Bankruptcy Law and Family Law: How They’re Connected

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Anyone who has been through a divorce knows that, second only to your love life, your finances are often the hardest hit area during a split. Many people continue to have financial difficulties long after their divorce is finalized, as well. Family lawyers who handle divorce cases know from experience that financial strife can be a huge contention between divorcing couples.

While your family law attorney will assist you in creating a Property Settlement Agreement that settles some of your money troubles (you may begin receiving child support or alimony payments after the divorce is finalized), oftentimes divorced couples will struggle with things like losing their family home to foreclosure, credit card debt, and potential bankruptcy.

As much as your divorce attorney may want to assist you with all of the above money matters, they have to focus their attention on everything within their own wheelhouse to ensure that you (and their other clients) achieve the desired outcome from your divorce. Their duties are many, and include drafting your PSA, attending court dates, negotiating and corresponding with counsel for your soon-to-be ex-spouse, handling domestic violence matters, and much more.

Frequently, family law attorneys find it very beneficial to work in tandem with an attorney who specializes in bankruptcy, real estate and/or debt relief. Because financial strain is a given in most divorces, it can be helpful for everyone involved to work as a team. Your divorce (family law) attorney will walk you through all of the steps of your divorce. With your permission, ideally he would then discuss your case with his tandem bankruptcy attorney, whom you would then work with to clean up your finances.

Of course, family law attorneys attend to matters other than divorce, like name changes, parenting time, grandparents’ rights, pre-nuptial agreements, child custody (unrelated to divorce), adoption, restraining orders, and domestic violence. Some of these matters can also be made easier by working with an attorney who specializes in finances. For example, the financial aspect of adoption matters can be quite intense. While your family law attorney will handle much of the adoption paperwork, he can refer you to a financial specialist like Veitengruber Law if you need more help organizing the necessary finances.

Every attorney has a lot on their plate every single day, regardless of their practice area(s). The best attorneys limit their focus to a limited number of practice areas so as not to get overwhelmed and spread too thin. If your family law attorney attempts to do it all himself, you may find that he’s too busy to set aside time to keep you updated on your case. On the other hand, a smart divorce lawyer will say, “Hey, while I’m working on negotiating your child visitation schedule, why don’t you go see George Veitengruber to start sorting out the fact that you can’t afford your mortgage payment?”

When attorneys work together, their clients always have a better result. Mutually beneficial relationships between experienced professionals give clients a well-rounded experience and optimal outcome. Veitengruber Law welcomes family lawyers in New Jersey (Monmouth, Ocean, Mercer, Burlington, Camden, and Gloucester Counties) to reach out to our firm if and when your clients need our services. We will gladly return the favor so that our mutual clients are well-cared for and happy with our services.

Image credit: Kamaljith KV

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What to Look for in a NJ Bankruptcy Attorney

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If you’ve finally reached a point where bankruptcy looks like your best option, you’re probably trying to figure out how to choose the right bankruptcy attorney to help you through the process. Finding the best NJ bankruptcy lawyer for you is much easier when you know what qualities to look for. You may have to consult with several attorneys before you find the one that feels like a good fit, but taking your time during the selection process will mean you’ll be more likely to have a better outcome.

Look for a bankruptcy attorney who demonstrates the following qualities:

