What to do When Unemployment Assistance Ends


Image: “Pay Bills Key” by GotCredit

Last month saw the end of the $600 per week unemployment benefit. Many Americans are still unemployed as COVID-19 restrictions remain in place and companies continue to face uncertain economic times. If you are still unemployed and struggling to keep your head above water, there are some actions you can take right now to stay afloat. Here are three ways to stretch your finances long enough to get through this economic rough patch.

1. Take Advantage of Other Government Programs

Many unemployment provisions offered by the CARES Act have now ended. But that doesn’t mean there aren’t other government assistance programs you can take advantage of. The Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), and Women, Infant, and Children (WIC) program are three great assistance programs if you are really struggling. You may also benefit from the Pandemic Electronic Benefit Transfer (P-EBT) which helps households who no longer have free or reduced school lunch for their children due to COVID-19. If you are entitled to these programs, don’t hesitate to access those services.

2. Pay Everything Manually

If you have your bills and savings commitments automatically debited from your bank account, it’s a good idea to switch to paying manually for now. If you are unemployed, your source of reliable income is gone. Without this, you can easily overdraft or end up paying late fees. This is especially true if you are at the point that you are deciding which bills to pay based on grace periods and knowing when late payments will be reported to credit bureaus (you can get this information from your lender/creditor). While it is never advisable to put off paying your bills, the unfortunate reality is that many Americans are making these choices. Paying things manually gives you increased control over your finances.

3. Borrow From Retirement Accounts (but only as a Last Resort)

The savings you have built up in your 401(k) or IRA may look very tempting right now. The CARES Act even includes exemptions on penalties for early withdrawals up to $100,000 and spreads tax liabilities for withdrawals over three years—but it still isn’t a great idea. Those tax liabilities could come back to haunt you if you have also received other forms of untaxed income in 2020. For instance, if you have been receiving unemployment benefits, they could end up being a significant tax liability if you are also combining them with early retirement savings withdrawals. You do not want to swim now just to sink come tax season. You will also lose out on all the compounding interest you earn if you withdrawal those funds from your retirement account.
The bottom line: Do it if you absolutely have to – only if you have exhausted every other option.

The current economic crisis and global health situation have created many difficult financial scenarios. When you are struggling to put food on the table, it can seem like a near impossibility to focus on credit card or loan payments. If you are finding yourself slipping deeper into debt during this time, you have options. Veitengruber Law can help you get back the control over your finances. This isn’t easy for anyone, but there are solutions to help you get to the other side of this crisis.

 

 

The Effects of COVID-19: How to Talk to Kids About Money Troubles

No family is immune to financial struggle. When these tough times inevitably happen, it is important to understand how to talk to your children about it. While it might seem easier—or even like the right thing to do—to hide financial difficulties from children to shield them from anxiety, kids are smart. Children can sense their parents’ anxiety. It is better to have age-appropriate and honest discussions about financial issues when they arise. Here are some things to keep in mind if you have to discuss financial changes with your children.

1. Let children in on your plans.

After you tell your children that your family is facing some financial issues, share steps you are currently taking to address the problem. If you lost your job, tell them you are looking for a new job. While kids do not need a lot of details, they need assurance that you are working on a solution. Be honest about time frames. If you don’t know when you will be employed again, or when business will return to normal, say it may take a while for things to get back on track.

2. Alert them to potential changes.

Tell your children honestly what kinds of financial changes you will need to make in the meantime. Keep this specific to things that directly impact your children. Family vacations, going out to eat, and entertainment might be different for a while. Explaining these cutbacks as solutions to a family problem can help frame the adjustments as ways to help the family instead of punishments.

3. Older children can sit in on financial budget planning.

Older children who are beginning to understand money can benefit from the experience of watching their parent(s) work toward a brighter financial future. Allow them to sit in on planning the budget for housing, utilities, groceries, and other essentials. This can help them understand how much money goes into living independently and how to make an income or savings stretch over a month. Understanding the worth of a dollar can give them the skills to make it out of their own financial difficulties.

4. Keep it positive.

Let them know that while it may seem like the family is having to give up a lot, there are plenty of positives to the situation. Many families who are trying to save money end up spending more time at home together. You can also start exploring other (cheaper or free) forms of entertainment. Getting a library membership, going on trips to the park, and having a family movie night are all inexpensive ways to spend time together. You may find your kids quickly and happily adapt to (and even thrive with) a more laid back schedule.

