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.


Getting Back on Your Feet After Bankruptcy

nj bankruptcy

You’ve finally crawled out of the deep, dark, seemingly unending hole of debt. After this exhausting journey, you’re more than ready to get back on your feet. Many people wonder how exactly how to get back to “normal” after bankruptcy. If you filed for Chapter 7 bankruptcy and your debts were discharged, or you filed for Chapter 13 bankruptcy and you developed a payment plan, you can see the light at the end of the tunnel. Now you have a fresh start, but before you get too excited, you need to be aware that it does take effort on your part to make sure you stay on the right path for good.

The state of New Jersey requires all individuals that receive a bankruptcy discharge to take a debtor education course that focuses on personal financial management. A bankruptcy discharge will not be given unless the debtor completes this class. The course must be done through a certified counseling agency and an Official Form 23 must be filed when the financial management course is finished. If a married couple files for bankruptcy, both individuals must attend counseling and submit an Official Form 23.

Here are a few post-bankruptcy steps you can take that will get you standing on two feet in no time.

1. Make a budget.

The first step is to track your spending for a few months to get an idea of how much you’re bringing in and where your money is going. Once you do this, you can come up with a monthly spending plan based on your income and the tracking results you gathered. It’s important to also become acutely aware of what exactly you’re spending your money on; if it’s mostly necessities, it’s crucial to have money set aside for that, but if you’re still spending significant amounts on unnecessary items, you’ll need to rethink your budget. Discipline in setting boundaries for yourself is vital.

2. Love cash; like credit.

Once you’ve gone through bankruptcy, it might be a good idea to develop the mindset of paying with cash more often than paying with credit. If you allow yourself to only carry a specific amount of cash in your wallet, you will be able to limit your purchases to necessities. On the other hand, there is no reason to fear credit. Following bankruptcy, it’s crucial to reestablish your credit, especially if you eventually want to purchase a house or car. Future employers, banks, and potential landlords will want to be reassured that you have been able to reestablish a decent credit score.

3. Pay bills on time.

Whether the bill is big or small, make sure you pay it on time. If you have bank fees or are bouncing checks, these will show up on your credit score, which can be detrimental to your financial health – knocking your credit score down incrementally when it needs to be moving upward.

4. Don’t fall into the scam trap.

Be aware of anyone that offers to “fix” your post-bankruptcy credit situation. You are completely capable of fixing your credit on your own, therefore you don’t need anyone else’s assistance. There are a plethora of scammers who will claim to be able to repair your credit overnight, (but for a fee – and believe us when we tell you it won’t be a small fee). Building credit requires time and patience.

If the offer from a credit repair “company” seems too good to be true or they request money upfront, be incredibly careful. When in doubt, don’t hesitate to check with the credit bureau or state regulatory agency. If you’re truly in need of help, reach back out to your NJ bankruptcy attorney – he will be the best source for reliable post-bankruptcy assistance.

Bankruptcy can be a long and trying process, but once you make it through, be assured that there is a light at the end of the tunnel. Knowing how to get back on your feet and actually “doing” it are two different sentiments. Be self-disciplined in working towards a financially healthy state. If you’re feeling unsure or a little bit lost, don’t be afraid to contact your bankruptcy lawyer who can help you after bankruptcy as well as during it.

What are the Duties of a Bankruptcy Trustee?


A NJ bankruptcy trustee is responsible for completing the administrative tasks of a specific bankruptcy case and is typically appointed by the New Jersey bankruptcy court. These individuals are not judges, but are sometimes lawyers, though that is not a requirement. The trustee’s jobs include (but are not limited to): management of all of the petitioner’s bankruptcy paperwork and documentation, leading the meeting of creditors, and handling the liquidation of the petitioner’s assets.

When filing for bankruptcy, you need to first gather the necessary information and paperwork, either on your own or with the guidance of your New Jersey bankruptcy attorney. Based on the New Jersey exemptions, it’s also important to figure out what property (of yours) is exempt from seizure. Once you have filed for bankruptcy, the bankruptcy court will take legal control of all debts and properties that are not free from New Jersey exemptions.

The next step in a NJ bankruptcy case is when a trustee will be assigned. His or her responsibility is to review your paperwork in a detailed manner, especially any possessions and exemptions you want to claim. You may contest any decisions or rulings made by your trustee. About one month after you’ve filed, the trustee will be responsible for calling a meeting of creditors. The debtor must attend this meeting.

