Bankruptcy Legalese: Translated (Part 2)

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There are so many important legal terms related to bankruptcy that we felt it prudent to devote two entire posts in our Back to Basics series to the topic. Hence, today we present you with Part 2 of what we in the legal profession and our clients lovingly refer to as bankruptcy ‘legalese.’

  • 341 hearing – Also referred to as the Meeting of Creditors, this  event takes place 21 – 40 days from the date your bankruptcy case was filed. Your trustee will head up the 341 hearing, with the purpose of investigating the validity and dischargeability of your debts, as well as any exemptions you may have. This hearing is open to all of your creditors, and you are personally required to attend.
  • Adversary proceeding – Although rare, this is a lawsuit filed by you or one of your creditors (even potentially the trustee) during the course of your bankruptcy case. Technically, an adversary proceeding is part of your bankruptcy, but it is a separate case in its own right. Reasons for filing: suspected fraud, potential preference payments, questions about whether or not a debt is dischargeable and property that is jointly owned (and therefore must be split in order for the trustee to sell it).
  • Bankruptcy code – The group of laws put into place after the Bankruptcy Reform Act (1978) that govern the entire bankruptcy process.
  • Collateral – Property that is subject to a lien. An example is a home that has been mortgaged. The collateral is the home, while the mortgage is the lien. If a creditor has the right to any collateral, they are considered to be a secured creditor*. The Bankruptcy Code gives specific protection for secured creditors and the collateral they have an interest in.
  • Liquidation – While it may sound like something you’d do with a blender, in reference to bankruptcies, liquidation is the act of selling as much of the debtor’s property as possible in order to repay as many of their debts as possible prior to discharge (chapter 7).
  • Means test – Added to the Bankruptcy Code in 2005, the means test is used as a screening tool. This tool allows the bankruptcy court to determine whether or not you “qualify” to file for bankruptcy. The factors used to determine your bankruptcy worthiness include an average of your most recent six months of income in comparison to your state’s median income and the total amount of your unsecured debts. The means test helps prevent abuse of the bankruptcy process.
  • Secured creditor* – When you borrow money from a company without any collateral involved (credit card companies, your electric company, internet service providers, fitness centers, etc) – those creditors are considered to be unsecured. Secured creditors, then, are those that have a claim to some property that you own, like a car or house. As far as creditors are concerned, it is riskier to be unsecured. Secured creditors  can seize the property they have an interest in if you fail to make good on your payments to them.

You can learn more about the terms included in our Back to Basics series as well as additional important bankruptcy verbiage here. For more detailed information about a specific bankruptcy topic, be sure to search our bankruptcy blog or call us directly. Veitengruber Law is always more than happy to help you fully understand the New Jersey bankruptcy process.

 

Image credit: Caleb Roenigk

Bankruptcy Legalese: Translated (Part 1)

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Today, our Back to Basics series continues with a look at all of the ‘legalese‘ used in association with filing for bankruptcy. Like almost any area of law, bankruptcies are chock full of legal terms that can be difficult to understand. It’s extremely important that you have a good grasp on bankruptcy legalese before filing so that you can make sound decisions regarding your case, and subsequently, your future.

When you meet with Veitengruber Law, we will take all the time it takes to ensure that you thoroughly comprehend everything that we discuss. With that being said, you can get a jump start by learning about some bankruptcy terminology before our first meeting. Therefore, we have compiled a list of the most common legal terms used in chapter 7 and chapter 13 bankruptcies in New Jersey.

Automatic stay – One of the most important bankruptcy terms, an automatic stay means that as soon as you file for bankruptcy, none of your creditors can attempt to collect any money from you until after your case has ended. An automatic stay can also help you keep your home if it’s in danger of being sold via foreclosure (Sheriff’s Sale).

Bankruptcy estate – Your estate is simply any property of value that you own or have equitable interest in at the time of your bankruptcy filing.

