NJ Real Estate: Understanding the 3 Day Attorney Review Period

nj attorney review period

When it comes to NJ real estate transactions, first-time buyers or sellers can find themselves under-informed when it comes to their rights and responsibilities during the sale of a home. Real estate contracts are complex documents that may be difficult for many people to understand as well as they need to. In New Jersey, buyers and sellers have the right to a 3 day attorney review period to ensure that their best interests are being met.

 


The attorney review period is unique to New Jersey and protects both buyers and sellers from entering into unwise real estate contracts.

 

The Contract

In New Jersey, as well as in every US state, the contract is far and away the most important document in the entire real estate transaction process. Almost all real estate transactions begin with the signing of this document and it sets forth the rights and responsibilities of the buyer and seller for the remainder of the transaction. These rights and responsibilities are the essential terms of the contract and identify the following information:

  • Purchase price
  • Closing date
  • Paperwork each party must provide
  • Specific details about the sale of the property

Plans for inspections, repairs, and many other agreements between the buyer and seller will also be part of the contract. Because the real estate contract is so essential to the legal transfer of property, it is imperative that both parties utilize their legal right to an attorney review.

Attorney Review Period

The state of New Jersey allows for a 3 day attorney review period to begin after a contract of sale has been signed by the buyer and seller and a copy has been delivered to both parties. This 3 day period allows both parties ample time to retain a real estate attorney who will review the contract. The attorney will either accept/approve the contract as-is, make changes to it, or cancel it all together.

If there are changes to be made to the contract, the attorney must send a disapproval letter to the other party’s attorney for review within the 3 day review period. At the end of the allotted time period, if the contract has not been disapproved or canceled by either the buyer or the seller, both parties are henceforth legally bound by the contract.

Beware of “Legalese”

Taking advantage of the attorney review period is important for both buyers and sellers. While all real estate contracts in NJ must be written in “plain language,” the fact remains that some confusing legal concepts (legalese) will make their way into virtually every real estate transaction. Working with an experienced real estate attorney can ensure you are getting the best advice on the ins and outs and specific legal language of real estate law. You do not want to find yourself bound to a contract that includes terms that you never fully understood. The attorney review period gives you time to work closely with your attorney so that you have a solid grasp on your rights and responsibilities as set forth in the contract.

 


 Realtors are not legally permitted to give legal advice to either party engaged in a real estate contract.

 

Contract missing the Attorney Review Clause? DO NOT SIGN.

Real estate contracts will differ from realtor to realtor. Some may not even include an attorney review clause. It is important to know that in New Jersey, the attorney review period is your right as a buyer or a seller in a residential real estate transaction. If the contract does not include an attorney review clause, do not sign the contract until it has been reviewed by your attorney.

Veitengruber Law has extensive experience working with clients in the attorney review process. We know how intimidating, nerve wracking (and at times overwhelming) it can be to buy or sell a home. Our goal is to ensure that your rights are protected so you can make clear-headed, informed decisions during the real estate transaction process. Reach out to us for help at any time during your NJ real estate transaction!

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What are the Rules for Filing for Bankruptcy Twice?

rules for filing for bankruptcy twice

Despite the myths and fears surrounding bankruptcy, people who have successfully filed for bankruptcy understand that it can be an excellent legal tool to help individuals and families get their financials back on track. But what happens if you are still struggling after bankruptcy? If the deficits that led to the original bankruptcy are still impacting your finances, you need to know the rules for filing for bankruptcy twice. While less common than a single filing, multiple bankruptcies do happen to some people. Here, we will discuss what you can expect, how the process will work, and common mistakes to avoid.

Time Limitations

The first thing to keep in mind is that there are specific time limitations. If you have previously filed for bankruptcy, you cannot file again “whenever you want.” In fact, when you can file again will depend on the type of bankruptcy you filed previously as well as the type of bankruptcy you plan to file now. Different timelines apply to different types of bankruptcies and even depend on the order in which they were filed. It should also be noted that these time limitations begin from the date you last filed.

