5 Ways to Get Caught Up on Bills After the Holidays

 

debt resolution

Just as a little too much partying on New Year’s Eve can leave you with a painful hangover — a little too much spending during the holiday season can result in a financial hangover. Unfortunately, the latter can’t be cured by drinking plenty of water and getting some extra rest.

When your out-of-town loved ones have gone back home and the decorations are starting to come down, credit card debt and crumbling finances can be a cold, unwelcome reality check. While we want our holiday memories to last a lifetime, holiday debt is something we’d really rather not think about. Avoiding the truth about how much you really spent on gifts for all and sundry won’t make the problem disappear; what it will do is snowball the interest and late fees.

5 effective ways to begin tackling your excessive holiday spending:

 

  1. Assess the Situation/Make a Plan

Tackling excessive debt is anything but fun, but it can’t be avoided. Begin by looking over all of your banking statements and making sure that you agree with all listed charges. Then, make a list of your debts from smallest to largest (based on total amount) to get an idea of  how much you’re in the hole for. Next, create a list of their interest rates from highest to lowest.

Once you have a clear picture of what you’re dealing with, choose either the Snowball or Avalanche debt repayment strategy and start working on the plan of your choice ASAP.

 

  1. Return, Return, Return

Did you end the holiday season with scads of decorations, gifts, or other items that were never even opened? Perhaps you bought gifts for a friend’s significant other only to discover that they broke up in November. Maybe you lost self-control and brought home that ridiculously overpriced holiday decoration you’ve coveted for months.

Do not hesitate — GO NOW, this minute, to return any still-in-box, tagged items. If you are able to get your money back – put it to good use by making an extra credit card payment before you have a chance to buy something else you don’t need. Without a receipt? Use store credit to buy something you’d purchase anyway, like home goods or diapers.

 

  1. Work to Cut Regular Monthly Spending

If you have assessed your budget and concluded that there isn’t enough money left over each month to pay off your credit card debt, then reducing your monthly expenses is a must. Chances are, you have at least some recurring monthly payments that could be eliminated or decreased. Try calling your cell phone provider or cable company to see if they have any New Year’s offers or plans that would be cheaper than what you’re currently paying. Be sure to mention that you’ll have to change providers if they can’t lower your monthly bill.

Look around for a new (lower) quote on home and car insurance. Keep searching until you find a company that has the coverage you need and is willing to work with your budget.

Lastly, assess any larger loans you’re currently repaying (mortgage, home equity, education). Consider refinancing or modifying some or all of those more substantial loans. Every dollar you decrease your monthly payments by can go directly toward paying off credit card debt.

 

  1. No Credit Diet

Until you have that credit card debt completely paid off, we strongly recommend putting yourself and your family members on a “no credit diet.” When you purchase anything, use debit cards, cash or write a check (ancient, but still better than spending money you don’t have). Using these forms of payment will avoid racking up any more credit card debt.

 

holiday spending

 

  1. Every Dollar Counts

Everyone has some expenses that could be considered “flexible” – grocery bills, clothing, entertainment, recreation, and more. Determine what items in your budget are ‘must-haves’ and what you or your family could go without.


In short: Evaluate your spending habits and start making better choices until they become habits.


Example: When you’re tempted to buy that five dollar cup of coffee, think about how quickly your coffee habit could put a dent in your debt. Bonus: Getting off caffeine (or reducing your intake) is good for your blood pressure!

We’ve given you a few ways to start lowering that holiday debt that you had so much fun charging last year. Take the tips that work for you and add your own debt pay-down tricks into the mix.


One caveat: If your holiday debt goes far beyond just the recent holidays, and you’re finding your monthly minimums are more than you can handle, regular debt pay-down strategies probably won’t get you very far. That doesn’t mean you’re out of luck.


When you’re so far behind on your bills that they just keep piling up, unpaid, on your kitchen table, it’s time to ask for professional help. Call Veitengruber Law. We will provide you with a holistic analysis of your debt and tailored solutions that will get you “back in black.”

The best part about reaching out to us for help?  The first meeting’s on us.

Make an Offer on Your Dream Home or Save for a Down Payment?

 

You’ve finally found your dream home and you think you’re ready to buy, but unfortunately it’s not as easy as ringing the doorbell and claiming the house. The decision to buy can be the start of a tricky dance between buyer and seller, typically with real estate agents acting as mediators. Your agent will be able to help you with questions you may have on the potentially daunting process of buying a future home, but this guide can help you get started.

When is the “right” time to buy a home?