Creditor – People, or more likely companies, from whom you have borrowed money that you are having trouble repaying.

Debtor – In this case, the debtor is you. A debtor is a person who owes money to someone else.

Discharge – This is the bankruptcy outcome that every debtor hopes for. A bankruptcy discharge is issued by your bankruptcy judge at the end of your case, and it states that your dischargeable debts are dismissed. A discharge means you will no longer be responsible for repaying the dischargeable debts that were included in your petition and that creditors are no longer allowed to contact you regarding any debts that were discharged.

Dischargeable debts – These are debts that can be virtually erased with a bankruptcy discharge, and they include: credit card debt, medical debt, personal debt, past due utility bills, and even car loans and mortgage loans. It’s important to know, though, that if you choose to have any debts discharged in order to remove a lien*, you will lose the property at the end of your bankruptcy case.

Exemptions – If you file for chapter 7 bankruptcy, a trustee will be assigned to your case. The trustee’s job in a chapter 7 bankruptcy is to sell some of your property (called liquidation) in order to repay some of your debts. Certain property is protected or exempt from being sold. You can read about New Jersey’s bankruptcy exemptions here.

Lien* – A notice that is attached to property (your home, vehicle, etc) that makes it known that you owe a creditor money before the property is officially owned by you.

Nondischargeable debts – Certain specific debts do not qualify for bankruptcy discharge because of their high importance. Examples include: child/spousal support, student loans, fraudulent debts, and some taxes (tax liens, property taxes, certain employment taxes).

Reaffirmation – If you want to keep an item that is considered dischargeable (i.e. could be sold by the trustee), you can reaffirm the debt and continue making payments after your bankruptcy is concluded. This allows you to keep your home and vehicle (which you’ll still be required to pay for), if you so desire.

Trustee – A third party (typically another attorney) who is appointed by the bankruptcy court to be in charge of overseeing your case to ensure that nothing is missed and that all nonexempt assets are liquidated appropriately.

The bankruptcy terms we included today are some of the most common and most important legalese that you’ll come across in your bankruptcy case. Now that you have a solid grasp of the most basic bankruptcy terminology, we will delve deeper into some more complicated bankruptcy language next week. Stay tuned for Part 2!

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5 Common Bankruptcy Myths: Debunked

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Without a doubt, there is no shortage of misinformation when it comes to bankruptcy. Veitengruber Law works hard to consistently provide valid, up-to-date information about bankruptcy in New Jersey to help our readers and clients educate themselves based on facts.

Today, however, we’re going to address some of the biggest bankruptcy myths and the truth that lies behind them. Much like the mythical mermaid, believing in something that isn’t based on facts won’t make it a reality any way you look at it.

  1. “You can’t discharge income taxes in bankruptcy.” For some reason, it is a common misconception that income taxes are non-dischargeable in a chapter 7 bankruptcy. The reality is that income taxes are the only type of tax debt that can be discharged! Read more about the rules associated with tax debt qualifications for bankruptcy here.
  2. “Because of the Means Test, I’ll have to file chapter 13, which won’t help me get rid of any debt, so why bother?” While the first half of this may be true, even if you don’t qualify for chapter 7 based on the Means Test, filing for chapter 13 does not automatically mean that you will have to repay all of your debts in full. In fact, most chapter 13 reorganization plans see the debtor only paying a fraction of their total debt amount.
  3. “I can’t risk ruining my spouse’s credit, so bankruptcy’s not an option.” This is something we hear constantly. In New Jersey, bankruptcy does not have to be filed jointly with your spouse. You may need to disclose how much money your spouse makes, but ultimately you can file solo and it will literally have no impact on your spouse’s credit score.
  4. “Bankruptcy is only for people who are unemployed and/or impoverished.” While we understand why this belief exists, we want to be clear that it doesn’t matter how much money you make when it comes to bankruptcy. As long as your debts and expenses outweigh your income, you will almost certainly pass the Means Test, which will qualify you to file for bankruptcy in NJ.
  5. “Any attorney can help me file for bankruptcy. The cheaper the better.” Did you know that some attorneys will take your retainer even if they have zero experience with bankruptcy law? Do your research and select a bankruptcy attorney in New Jersey who has hundreds of bankruptcy cases under his belt. Selecting a NJ lawyer with little to no bankruptcy experience may cost you less money up front, but the end result can be catastrophic.