Most individuals file for bankruptcy under Chapter 7 or Chapter 13. A chapter 7 bankruptcy liquidates all debt. Approval is dependent on specific income requirements. Chapter 13 bankruptcy is a reorganization of your debt to create a more manageable repayment plan. In NJ, you can only file for Chapter 7 bankruptcy once every eight years. However, the rules are more lenient with Chapter 13 bankruptcy. NJ residents are allowed to file for Chapter 13 bankruptcy every two years. In order to file for a second Chapter 13 bankruptcy, you will need to prove you can afford the proposed repayment plan.

Exceptions

After filing for bankruptcy under Chapter 7, you must wait at least four years before you can file for a subsequent Chapter 13 bankruptcy. If you have filed Chapter 13 bankruptcy, you will need to wait six years before you are eligible to file for Chapter 7 bankruptcy, except in the below situations:

  1. You filed for Chapter 13 bankruptcy and 100% of your unsecured debt was paid.
  2. When you filed for Chapter 13 bankruptcy, at least 70% of your unsecured debt was paid, the bankruptcy was negotiated in “good faith,” AND you can prove you made a dedicated effort to paying off your debts.

The outcome of your previous case will also impact your current bankruptcy filing. If your previous case was dismissed before it could be successfully discharged, you will be able to file again. The time frame for when you can file again will depend on the reason for the dismissal. If you were dismissed because of failure to obey a court order, failure to appear in court, or due to a voluntary discharge, you will need to wait 180 days before you file again.

Automatic Stay

Filing for a subsequent bankruptcy will also change the way automatic stay works with your case. Normally, an order of automatic stay from the court will block all actions by creditors against you for the entirety of the bankruptcy process. If you file for a second bankruptcy after having a Chapter 7 or Chapter 13 case dismissed within the past year, the automatic stay will only be in effect for 30 days. This 30 day automatic stay can be extended in a Chapter 13 case – but only if you file specific paperwork with the court. The judge must approve this request and will likely only do so if you can prove that you’ve had a significant financial improvement in your life since the previous dismissal. If you have two bankruptcy cases dismissed within one year, there will be no automatic stay.

Getting the details right when it comes to the timing and other rules related to multiple bankruptcies can be difficult, but we are experienced in handling even the most complex of cases. Our team of bankruptcy experts is laser focused on helping clients make well-informed decisions that will ultimately result in a much-improved financial future. We will work with you to develop a customized bankruptcy plan that works best for your specific circumstances.

5 Credit Repair Hacks that Actually Work!

credit repair

People often don’t realize the value of good credit until they really need it. Typically, it’s when they attempt to buy a house or open a new line of credit that people realize their credit score isn’t quite up to par. When that happens, the gut reaction is to race to fix their credit quickly. The good news is that raising your credit score is possible, regardless of your financial situation. However, this is a process that often takes time. Rebuilding a poor credit score can take months or even years.

Use these hacks to repair your credit score:

1. Pay Down Your Balance(s)

One of the best ways to raise your credit score quickly is to pay off a significant amount of your debts. Don’t just throw money at credit cards blindly, but be strategic about how you pay off your debts. A good way to do this is to look at your credit utilization ratio. This is the amount of credit you have used against the amount of credit you have available.

Example: if you have a $2,000.00 balance on a card with a limit of $5,000.00, your utilization ratio is 40%. Most experts suggest keeping your credit utilization ratio under 30%. If you are trying to increase your credit score quickly, you will want to pay off the cards where your credit utilization ratio is above 30% first. One of the best ways to do this is to make two payments a month. If you can swing it financially, making one extra payment a month can quickly reduce your overall debt and your credit utilization ratio.

2. Raise Your Credit Limit

Since we know your credit score is partly based on your overall credit utilization ratio, a quick way to lower that ratio without reducing debt is to see if you can increase your credit limit. In using the example above, if you have a $2,000.00 balance on a card with a limit of $5,000.00 (40% utilization ratio) and your creditor increases that limit to $6,500.00, your new utilization ratio will be at a more desirable 30%.

There are some important caveats when using method. You know yourself best: if you have trouble with overspending, this might not be the best choice for you. Also, if you have missed payments or have seen a steady decrease in your credit score lately, this will likely not work for you. In these instances, your credit card issuer may see the request for more credit as a sign that you are having a financial crisis. If you are a good customer with on time payments and your score is steady, this could be a good strategy to instantly boost your credit score.