  • Personability: While this may seem like a given, too many people are willing to accept less when it comes to working with professionals. You do not have to work with someone who does not treat you well! Look for a bankruptcy attorney who welcomes you into his office and makes you feel like a friend right away. Personable staff members are important, too. You will be entrusting your attorney and his legal staff with very personal and private information. If they don’t seem like genuinely nice people, it’s time to move on.
  • Experience: Naturally, everyone has to start somewhere, but in general, the best bankruptcy lawyers are those who have significant experience under their belts. Find out how long he’s been practicing law – specifically how long he’s been specializing in NJ bankruptcy. Ask how much of his practice is dedicated to bankruptcy law versus other practice areas and be wary of those attorneys who spread themselves too thin. An attorney who focuses on a smaller number of practice areas is more likely to have honed his craft in those domains.
  • Knowledge: You want a bankruptcy attorney who is up-to-date on all local district bankruptcy rules and regulations as well as federal bankruptcy laws. A good bankruptcy attorney will also be familiar with local bankruptcy trustees including any special requirements they may have during the bankruptcy process.
  • Open communication: While you can’t predict how your attorney’s office will behave in the future, you can definitely inquire about their communication process with clients. Your bankruptcy attorney should be able to give you a clear description of how to get in touch with him at all times. He should also give you a good estimate of how long it takes him to return phone calls and emails. Look for attorneys who are willing to talk freely about their communication style and those who seem honest about how often they will be in contact with you.
  • Passion: Ask your bankruptcy attorney why they started practicing bankruptcy law and listen very carefully to their response. Watch for body language that indicates excitement and passion for the field. An attorney who cannot give you a direct answer to this question or glazes over it with a quip or joke has probably either burned out or entered the legal field for the wrong reasons. The right attorney will respond with answers about helping others get their lives back again, doing good in the community, and feeling rewarded by what he does.

Finally, don’t base your NJ bankruptcy attorney selection process on their fees alone. While it can be stressful to contemplate spending even more money when you are on the brink of filing for bankruptcy, hiring a “bargain basement attorney” will lessen your chances of achieving the outcome you desire. It is definitely important to ask about pricing before signing any paperwork, but keep in mind that, as with many things in life, you get what you pay for.

 

 

 

How to Repair Credit Quickly

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Although we regularly counsel our clients that it can take some time to significantly raise a damaged credit score, there are times when you may want or need to boost your score rather quickly. Perhaps you need to buy or rent a house soon due to a job transfer. You might be expecting a baby and want to have a more stable financial situation before s/he arrives. Maybe your car is about to conk out on you, and you’ll soon need to be able to purchase a new vehicle.

Whatever the reason, if you want to get your credit score quickly moving in the right direction, there are some steps that can speed up the process.

  • Fix any errors: Before you start taking any other actions at all, be sure to check your credit report for any mis-reported information that may be unnecessarily dragging your score down. Commonly seen errors include debt that you already paid off that hasn’t been reported as paid, debt that doesn’t belong to you and credit limits reported lower than your actual limits (makes it appear that your cards are maxed out when they aren’t).
  • Use your credit cards: That’s right – surprising though it may be, you need to demonstrate the ability to use your credit cards wisely for your credit score to rise. The keyword here is obviously “wisely,” so be sure that you’re charging only 10-30% of your credit limit monthly – and pay it all off every single month.
  • Negotiate: Whether or not you’ll be able to convince a credit card company to forgive any of your debt is debatable, but you can usually negotiate your credit card’s interest rate as well as your credit limit. The more you charge each month, the higher your limit should be so that you’re only using a maximum of 30% of your extended credit. Any more and your credit score’s upward climb will halt.
  • Pay off debt: This tip probably goes without saying, but some people don’t realize they’re carrying too much debt. Some credit card use is good, as mentioned above, as it shows your ability to control your spending. However, if you have multiple credit cards that are maxed out, you’ve simply got to pay them down. If paying them all off at once isn’t something you can do, work hard to throw as much money at them every month as possible. Getting a nice tax return this year? Put all or most of it toward your credit card debt.
  • Be on time: In addition to making sure you pay your credit card minimums every month, pay close attention to your other monthly obligations. Paying all of your utility and other monthly bills on time month after month looks very good to the credit bureaus and will give your score a nice jump. You may also want to consider paying your credit card bills two times a month if you can only afford the minimum payment. Paying once just after each paycheck will ensure that you attend to your debt before spending more money.

 

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Can the Bank Repossess My NJ Foreclosed Home Before Evicting Me?

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If your home has been through the NJ foreclosure process and the new owner has tried to take possession of the property before you have received formal eviction notice, it is important for you to know your rights.

