My Ex Is Using My Credit Cards after Our Divorce!

Unfortunately, divorce almost always brings with it some degree of contention. Regardless of what the former couple disagrees about, it usually comes down to a “he said, she said” type of dispute.

Sometimes, however, there is legal recourse for post-divorce behavior that simply crosses the line. Take, for example, a woman who, upon setting out to clean up her credit report and boost her score, discovered that her former husband had been using her credit cards quite liberally well after they split up.

While, yes, there can be a bit of ambiguity when it comes to using shared cards in the time period after a married couple decides to part but before the Final Judgement of Divorce has been entered, the law speaks loud and clear after the divorce is final.

Any use of your ex-husband or ex-wife’s credit cards (that are in his or her name only) after you divorce is specifically disallowed. In fact, it’s against the law and reeks of identity theft.

Do some married couples use each other’s credit cards while they’re married? They do – even if the credit card in question is not a shared card and only officially “belongs” to one party. This is legal if the non-card-holder is named as an authorized user on the account.

Example: Husband goes out of town for the weekend and leaves his credit card for his wife to use for shopping. As long as she is an authorized user on his account, this is perfectly legal. However, she must sign her own name on any receipts as opposed to forging her husband’s signature.

Even if you’re currently happily married, it is generally considered unwise for you to utilize your spouse’s credit card (that is in his or her name only) if you aren’t listed as a user of the credit card. Some couples do it anyway because most merchants assume that the cardholder gave permission to the spouse to use their card. Simply calling your credit card company and adding your spouse as an authorized user is easy to do and can eliminate any potential problems.

After you are officially divorced from your spouse and are holding the Final Judgement of Divorce in your hands, there should be exactly zero further use of the other party’s credit card. This is true even if you were listed as an authorized user while you were married. Should your spouse forget to remove your name from their authorized users list, this does not in any way mean that you may continue using your ex’s credit after divorce.

An ex-spouse utilizing your credit card falls under the category of a criminal offense: identity theft. It is no different than a complete stranger stealing and using your credit card(s). If this has happened to you, the next step you should take is filing a police report and sending a copy of the police report to the credit reporting agencies. Working with a credit repair specialist will help you get the debt removed from your card and you may even be successful in making your ex pay for the charges.

A Letter to Bankruptcy

Dear Bankruptcy,

Oh how thee have gotten such a bad rap over the years. It’s a shame because of all the good you can do! I know it must hurt your feelings when people believe myths about you that simply aren’t true.

I recently heard the most incredulous Bankruptcy myth: that you don’t even exist anymore! Just because a few more rules have been put into place so people don’t abuse you does not eradicate your existence. Bankruptcy, I know you are real, and I know that you just want to help people.

This next one you might not have even heard yet. Did you know that some people are spreading rumors about me, too? It has been said that “consulting with me (or another one of the law people) about you means we can force bankruptcy upon them.” Haha, seriously! As Bankruptcy law helpers, we are exactly that – helpers. Not to mention, it would be illegal for any of us to force anyone to do anything against their will.

Now – I’ve only heard this rumor from a friend of a friend, but I believe it went something like, “The Jones’s can’t ask for help from Bankruptcy because they still pay all of their bills on time.” I did try to explain that your help is available even before people dig themselves into a hole, but I’m not sure my friend believed me.

Please don’t get offended, Bankruptcy, but there are a few things being said about you that, while they aren’t exactly 100% true – they do hold some merit. I guess I’d say these are more like pieces of misinformation than myths. For example: “Making too much money prevents someone from calling upon you for help.” Obviously, it’s not a person’s income alone that determines how badly they need you, Bankruptcy. I’ll be the one to say it: Means Test!!

Brace yourself, because this one may sting a little. I know you’d never do this, but apparently it’s been said that you can destroy people. I mean, as if! Now, I acquiesce that you are indeed one powerful fellow, and naturally you do pack a bit of a punch when you do your thing, but “destroying” someone has never been your M.O. You hang around for what, 7-10 years, but in name only, right? What about all of the good things you do for people, like taking care of everyone they owe money to and stopping foreclosure single-handedly?

Bankruptcy, I know your intentions are good. You are a superhero in my eyes! Don’t fret about the bad press; I’m working hard every day to set people straight, one rumor at a time.