3. Become an Authorized User

When rebuilding your credit, it is difficult if not impossible to get approved for a new line of credit. One way to get around this issue is to enlist the help of a trusted friend or loved one. If this person has good credit, they can add you as an authorized user on their current credit card account. This authorized status will show up on your credit report and boost your score.

IMPORTANT: When tying your credit to another person, you MUST make sure they are responsible first. The ideal candidate is someone who makes timely payments and keeps their balance low. If you tie your credit to someone who makes late payments and carries a high balance, you could end up lowering your credit score.

4. Consolidate Your Debt

There are two different kinds of debt: revolving debt and installment debt. Credit card debt is revolving debt, where the balance changes with each new purchase and payment. The FICO formula that determines your credit score favors installment debt, like loans, because this kind of debt tends to be more stable. Thus, consolidating your credit card debt into a personal loan can really give your score a boost. Personal loans also tend to have a much lower interest rate than credit cards, so you will end up paying less money in the long run.

5. Mix Up Your Credit Portfolio

Having a wide array of different kinds of credit is a good way to boost your score.  If you find you only have credit card debt, taking out a personal loan or a car loan isn’t a bad idea. While your credit mix is only 10% of your total score, diversifying your credit can give your score that extra boost it needs to go from “fair” to GOOD. It should be noted that this is a long term approach to better credit and should not be used by those who need an instant boost for an impending big purchase or financial change.

These tips and tricks can give you the boost you need to finally achieve excellent credit. If you are struggling to manage your debts or get your credit score where it needs to be, the team at Veitengruber Law can help. We offer personalized credit repair options to fit your financial needs.

 

How to Buy a Home After NJ Bankruptcy

NJ bankruptcy

Buying a home is at the core of the American dream. The advantages are clear: tax incentives, stability, investment, and being independent of a landlord. Since the housing market crash of 2008, banks have become much more scrutinous of potential homebuyers’ credit history. Do you have to give up on your dream of home ownership if you’ve had a NJ bankruptcy discharge? You may be surprised to learn that owning a home is a real possibility.

In chapter seven bankruptcies, an individual’s assets are liquidated and used to repay their debts, with any remaining debts are discharged, or cleared. This will give you a clean financial slate to start over with. In a chapter thirteen bankruptcy, you can keep some assets but you will have to abide by a payment schedule for repaying your debts over three to five years. After the time period is over, your remaining debts are often dismissed. There are several different types of home loans that have different requirements for post-bankruptcy discharge.

New Jersey Housing and Mortgage Finance Agency (NJHMFA) Down Payment Assistance (DPA)

If you are a potential first-time home buyer you may want to look into the NJHMFA Down Payment Assistance program. It provides $10,000 towards a down payment and/or closing costs. The DPA is considered a second loan with no interest or payments. Once a buyer has lived in their home for five years, the loan is considered paid. There are several qualifications that must be met in order to participate in the program:

  • You must wait 24 months after chapter seven or chapter thirteen bankruptcy discharge.
  • You need to have a FICO credit score of 620 or above and meet debt-to-income requirements.
  • Only homes purchased in New Jersey are eligible.
  • The DPA must be paired with an NJHMFA first mortgage loan which is a 30-year fixed interest, government-insured loan through participating lenders.
  • The property must fall below purchase price limits.
  • The borrower’s income must fall below limits of 140% of median area income.

Qualifying for $10,000 interest-free is a huge incentive to acquiring an NJHMFA loan. After your bankruptcy discharge you can work towards meeting these requirements and getting your credit score above 620.

Federal Housing Authority (FHA) Loan

If you’re not a first-time home buyer or don’t otherwise qualify for the NJHMFA loan, an FHA loan is your next best bet. An FHA loan is a government-insured loan which has less requirements than conventional loans.

In regards to chapter seven filings, you’ll need to wait two years after the date of discharge (with a notable exception). If you can prove that you filed for bankruptcy due to no fault of your own, you can apply for a twelve-month exception. These circumstances may include illness, divorce, or theft. You will also need to demonstrate responsible financial behaviors in the months following the discharge.