A trustee either deals with Chapter 7 cases, where the profit is made from liquidating (selling) the petitioner’s nonexempt property, or Chapter 13 cases, in which the profit comes in the form of a repayment plan. Because the trustee receives a portion of what he or she can collect for the filer’s creditors, the trustee has a powerful incentive to collect as much as possible for the creditors.

Regarding Chapter 7 cases, there are typically no non-exempt assets. If there are non-exempt assets, you will have to release non-exempt property, or the cash equivalent of its market value, to the trustee. This takes place following the meeting of creditors. The trustee will then split the proceeds from selling this property to the creditors. In some cases, if the property does not have a high value, the trustee may turn the property back over to you.

Regarding Chapter 13 cases, the trustee is responsible for handling the most important piece of the puzzle – the repayment plan. The trustee will work with the filer to set up a repayment plan of his or her debts. While the filer is in the process of repaying creditors, the trustee will be responsible for collecting the monthly payments and distributing them to the creditors. The trustee will also give the petititioner occasional updates on who has been paid and how much is still owed to each creditor.

Because bankruptcy trustees have a significant role and power in the bankruptcy system, it’s important to start off on the right foot with the trustee that is assigned to your case. A working relationship with your trustee will be vital, especially if you are involved in a Chapter 13 case. Be meticulous and honest when completing the bankruptcy forms and make sure you let the trustee know immediately if you’ve made a mistake. Open communication will make the bankruptcy process easier for both you and the bankruptcy trustee.

Image: “November 9th” by Kate Hiscock – licensed under CC 2.0

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.

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.”



Have You been the Victim of Predatory Lending?

nj real estate attorney

Predatory lending is precisely what it sounds like. While there are many lenders in the US who have all of their scruples, it’s important to know that unscrupulous lenders do exist. If you think you were granted a loan you didn’t truly qualify for, or a loan you can’t possibly make the payments on, you may be a victim of predatory lending.

In general, predatory lenders target groups of people based on their lack of understanding about loans and/or their inability to actually repay the loan. Some groups that are targeted include: the poor, the less educated, the elderly, and those who are in need of immediate cash.

Loans given to those who fall into the above groups benefit the lender and can seriously damage the borrower’s credit score and overall finances. Because of this, it is important that you have a clear understanding of any loan you are signing for. If you don’t understand some or all of the loan language, DO NOT SIGN.

As a potential borrower, you have the power to tell a lender that you’d like to wait to make an informed decision before signing. You should then walk out and go directly to an experienced NJ attorney who regularly works with lenders. This may be a debt negotiation attorney, or one that specializes in real estate transactions.

Your New Jersey real estate attorney will have the experience needed to advise you on the loan you are considering. He will also be able to tell you if you are being taken advantage of by a dishonest lender.

Specifically, mortgage lenders have been found to practice predatory lending in recent years. Unscrupulous lenders may target potential borrowers who currently have substantial equity in their home. This is because mortgage lenders will benefit from a loan backed by a borrower’s real property and even a foreclosure. Naturally, not all mortgage lenders are bad! In fact, most lenders are on the up and up.

However, if you get a bad feeling while you are discussing your loan options with a lender, it’s in your best interest to leave their office before signing anything, and take copies with you. When you meet with your NJ real estate attorney, he will be able to read through the proposed loan contract in order to inform you of your best next move.

Don’t risk getting yourself in over your head on a loan that you ultimately will default on. Know all of the facts about the loan by working with a professional who can guide you toward honest and helpful lenders in New Jersey.

Fear of Filing: What’s Keeping You from Bankruptcy Relief?

Without a doubt, money incites emotion.

What emotion depends on the specifics of your financial situation. Suddenly getting a substantial raise at work gives a feeling of success and relief. Coming into an unexpected windfall of money can evoke a sense of thrill and excitement. Steadily watching the number in your bank account dwindle inevitably leads to anxiety, stress, and panic.

Realizing your debt is higher than you can handle can provoke a fear that feels like you’re drowning. Learning that you have solid options to get out of debt when you thought it was an impossibility should instill a solid sense of comfort. Unfortunately, the thought of filing for bankruptcy comes with its own set of complex and confusing emotions.

Even though you may know and logically understand how the New Jersey bankruptcy process can eradicate a large percentage of your debts, you may hesitate to take the necessary steps to file. You’re not alone. In general, those who know they need to file for bankruptcy but are afraid to do so, are afraid of one (or more) of the following:

Ridicule/social embarrassment

Yes, it is more socially acceptable today to file for bankruptcy, but this fear isn’t unfounded. You may have some naysayers and Negative Nanceys if you file for bankruptcy. While they may tsk tsk behind your back, what’s most important is getting your financial life back on track. What will the naysayers have to cluck about when all of your bills are current and you’re able to rise above your strife? Keep your eye on the prize, and kick any and all negativity to the curb.