Deciding on the right time to make an offer on a house can be an intimidating task, especially if the house appears to have all you ever wished for and more. Because a down payment can be an important part of buying a home, you need to be aware of your borrowing capabilities with and without a down payment when making a home purchase.

What is a down payment?

A down payment is a specific portion of the total cost of the house that the lender requires you to submit up front in order to qualify for a mortgage loan. The more money you are able to apply towards the down payment, the lower your interest and monthly mortgage payments will be. It is ideal if you can save up an amount that is at least 20% of the home’s price.

Is a down payment required?

Without question, it’s vital to wait to make an offer until you have a handle on your finances, as it makes the buying process easier. When you make an offer on your dream home, you should know how much house you can afford – meaning you’ve been pre-approved to borrow a set amount of money from a lender. Sellers are inclined to go with buyers who make a solid offer and have proof of exactly how they’ll come through on that offer. Depending on your finance history, credit report, asking price of the home and requirements set out by your lender, you may not be required to make a 20% down payment.

What is earnest money?

Most likely, you will be required to submit an “earnest money” check or money order, which will be held in an escrow account until closing, if the seller accepts your offer. Earnest money is a good faith deposit that the seller requests before they agree to sell their house to you. This deposit shows that you are serious about purchasing the house and that you are most likely financially capable of following through with paying off the house. The earnest money deposit (EMD) is typically listed on the Multiple Listings Sheet (MLS) and is usually submitted with the offer. Because it is possible to lose your EMD, it is recommended not to submit a higher EMD than what the seller lists on the MLS. The EMD can be lost if your contract with the seller is breached without an acceptable reason or if another potential buyer’s offer is accepted over yours.

How can I avoid losing my EMD?

 

Real estate breach of contract happens all the time – and it’s usually not something that the buyers could have seen coming on their own. Although your real estate agent is an expert in selling homes, it’s possible that they aren’t as versed in real estate law as a NJ real estate attorney. Trust in your real estate agent, but once you have a contract in hand, it is always wise to have it reviewed by your favorite real estate lawyer.

Working with both an experienced real estate agent and a real estate attorney won’t guarantee that you’ll land the home of your dreams, but it will increase your odds. Do you have questions about your real estate contract? Fill out this simple form and have your questions answered by a professional and experienced New Jersey real estate attorney.

Estate Planning Challenges: What Happens When Your Ex-Spouse Dies?

Getting married for a second or third time can bring a lot of joy, but it can also present new challenges, especially regarding how your estate plan financially affects current and former family members from your past marriages.

An important part of estate planning is understanding under whose ownership certain assets and property are currently held, as well as how they will be allocated in the future. Updating all of your account titles and designations, such as beneficiary designations on retirement accounts and insurance policies, is a must after a marriage, whether it be marriage number one or marriage number five.

Be sure to put all of your intentions in writing, so that there are no questions about what assets are to be distributed to children from your current vs. previous marriages. For example: if you want your current family to inherit your house, you’ll need to change the names on the legal documents associated with your home. If real property is not transferred correctly, your family may become homeless or experience unintended hardship after you or your spouse dies.

Alimony is a legal obligation for one person to financially support an ex-spouse after divorce in order to maintain the lifestyle that was experienced during the marriage. As part of a divorce agreement, a judge can order for alimony to be awarded, but it must be in accordance with any state laws. When an ex-spouse dies, a financially difficult situation can arise if you rely solely on alimony for income. In an unfortunate situation like this, it is typical that your alimony payments will discontinue unless your divorce decree specifically states otherwise. You may, however, be able to file a claim with the court against the estate of your ex-spouse to receive any unpaid alimony.

The estate of your ex-spouse will go through the probate process when he or she passes away. The administrator that is appointed to oversee the estate will pay any remaining debts and allocate assets to the beneficiaries. If your ex-spouse was indebted to you for past alimony or other monies, you will become a known creditor to their estate and can therefore submit a claim for said funds that are owed to you.

Although it makes perfect sense, the concept that alimony does not typically continue once an ex-spouse passes often isn’t given much thought until the time comes. You may very well need to discover new ways to supplement your income once alimony payments cease, so it is best to be prepared for this.  Many couples, especially those who have children together, elect to include each other in their respective life insurance policies as the beneficiaries. This will ensure that the surviving ex-spouse and any children from the marriage will be cared for adequately.