Chapter thirteen filings require ongoing payments for three to five years so if you wish to purchase a home during that time, you will need to involve the court in your loan application. This is where a skilled bankruptcy attorney like George Veitengruber can assist you and present your purchase in the best possible light. First, you must make twelve months of payments to creditors. You will need to show the court that the reason you filed for bankruptcy was an anomaly.

Conventional Loans

Conventional home loans have tougher requirements for post-bankruptcy home buyers. Both chapter seven and chapter thirteen bankruptcies require a waiting period of 48 months after discharge to apply. In the exception of bankruptcy that was beyond your control, the waiting period can be reduced to 24 months. A conventional loan requires a twenty percent down payment on a property. Down payments of less than twenty percent are subject to mortgage insurance, which can be removed after the 20% has been paid. Conventional loans also traditionally require a higher credit score than an FHA loan.

The good news is that bankruptcy does NOT mean the end of your financial independence. You can rewrite your story and craft your new future. Since each of these loans requires a waiting period, take that time to plan carefully rebuild your credit so that you can embark on your new home purchase with a solid financial foundation.

Common Reasons Banks Reject NJ Short Sale Offers

nj short sale, nj short sale attorney

There is a lot of ambiguity in the world of short sales. During the whole NJ short sale process, no one knows if an offer will be accepted or rejected from the bank except the bank itself. Short sales require complex documentation and listings can be misleading—not every property advertised as a short sale is a short sale. When listing agents advertise a property as a short sale, sometimes they are just hoping the bank will take a low offer. Because of the abundance of uncertainty involved in short sales, it is important to know the top reasons most banks cite as reasons for rejecting an offer.

Despite common belief, a seller does not have to be in foreclosure or bankruptcy for a short sale to occur. If the selling fees on top of the remaining mortgage are enough to put a seller under water, the sale of any property can proceed as a short sale. However, banks almost always require a ton of documentation before they will consider a short sale offer. While a NJ real estate agent who has experience handling hundreds of short sales could probably tell you if a bank will accept or reject an offer, it can be an arduous task for real estate agents unfamiliar with the process.

To give your offer the best chance of getting accepted, pay attention to these common reasons banks decline short sale requests:

The Price Is Too Low

The listing price of a short sale has little bearing on the price a bank may or may not accept. Often, listing agents will try to keep the list price low to attract more interested buyers and competitive offers. A bank, however, will not accept a list price that is too low—even if the seller accepts the offer. Banks can request one or multiple appraisals to determine the value of the property. It is helpful for the short sale agent to submit a comparative market analysis to justify the price of a potential offer. No matter what, the final sales price of the property is completely at the discretion of the bank. If they think they could make more money through foreclosure proceedings, they will reject the short sale offer.

Documentation Is Incomplete

Without every single required document, the bank will typically reject a short sale offer. A short sale package is a complex series of documents and even one mistake on any of the paperwork can cause a bank to reject the short sale. This is why working with a New Jersey law firm experienced in short sales (alongside your NJ realtor) can save you a lot of headache down the road. Be aware that banks are notorious for losing documentation. Keep copies of every document you provide in the event your paperwork gets lost.

The Buyer Does Not Qualify

Just because a buyer is motivated and can afford a mortgage does not mean they are qualified to purchase a property. The bank will look at the buyer’s credit history, employment history, debt, and evidence of sufficient assets. Buyers will need to have evidence of a loan prequalification or a loan pre-approval letter included in their short sale paperwork.

The Seller Does Not Qualify

If the seller is seeking debt forgiveness, the bank will need to receive sufficient evidence from the seller that they truly are unable to pay back the shortfall difference due to financial hardship. The seller typically stands a better chance of getting the short sale offer accepted if they are able to work with the bank to create a repayment plan. If the bank determines the seller does not have sufficient evidence of financial hardship, they may reject the short sale offer.

Our team at Veitengruber Law has years of experience helping clients negotiate real estate sales and complex short sales. We know what banks want to see in a short sale offer and will work with you to create an offer that has a high chance of being accepted. Call us today at 732-852-7295 for your free consultation and to start discussing your real estate plans.

