How Can an Attorney Help me Get out of Debt?

If you find yourself saddled with more debt than you can comfortably pay back in a timely fashion, it may be time to consider seeking professional counsel to help you resolve your debt in a manageable way. An attorney is often a good place to start, even if you’re unsure if your debt is serious enough to warrant professional help. A qualified attorney will be able to determine if and how they can be of assistance to you during a private consultation.

Learn your options

For starters, you need to find a NJ-certified attorney you are comfortable with disclosing your unique financial information to, including all of your debts. Whether you’re drowning in six figures of debt, or simply have a few unpaid medical bills, your attorney will need to know the scope, nature and sum of your debt to determine if you may be a candidate for any reputable debt consolidation programs, whether it’s time to consider bankruptcy, or, if they may be able to negotiate a lower debt repayment rate with any debt collection agencies pursuing payment from you. Debt collectors do appreciate when you reach out and demonstrate a good-faith effort to consistently pay on time, even if you cannot afford to pay the minimum required amounts.

Debt repayment negotiation

If you have something like past due medical debt, it may be easier to negotiate a lower rate, as oftentimes hospitals are able to write off at least a portion of the debt and use a sliding scale to determine whether or not a patient is eligible for financial aid. Do you have childcare, child support or other necessary expenses? Have you demonstrated a consistent effort to chip away at your debt even if you cannot afford your monthly minimums? An attorney will be able to better negotiate with your debt collector on your behalf. While many debt collectors can be heartless and ultimately do not care about any of your other financial responsibilities other than the debt you owe to them, your attorney has a good chance of arguing successfully on your behalf and ultimately negotiating a pay-back plan you can realistically afford.

The B-word

If your debt is truly beyond your financial ability to realistically pay back, it may be time to consider a more drastic solution like bankruptcy. While bankruptcy can sound like a scary word, it need not be as daunting and overwhelming as it sounds. An attorney will be able to walk you through every step of the process and explain how bankruptcy may impact your life going forward. With careful planning, bankruptcy may not be as painful of an experience as rumor would have it. It will not hinder you financially for the rest of your life, however you can expect some changes to your immediate financial future.

Life after bankruptcy

However, there is a light at the end of the tunnel. You will be taught how to bring your score back up even higher than what it was pre-bankruptcy, which is possible in just 12-18 months. There are some fairly straightforward steps you can take to start rebuilding your credit, even during bankruptcy proceedings to get on a better financial path. An attorney can steer you in the right direction, and if necessary refer you to a financial planner who has experience in budgeting, credit building and other financial planning skills to set you up for success once your bankruptcy has been fully discharged. There is no time like the present to get established on the right path to a debt-free future.

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How To: Overcome Financial Stress and Get Your Finances in Order

Before the Great Recession, financial stress was the number one worry of over 70% of Americans. Since the Great Recession, money issues have become increasingly depressing for some people. With the loss of a job or a decrease in income, many people can have a prolonged stress that sits like a ton of bricks upon their shoulders. This chronic financial stress is extremely detrimental to the body, and you will begin to affect the lives of those around you. Before you know it, you may start to rely on bad habits to relieve your stress. How can you get a foot in the door of overcoming your financial stress and straightening out your money matters? Well, it obviously doesn’t happen overnight, but if you keep reading, you may gain some insight as to how you can begin.

Setting Goals. 

Though you can’t control all of your circumstances, you can initiate steps towards improving them. One of the most important first steps is setting a goal. This might sound simple, but that’s because it is! Before you can even think about your goals, you need to take a step back and review your finances. Doing this on a monthly basis could be beneficial for you, and don’t forget to check out your budget to know where exactly your money is being delegated.

Once you’ve had a chance to look over and get really familiar with your debts and income, set some goals. We are always setting goals in life – (financial, fitness, education, etc) and this goal is just like the others. It should have a purpose and a particular plan of action that will help you to attain the goal. Rather than setting a broad goal, attempt to set specific goals. Maybe your goal is to have $5,000 in your bank account within the next 2 months. You can break that broad goal down into smaller goals, like making yourself more valuable to your employer or improving your business plan. No matter the goal, review your financial state, set a goal, and clearly define the parameters and steps needed to reach it.