Sincerely,

George

 

 

 

Can my Landlord Evict me if I File for NJ Chapter 13 Bankruptcy?

Living paycheck-to-paycheck is the way of life for many Americans, and unfortunately, it doesn’t seem as though this has the potential to change any time soon. With the Mortgage Crisis of 2007 having lasting effects on the US real estate market, many former homeowners were forced to give up their underwater homes and downsize. Many of these people did not take on a new mortgage, but decided to become renters – at least until the real estate market righted itself.

The new renters brought on by the Mortgage Crisis (which had aftershock effects lasting well past 2010) plus those Americans who were already renting prior to 2007 combined to create a large population of US renters. While some renters have since been able to secure mortgages, a plethora of tenants feared losing yet another home to foreclosure and have continued to rent property in NJ.

The struggle of not knowing whether or not you’ll have enough money to cover your monthly living expenses is real. As of the end of 2016, nearly 11% of New Jersey residents were living at or below the poverty level, which is an excessively high number. For these New Jerseyans, figuring out how to stretch their low income to pay for food, housing and utilities is a daily burden that weighs on them constantly.

As a renter in New Jersey, filing for chapter 7 bankruptcy no longer prevents a landlord from initiating the eviction process. New legislature in 2005 protected homeowners but not tenants in chapter 7 cases. Those renters who need to file for bankruptcy to get out from under crushing debt cannot do so with a chapter 7 without risking eviction.

Although chapter 13 bankruptcy doesn’t completely wipe out debts like a chapter 7 discharge does, the good news for NJ renters is that it offers protection from eviction. All back rent that you owe your landlord can be included with your other debts when you file. A chapter 13 bankruptcy can save you from eviction by creating a payment plan wherein you will repay your landlord the arrears you owe over a set period of time that is considered reasonable.

As long as you continue to make all of your chapter 13 repayments (made through your bankruptcy trustee who then pays your creditors/landlord) along with your current rent payments, you cannot be evicted due to being behind on your rent. Your chapter 13 repayment plan will be structured in such a way that you can afford in comparison with your unsustainable living expense schedule prior to filing for bankruptcy.

It’s important to note that in order for you to avoid eviction via chapter 13 bankruptcy, you must be able to prove that you have enough income to afford your repayment plan with enough money left over every month to be able to make your current rent payments on time and in full. In addition, any landlord may evict a tenant who has endangered the property in question through illegal activities such as drug use, drug distribution or breaking the lease agreement in other dangerous ways, even if they have filed for a NJ chapter 13 bankruptcy.

 

Image: “Evicted” by Gideon – licensed under CC 2.0

New Jersey Title Insurance: Do I Really Need it?

Purchasing real property in New Jersey (or in any state, for that matter), is definitely not a time to take short cuts. While most home buyers acknowledge this fact, some may still question the necessity of some of the steps along the journey to home ownership. The process of buying a home involves a pretty long checklist – if you’re doing things the right way.

One standard task that you need to accomplish before the closing date is purchasing title insurance. Buyers who aren’t familiar with title searches and title insurance may be caught off-guard when they discover another fee that they are responsible for in their quest to own a home. Important questions you may have include:

What is the purpose of a title search?
The person or persons listed on a property’s title are the rightful owners of the home. When the title insurance company (or your NJ real estate attorney) performs a title search on your intended home, they are looking for anything in the history of the property’s ownership that suggests there may be a problem in transferring the ownership of the home. This preliminary examination combs through records surrounding the previous ownership of the home, i.e: deeds, trusts, wills, divorce agreements, judgments, bankruptcies, tax records and liens. Any minor encumbrances (a lien that needs to be paid off, missing signatures) can usually be cleared up, allowing the sale to proceed.

Why do I need to buy title insurance if the title search was clear?
The reason title insurance is necessary is because it is virtually impossible for any initial title search, no matter how thorough, to foresee a claim to ownership that was filed incorrectly and/or is long-buried in a pile of dusty paperwork. Misspelled names, long-lost relatives, estate planning snafus and other problems can pop up at any time in the future – after you’ve already closed on the property and have moved in.