What if I Can’t Pay Back my Personal Loan?

personal loan

Personal loans, unlike student loans, mortgages, or auto loans, can be used for almost anything. If approved, you receive a lump sum that must then be paid back in monthly installments. From big purchases to home renovations to consolidating debt, a personal loan can be a useful financial tool. But sometimes, as with anything else, “life happens.” Unexpected financial difficulties like a pay cut or medical expenses can disrupt even the most carefully planned budget. When a financial set-back occurs, it can be difficult if not impossible to keep up with bills and payments. Often, it is loans and credit cards that are the first payments to be put off. What do you do if your situation has changed since being approved for a loan and you can no longer make payments on your personal loan? Today we’ll give you a few examples of steps you can take to remedy the situation.

While most people are reluctant to talk to their lender in the event of a financial set-back, this is often the best thing you can do. In fact, most lenders will respect a proactive approach to handling the situation and appreciate your dedication to paying back the loan. The sooner you make your lender aware of the problem, the more likely they are to work with you. On the other hand, simply ignoring missed payments can result in an accumulation of late fees, collection efforts, a drop in your credit score, and even default. If there is a valid reason you cannot make the payments, your lender should understand and work with you to find a mutually agreeable solution.

Once you have taken steps to make your lender aware of your situation, they may be willing to revise the terms of your loan to make monthly payments more manageable for your new financial circumstances. Lenders who are willing to negotiate will look at your expenses, other debts, and income to determine a more realistic monthly payment. So while the total principal of the loan will remain the same, payments can be made more affordable. The solution might even be as simple as changing the monthly due date of the payments to a time when it does not conflict with other bills. You may even be able to negotiate a deferment on your payment—it doesn’t hurt to ask!

If your lender does not work with you to revise the terms of your loan and is still demanding on-time payments, you will have to find different ways to make the payments. Consider areas in your budget you could cut back on, even if it is only until you’ve paid back the loan. Determine which expenses are necessities (like food, utilities, transportation to work, etc.) and which are extra. If it is possible, try selling high dollar items, like a second car. You may even consider doing side work or getting a part-time job to help offset the cost of the loan payments. Explore all of your budget-revising options to avoid missing payments.

In the event you still cannot afford to make the payments on your loan, don’t assume all hope is lost. When you’ve done all you can do to remedy your finances and you’re still struggling, it is time to reach out for professional help. At Veitengruber Law, our team of experts has years of experience dealing with difficult lenders and assisting borrowers in getting back on the right financial track. We will negotiate with lenders on your behalf to find effective solutions for real financial relief.

We understand that not every debt problem is the same and we will work diligently to come up with a customized solution for your specific situation. Bankruptcy is not the only solution to unmanageable debt, although it may be the best solution for your circumstances. Our team will perform a holistic financial analysis to help you make informed choices about your financial future.

NJ Estate Planning for Small Business Owners

NJ estate planning

No one wants to plan for their untimely death. It’s a terrifying prospect that your family could be suddenly left without you. However, planning for your estate is an important part of being an adult. You need to designate what happens to your possessions and who will care for your children. What most people don’t realize is that planning for your business is just as important, if not more so. With careful planning, small business owners can ensure that their business endures and will help support their families for years to come.

Succession Planning

What is your plan for your company’s future without you? Do you want to pass on your business to your family to continue to run or do you want to make it easy for them to sell it? Do you have a plan for your employees and have you ensured that their futures will be safe without you? These are just some of the questions to consider.

Your family may not want to continue in your footsteps and these are conversations you will want to have with them before you start planning. While starting and growing your business may have been your dream, it might not be theirs. Make sure that if you plan to leave your business in the family that it is not a burden for them after you’re gone.

Death and Taxes, the Two Certainties in Life

Tax law is ever-changing and it is important to modify your plan accordingly. The good news is that New Jersey’s law recently changed and no longer imparts an estate tax (also known as the death tax) on deaths occurring in 2018 and afterwards.

New Jersey does still impose an inheritance tax, but close relatives such as parents, grandparents, spouses, and children are exempt. Other relatives will be subject to the inheritance tax which can range from eleven to fourteen percent depending on the amount inherited. These relatives can include siblings and spouses of deceased children.