Many American families are going through major financial upheaval. No matter how drastic the changes are, assure your child that you are in this as a family. Even if you have to sell your home, change schools, or move to a completely different city, your family will be together. Although no one anticipated or wanted all of the changes that have come with COVID-19, this is an opportune time to teach your children that money doesn’t buy happiness.

 

 

Unemployed and Over Fifty: Making Adversity Work for You

If you are over 50 and have found yourself unemployed because of the 2020 coronavirus pandemic, you are not alone. The unemployment rate of Americans 55+ has gone from 2.6% in January of this year to 11.8% in May. It is a difficult time for many Americans to find work and make ends meet, but that becomes a bigger challenge for those closer to retirement age. Working against the age bias of potential employers can be a significant hurdle. But you know better than anyone just what you have to offer a workplace. Here is how to make adversity work for you and finally land a new job.

1. Set a Budget

After you have lost employment, the first thing you should do is get a good idea of where you stand financially. Get a summary of all of your financial resources and determine how long you can survive out of work. If you are unemployed for an extended period of time, a solid understanding of your finances can help you stretch your funds further. Those who are unemployed in their 50s should plan to be unemployed for an average of one year.

2. Review your Resume

If it’s been a while since you updated your resume, it’s time to make some changes. Focus on major accomplishments from the last 15 years and provide a brief highlight of your earlier work experience. Showcase your best attributes and play up how valuable your experience can be for a company. While you never want to lie on a resume, it is ok to omit dates—like the year you graduated college, for instance—in order to avoid being screened out for your age. Be sure to address any concerns a potential employer may have about your technological prowess up front: discuss the technology you use that is relevant to your field, including software and computer programs.

3. Stay Active

It is easy to get depressed and wallow after extended unemployment, but try to stay active. This is the best time to explore things you have never had the time for. Start a side project that relates to your career. This could include writing a book, doing pro bono consulting work, or investing your time into your community. This work will keep your brain busy, create networking opportunities, and will show future potential employers that you are still active in your field (during job interviews). You could also look for temporary or part-time employment to help make ends meet while you continue to look for a job in your field.

4. Networking

Networking serves two major purposes: it gets you out of the house to socialize and it opens doors for future career opportunities. Old co-workers, friends, family, neighbors—you never know who might hold the key to a new job opportunity. These people can also be a great support system as you navigate unemployment and your job search.

5. Keep Applying—Don’t Give Up!

Apply to every job you think would be a good fit—and even some you are on the fence about! You should be sending your resume to any open position that fits your skill set. You can also apply directly to hiring managers at companies that may have an interest in an employee with your special abilities and background. Don’t get discouraged by a rejection and keep applying to as many positions as you can.

Just because you have lost your job in your 50s doesn’t mean you will never be employed again. Stay persistent in your job search – the right position will present itself as long as you don’t give up!

Should I Quit My Job to Avoid Wage Garnishment?

8457385720_85b2fb919f_o

If you’ve recently discovered that a NJ lender to whom you are indebted plans to garnish your wages in order to recover some of your missed payments, it’s natural to feel scared and overwhelmed. How much of your paycheck can they legally garnish? Will your co-workers find out that your wages are being garnished? The fear of that embarrassment is what prompts some people in this situation to ask themselves if they should simply quit their job to avoid the wage garnishment.

Wage garnishment is a debt collection strategy utilized by some lenders when other debt recovery tactics have failed. If you, as a debtor, have not made good faith efforts to repay the money you owe to a particular lender, the lender can get a court order that will order your employer to pay a percentage of each of your paychecks to the lender.

Will quitting your job help you avoid wage garnishment? Well, yes! Wage garnishment only works if there are “wages” being paid for a lender to intercept. So, does that mean you’ve outsmarted the system?

You cannot outrun a debt by quitting your job. In fact, leaving a steady place of employment simply to dodge a creditor is foolish, as they will find new ways to extract the money from you, and it is impractical to think that you can remain unemployed until the 20 year statute of limitations on your lender’s judgement runs out.

Is there any way to stop a wage garnishment order while keeping my job?