If a title problem arises after I’ve moved in, how will title insurance help me?
Your title insurance lender’s policy will act as a safety net if a buried problem turns out to present a real claim to the property even after you’ve closed on it. If a long-lost co-owner turns up and wants to enforce his claim of ownership, he can take the matter to court, however, even if he wins and is granted ownership of the home, your title insurance lender’s policy will pay your lender the balance on your mortgage. If you also purchase an owner’s policy, that will kick in to reimburse some or all of the money you already paid, such as a down payment and any initial mortgage payments.

How much does title insurance cost?
Purchasing title insurance is going to cost you a one-time fee of around $1,000, give or take, for the lender’s policy, and less than $100 for an owner’s policy. This is money well spent even if you never make use of the coverage. That may sound strange, but here’s why it’s true: on the very small off-chance that a missed claim surfaces and you are without title insurance, you could lose your home and a significant amount of money.

Virtually all lenders will require you to acquire title insurance before they agree to approve your mortgage. In addition, most NJ real estate attorneys won’t represent you if you attempt to refuse title insurance because of the inherent risks involved in your future as a property owner. Title insurance may seem unnecessary, but it is absolutely, without a doubt, a crucial piece of any New Jersey real estate transaction.

 

Stripping a Second Mortgage in a Chapter 13 Bankruptcy

Many people have taken out a second mortgage on their home. These second mortgages are usually referred to as home equity loans, because they are based on the amount of equity you have in your home. Your original mortgage loan’s value vs what your home is worth, along with your credit score determines how much money you can borrow through a home equity loan.

Typically, these loans are paid to homeowners in one lump sum so they can do home renovations or repairs. Some people use home equity loans to pay off a large debt with a high interest rate or to buy a vacation home. A home equity loan can seem extremely advantageous if you’re in need of some fast money, however the danger is that if you fail to repay the loan, you could lose your house.

Getting in over your head with your mortgage has been a popular theme in the past decade, so if you’re finding that you can’t make both your first and second mortgage payments, you’re not alone. Luckily, you do have some options.

If you could eliminate your second mortgage, would that make your monthly living expenses doable? Wishing you never took out that home equity loan? Filing for a NJ chapter 13 bankruptcy might be right for you.

A process known as ‘lien stripping’ can essentially erase that second mortgage, but this process is only available to debtors who file for chapter 13 bankruptcy. Additionally, in order to qualify for a lien stripping, your first mortgage balance must be higher than the current value of your home.

For example, if your first mortgage balance is $300,000, but your home is currently worth $275,000, you have zero equity in the property. In fact, you’re said to be ‘upside-down’ or ‘under water’ in regards to your first mortgage.

A $25,000 second mortgage would qualify to be stripped via chapter 13 bankruptcy in New Jersey. Upon application for a chapter 13 bankruptcy, your debts will be reorganized so that you can afford your monthly payments on all of your secured debt. In a chapter 13 bankruptcy, a second mortgage is referred to as a junior lien, and will be lumped in with all of your unsecured debts.

Throughout your chapter 13 repayment plan, you only have to pay a percentage of the total lump sum of all of your unsecured debts because they are considered “non-priority” debts. Upon successful completion of your bankruptcy payment plan, you will be granted a discharge. A chapter 13 discharge will put the lien strip into motion, and you will no longer be responsible for any remaining balance on your home equity loan or second mortgage.

The same is true for homeowners who also have a third mortgage on their home. If you want to stay in your home and would be able to afford your mortgage plus monthly living expenses if only you could “get rid of” your second or third mortgage(s), ask George about filing for a NJ chapter 13 today. You only have debt to lose!

 

Practicing Bankruptcy Law: “Isn’t it Depressing?”

I frequently get asked why I decided to go in to bankruptcy law. Most of the time, the person asking the question does so with a perplexed facial expression and concerned body language.

“Isn’t it depressing?” they ask.

The truth about why I got into bankruptcy law is actually quite simple. To be completely honest, when I first graduated from law school, I worked on the other side of the equation for a debt collection law firm. Not to say that lenders and creditors don’t need and deserve quality representation, but it just wasn’t for me. I saw the debtors who were struggling and I felt drawn to wanting to help them. I knew that I could help them, but I needed to figure out the best way to do that.