There is good news when it comes to the federal estate tax as well. Businesses valued at less than 11.4 million dollars are exempt from the tax. Most small businesses fall under this valuation. If your business does meet this criterion, there are several actions you can take to minimize your tax exposure. You can develop a family limited partnership or divide the estate into several trusts depending on the size of the business.

Life and Disability Insurance

These two policies are essential for ensuring that your family and business continue to thrive without you. First you want to set up policies that will benefit your family. Then you will need policies that benefit your business. The payouts from the policies will enable the business to continue to operate during the transition between owners, enable payments to estate taxes, and/or buyout from other owners and partners in the business. Term life policies are expensive but the alternative is leaving your family and business without a safety net.

Keep Updating Your Plan

Approximately thirty percent of small business owners have no estate plan. Among those who do have a plan, the majority are over five years old. If your business is growing, your estate plan may no longer match your needs and it most certainly is not taking advantage of the ever-changing tax code. Once established, you should review and update your estate plan every three to five years. This is why it is so important to enlist the help of an experienced estate planning team like Veitengruber Law. We can help you create your last will and testament and other documents pertaining to end of life like power of attorney, living will, succession plan, and estate plan. With careful planning, you can ensure the success of your business and the security of your family in the future.

How will my Spouse’s Debt Affect me?

When you meet someone new, finding out their credit score is typically not your go-to first date conversation starter. In the whirlwind of new romance, money matters tend to remain ignored. It is often much later in the relationship—after a couple has already become financially entwined through marriage or the sharing household bills—that financial issues come to the surface. You may be surprised to find out your spouse has accrued a substantial debt that you had no idea about. When facing this startling new information, it may be difficult to know how to move forward with your partner. Here are some tips to dealing with a spouse who has debt.

1. Hold Off On Making Judgements

In situations like this, emotions can run high. You may feel lied to or betrayed by your partner for concealing their debt. Breathe through your initial reaction. When people feel attacked they tend to shut down or become defensive. Keeping an honest, open space for communication with your spouse will allow you to move forward to fix this problem together. This also goes for making judgements about their current financial choices. If you see your spouse making consistent efforts towards paying off a debt, don’t chide them for their purchase of a new pair of shoes. Paying off debt is a process that you cannot expect your spouse to complete overnight.

Keep in mind that debt accumulates for many reasons and a past debt does not necessarily mean your partner cannot be financially responsible now. Maybe they were overzealous with their first credit card or are struggling with student loan debt. Unemployment, divorce, and medical expenses can also add up quickly. Don’t judge too harshly until you have the full picture of your spouse’s debt.

2. Get the Details

The amount of debt your spouse has makes a difference, so it is important to know the exact number they are currently working to pay off. How your partner is paying off the debt matters, too.  Is the repayment situation short term (over a year or two) or long term (5-20 years)? If it is a long term repayment plan, you can expect this debt to impact your life together for years to come. This is also the time to check your spouse’s credit report with them. This will give you the full picture of any late payments, high balances, legal judgements, or bankruptcy filings they may have.

3. Know When You’re Liable

Many people assume that once you get married, you automatically take on your spouse’s past debt. This is not true. Your credit histories will remain separate for any debts or financial troubles that occurred before your marriage. New Jersey is a common law state, meaning that even after marriage you’re only responsible for debt accrued in your name.

This changes once you open joint accounts, apply for joint credit, cosign on loans, or include your spouse on an account as an authorized user. These actions will show up on your credit report and you will be responsible for the debt. If at any point your spouse cannot make payments, even if it is on debt they personally accrued (after the date of your marriage), you will be responsible for the full payment of the debt.

4. Decide How You’ll Make Purchases Going Forward

Your spouse’s debt, and its impact on their credit score, may make it difficult for you to make big purchases together for the duration of the repayment period. Depending on how much debt they have and how low their credit score is, you may be looking at taking on the full weight of big purchases for awhile. You may be hesitant to apply for joint credit, cosign, or add them as an authorized user on your accounts. Have an honest conversation about how you will make big purchases together going forward.