Job loss/difficulty finding future employment

In order to assuage this particular fear, it’s always a good idea to discuss a potential bankruptcy with your current employer before filing. An informed boss is much better than one who finds himself “hoodwinked.” As long as your higher-ups and HR department give you the green light, you’ve got nothing to fret about.

As for future employment, as long as you keep your nose to the grindstone and make the most of filing for bankruptcy, chances are good that a potential future employer will look at your overall financial picture rather than zero in on just one incident. Bankruptcy discharge is your opportunity to get a strong foothold where your finances are concerned. By using bankruptcy as a tool, you can get out of (and stay out of) debt, improve your credit score, and completely turn your life around.

Inability to buy a home/fear of losing your current home

It’s true that filing for NJ bankruptcy will lower your credit score temporarily. This does mean that making large purchases that will require a loan are off the table, but only in the short-term! By remaining steadfastly dedicated to cleaning up your financial past, a lender will see that you’ve made a lasting change. In just a year or two, you will be able to make large purchases again.

Losing your home is a huge fear for almost everyone when they think about bankruptcy, although this fear is largely unfounded. Now, if you should decide that your home mortgage is out of your budget – you can decide to go forward with a short sale or foreclosure in order to downsize. However, if you would be able to successfully make your mortgage payments if your other debts were gone or significantly reduced, filing for bankruptcy in New Jersey triggers the automatic stay.

Do you have other fears about filing for bankruptcy that weren’t mentioned here? Call us; talk to us. We can walk you through what you’re afraid of and help you understand the process. We’ll give you real, honest feedback, even if that means bankruptcy isn’t right for you.

Collection Defense vs NJ Bankruptcy

If you have been sued by a collections company or “debt collector,” and the debt truly belongs to you, the most important piece of advice is: Do not ignore the lawsuit.

With that being said, people in your position naturally wonder if they have options. Being sued for a debt that perhaps you thought had been forgiven, or that had reached its statute of limitations, can come as a surprise. Many times we put these things out of our minds because it is easier than focusing on it and worrying about it.

Unfortunately, by putting a large debt that you failed to repay out of your mind, you are now faced with a lawsuit that asks you for the entire lump sum that you owe. This sum may even be larger than you remember due to late fees, attorney fees for the collections agency, and interest.

Is filing for bankruptcy your only option?

While it is impossible to give a blanket answer to this question (as everyone’s case will vary wildly) – the general answer is that no, bankruptcy is not your only option when you are being sued for an unpaid debt.

There are several things your NJ bankruptcy attorney will ask when you meet with him or her. Is this your only significant debt? What is your income? Can you repay this debt if it is broken down into payments?

If you have other debts along with the one in the lawsuit, and your income doesn’t allow you to get ahead on paying them back, it may be that bankruptcy is right for your situation.

Can you negotiate with the debt collector?

On the flip side, if the debt in this lawsuit is literally your only debt (outside of your mortgage and car payment), and your income is steady, you might want to have your bankruptcy/debt resolution attorney negotiate with the collection company.

For example, if your unpaid debt amount is $15,000, you may be able to talk the debt collector down several thousand if you pay in a lump sum. It is also possible to negotiate a payment schedule if you wish to avoid bankruptcy.

Is collection defense an option for you?

Collection defense is only appropriate if the debt in the lawsuit doesn’t belong to you, or if the lawsuit contains errors. So, if you are being sued in error, then collection defense is an option, but the reason many people opt for a different resolution is that collection defense representation can get expensive. Regardless of how much you pay your attorney, you can still end up losing the case, even if the debt collector is in the wrong. This is because NJ law doesn’t require strict proof of signed agreements when it comes to credit cards. Therefore, you may end up owing hefty attorney’s fees and still have to repay the debt in full when all is said and done if you go this route.

The only way to know for sure which direction you should go is to sit down with a NJ bankruptcy lawyer or debt resolution attorney. Often, bankruptcy attorneys also specialize in credit repair and debt resolution strategies other than bankruptcy, so look for an attorney who is well-versed in all areas in which you need assistance.

Should I Pay my Debts or Hire a Bankruptcy Attorney?

bankruptcy attorney nj

When you are face to face with a huge pile of unpaid debt, you might wonder if it would be more cost effective to put a pay-off plan into effect or to make an appointment with a bankruptcy attorney. Naturally, both options are going to cost money – but there are a few questions you can ask yourself to help you determine which option will end up costing you less in the end.