Now you’re talking! Keeping your job is your best bet in this situation, because you do have other options. Need to get rid of a New Jersey debt that you can’t afford to pay? Priority number one is remaining employed. Check.

Next, it’s time to talk about filing for NJ bankruptcy. Maybe you don’t want to file for bankruptcy either; perhaps it feels like ‘giving up.’ You may not want anyone to find out that you filed for bankruptcy just as you were worried about people knowing your wages would be garnished.

GOOD NEWS: Bankruptcy today does not have the stigma it held a generation ago. Times have changed, many people have been through some difficult financial challenges in the past decade, and bankruptcy now looks like a pretty good option for a lot of people.

You’re not alone if you consider filing for bankruptcy. Many people have come to the realization that filing for bankruptcy is the best answer to settling their debts. Many New Jersey bankruptcy attorneys will not charge you a fee to consult with them – call and make an appointment to find out what your options are.

A chapter 7 bankruptcy will wipe your debts clean (with a few exceptions like child support and student loans). You’ll be left owing a significantly less amount of money as soon as your bankruptcy is discharged, giving you more money to pay your bills and live life with. You’ll be able to find your way back to a balanced financial situation and a bright financial future if you decide to file for NJ bankruptcy, and you won’t have to try to out-run your creditors.

Image credit: Christie Parker

How to Achieve Financial Success with a Criminal Record

27680527941_62e7d1acc8_z

A staggering 25% of Americans have a mark on their background check that is preventing them from being gainfully employed. In fact, for those with a criminal record, finding any kind of work has become next to impossible.

We’re not talking about murderers or bank robbers, either. Naturally, those more serious offenders are busy spending many years in prison. Meanwhile, one in four Americans is dealing with a criminal record from many years ago – sometimes even decades. These dings on their background checks were often petty crimes that took place when they were young and immature. Many who are affected by their past crime(s) say they haven’t been in trouble with the law since, having learned their lesson and lived a clean and honest life after a run-in with the the police. Regardless, they are still repeatedly turned away from job openings, have lost their homes, and many can’t even rent an apartment.

New Jersey, along with many other states, have recently passed legislation that prohibits employers from asking potential employees up-front about their criminal history. This Ban the Box law is aimed at reducing discrimination against applicants based on the fact that they have a criminal record. Employers are still allowed to inquire about criminal history, but only after the initial application and interview stage has passed. Even with the Ban the Box law in place, many employers will simply drop an applicant the second they find out that they have a criminal record.

What is a person to do if they’re dealing with an event from their past that they can’t seem to get out from under?

If the crime took place a long time ago and the applicant has maintained a clean criminal history since, it might be best for them to be up front about the event with potential employers. This is especially true if the crime was relatively minor, and most importantly, non-violent.

A good example of this is a man who fell behind on child support payments due to a cost of living increase. He was not made aware of the increase and was subsequently arrested. Upon arrival at his front door, the officers attempted to detain him, but the man had no idea what he had done wrong so he resisted. Now he is dealing with a count of Resisting Arrest on his criminal record. Employers who hear the whole story will be more inclined to understand rather than discriminate.

For those who still struggle to get work even when taking the honest approach, try applying at a temporary work agency. It may not be your ideal job, and it may not provide work every day, but it’s a step in the right direction. It’s important to get some work history under your belt after the date of the criminal event so that when you do apply for a steady job, employers can call your reference person (your temp agency coordinator or someone you worked for through the agency) to find out that you’re a hard worker who stays out of trouble these days.

If your financial situation has become dire due to being unable to find work, you might benefit from filing for NJ bankruptcy. This can give you a fresh start by eradicating your debts so that when you do finally land the right job, you’ll already be on the path to financial success.

 

Image credit: Jobs for Felons

Wage Garnishment: FAQ

7027595009_f3c5fc23e4_z

What is wage garnishment?

If you owe money to a person or company that you have failed to repay or even begin to repay, the creditor (entity to whom you are indebted) can obtain a court order against you. This court document will order your current employer to take a specific amount of money out of each of your paychecks. This money will go directly to the creditor to whom you owe money.

How much of my paycheck can be garnished?