At Veitengruber Law, we know the stress of large debt can create a lasting impact on marriages and families. Our experienced legal team can help you sort through the debts and create a future path that looks bright. Our comprehensive approach to resolving debt problems can help relieve the stress on you and your spouse.

 

 

Can a NJ Bankruptcy Forgive Gender Reassignment Surgery Debts?

NJ Bankruptcy

Bankruptcy is one of the more maligned aspects of the law. Unfortunately, some people feel like bankruptcy means they are a financial failure. But the truth is that bankruptcy can be a true lifeline when all other options have been exhausted. People on the brink or already in financial ruin can be given a clean slate and a chance to start over.

One specific group of the population for whom mounting debt is a real problem are those undergoing gender reassignment surgery. In some cases in NJ, gender reassignment surgery can be covered by health insurance when deemed medically necessary. However, even if a patient’s plan does cover the surgery, the costs can still be overwhelming. The process can span over a few years, and includes ongoing treatment including hormone therapy. Many gender reassignments require multiple procedures and/or surgeries as well.

Many aspects of a person’s transformation are considered “cosmetic” by health insurance companies and are therefore not covered. Some of these include voice alteration, jaw reduction, chin implants, hair removal, lip reduction, pectoral implants, and more. The costs can quickly spiral out of control. Medical bills can easily cripple your finances and declaring bankruptcy may be the only viable solution.

 

What Chapter Is Right for You?

It’s important to have a lawyer on your side who can help you navigate the confusing differences in the various bankruptcy filings. Veitengruber Law can guide you through the process of determining which chapter will be right for you and your future financial health.

Individuals can file for New Jersey bankruptcy in one of two ways: Chapter 7 or Chapter 13. There are important differentiations between these two types of bankruptcy and it’s important to choose the right one for your unique situation. If the medical bills from gender reassignment surgery are your chief debt, you can find relief through debt discharge in both of these filings.

 

The First Step

Before any individual may file for either Chapter 7 or Chapter 13 bankruptcy, they must receive credit counseling from an approved non-profit counseling agency within 180 days.  Veitengruber Law can assist you in this process. We can help you choose an agency that qualifies, that will work with you on the fees if necessary, and that will be the most beneficial for your financial education. The main objectives to the credit counseling are to instruct you on how to remedy your current poor finances and how to achieve and maintain financial health.

It is entirely possible after credit counseling to discover that filing for bankruptcy isn’t actually necessary for your situation. You may be able to work out payment plan(s) or pay negotiated sums to pay off your medical debts. In addition to your medical debts, you can naturally include other non-medical debts within the same bankruptcy. Some creditors will be more willing to accept reduced balances if they are aware that you are beginning bankruptcy procedures. To them, a portion of repayment is better than discharged debt, which will mean they end up with no payment at all. If, however, you are unable to come to a solution after attempted negotiations, bankruptcy may in fact be the best course of action.

 

Chapter 7

If you don’t own property or many assets, this may be the course for you. In Chapter 7 cases, the debtor’s assets are given to a trustee who sells them off to pay your creditors. Certain personal property is considered exempt, however it is important to know the rules specific to your state. There is a list of federal property exemptions and NJ state exemptions. You can choose which list you are going to use, but you cannot use both. That is why consulting with a local bankruptcy attorney can be the difference in saving thousands of dollars of lost property. If you have no personal property to liquidate, it can still be possible for you to file for Chapter 7 with the help of an experience New Jersey bankruptcy attorney.

After your assets are liquidated and creditors paid based on priority, the remainder of your debts will be discharged – with certain exceptions – like student loan debt.

 

Chapter 13

Chapter 13 bankruptcy is that it gives the debtor a chance to reorganize. The petitioner must file a plan of repayment to creditors that will usually take place over a period of three to five years. After the repayment period ends, the debtor will receive a discharge of the remaining debts. The key difference between Chapter 7 and Chapter 13 bankruptcy is that in Chapter 13, the debtor remains in possession of their assets. If you own a home or other property, you will want to consider Chapter 13. This is another situation in which a knowledgeable bankruptcy attorney like George Veitengruber is invaluable, because he can guide you to the type of bankruptcy that will be most beneficial for your situation.