Make it measureable.

As covered in the last paragraph, clearly defined goals will be of more benefit. A goal such as “having a lot of money” does not have clear parameters. Some financial professionals suggest keeping 3-6 months of expenses in your bank account. Rather than setting a goal of “I want to always have 6 months of expenses in my account, sit down and put an actual value to that 6-month amount. This will focus your mind on a specific number instead of a vague sum.

Realistic and Reachable.

When you are setting your goal, it’s crucial to ensure that it’s one that you can actually attain. If you don’t have a good chance of reaching the goal, what was the point in setting it? Since you’ve already reviewed your finances and budget, you know whether or not a goal is realistic. If the goal is realistic, in your mind, you know that it’s attainable. Maybe your goal is adding $500 to your savings account each month. If you’re currently struggling to pay rent and have a low income, that goal may be a little out of reach. Work with what you have.

Deadline.

If you have no time limit on your goal, it might take you forever to reach it, which in turn makes setting the goal a waste of time. Part of defining a goal is listing a deadline so that you are able to separate your one big goal up into smaller chunks. Focusing on reaching your goal week to week can be mentally easier than seeing a huge number in front of you and stressing about how to climb that mountain.

Financial stress can take a toll on your mental, physical, and emotional state, which is why it’s so crucial to alleviate at least a small portion of that worry. Now that you have a few pieces of advice on how to overcome your financial stress, don’t wait until you find yourself in a desperate financial state. If you aren’t sure how to go about everything on your own, don’t hesitate to get in contact with a professional debt resolution/credit repair expert. They will be able to help you in setting a proper budget as well as raising your credit score and negotiating with any creditors to whom you may owe outstanding payments.

Pre-Bankruptcy Credit Counseling: Is it Required?

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If you are contemplating or have already made the decision to file for bankruptcy, you may be wondering about the NJ pre-bankruptcy credit counseling course you’ve heard mentioned. Is it required to do pre-bankruptcy credit counseling before filing for Chapter 7 or Chapter 13 bankruptcy in New Jersey? Does everyone have to take the course? What are the stipulations and specifics? Let’s take a look at the nitty gritty details.


When do I have to take the pre-bankruptcy credit counseling course?


Within 180 days of filing for bankruptcy in New Jersey, you must show proof of credit counseling from a non-profit agency that has been approved by the office of the U.S. Trustee. This step is required if you plan to file for bankruptcy. Within 15 days of filing for bankruptcy, you have to file the certificate of completion your credit counseling agency presented you with. Additionally, any suggested repayment plan(s) that you developed with the agency will also be provided so you can present it to your bankruptcy attorney.


Is this really necessary? Who is profiting from this course?


You may be asking, is there more than meets the eye when it comes to pre-bankruptcy counseling? Some debtors are initially suspicious of taking the course, with thoughts like:

  • “Am I going to be charged more money for this course?”
  • “I am already paying a bankruptcy attorney to help me with this.”
  • “Is this just a ploy for the government to make even more money?”

The goal of bankruptcy counseling is to help you determine if filing for bankruptcy is really the right move for you. During the course, you’ll work through your finances with a certified credit counselor. They’ll be able to assist you in deciding if Chapter 7 or Chapter 13 is better for your unique situation, or if you can come up with an informal payment plan to help you overcome the debt without filing for bankruptcy. The repayment plan may not be realistic for you, especially if you have a low income and the bills are too high. You may not want to pay off high credit card debt with inflated interest rates or emergency room bills.

Even if either of the above stipulations in bold describe you, counseling is still required. Typically, the agency will prepare a repayment plan for you based on your income and debt, and then will review your available options for repayment. In the majority of cases, if you don’t have any other options besides filing for bankruptcy, the agency will confirm that no feasible options exist.


I’ll listen to what they have to say, but I’m not going to participate.


You are actually obligated to participate in the counseling, as well. This will be one of your first steps in getting your money mindset turned around. Your counselor will help you begin to formulate a working budget so that you don’t end up in this situation again. Whether you choose to follow the suggested repayment plan or not (if one was proposed during counseling), you do have to include it when filing for bankruptcy.