Naturally, if you’ve made it all the way to the end of the foreclosure process in New Jersey, the fact that you’ll have to move soon should come as no surprise. With that being said, as the former owner of the home, it is within your rights to stay in the home until you have received proper notice of eviction.

After the Sheriff’s Sale of your home has occurred, the NJ County Sheriff must provide the bank/lender with the property deed within ten days. If the bank or lender was not the winning bidder at Sheriff’s Sale, the successful party who purchased the home will be the deed recipient. It is most often the mortgage company who ends up with the home since they are the ones who initiated the foreclosure process in the first place. Their reason for filing for foreclosure is so they can re-sell the home to recover part or all of mortgage loan that you (as the borrower) have failed to pay. Missed mortgage payments are what lead to foreclosure.

Upon receipt of the deed to the property, the mortgage company’s next step is to file a formal eviction motion in New Jersey State court. Without this official eviction (called a Writ of Possession in legal terms), you cannot be forced to leave the home even after it has been sold at foreclosure sale.

Is your mortgage company attempting to force you out of the home without a formal eviction? If you have yet to see an actual eviction notice affixed to your front door, you have almost certainly not been served with notice to vacate the premises. Any efforts on the part of the lender to forcibly kick you out without eviction paperwork is against the law in New Jersey.

We typically advise our foreclosure clients to be prepared with an alternate place to live as of the date of the Sheriff’s Sale. Forcing your mortgage company to evict you can look bad to your future landlords or lenders – potentially marking you as a “difficult” borrower or renter. However, it is within your rights to remain in the home until you have formally been evicted, and staying there can give you several months to save money because you won’t be paying a mortgage or rent payment. Weigh your options carefully before you decide whether to vacate willingly or stay put until the Sheriff removes you.

The bottom line is that, legally, your mortgage company (or new owners after Sheriff’s Sale) cannot take possession of the home until you have been formally served with an eviction notice. If your foreclosed home’s new owners are attempting to prematurely take possession of the property by locking you out, removing your personal items, or moving new tenants in while you aren’t home – you need to contact your New Jersey foreclosure attorney right away in order to preserve your rights.

Image credit: Andy Wright

Should I Quit My Job to Avoid Wage Garnishment?

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If you’ve recently discovered that a NJ lender to whom you are indebted plans to garnish your wages in order to recover some of your missed payments, it’s natural to feel scared and overwhelmed. How much of your paycheck can they legally garnish? Will your co-workers find out that your wages are being garnished? The fear of that embarrassment is what prompts some people in this situation to ask themselves if they should simply quit their job to avoid the wage garnishment.

Wage garnishment is a debt collection strategy utilized by some lenders when other debt recovery tactics have failed. If you, as a debtor, have not made good faith efforts to repay the money you owe to a particular lender, the lender can get a court order that will order your employer to pay a percentage of each of your paychecks to the lender.

Will quitting your job help you avoid wage garnishment? Well, yes! Wage garnishment only works if there are “wages” being paid for a lender to intercept. So, does that mean you’ve outsmarted the system?

You cannot outrun a debt by quitting your job. In fact, leaving a steady place of employment simply to dodge a creditor is foolish, as they will find new ways to extract the money from you, and it is impractical to think that you can remain unemployed until the 20 year statute of limitations on your lender’s judgement runs out.

Is there any way to stop a wage garnishment order while keeping my job?

Now you’re talking! Keeping your job is your best bet in this situation, because you do have other options. Need to get rid of a New Jersey debt that you can’t afford to pay? Priority number one is remaining employed. Check.

Next, it’s time to talk about filing for NJ bankruptcy. Maybe you don’t want to file for bankruptcy either; perhaps it feels like ‘giving up.’ You may not want anyone to find out that you filed for bankruptcy just as you were worried about people knowing your wages would be garnished.

GOOD NEWS: Bankruptcy today does not have the stigma it held a generation ago. Times have changed, many people have been through some difficult financial challenges in the past decade, and bankruptcy now looks like a pretty good option for a lot of people.