There are federal laws in place that limit the amount of money that can be garnished from anyone’s paycheck so that the debtor can still manage their monthly expenses. Generally, no more than 25% of your income (after deductions) can be garnished by any combination of creditors who may be seeking money from you.

Can I lose my job because of a wage garnishment?

If you have only one garnishment against your wages, your employer does not have the right to terminate your employment, nor can they punish you or treat you any differently because of a wage garnishment.

Multiple wage garnishments filed against you will give your employer some rights to take action. For example, suppose your employer discovers that you are neck-deep in unpaid debt and your job duties include dealing with company finances. Your severely disordered finances at home send up a red flag, and many times employers do have rights against you when the garnishments keep rolling in.

What can I do to eliminate a wage garnishment?

If you feel that a wage garnishment has been filed against you erroneously, you can protest the garnishment at a court hearing. You may also have rights if you cannot manage your bills with the wage garnishments set as they are.

Additionally, you can immediately eliminate any and all wage garnishments by simply paying off the debts in full. If you are starting a new job and don’t want your new employer to know that you owe money to a creditor, your best bet is to try to work with your debt negotiation lawyer to lower the amount you owe so that you can pay it all off in one fell swoop.

Can I eliminate all wage garnishments?

While you can “cancel out” a wage garnishment for say, credit card debt, defaulted loans or medical debt, some garnishments are harder (and sometimes impossible) to remove. For legal reasons, if you owe child support, your NJ county court will automatically set a wage garnishment action in place once your Final Judgement of Divorce has been entered. This guarantees that your children will always be cared for appropriately with no missed payments.

The same is true if you owe money to the federal or state government in the form of back taxes, or if you have delinquent student loans. In fact, wage garnishments for child support, taxes and student loans can even be initiated without a court order.

If you are facing a wage garnishment in New Jersey that you feel is inaccurate or that is preventing you from meeting your other basic financial obligations, work with your NJ debt relief attorney to either modify the wage garnishment order(s) or eliminate them if they are unlawful.

 

Image credit: Tax Credits

Is My Workers’ Compensation Settlement Safe from Creditors?

281094918_e916dfe3e9_z

Carrying workers’ compensation insurance is a requirement for employers in every state except Texas. This type of insurance is a safety net, in a way, that protects employers from being sued and potentially having to pay out large sums of money in the event of an accident or injury in the workplace.

If you’ve been injured at work and have received a workers’ compensation settlement, you may potentially still be out of work due to your injury. In many cases, even with a workers’ compensation settlement, workplace injuries lead to financial strife.

Extended time off work in order to heal or to receive surgery obviously means no wages earned during that time. Sure, your workers’ “comp” will definitely help, but it will not replace your entire income. This frequently leads to missed mortgage or other important payments. Ultimately, you may decide to file for bankruptcy in order to get rid of the past due debts that have accrued.

If I file for bankruptcy in NJ, will I be able to keep my workers’ compensation settlement money?

This is a pressing question for anyone in this particular situation. After all, the money you received as a result of your workplace accident may have been the only thing keeping you above water. The answer to the above question is almost an unequivocal “YES.”

When a person files for bankruptcy in any state, there are state “exemptions” – assets that are protected from liquidation or distribution to creditors to pay back some of the debts owed. Other examples of NJ bankruptcy exemptions include social security disability benefits, life insurance benefits (usually), retirement benefits and unemployment compensation.

Also on that list of exemptions in New Jersey is workers’ compensation settlement funds. To be clear, anything listed as exempt cannot be taken from you if you file for bankruptcy.

Although safe from creditors, any monies received as part of your workers’ comp settlement must be carefully kept in a designated account into which you only deposit money paid to you for workers’ compensation.

The reason it is so important to keep your exempt cash assets in their own account is because of a funny word that bankruptcy judges don’t like to see: commingling. Now, even though commingling may give you mental images of a long-past dinner party where you didn’t know anyone, in financial terms (at least in terms of bankruptcy in NJ), it means certain death.

Not yours, mind you, but if you allow your exempt monies to commingle with funds you receive from other sources, you’ll cause your protected settlement money to lose its exemption status, and you’ll have to say goodbye to it. If you want to keep your workers’ comp settlement, take every precaution to ensure that it lives in its own private bank account with absolutely NO funds from any other source.