What kind of agency provides pre-bankruptcy credit counseling?


Here are a few tips when searching for a professional credit counseling agency:

  • Look for a non-profit agency that has at least 7 to 10 years of experience.
  • If you can’t afford the fees, ask around – some agencies are willing to renounce or lessen them.
  • Debtors who make less than 150% of the poverty level for a family of the same size, there must be a sliding scale fee or fees must be waived completely.
  • The agency should be a part of the National Foundation for Credit Counseling (NFCC) or the Association of Independent Consumer Credit Counseling Agencies (AICCCA).
  • It’s important to check with the Better Business Bureau to see what information they have on the agency you’re researching.
  • The agency must be approved by the Department of Justice if you’re specifically in need of pre-bankruptcy credit counseling.

I’m disabled; do I still have to take the course?


Pre-bankruptcy credit counseling is required whether you’re considering filing for Chapter 7 or Chapter 13 bankruptcy. The only people who are exempt from the course are those who are:

  • Currently on active military duty in a combat zone
  • Physically and/or mentally impaired or handicapped so severely that it prevents you from taking the course

If, for some reason, you intended to take the required course but became ill or encountered an emergent situation that prevented you from attending, you’ll need to petition your bankruptcy court to allow you to take the course after your case has been filed. Talk to your NJ bankruptcy attorney about this, if this situation arises.


What do I need to do to prepare for the credit counseling course?


Make sure you are knowledgeable regarding your current financial state before attending counseling. If you have already met with a bankruptcy lawyer in NJ, you can ask what they recommend you have with you when you begin the course. In short: anything you’d share with your bankruptcy attorney is applicable and should be mentioned and discussed during your credit counseling course.

It’s crucial to be mentally present during your credit counseling (avoid going on “auto-pilot” or “zoning out”) because it will help you reach your goal of climbing out of debt. Not only is it a practical way to deal with your debt outside of bankruptcy, but it can also help you to avoid adding even more debt to what you already owe.

Remember: your NJ bankruptcy attorney can assist you with setting up the pre-bankruptcy counseling course, as well as help you get all of your financial paperwork and information organized prior to attending so that you’re prepared. This will allow you to get the most out of the assistance the counseling will offer you.

Image: “Pieta House” by Joe Houghton – licensed under CC 2.0

Applying for and Refinancing a NJ Home Equity Loan

 

Do you have a brilliant idea for a new house project?

Have you been trying to figure out how to pay for the new roof you’ve needed for a few years?

If you’re nodding your head, a home equity loan (HEL) or a home equity line of credit (HELOC) may be the answer you’re looking for.

A home equity loan can provide you with access to a large amount of money with which you can complete a project with the added benefit of borrowing against the value of your home. A home equity loan is essentially a “second mortgage,” with your first mortgage being the one that you used to purchase your home.

Because this kind of loan is locked in by your house, a home equity loan can be relatively easy to obtain from a bank or lender. The beauty of a home equity loan is that it can provide funds for virtually anything you want, as long as your home is worth more than you owe (in your first mortgage) – and you’ve built up enough equity.

Home Equity Loan Options: Lump-Sum or Line of Credit

 

A home equity loan as a lump-sum is like any other loan; you attain a large amount of money up front and then pay it back with fixed monthly payments. Your interest rate will be set when you take out the loan. With each monthly payment, the total that you owe on the loan will decrease.

A home equity line of credit works much like a credit card. You’ll be approved for a specific amount of money and then only use what you need. Following approval, you can borrow money in small amounts, but at some point, you’ll need to make larger payments to finish paying off the loan.

Because a home equity loan can offer a fixed and steady repayment schedule, it can be a valuable way to decrease debt or pay for large expenses. If you’re considering completing a home improvement project, a home equity loan could be beneficial, especially since it’s a one-time remodeling project that involves directly investing money back into your house.