You’re not alone if you consider filing for bankruptcy. Many people have come to the realization that filing for bankruptcy is the best answer to settling their debts. Many New Jersey bankruptcy attorneys will not charge you a fee to consult with them – call and make an appointment to find out what your options are.

A chapter 7 bankruptcy will wipe your debts clean (with a few exceptions like child support and student loans). You’ll be left owing a significantly less amount of money as soon as your bankruptcy is discharged, giving you more money to pay your bills and live life with. You’ll be able to find your way back to a balanced financial situation and a bright financial future if you decide to file for NJ bankruptcy, and you won’t have to try to out-run your creditors.

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I Received a NJ Bankruptcy Discharge: Now What?

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Having all or many of your debts erased in a New Jersey chapter 7 bankruptcy is referred to as a bankruptcy discharge. Most people filing for chapter 7 feel a great relief when their discharge is granted.

While you are deeply immersed in the bankruptcy process, it can be easy to view your discharge as the finish line. However, once you’ve passed that finish line, you’ll have new goals to reach for, and achieving these goals will be the true measure of your future financial success.

After bankruptcy, you’ll be aiming for repairing your credit score, which will take a hit when your bankruptcy is reported. Lenders will want to see that your credit score is slowly rising post-bankruptcy. While this isn’t always easy to do, it’s definitely not impossible. You can:

Apply for a secured credit card – While significantly different from a traditional credit card, secured cards are backed-up by money you pay up front. While few banks will see you as an ideal borrower right after bankruptcy, some offer secured card programs to borrowers who need help rebuilding their credit. This is a temporary solution that you should only use until your score rises enough to make you eligible for a traditional credit card.

Apply for a secured loan – This type of loan typically involves a credit union or a local community bank. You can either “borrow” from funds that you supply to your own loan account, or borrow money wherein you must make certain necessary payments before any funds will be released to you. While not a typical loan, these baby steps help your credit score because your loan activity will appear on your credit report, helping other lenders to see that you’re moving in the right direction.

Ask a family member to co-sign a loan or credit card – It’s true that we typically do not advise our clients to co-sign loans for friends or family members. A co-signer is putting a lot of faith into you, because they are essentially letting you “borrow” their good credit. The only times we recommend considering co-signing is after bankruptcy and when you truly have zero other options.

Request to be an authorized user – An alternative to finding someone to co-sign a loan or credit card is to request to be listed as an authorized user on a family member’s credit card. This is probably the option that will have the least positive effect on your credit score, but it can help a little bit. However, ensure that the lender in question reports all payment activity to credit bureaus for all authorized users, not just the main account holder.

As you begin your journey post-bankruptcy, the most important thing you do will be to make every single payment you owe to anyone ON TIME. This includes the aforementioned secured loans as well as utility bills and any other monthly expenses. Bankruptcy discharge should have given you a huge break from significant debts, leaving you with enough money to pay for your living expenses with a little bit left over each month. This means there are no more excuses for late payments.

When we work with a bankruptcy client, we also offer credit repair assistance after your discharge. If you’ve received your NJ bankruptcy discharge and you’re still struggling, we’re here to help you figure it all out.

Image credit: John Eisenschenk

How to Tell if You’re Living Beyond Your Means

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The recent popularity of YOLO-based thinking (You Only Live Once) has encouraged many people to take life by the horns. Learning to stay in the present is beneficial for so many reasons. After all, everyone’s living on borrowed time, so really appreciating life’s little moments is a key factor in living a fulfilled life.

Some YOLO enthusiasts take the concept one step further, however – following a “Treat yourself!” mantra that goes beyond staying present and moves toward the idea that since you only live once, you might well “live it up.” This mentality can very easily lead to spending more money than you actually have on things that make you feel good – that new pair of shoes, the latest tech gadgets, getting your hair professional styled, a new car, etc.