How will anyone know if I have allowed my funds to commingle?

Granted, it may feel like you can simply tell the bankruptcy trustee that you’ve kept your money separated by source, even if there have been times when it was just easier to allow commingling to occur. Know this: if you fail to keep your workers’ comp funds completely separate, the trustee WILL find out about it. Every deposit made into every account you own will be scrutinized. You will need to keep a detailed paper trail that clearly shows the origin of every single cent kept in all of your bank accounts.

While you do have to be extremely careful in order to protect your exempt assets in bankruptcy, as long as you follow the rules, you’ll be able to keep all of your New Jersey workers’ compensation money.

Image credit: Anthony Easton

Have Your Wages Been Garnished? You Have Options.

2413379148_e703cce1c5_z

Wage garnishment is a legal situation in which your employer is required to withhold a specific amount of money from your paycheck in order to repay one or more of your creditors. In order for most creditors to have a valid wage garnishment order, they must have a judgement from the court stating that you legally owe them money and that your wages may be garnished until such time as the debt is repaid in full.

Naturally, when you borrow money from a creditor, you enter into an agreement that states your intention to repay the money you borrow. Whether you owe money to a creditor, the IRS, a secondary learning institution (student loans), a medical institution or an ex-spouse, it is possible that you will have your wages garnished if you fail to make payments on your debt.

It is understandable that debtors should be held responsible for their financial obligations. However, you still have to be able to survive while you are repaying your creditors. If you currently have wage garnishment(s) against you, there are some specific federal and state regulations that you should become familiar with.

  • Not all debts are created equal. Some types of debts do not require that a creditor receive a court order for a wage garnishment to commence. If you’ve received a child support order since 1988, it also contained an automatic wage garnishment order. No additional court order is required. The same goes for any unpaid income taxes and student loans that you’ve fallen behind on. Credit card debt and medical bills are debts that require the creditor to sue you and obtain a judgment and order from the court before your wages can be garnished.
  • Wage garnishments have limits. Federal laws state that your creditor(s) can take 25% of your disposable earnings OR your disposable earnings less 30 times the current federal minimum wage, whichever is less. New Jersey wage garnishment laws further limit how much your creditors can garnish. Under NJ wage garnishment rules: creditor(s) can garnish up to 10% of your wages if you make less than 250% of the U.S. poverty level. If your income is more than 250% of the poverty level, creditor(s) can garnish up to 25% of your wages.
  • You cannot be fired due to a wage garnishment order in New Jersey. Some employers may not like dealing with a wage garnishment order, which may tempt them to fire you so they don’t have to comply. In New Jersey, this is illegal. All employers must comply with wage garnishment orders.
  • Wage garnishments can be negotiated. If you’ve received a wage garnishment order from one or more of your creditors, you may very well be quite upset and anxious about losing a significant portion of every paycheck. A NJ wage garnishment order that will impede your ability to pay all of your monthly expenses can be appealed. Veitengruber Law will sit down with you to go over your living expenses and the garnishment that has been ordered. We will then formally object to the order and request that the court lower the amount of the garnishment.
  • Bankruptcy will halt a wage garnishment order. If you’re in extreme dire straits, you should consider filing for bankruptcy. Firstly, as soon as you file for bankruptcy, something called an automatic stay goes into effect, which prevents any of your creditors from collecting any money from you. (Exempt from this, of course, are alimony and child support.) Secondly, if satisfying a wage garnishment is well beyond your means – you probably should have filed for bankruptcy awhile ago.

To learn more about how we can help you with your wage garnishment dilemma, call Veitengruber Law at (732) 852-7295. We offer free first-time consultations, and payment plans that are extremely reasonable.

Will a Gainful Job Offer Affect My Bankruptcy Case?

5015628145_70684eaae0_z

So, you’ve found yourself way over your head in debt. You’re certainly not alone. If the fact that you aren’t alone in your financial distress doesn’t buoy your spirits, try this: Help is available.

Maybe you’re just able to keep paying your rent, utilities and living expenses. Anything above and beyond those payments has likely been put off repeatedly, like student loan debt, quickly compounding credit card bills, personal loans and medical bills.