Firstly, it must be said that there isn’t a cut-and-dry, cookie cutter answer to this question, so please take the advice herein with that knowledge. There are a number of variables that will affect the direction you ultimately choose to take, like:

  • How much debt do you have?
  • What type(s) of debt do you have?
  • What is your current income?
  • Do you foresee your income increasing in the near future?
  • Is there a potential financial windfall in your near future (like a work bonus)?
  • How long do you want to spend paying off your debt?
  • Are you ok with losing credit score points (temporarily)?

If you are currently not even (or barely) able to make the minimum payment each month on sky high credit card debt, you’re looking at a very long road ahead and you will have paid a huge amount of interest at the end of your debt pay-off journey. In this case, filing for bankruptcy looks like it would be a better decision, because your bankruptcy attorney’s fees are likely to cost you less than how much you’ll be paying in interest over the years. Also, by filing for bankruptcy, you can rid yourself of your burdensome debts as soon as you case is approved for a discharge. This will allow you to start a savings account, put your child through college, or otherwise focus more of your income in a way that you weren’t able to before.

The bankruptcy route will knock your credit score down for awhile, but if you’re working with a bankruptcy attorney in NJ who knows what he’s doing, you’ll be counseled on how to potentially bring your score even higher than it is now. This can usually happen in 12-18 months after a bankruptcy discharge if you follow the recommendations given.

On the flip side of the coin – maybe you have more debt than you’d like to have but you’re not drowning in debt. This is not an uncommon situation to be in. If your income is substantial enough to handle your monthly cost of living plus (give or take) double your minimum payments on at least one of your debts, you may be a good candidate for avoiding bankruptcy.

It’s impossible to give you a completely straight answer to this question, as mentioned earlier, because everyone’s financial situation is so unique. The above general tips are just that – general – and you should base your final decision off of the in-person advice you get from an experienced NJ bankruptcy attorney. He will be able to comb through your debts and assets in order to properly guide you toward making the choice that will best fit your finances.

Get in touch with a reputable New Jersey bankruptcy attorney today – most offer free consultations, so you have nothing to lose but debt!

Can Wages be Garnished for Money Borrowed from a Friend?

There are certain situations in life that call for borrowing money from a family member or friend: if your financial situation is less-than-optimal, and if your credit score is poor. When you’ve exhausted all traditional lenders and “bad credit” lenders, your Hail Mary may be asking someone you know to lend you money.

In these situations, most people make grandiose promises to pay the money back (sometimes with interest). Out of sheer gratitude, it can be easy to make promises you’ll never be able to fulfill. On rare occasions, the friend or family member (especially if it’s one of your parents or grandparents) will wave you off if and when you try to pay them back. Note the use of the word “rare.”

The honest truth of the matter is that, unless they’re abundantly wealthy with cash flowing in faster than they can spend it, your personal lender is going to expect to be repaid the money that you borrowed from them. In all likelihood, they’ve probably dug into a savings account that was specifically earmarked for something important in their own life, like paying for a child’s college education or putting a down payment on a home, in order to help you out of a bind. Failure to repay this ultra-generous favor is frankly very uncool.

Just as you wouldn’t borrow money from a traditional lending company or banking institution if you had no means to pay back the loan (because they wouldn’t lend you the money if you didn’t qualify in the first place) – you shouldn’t take money from a friend or relative if you have a pretty solid hunch that repaying them isn’t in the cards.

What can happen to me if I never repay a debt I owe to a friend?

Just as any debt that you leave unpaid, the lender (in this case, your pal) has every right to collect the money from you. Naturally, most loans of the personal nature tend to start out with the lending party casually mentioning the money he’s owed. This may happen several or a multitude of times, depending on the nature and patience level of the person who loaned you the funds.

You can prevent straining your friend’s patience by making a plan to pay him back the very second his money hits your hand. After all, “it takes many good deeds to build a good reputation, and only one bad one to lose it.” Electing to borrow money from anyone and then ignoring their requests for repayment is a bad deed, indeed.

Your good-natured lending friend is likely to tire quickly of gently asking you for the money he’s owed, and personal relationships are bound to suffer the longer you fail to make good on your handshake agreement. What many people don’t know is that even personal loans between friends and family members can be enforced in the NJ court system.

What started out as a buddy helping a buddy out can end with a nasty court case wherein you’ll be sued for the money owed, and wages can be garnished from your paycheck if you don’t have enough money to satisfy the judgment straight away.

Save yourself the hassle and a relationship that you likely value: start repaying the money you borrowed, even if it’s a small amount at a time. Good faith often goes a long way, especially when life-long friendships are involved.