If you are considering tying the knot for a subsequent time, there are many important aspects of estate planning and beneficiaries that you should have a solid understanding of. This will eliminate or lessen the amount of confusion as to what assets stay with or go to each person when an ex-spouse dies. Along with forming an estate plan can come discomfort, but having a plan in place can bring peace and comfort. To learn more about estate planning if you’re preparing to wed again, reach out to our office with any questions or to initiate a free one-hour consultation.

Saving for Retirement When You’re Self-Employed

Being self-employed has its fair share of benefits, but requires extra attention to financial planning for the future, especially retirement. According to the Bureau of Labor Statistics in 2015, there were 15 million Americans that were self-employed. Self-employed individuals have to provide their own healthcare and benefits and save for their retirement. These tasks can be difficult when individuals cannot necessarily count on a steady paycheck and a regular income. You may not feel ready to start saving thousands per year, but when that time comes, a retirement plan will be extremely useful. The Internal Revenue Service (IRS) offers various plans with unique advantages for those who are self-employed.

  1. Simplified Employee Pension IRA

Contributing money to this account will allow it to grow tax-free until retirement. You are able to invest up to 25% of your net earnings up to a maximum, which ended up being $53,000 (in 2016). This type of plan is easy to set up at a bank, mutual fund company, or brokerage firm, and some banks allow you to open one online. This kind of account is simple, easy to establish, and increases flexibility because it lets you decide how much you want to contribute throughout or at the end of the year. If you do have employees working for you, you are required to invest the same amount of money into their accounts as you do into yours.

  1. SIMPLE IRA

This savings incentive match plan for self-employed individuals and their employees allows individuals to put 100% of their net earnings into the account, up to $12,500 (in 2016). Individuals older than 50 can contribute $3,000 more each year for “catch-up” deposits. Employers are also required to pay a 2 to 3% company contribution to this account for employees, which could potentially allow you to add more than $12,500 per year. The money that you add is tax-deductible and remains tax-free until you begin drawing money out of the account. It is typically used by small businesses with employees, the self-employed, and solo entrepreneurs. Unfortunately with this type of account, contribution limits are lower.

  1. Solo 401(k)

This type of plan is a good choice for individuals with a large income and is typically used by sole proprietors and businesses owned by couples because it allows for larger contributions. It is possible to add up to $18,000 per year (in 2017), in addition to $6,000 for those age 50 and older. Adding to these amounts, you can contribute an additional 25% of your self-employment net earnings, for up to a total of $54,000 (in 2017). The negative side of a solo 401(k) is that it requires more paperwork than a Simplified Employee Plan (SEP) IRA. If there are employees other than your spouse that work for the business, it is no longer a “solo 401(k).” A normal 401(k) plan is not exempt from discrimination testing.

It is always in your best interest as an entrepreneur and business owner to do research on your current and future income and be knowledgeable about the direction of your business. If you need more information than is available here, Veitengruber Law can put you in touch with a professional financial adviser in our trusted network.

Top Money Arguments Couples Have and How to Stop

Facing money problems for couples is not unknown territory. Chances are, if you and your partner are like most couples, money can often be a touchy subject. Unfortunately, studies have proven that fights about finances are able to predict divorce rates. The scary thing is, these arguments can begin even before you and your partner get hitched. Today, we’ve got a few tips to help you avoid and/or resolve these challenges.

Problem #1: Differences in Spending Habits

One of the most common financial issues that a couple may face is how they are going to manage spending. More often than not, one partner gets labeled the “spender” and the other one the “saver,” but labels are never beneficial for a relationship and can lead to tension. When one person takes care of the grocery shopping, bills, and ensuring that the family and home needs are met, and the other spends their money on frivolities, one can see how frustration can easily boil over into arguments. The key to avoiding an argument is to side-step any surprises. A budget will assist in planning out monthly spending so that both parties know how much money is necessary for bills and other living expenses. This will help “the spender” to understand that they are possibly spending too much money on unnecessary things. Creating a budget together is a great way to improve communication and get closer as a couple, as well.

Problem #2: Past Debts

Most people come to the altar with some kind of financial baggage, whether it’s school loans, credit card debt, car loans, or even alimony and child support if this is a second marriage. If you are entering into a relationship and you have a lot of financial strife, it can sometimes feel like you’re dragging your partner down, but it’s important to remember that no one is perfect. Dealing with debt as a couple can actually strengthen a relationship, and in fact, by working together, you can reduce the debt more quickly. Again, working out a plan to pay down your past debt together (even if the debt is one-sided) will increase feelings of being on the same team.

Problem #3: Separate or Joint Accounts?