At Veitengruber Law, we’ve made it our priority to help New Jersey debtors get out from under their debt. We provide our clients with personalized and in-depth meetings so we can evaluate your debts from every angle.

As our client, you’ll receive tailored advice and a team to walk you through the entire bankruptcy process from start to finish and beyond. Because we understand the financial strife our clients are facing, we offer free consultations and extremely flexible payment plans that fit into your reality.

“There are very few monsters who warrant the fear we have of them.” ~ Andre Gide

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Estate Planning Basics: What You Need to Know to Get Started

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The term ‘estate planning‘ can make preparing your will sound a lot more daunting than the process really is. In fact, some of our clients come to us without understanding that your estate is simply everything you own. So, estate planning is essentially just making plans for what will happen to your real estate property, personal items, investments, life insurance policies and anything else you own after you pass away.

The process of setting up your estate plan is commonly referred to as ‘writing your will.’ Along with the fact that not very many people enjoy thinking about and planning for their own death, the process in itself can seem like it might be complicated.

The good news is that the reality of estate planning is quite simple for most people. At Veitengruber Law, we like to start getting to know our estate planning clients by having them fill out a questionnaire. Ideally, clients will return the questionnaire to us before their consultation so that we have time to get a feel for your overall financial details. Alternatively, you can bring the (completed) questionnaire along with you to your first appointment.

We will help you to determine which of the following documents that are appropriate for your needs:

Last Will and Testament – Also referred to as your ‘will,’ this document’s purpose is to let all of your survivors know how you want your property to be divided after your death. You’ll need to name someone to carry out your wishes (an executor) and you will have to decide who should get what. One of the tougher decisions to be made in your will involves custody of your children (if applicable).

Durable Power of Attorney – Another extremely important facet of your estate plan, your Durable Power of Attorney names someone to make decisions for you regarding your finances if you become unable to make sound decisions for yourself. This document will name someone as your ‘agent’ in case you become ill and/or incapacitated. Your agent is automatically your spouse if you are married. If you aren’t married, you definitely need a Durable Power of Attorney to ensure that your finances will be responsibly managed if you become unable to make smart decisions for yourself. This document expires when you do, so your agent will not make any decisions after your death unless s/he is also your executor.

Living Will – This document will set out any specific health care directives that you wish to be followed if a time comes when you are not able to communicate your wishes verbally. Some things included in your living will are:

  • What (if any) life extending procedures do you wish to be carried out?
  • Do you want to be resuscitated or would you like doctors to follow a DNR protocol (Do Not Resuscitate)?
  • Are there certain situations in which you would want doctors to stop life saving treatments?
  • Would you want to be tube fed or be placed on a ventilator? For how long?
  • Do you want to donate any or all of your organs for donation or scientific study?

Along with the above documents, we will also talk to you about your life insurance coverage, especially if you have a family who is dependent on you. Call us today or fill out our quick info form to get your estate plan started.

 

Image credit: Mark Moz

Bankruptcy Attorney Fees: Why They’re Worth Paying

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One common misconception about filing for bankruptcy is that the entire process is simply filling out a bunch of forms. This erroneous information leads some people to believe that hiring a bankruptcy attorney is a waste of money.

“Why should I pay an attorney when I can easily do it myself?”

We’d like to help you better understand the New Jersey bankruptcy process and some of the things your bankruptcy attorney does that make their legal fees totally worth it.