In 2010, I took the leap and opened Veitengruber Law. We started out as a very small solo practitioner firm, but I knew from the very beginning that we would do great things for many people. I put together the very best team to work with me: a bankruptcy specialist paralegal, a foreclosure specialist paralegal, a marketing specialist, and the most qualified legal assistant I could find.

Since the year of our inception, we have not looked back. I knew instantly that making the move to own my own firm was the right decision. Every year the firm grows exponentially. I have put no less than my entire heart, soul, blood, sweat and tears into moulding Veitengruber Law into the kind of bankruptcy law practice that has a reputation for helping people.

To circle back to the original question that was posed at the opening of this post: “Isn’t bankruptcy law depressing?” The general consensus is that I must be crazy to want to spend all day every day with those less fortunate, or those who have made some poor financial choices.

The answer to that question is quite simple, actually. My “job” as a NJ bankruptcy attorney is hands-down the most rewarding thing I’ve ever done. You’ll often find me still working at 9pm – and happy about it! The bottom line: I’ve discovered that helping people is what I was destined to do, and I don’t say that boastfully. Showing my clients (who quickly become friends) that there is a light at the end of what they thought was a never-ending tunnel of debt makes all of my efforts worthwhile.

Upon first meeting me, my clients are almost always in emotional distress. They are almost never happy about filing for bankruptcy, and many of them have a very negative attitude:

“I don’t want to be here.”

“I can’t believe I’m really doing this.”

As we begin to talk and I make them aware of what bankruptcy can actually do for them, every single person visibly relaxes. It’s as if I have physically removed a 25 pound weight from around their shoulders. Smiles start to peek out, they begin to make more eye contact with me, and sighs of relief abound. Sometimes, tears spring from their eyes, taking them by surprise – simply because they are tears of joy.

Tell me, what could be more fulfilling than that?

NJ Senate Bill 1593: A Proposed 6 Month Foreclosure Stay

Because the number of New Jersey foreclosures continues to rise even as we are now reaching the mid-point of 2017, the NJ Senate and Assembly have proposed new legislation with the goal of generating positive change for underwater New Jersey homeowners.

Senate Bill 1593 proposes that a six month stay of foreclosure proceedings shall be implemented in New Jersey if such action is agreeable to the homeowner and lender. The bill also proposes that the court can impose the six month stay if it has been determined that it would be possible for credit counseling and/or negotiations to occur during the six months that would potentially eliminate the need for a foreclosure.

Homeowners who are offered a reasonable and feasible mortgage loan modification by their lenders prior to beginning foreclosure proceedings will not be eligible for the six month stay. If an acceptable loan modification agreement is reached between the parties during the six months, the forbearance will be lifted and mortgage payments will resume. Additionally, if at any time during the six month forbearance, the homeowner moves out of the residence or advises their lender in writing that they have no intention of participating in the formal foreclosure mediation program (required during the six month stay), the stay will be lifted immediately and foreclosure proceedings will commence.

This legislation is an attempt by the Senate Committee along with the Urban Affairs Committee to drastically reduce the overall number of NJ foreclosures that continue to plague the Garden State a full decade after the Mortgage Crisis that began in 2007. While most states’ real estate markets have bounced back, several states are still struggling with high foreclosure rates.

In addition to NJ, the following states still have excessively high foreclosure numbers as of May 2017: Florida, Nevada, Oklahoma, Illinois, Maryland and Delaware. New Jersey tops the list with a foreclosure rate of one in every 515 residential housing units. Delaware, in second place, has a foreclosure rate of one in every 753 housing units. As you can see, New Jersey is the clear “winner” by a landslide.

In fact, the country’s two most foreclosure-stricken cities are also in New Jersey, with #1 being Atlantic City and #2 being Trenton. Jersey’s neighbor across the bridge, Philadelphia isn’t far behind, coming in at #5 even though Pennsylvania’s overall foreclosure rates are down.

New Jersey’s continued inability to pull out of what can now only be described as a foreclosure emergency has led to damaging effects like neighborhood blight, which greatly reduces property values. This, in turn, leads to more homeowners who are ‘underwater’ (owing more money on their mortgage than their home is actually worth), which then leads to more foreclosures. The cycle seems unending in NJ, and drastic measures are needed to put a stop to the deleterious effects on the state’s economy. We have high hopes that New Jersey will be able to come out ahead of foreclosure, and this bill is one giant step in the right direction.