Other valid uses for a home equity loan:

  • Paying for a college education (for you or your child)
  • Making a vehicle purchase
  • Eliminating credit card debt
  • Investing in the stock market or real estate

You can also use a home equity loan for any other one-time investment that has value. Additionally, you may want to consider refinancing a home equity loan. If you are looking to decrease your monthly payment or want to lock in a lower interest rate, refinancing would be helpful. In addition, if you want to change from an adjustable rate to a fixed rate or vice versa, you should consider refinancing. While completing the project (or paying for school, etc), you may discover that you need a bit more money than expected, and refinancing could allow you to obtain supplemental funds or potentially extend or shorten your repayment period.

If interest rates have lowered from when you first purchased a home equity loan or if you’ve dramatically improved your credit score, always be sure to check into refinancing. As previously mentioned, if you switch from an adjustable rate to a fixed rate while interest rates are low, you can guarantee that the interest rate will stay that low throughout the rest of the life of your home equity loan.

If you’re considering taking out a home equity loan or refinancing one that you currently have, visit your credit counseling attorney who has your best interests at heart. Here at Veitengruber Law, we can also connect you with trusted lenders with whom we have cultivated valuable professional relationships. From there, you’ll meet with a lending specialist who has experience with refinancing home equity loans.  Refinancing a home equity loan can save you money, provide access to money, and help you reach your financial goals!

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.

 

Fixing Your Credit to be Pre-Approved for a Mortgage Loan

If your credit score is very low (under 500), you may feel like you’ll never be approved for a mortgage. Owning your own home is a life-long dream for so many people, and luckily, it’s not one that you have to give up. You will, however, have some work to do before you will be granted a mortgage loan.

Anyone who is looking to buy a house in the relatively near future should take a good look at their credit report(s). The higher your credit score is when you’re approved, the better your mortgage rate will be. This can save you hundreds of dollars on your monthly mortgage payment. First, request a copy of your most recent reports from each of the three main credit reporting bureaus: Equifax, Experian and TransUnion.

As an aside, it’s wise to take a look at your credit report once a year on a regular schedule even if you’re not in the home-buying market.

Once you have a copy of your credit reports, the first thing on your agenda should be scanning it with a fine-tooth comb to check for any errors. This is the easiest way to give your credit score a quick boost.

If you find any errors (debts that are being reported incorrectly, satisfied debts that continue to show up as unpaid, payments marked as late when you paid on time), filing a dispute with the agency whose report contains the error(s) is the next step. Working with a New Jersey credit repair attorney is a good idea if you have errors and a lot of negative marks on your credit report. Your attorney will negotiate with your creditors, requesting forgiveness for lesser offenses like late payments. This “goodwill letter” is frequently an effective approach to jump-starting your credit repair process.

Once you’re sure that any errors have been appropriately dealt with, the following behaviors will give your credit score further boosts to get it up to your “goal range.” Your NJ credit repair attorney will know how much your score needs to increase in order for you to get pre-approved for a mortgage loan.

Make your monthly bill payments early

Even better, if you can make an extra payment each month on your credit cards with the highest balances, you’ll be able to zap your debts faster.

Create a debt resolution plan

In addition to making more than one payment per month, create a plan to pay down all of your existing debt until it’s gone. The lower your credit utilization ratio, the better.

Raise your credit limits

Related to lowering your credit utilization ratio, you can also request a higher credit limit on one or two of your credit cards. Be careful with this tip, though, and only do this if you have the self-control to keep yourself from charging even more purchases.

Consolidate

If you have more than one card with the same lender, keeping your oldest card active and transferring balances from newer cards (and then closing the newer cards), the overall age of your debt will be older, which looks good to credit bureaus.

If you are diligent about reigning in your spending, paying all of your bills early or on time, and taking the steps listed above, it is possible to boost your credit score 50-100 points in six months to one year. Your results will be dependent on your starting credit score and the type and number of dings currently on your credit report.

Before you know it, you’ll be walking out of your lender’s office with a mortgage pre-approval letter!

How to Invest in Your Future When You’re Broke

If you find yourself “barely” living paycheck to paycheck, the worry of not having any money saved can eat away at you. The concept of planning for future events like sending your kid(s) to college, helping them get married, and enjoying your own retirement can feel impossible when you can hardly afford your current lifestyle.

Although it may seem completely unimaginable, you can make a plan for your future; in fact, strategic financial planning may be the one thing that also helps you live better now as well.