First and foremost, a bankruptcy attorney will determine when is the best time for you to file for bankruptcy. Timing can be very important in some cases. Filing for bankruptcy does involve a significant amount of paperwork, much of which can be quite complicated and confusing, and everything must be filled out 100% correctly. If there are any errors anywhere in your bankruptcy papers, your case can be dismissed.

Your NJ bankruptcy attorney knows exactly what forms need to be filed and when. He will be able to consult with you about what type of bankruptcy would be best for your unique circumstances. Many people who file without an attorney end up filing for the wrong bankruptcy chapter.  Another thing you may not have considered is that there may be bankruptcy alternatives that would work for you. You might not even need to file for bankruptcy! Your attorney will educate you about all of your options so that you make the right choice.

A bankruptcy attorney knows bankruptcy laws inside and out. This means that you won’t have to worry about committing bankruptcy fraud accidentally. Understanding the definitions of exempt and non-exempt assets and how they relate to your case is imperative. There are different exemptions for each state as well as federal exemptions. Listing your assets incorrectly can result in significant property loss that you weren’t expecting.

As your case progresses, your attorney will constantly review things to make sure that nothing is missed. There are local bankruptcy procedures and rules, as well as trustee requirements, that must be followed. By working with an experienced bankruptcy attorney, you can rest assured knowing you won’t break any rules that could seriously delay or even ruin your entire case.

If one of your creditors feels that a particular debt shouldn’t qualify for a bankruptcy discharge, your attorney will defend you against any claims that they may file against you. Additionally, most bankruptcy attorneys try to stay on good terms with the local court employees, which means the court staff won’t give you a hard time. Without an attorney, you may not have such a pleasant experience, especially if you make any mistakes in your paperwork.

In addition to all that your bankruptcy lawyer will do for you throughout the duration of your case, he will also work with you after it has ended. After you’ve received a discharge of many of your debts, you’ll be able to start rebuilding your credit score. Your attorney will give you specific directions on how to keep your credit score moving in the right direction.

Last, but certainly not least, bankruptcy attorneys understand that you are struggling financially and they have made it their life’s work to help you. As a rule, you’ll be able to  pay your attorney’s fees on a payment plan that works for you. To learn more about this New Jersey bankruptcy attorney’s fees, schedule a free consultation. We’re confident that you will be pleasantly surprised.

Image credit: Got Credit

Will I Lose Everything if I File for Bankruptcy?

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A common misconception is that filing for bankruptcy means you will lose all of your personal property in exchange for wiping your debts clean. Unfortunately, this causes some people to drag their heels about filing a bankruptcy petition, leading them into deeper and deeper piles of debt.

While the fear of “losing everything” due to a bankruptcy is very common – it’s unfounded, regardless of whether you’re filing for Chapter 7 or Chapter 13. Bankruptcy laws have been created with the end goal of helping struggling debtors get back on their feet. Taking everything they own would be counter-intuitive to that goal, as it would leave them with no debt, but no assets either.

Filing for bankruptcy DOES NOT mean you will lose your home. Additionally, you will almost always be able to keep at least one vehicle, so that you can continue to work.

What Happens in a Bankruptcy Case?

If you file for Chapter 7, your case will be assigned a bankruptcy trustee. This person is not working for or against you; they are working for the Department of Justice. Their job is to ensure that your assets are liquidated properly and that your creditors are paid off fairly, all while following federal and state bankruptcy guidelines.

While your trustee is assigned to liquidate (sell) your assets (property), there are limitations in place for what can and cannot be sold in order to pay off your debts. These limits are set so that you will be left with a place to live, clothes to wear, and furniture to sit on. You will typically be allowed to keep all or most of your household items as well (dishes, toiletries, tools, artwork and other home decor) unless they are unusually valuable.

Some states have what is known as a “Homestead Exemption Policy.” This policy varies from state to state in how much home equity you are allowed to exempt (keep). New Jersey does not have a Homestead Exemption Policy, but debtors who file for bankruptcy in NJ are allowed to use the federal bankruptcy exemptions, which will protect some of your home equity.