 

Post-petition Debts

From the date that you file your claim, any additional debts you incur will not be included in your bankruptcy case. This can be a major consideration in your decision to file if you are trying to clear debts from gender reassignment surgery. Medical bills can be extremely slow to process. Each doctor’s office must bill medical insurance, wait for the claim to process, receive the claim, and then bill the patient. It can be weeks or months from the date of a procedure to when you receive the bill. If you are accumulating debt from multiple procedures, you may want to wait until after you have been billed for all of your procedures and appointments before filing. When you file your bankruptcy claim you will be required to provide a detailed list of all the creditors and amounts due. Any debts that are incurred after the date your petition is filed, will not be discharged and you will be responsible for paying them back.

Undergoing a major transformation like gender reassignment is a life-changing experience. If you need to go through bankruptcy proceedings, don’t be intimidated.  George Veitengruber is an experienced attorney who can guide you through the process every step of the way: seeking credit counseling, negotiating credit balances, choosing the right chapter, maximizing your property exemptions, minimizing your post-petition debts, and making sure much of your debts are discharged, including medical debt from gender reassignment surgery.

What Should my Budget Look Like After a New Jersey Bankruptcy?

New Jersey bankruptcy

When overwhelming debt and missed payments start to control your life, bankruptcy can offer a fresh start to begin rebuilding your finances. It is important to take advantage of this clean slate by doing everything in your power to learn from past financial mistakes and create better habits for your future. Debt can accumulate from overspending, a medical emergency, or the loss of employment or income. No matter how you found yourself in debt and filing bankruptcy, there are steps to take to make sure it doesn’t happen again. One of the best ways to become more aware of your finances and prepare yourself for unexpected expenses is to create a household budget.

A household budget will allow you to track your spending and find opportunities to build your savings. Every budget will look different for every household, which is why you need to make sure you are creating a realistic budget that works for your household. Learning how to use this helpful tool will help you manage your money and bounce back fast after bankruptcy. Here are some steps to creating a household budget while recovering from bankruptcy:

1. Track Your Expenses

Take the first thirty days after bankruptcy to track how much money you are spending and what you spend your money on. The best way to do this is to create a spreadsheet listing different categories of expenses and then tracking these expenses throughout the month. Make sure you include every purchase you make to ensure you are getting the most holistic view of your finances. After you spend one month tracking your expenses, subtract your total expenses from your total monthly income.

2. Adjust Your Spending Habits

What are the results? Pay attention to where your money is going. You should never be spending more than you earn in a given month. If you have more money going out than coming in, it’s time to figure out where to make some spending cuts. You should start by determining which expenses are essential, like groceries and utilities, and which expenses are not. Start cutting back on any non-essential expenses.

3. Allocate Your Income

Once you know where your money is going and where you can start to make some cuts in spending, it’s time to figure out how you’re using your money. The best way to do this is to determine what percentage of your monthly income goes to specific expenses. For instance, if your monthly income is $4,500 and you spend $1,000 a month for your mortgage payment, you’re spending 23% of your monthly budget on your house. Here are some suggested percentages to compare with your budget:

  • Medical: 5-10%
  • Housing: 25-35%
  • Transportation: 10-15%
  • Savings: 10-15%
  • Food: 10-15%
  • Utilities: 5-10%
  • Insurance: 10-20%
  • Recreation: 5-10%

These percentages are only meant to serve as rough guidelines and they will not work with every household, but this is a great jumping off point for creating your household budget. If you find your spending in the above categories is significantly higher than recommended, you may want to start cutting back on those costs.

4. Finalize Your Household Budget

Based on the above information, you should be able to create a monthly budget that works for your household. Continue to track your expenses to keep yourself accountable for your spending and to make sure your budget is realistic. Staying aware of your spending habits will help prevent former bad habits from resurfacing. Pay specific attention to growing your savings and emergency funds. These financial reserves can really save you in the event of an emergency.

At Veitengruber Law, we know that life is unpredictable and rarely goes according to plan. A monthly budget can’t account for everything life will throw at you, but it can help you prepare for unexpected life events and sudden expenses. Creating a household budget will help bring some stability to your financial status and ensure you can weather the set-backs. If you need help making your post-bankruptcy budget, we can help!