Should you have separate account for personal expenses and a joint account for household expenses or two totally separate accounts? From which account will you draw money to take care of your children? These are just two examples of the many questions couples frequently find themselves asking when determining how to best merge finances. Many times, this argument can leave one person feeling hurt because they feel that their partner doesn’t trust them enough to share a bank account together. The desire for separate accounts does not indicate that your partner doesn’t want to be close to you. In fact, it can be a good idea to keep separate accounts for many couples. Finding what works for you and your spouse will take time and some “from the heart” conversations. Whether you create a joint account or continue to maintain your own bank accounts, approach this subject with love and care, so as to avoid unintentionally hurting your loved one.

Solution: Good Communication

As we all know, good communication is the key to any successful relationship – romantic or otherwise. In order to navigate the maze of marital finances (spending habits, debt, bank accounts and more) – you need to come together as one. Approach financial conversations with an open mind, while being cognizant and respectful of your partner’s personality and opinions. If at all possible, discuss your ideas about finances when you are still dating. It never hurts to get the ball rolling as soon as possible on a topic as loaded as this one. The sooner you begin to get comfortable talking about money, the better off you’ll be – long after you say “I do.”

 

 

How to Legally Sublet an Apartment in New Jersey

When you signed your current lease, you more than likely had every intention of fulfilling that lease, whether it was for 6 months, a year, 2 years, or more. However, as we all know, life is sometimes messy and unpredictable. If life throws you a curve ball you weren’t ready for, (and is anyone ever really prepared for a curve ball?) you may find yourself wanting or needing to break your lease.

Reasons NJ tenants break leases

Your life may have shifted in a good way or surprised you with some unwelcome roadblocks, like:

  • A new job – Perhaps you received a surprise job offer you can’t turn down, but it’s across the country.
  • A job transfer – You may be told that your job location will be moving and unless you acquiesce, you’ll quickly be unemployed.
  • Divorce – Never planned for but all-too-common: if you signed the lease together and then split up, one of you has to move out.
  • Marriage – You’ll potentially need more space or need to relocate.
  • Job loss – Regardless of the reason, finding yourself without an income may mean you can’t afford your rent.
  • Health problems – Your 6th floor walk-up sounded charming when you signed the paperwork (“The stairs will keep me in shape!”). That outlook can quickly change with the diagnosis of a chronic illness or an injury that has created limitations on your mobility.
  • Family issues – (Example): When your 70 year old mother falls and breaks her hip, she may ask you to move in with her until (and if) she regains her mobility.
  • Military duty

What to do if you need to break your New Jersey lease

When and if you find yourself in any of the above or other extenuating circumstances, you’ll need to become extremely familiar with all of the terms of your lease. While you may not have read the terms as closely as you should’ve when you signed, now is the time to learn exactly what your lease states regarding your rights to move out early.

Many leases include a list of acceptable reasons for breaking your lease. If your reason falls under that list – you’ve got it made! However, if you don’t find what you’re looking for in the fine print of your lease documents, all hope is not lost.

If I move out early will I have to pay the remainder of my rent?

Lucky for you, landlords are required to at lease make an attempt to find a new tenant under New Jersey law (Sommer v. Kridel, 378 A.2d 767 (N.J. 1977)). This is true even if you break the lease for an unlawful reason. Landlords are legally held responsible to make an effort to find a new tenant if you have to move out before your lease ends.

To help things along, you can attempt to find someone to take your place as a tenant under your lease. Your landlord doesn’t have to accept your proffered tenant, but is likely to do so as long as they have decent credit and can provide solid references. Any landlord would much rather “sublet” your rental if you have to cut out early than lose thousands of dollars while the apartment sits empty.

Short Sale vs Foreclosure: The Facts

When trying to decide between a short sale and foreclosure, sometimes it’s easier for homeowners to just throw in the towel and let the agent do the work. It is important to seek legal advice from a professional before making a decision, but allowing the bank to have complete control may not be the wisest decision. By becoming more informed about short sale vs. foreclosure, you will be able to make a more confident and educated decision regarding your home.

Process of Foreclosure

A foreclosure occurs when a lender takes ownership of the property and removes the borrower. This occurs when the borrower cannot make the mortgage payments on a consistent basis. Foreclosures can be done through a real estate agent or sold at an auction. The lender can then sell the foreclosed property and collect and recover the unpaid mortgage balance.

This process begins when the lender doesn’t make the mortgage payment for three to six months. The lender will notify the borrower of foreclosure and the reinstatement period, which allows the borrower time to resolve any disputes. The mortgage balance then needs to be paid off within three months, and if not, a notice of sale will be given to the homeowner.