It may appear to the untrained eye that you are doing ‘ok’ since you are able to remain in your home, pay your utility bills, and put food on your table. However, only you know exactly just how ‘not ok‘ your financial situation is, and with every credit card bill that you toss (unpaid) into the trash, your stress level is bound to increase. Your mental and physical health have undoubtedly begun to suffer due to a nearly constant feeling of worry.

Some people are in this or a very similar situation due to a lack of information about debt resolution. Oftentimes, we talk to people who (falsely) believe that filing for bankruptcy is only an option if you’re chronically unemployed and have essentially already lost everything, including your home. We are happy to rectify this misinformation!

If your income allows you to pay rent (or your mortgage) and feed your family but you have thousands of dollars of unpaid debt, you have a very solvable problem. Bankruptcy law focuses on helping struggling debtors just like you repay money and/or wipe out debts in order to get them back on track.

Don’t assume that you wouldn’t qualify for bankruptcy just because you have maintained a place to live and haven’t had your electricity shut off. If you have significant debts that you are simply unable to even make a dent in, bankruptcy is very likely a good option for you.

What if my job situation may improve in the near future?

First of all, congratulations on your perseverance! Secondly, a Chapter 7 bankruptcy would focus on your financial situation at the time of filing. If you successfully file for bankruptcy and subsequently obtain better employment or receive a raise, you don’t have to worry about losing any of that money to your bankruptcy trustee.

With that being said, there are strict laws in place that help prevent bankruptcy fraud. For example, you cannot legally accept a large sum of money (for example an inheritance) within a year after filing for bankruptcy. Debtors are also prohibited from repaying only  selective lenders prior to filing for either a Chapter 7 or Chapter 13 bankruptcy. This ensures that all of your creditors are paid back equally with none of them receiving preferential treatment.

However, as long as you are acting in good faith, you have the right to accept a better job or even a pretty significant raise after your bankruptcy has been filed. After all, the primary goal of bankruptcy laws is to eradicate your debts and see you on your way to a brighter financial future.

 

Image credit: S. Mann

Can Bankruptcy Get Me Out of Credit Card Debt?

scrabble cc debt

Annie had always been diligent about staying current on her mortgage payment and utility bills – it was important to her to be able to remain in her home and she was proud of paying her bills.

About 18 months ago, Annie incurred a demotion at her place of work, and started bringing in only about half of her former paycheck. Over that period of time, she prioritized her monthly payments and continued to stay current on her home loan and utility bills.

However, the cost of those bills quickly ate away at her new (much smaller) paycheck, and Annie found herself charging many of her living expenses to one of several credit cards. All the while, as she continued to use her credit cards for things like groceries, toiletries, gifts and miscellaneous expenses, she had only planned for this situation to be TEMPORARY.

Ever since her change in job status, Annie had been tirelessly applying for positions that would see her making the money she needed to finally pay down her credit card balances and start using real money for her expenses once again. Unfortunately, due to a challenging job market and her lack of a college degree, she was passed over for all of the higher paying jobs she applied for, and her credit card use continued.

She had been unable to pay her monthly credit card minimums for awhile, and tried to put the rising balances out of her mind until she reached a place in her life where she could adequately deal with them. Still stuck in the same lower paying job a year and a half later, she finally decided it was time to sit down and add up all of her credit card debt so she at least knew what she was dealing with. Imagine her surprise when the total amount was a staggering $25,000+. What she wanted to know now, was:

How can I get rid of this debt and still manage to live my life?

Many people don’t fully understand bankruptcy. It is still taboo in many areas of the country and among certain groups of people. In fact, some people like Annie don’t even realize that credit card debt can be erased by filing for Chapter 7 bankruptcy. Not just lowered, but ERASED! (It is possible to repay your credit card debt on a modified schedule with a Chapter 13 bankruptcy – but this requires that your income will allow you to do so.)

If you’ve found yourself in a credit card situation that you never thought you’d be in, do not be ashamed. It happens to A LOT of people! You did what you had to do to make it through a tough situation. Perhaps you made some less-than-optimal money decisions. The important thing is that you now recognize that there is a problem and that you are taking steps to rectify it. Contacting an attorney should be the next thing on your To-Do list, so that s/he can discuss your case specifics with you, and create a plan of attack that will see you with the brightest financial future possible.

 

Image credit: GotCredit via Flickr