Married couples in NJ may be allowed to double the federal exemption amount. Also, if you and your spouse own your home jointly, it may be completely exempt, as long as the outstanding debts you are seeking relief from are not joint debts. This will help married debtors if only one party has a lot of debt, and only if that person files for bankruptcy alone and not jointly with his/her spouse.

If you are filing for Chapter 13 bankruptcy, the ability to exempt your home equity will directly affect how much money you’ll be required to pay your creditors. Your trustee will not liquidate your assets in a Chapter 13, but will add up the value of your exempt vs nonexempt property. The value of any nonexempt property is what you will be required to pay to your creditors, so exemptions will lower your payment amount.

Regardless of whether you’re considering filing for Chapter 7 or Chapter 13 bankruptcy, the important thing to remember is that you will not lose everything. The goal of filing for bankruptcy is to help get you to a stable financial future.

 

 Photo credit: Money Images

Friday Five: We Can Do That!

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We are simply amazed by how many people we’re able to help here at Veitengruber Law. It’s the thing that drives us, because helping others is what we’re all about. Today, we want to tell you about five things we do that could possibly be making your life easier, happier, or just plain better. Did you know that we can help you with:

  1. Raising your credit score This falls at number one because it’s SO important to have a good credit score! It’s sort of like using building blocks: if you don’t have a solid first layer, you will have a really tough time creating any kind of solid structure. With a lower credit score, you’ll have trouble: renting or buying a home, purchasing a car, getting insured, and possibly even being hired for a job. We have the skills needed to put you on a plan that will raise your credit score significantly within six months to a year!
  2. Paying a lower mortgage payment each month – The biggest payment many of us have every month is our mortgage payment. This can quickly drive many people to foreclosure as rising costs of living escalate. Luckily, it doesn’t have to come to that. Veitengruber Law knows how to negotiate with lenders in order to change the terms of your mortgage agreement.  If you’ve had a change in your life that has caused you to have difficulty paying your current mortgage (job loss, divorce, decreased home values) – we can get your payment down to an affordable number.
  3. Filing for bankruptcy – If numbers 1 and 2 above just aren’t enough to get you above water, have no fear. In fact, bankruptcy is our original specialty, and we’ve had many, many hours of experience helping clients through to the other side of debt. We’ll help you determine whether you’d qualify for a Chapter 7 or Chapter 13 bankruptcy, and we’ll take you all the way through to a fresh financial future.
  4. Getting your home out of foreclosure – If you’re tiptoeing closer and closer to losing your home to foreclosure, or if you’re already receiving notices – we are the foreclosure defense team that you need. If keeping your home is important to you (while making your payments more affordable at the same time), we know exactly what to do! We have several tried-and-true foreclosure defense approaches that really WORK. Our firm has saved countless families from losing their homes to a foreclosure sale.
  5. Planning your Last Will and Testament – In order to ensure that your loved ones don’t have to face arguments over medical, financial or legal details after your passing, it is crucial that you set up a plan for them to follow now, while you are still able. Veitengruber Law will give you a personal and customized estate planning process depending on your specific needs, wants, assets and more.

Hopefully, today’s Friday Five has helped you to understand some of the areas where our firm holds a great deal of expertise and experience. For more information about any of the above areas, or to set up your free consultation meeting, give us a call anytime. If you feel more comfortable sending us a message, simply click here. We look forward to talking with you and, most of all, HELPING YOU move toward a healthier financial future!

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I Need a NJ Bankruptcy Attorney I Can Trust!

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As a general rule, people are scared to death to meet with attorneys. Asking for help can be extremely daunting to most of us, and even more so when you have to admit that you’ve made some mistakes managing your money. The mere thought of beginning the search for a New Jersey bankruptcy attorney is overwhelming enough that many people put it off much longer than they should.