Process of Short Sale

A short sale can be used as an alternative to a foreclosure because it bypasses the extra costs and fees for both parties involved, but it does require a large amount of paperwork. A short sale occurs when the homeowner cannot make mortgage payments and owes more than the current market value of the property. Lenders are often hesitant to accept short sale offers because the proceeds from selling the house often equate to less than the mortgage payment, which is known as a deficiency. Homeowners may still be obligated to pay these deficiencies even after a short sale agreement. The homeowner will put the house on the market and if he or she receives an offer, the bank also needs to approve it. The short sale process can take three to six months to closer. If a homeowner is experiencing hardship such as divorce, unemployment, family death, or job relocation, banks will be more likely to approve a short sale.

Effects on Credit Rating

Unfortunately, foreclosures can cause the borrower’s credit rating to decrease by 200 to 400 points and will remain on the report for seven years. On the other hand, short sale usually only causes a credit rating to fall 50 to 130 points and a credit report will state that the short sale was “settled,” “paid as agreed,” or “paid in less than full.”

Future Homeownership

After a home foreclosure, an individual can buy a house in five years with some restrictions, or in seven years with no restrictions. After a short sale, an individual may be able to buy a home immediately and the lender will not require the loan to be paid back.

Purchasing a Foreclosed or Short Sale Home

Typically, short sales home are better to buy than a foreclosed home because the property has been inhabited. The house and utilities have been maintained, but short sales can take a large amount of time to close. On the other hand, buying a foreclosed house is usually quicker and they are sold at lower prices.

For more info, whether you’re thinking about selling or buying a short sale/foreclosure, visit: https://www.veitengruberlaw.com/Real-Estate-Transactions/

              

How to Sell Your Home Before Your Lender Forecloses

nj bankruptcy attorney

Many times here on our bankruptcy blog, we describe situations where homeowners want to save their homes. Filing for bankruptcy sets the Automatic Stay into motion, which in turn prevents a home from being foreclosed upon. The length of the bankruptcy case and the anticipated outcome of a discharge of debts allows those homeowners (who desire it) the ability to adjust their debt-to-income ratio enough to keep their home via reaffirmation.

However, sometimes, a financially distressed homeowner doesn’t want to save their home. They may wish to downsize or move into a more affordable geographical location. Foreclosure, then, is not their ideal outcome, because they’ll end up with no money from the sale of the home, their credit scores will drop, and they could end up owing a deficiency judgment.

In these situations, selling the home is the desired outcome.

What’s the problem, then? Just sell the house and get on with things, right? The dilemma arises when homeowners have fallen behind on their mortgage payments and their lender is threatening to foreclose before they have a chance to get the house listed on the market.

If you do not want to keep your current house, but you’re simply short on time due to the immediate threat of foreclosure and sheriff’s sale, you’re in luck. You came to the right place, because we can help gain you enough time to get your property sold to a proper buyer rather than through a foreclosure bidding auction.

Why not just let your home go to foreclosure sale? A sale’s a sale, right?

Actually, no. Very, very much NO. However, many homeowners who’ve found themselves face-to-face with a foreclosure don’t realize they can take action toward an end goal of selling their home even when the home is actively being foreclosed upon. That’s right – this is possible even if you’re behind on your mortgage payments – or not making them at all.

Homes that sell via foreclosure auction or “sheriff’s sale” (find out why it’s called that here) almost always sell for significantly less than their real time market value. That is the #1 reason that you should consider trying to list your home for sale before sheriff’s sale.

For those homeowners who know they cannot continue living and maintaining their current lifestyle (i.e. high mortgage payments and property taxes), the last thing needed is the possibility of a deficiency judgement.

A deficiency judgement isn’t the only reason to avoid foreclosure.

By beating your lender to the punch and selling your home before they have a chance to pull the rug out from under you, you gain the opportunity for a substantially higher sale price. This will guarantee that all of your missed payments, late fees and interest is paid back to your lender, causing a domino effect of good results:

  1. Your foreclosure will be dismissed.
  2. You may end up with some equity in your pocket.
  3. Other dischargeable debts can be eliminated or greatly reduced.

Filing for bankruptcy in New Jersey should be viewed as a valuable tool that can be used to right a financial situation gone awry. The key to getting all of your ducks in a row, however, is working with the right NJ bankruptcy attorney. Timing is everything; don’t delay making a move on what can potentially turn into a disaster. Take action now, and you can walk right into a story with a happy ending.