, especially in the real estate industry. Owning multiple properties and collecting significant rent amounts each month, these so-called ‘real estate moguls’  could easily afford to purchase a luxurious home for themselves without worry. However, when the market began to collapse in 2008, property values tanked. Business owners in the real estate market took an extremely hard toll. For those who had purchased a personal home but were now left without any rental income, this meant their own mortgages went unpaid, often for years, as the housing crisis has only begun to right itself in the very recent past.

Judicial Foreclosure: In 23 states, the foreclosure process must move judiciously, or through the court system. What does this mean for homeowners who default on their mortgages? It means, quite frankly, that not much will happen at first. Although the number of new foreclosures in New Jersey is finally beginning to slow down since the market collapse of 2008, there is still a gigantic foreclosure backlog in the NJ court system. Therefore, even if a lender forecloses on a delinquent borrower, it can take years for the case to make its way to the end of the judicial foreclosure process, which culminates with the auction of the home at Sheriff’s Sale, thereby evicting the original ‘homeowners.’ Until the property is sold, homeowners are free to continue living in the home, due to lack of any other recourse.

Statute of Limitations: While rare, and only recently seen in New Jersey courts, the Statute of Limitations can be invoked if your last mortgage payment was made 6 or more years ago. Even if your lender filed for foreclosure in New Jersey within this time period, if they fail to move on the case within a 6 year period, you may be able to use the NJ Statute of Limitations on debt pursuant to N.J.S.A. § 2A:50-56.1(a).

Whatever the reason for your mortgage default, know this: Veitengruber Law has helped homeowners who have found themselves in the most dire situations imaginable. Five years with no mortgage payments? Let’s get you a loan modification so you can keep your home and your dignity can remain intact.

Call us today! We consult with you for ONE HOUR free of charge to help you determine if you think we can help you. We’re now providing consultations in Wall, Bordentown, and Marlton, New Jersey as well as over the phone when warranted.

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