The main reason most people don’t have a real savings plan in place is because they simply feel they don’t have enough money to do so. The change that needs to happen isn’t in making more money (although that is obviously not a bad thing) but in getting a new mindset.

The first step in getting a new money mindset is to change your inner dialogue from “I’m broke! I can barely even pay my bills!” to “Let’s see if I can find ways to improve how I spend money.”

While you may feel that you are barely able to meet the financial demands of your life, most people find that they’re spending too much in at least one area that can be cut back. Take a good, hard look at where all of your money goes for at least one complete month. Write down each and every cent that’s spent, organized into three categories:

  •  Necessary/survival: Housing (mortgage payment or rent), utility bills (electric, gas, water/sewer, trash removal), all forms of necessary insurance (homeowners/renters, car, health, life), food (for eat-at-home meals only), vehicle payment(s), vehicle maintenance, gas.
  • Debt: College/student loans, credit cards, personal loans, and any other forms of debt.
  • Luxury: These are things that, while dearly beloved by many of us, can be eradicated without causing you extreme hardship. Examples include: cable/satellite tv packages, streaming services (Netflix, Amazon, Hulu, HBO Now), high speed internet connection, Xbox Live membership, restaurant meals, magazine/newspaper subscriptions, cell phone(s) and their service plans, gym memberships, satellite radio, hair/nail services, frivolous (unnecessary) purchases like new electronics, expensive clothing/shoes, and other items that you simply don’t need.

Once you have a clear picture of exactly what you’re spending all of your money on, you will be able to create a plan to start saving money – it’s that simple!

Your mindset must remain steadfastly dedicated to saving money in order for this to work, however. See that list of luxury items? You are going to have to decide which of them you can either cut out entirely, or scale back. You will likely be surprised at how many companies will be happy to work with you to lower your monthly bill when you explain your situation. They’d rather keep your business at a lower profit than lose you altogether.

Instead of having your nails painted professionally, invest in the supplies needed to do your nails at home. Listen to the (free) radio in your car or pop in a CD rather than paying for satellite radio. Cut out your cable tv and keep your streaming services. Cancel your gym membership and get outside to exercise or start an indoor workout program – there are a multitude of free exercise videos on Youtube.

Even something as simple as not stopping before work to get a coffee and breakfast on-the-go can make a difference. If you spend $5 every day for a breakfast to-go, you can put that money directly into your savings account by eating breakfast at home. This habit can save you over $1,000 a year!

Another potential way to save money every month is to negotiate your interest rates with any lenders or credit card companies. You may also qualify for a loan modification (even for your mortgage loan) wherein the terms of your loan would be adjusted in order to make your monthly payments lower.

After you have found several good ways to save money each month – be sure to put the money saved into the right place! The best way to make sure this happens is to put a set amount into your savings account before you pay any bills or spend any money. That way you will train yourself to live on the money you have left after you’ve already invested in your future.

 

I’m Being Sued for More Money than I Owe!

Is a debt from your past coming back to haunt you in the present? Although not ideal, sometimes it happens. Perhaps you weren’t making sound financial decisions at that point in your life and accidentally (or intentionally) ignored some past due notices until they just stopped coming.

It can feel like it’s easier to ignore bills when you don’t have the means to pay them. However, the end result is almost always going to be substantially worse than your original debt.

While it can take some companies awhile to take action on smaller debts, the bad news is that your (once) small-ish debt has had a load of time to compound upon itself, rolling around in interest rates, gathering late fees and potentially even picking up attorney’s fees. If your original lender or credit card company has hired counsel to address getting you to pay up, it is possible for them to tack their attorney’s fees on to the amount owed.

What can I do?

Your credit card company is hoping that you’ll get scared by the big number they’re asking for – as you should. If you receive a summons and complaint that says you owe double, triple or quadruple your original debt amount – now is the time to obtain counsel yourself.

How can I afford an attorney if I can’t even pay my debt?

Working with a New Jersey debt settlement attorney on a matter like this is highly unlikely to cost you thousands of dollars. In all likelihood, the right NJ lawyer will have the required negotiating skills to bring the amount owed down to a much more reasonable number – simply by making a few phone calls and/or sending some letters.