Of course, you can find yourself living beyond your means even if you never knew what YOLO stood for until now. Even spending slightly more than you have over a period of time will eventually catch up with you. Regardless of how you’re spending too much, when you reach the point of no return, you’ll realize that you don’t want to spend the rest of your life digging yourself out of debt. THAT is definitely no way to live.

You might be wondering, “Do I spend too much?” It can be difficult to know for sure if you’re living beyond your means, especially if you haven’t hit any significant bumps in the road thus far. You’re house isn’t in foreclosure, your credit’s ok, you’re not late on your car payments, and there’s always enough food on the table. Even when it seems as though everything’s alright on the money front, there are still some signs that should send up a red flag to indicate that trouble is coming.

  • You have zero savings. Many Americans today don’t put as much effort into growing their savings as the generations before us did. The problem with this behavior is that no one really knows what their future holds. Your steady job may not last until retirement. You could become disabled or experience any number of truly stressful life events that will limit your income potential. Without any nest egg to fall back on, any hiccough in your life plan could have disastrous consequences.
  • You charge everyday items to a credit card. Things like gas and groceries should be factored into your monthly expenditures and paid for with real money. If you regularly pay for necessities by credit card, it’s time to take a harder look at your spending habits.
  • The balances on your credit cards are headed up. Ideally, you should be working to pay down anything you’ve charged to your credit card(s) recently, which should only be more expensive purchases. If, instead, you find that your credit card balances just keep rising, you’ll be heading for bankruptcy sooner rather than later.

Get back within your means by cutting back on unnecessary spending now. Take a good hard look at all of your monthly bills and expenses compared with your monthly income. If you can find several areas to reduce spending – great! On the other hand, if literally all of your monthly income is earmarked for life’s necessities – you may need a professional’s help to get back on track.

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Multi-Generational Living Arrangements & Home Ownership Rights

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Today’s modern families are ever-shifting in a multitude of directions, some of which were made possible by the evolution of our nation’s legal system. Still other present-day families form when an adult “child” returns to live at home after attending college, job loss, divorce, or simply by choice. Additionally, many older parents live with a daughter or son and their family in order to cut costs and to share child-rearing duties of the next generation.

Regardless of the reason, the changing structure of the typical American family can raise some questions about ownership of the family home. When other adults outside of the original home owner live together, what are their rights if that homeowner passes away?

Example: Single mom Nicole and her mother decide the best course of action after Nicole’s divorce is for the two of them to move in together. Nicole’s husband kept the marital home, so Nicole and her two children move into her mother’s more-than-ample house. As Nicole’s father passed away several years ago, this decision will allow companionship for Nicole’s mother, and will relieve the financial burden on both women.

Something important for Nicole and her mother to think about is what will happen to the home when Nicole’s mom passes away? Assuming the current living situation continues until such a time, what will Nicole’s rights be?

In New Jersey, Nicole and her mother can modify the home mortgage paperwork to include special language that will protect Nicole and her children from losing the home upon the death of her mom. The deed to the home must say that Nicole and her mother are joint tenants with right of survivorship.

Joint tenancy means that both parties named own the property equally, and upon the death of one of them, the deed to the home will automatically transfer to the other, superseding anything that is stated in the decedent’s will.

If Nicole’s mother had previously created a will indicating that upon her death, her home should be divided equally between all three of her children (Nicole and her two siblings), as long as the proper language was added onto the title documentation, Nicole should have no problem being granted full ownership of the home.

While in theory this is a relatively simple concept, it must be handled with the utmost seriousness and attention to detail.  As has happened in the past, if the joint tenancy language is not used precisely as required, legal disputes can and likely will arise.

Do you have questions about your rights to real property that you shared with another family member or unrelated roommate who has now passed away? If you were not joint tenants, you may still have some recourse, but you will have to act swiftly and with the aid of a very experienced NJ estate planning/real estate attorney.

If you’re currently in a situation like Nicole’s, be proactive and make sure that your living arrangements are solidified for the future by taking title of the home in joint tenancy.

Image credit: Bryan Anthony