Your attorney can then work to coordinate a payment plan that is manageable for you so that you can pay off the (now much lower) balance. The lender/credit card company will almost always be happy to get some form of payment from you as opposed to nothing.

What will happen if my case goes to court?

If, by chance, your credit card company does not want to settle via your credit repair attorney, New Jersey courts will set up a mediation wherein the same kind of talks will take place. A court appointed mediator will work with you and your attorney, along with counsel for the opposing side, to negotiate a resolution that everyone can agree to.

The bottom line is: if you have been served with a lawsuit to collect a debt in a much higher amount than you originally owed, you’re probably not going to get out of paying at least part of the debt unless you file for bankruptcy. If you have the means to pay back the amount that your lawyer negotiates for you, you should do so in a timely manner so that your credit score doesn’t take an even bigger hit.

On the other hand, if you are completely strapped and cannot imagine even one dollar of your debt (and likely other debts that you owe) being repaid, it is definitely time to consider filing for a NJ bankruptcy. This will wipe out a significant amount of your total debt, leaving you much more financially stable, which will allow you to “start over” with a much cleaner slate.

 

Image: “Breaking into your Savings” by Images Money – licensed under CC 2.0

Bankruptcy Law and Family Law: How They’re Connected

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

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

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

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

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

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

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

Image credit: Kamaljith KV

NJ Student Loan Forgiveness & the Brunner Test

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A plausible solution for student loan debt is urgently needed as the dollar amount of outstanding college debt approaches $1.4 trillion. That astronomical number means that student loan debt is now second only to mortgage debt in our country.

Currently, money that was borrowed to pay for college is considered nondischargeable in a chapter 7 bankruptcy. This means that, for most people dealing with (what feels like) crushing student loan debt, there is essentially no way to get out from under what may be $50,000 + in debt.

Has the cost of college gotten more expensive?

The cost of four-year college tuition in New Jersey has increased by 41% in the last decade. Additionally, living on campus at a NJ college or university is now nearly 25% more expensive than it was ten years ago. These numbers are even higher for out-of-state students who attend college in New Jersey.

It now costs NJ students an average of $24,000 for ONE YEAR of college tuition, fees, room & board, books & supplies and living expenses.

With that being said, there are proponents of an idealistic plan for two and four year college tuition to be free. Opponents of this utopian plan believe that offering free college won’t fix the problem because the problem ultimately stems from wages being too low.

What other factors have caused the student loan debt crisis?

There is evidence that the largest group of people who’ve defaulted on student loans are those who are earning the lowest income post-college. Data indicates that some of these defaulted borrowers are struggling because they didn’t finish college, and therefore didn’t obtain a degree. This leads to difficulty finding a job that pays enough for them to pay off their loans. Although there are a few student loan repayment programs that are based on earnings, they need serious improvements if they are to make a dent in what is quickly becoming the “student loan crisis.”

Hopefully there will be positive changes coming to the process of paying for a college degree that enable more people to finish college without being bogged down by debt. Until then, the only way to rid yourself of your student loans through bankruptcy is by demonstrating “undue hardship.”

What is undue hardship?

Relating to student loan repayment, the only reason you may be able to discharge your student debt is if repaying your loans would prevent you from being able to do literally anything else, like pay bills, buy food, etc. In New Jersey, the three part Brunner test is used to determine if a debtor demonstrates undue hardship that is significant enough to justify a discharge of student loan debt.

What is the three part Brunner test?

New Jersey bankruptcy court will require you to prove that the three following statements are true as relating to your finances:

  1. You will not be able to maintain even the most minimal standard of living (for yourself and any dependents) if you have to repay your student loans. The answer to this must be based on your current income and expenses.
  2. There is sufficient evidence to prove that #1 (above) will prove to be true for all or most of your student loan repayment time period.
  3. You have made a good faith effort to repay your student loan(s).

Most courts are fairly strict when it comes to the Brunner test, however, if you feel that you honestly would qualify for a hardship ruling in your favor, it is worth discussing the matter with a NJ bankruptcy attorney. As your initial consultation will be free of charge, you have nothing to lose by making a phone call and learning more about your options.

 

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