The truth of the matter is, that if you have found yourself in a legal situation that is rather complicated and/or involves a significant amount of money or debt, you should not handle this problem alone. The right attorney will be interested in the details surrounding your case, and will become your biggest ally.

The best kind of attorney will coach you along the way, giving you the information you need to make sound and informed decisions about your legal problems. You should feel a good rapport with the attorney with whom you will be working closely in order to get your life back on track.

Meeting with a bankruptcy attorney is one of the hardest things you may ever have to do, and Veitengruber Law knows and understands this. Admitting that you may be about to lose your home and possibly many of your possessions is a difficult thing for anyone to go through.

Upon walking into our offices, you will be immediately put at ease by our extraordinary staff members. Every member of the Veitengruber Law family takes pride in giving great face time to all of our clients. We want you to feel comfortable and relaxed from the moment you walk in the door. It is our goal that all of our clients be able to relate to us as people who are here to help. We know that the more relaxed you are, the more likely you will be to open up to us. This is when our relationship with our clients blossom and become extremely worthwhile for everyone involved.

At Veitengruber Law, we want you to feel at home. We are probably the least pretentious law firm in all of Ocean County, NJ. We will never feed you a line just to get your business! In all honesty, we are IN THE BUSINESS OF HELPING people just like you, and we wouldn’t have it any other way.

Whether your legal problem stems from out-of-control debt or simply one particular loan that may be able to be modified to make your life easier, we are the NJ attorney team you want working for you. Are you being harassed by a debt collector? Is your house in danger of being lost to foreclosure? Do you wish you had a “Start Over” button?

We can help you with any of those problems and so many more. Don’t let fear get in the way of asking for quality legal help in New Jersey. You might also be glad to learn that your first consultation with us will be free of charge. We’re not scary – we promise. 🙂

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Protecting Your Credit Score: A Free Legal Workshop 10/23/14

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As you have probably already realized, the numbers and information contained in your credit report and credit score affect a lot of financial decisions made in your life, both by you and others (including lenders, employers, landlords, etc).

If you are struggling financially and your credit score is suffering, there are things you can do to make significant and substantial improvements to that number. There may also be errors on your credit report which may be bringing your credit score down further.

Understanding how to read a credit report is the first step to managing your money better. If you have the desire to get a handle on your finances, but have been wondering what the next step is for you, come out to our 100% free informational workshop presented by George Veitengruber, Esq., a New Jersey certified attorney who specializes in credit repair. The workshop details are listed below.

When: Thursday 10/23/2014 at 7:00 PM – 8:45 PM

Where: Howell Public Library – 318 Old Tavern Rd., Howell, NJ   07731

RSVP: To reserve your space or if you have any questions, call 732-695-3303 or send an email to: ivyjacotlaw@gmail.com. You can also send an inquiry via this link.

To reiterate, this workshop is completely free of cost to you and its main purpose is to inform the audience about: how to properly read and understand a credit report, repairing and improving your credit score, how to report and correct credit report errors, and how to get better at managing your budget.

George Veitengruber, who practices law in Ocean Township, New Jersey, will be the presenter of this interactive legal workshop. George practices law in the areas of: credit repair, bankruptcy, foreclosure defense, real estate matters, loan modification, debt collection, contract disputes, estate planning and adoption. During the workshop, George welcomes questions in any of those legal areas as well.

Come prepared with your most important legal or financial question(s) and prepare to have them answered free of charge! Bring a friend or friends – everyone is encouraged to attend.

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Does Your Paycheck Fall Short? We Can Help.

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Do you find that your income falls just slightly short of covering all of your bills? Are you consistently filled with an underlying anxiety about whether or not you’ll bounce a check this month – which would push you even further into the red?

Money worries can take over your every waking thought, and can even wiggle themselves right into your nightmares, leaving you exhausted and stressed out! You may find yourself wondering time and time again how to possibly stretch your dollar just a little bit further, or if you could shoulder the responsibility of a second (or third) part-time job. Most likely, you’ve also considered selling everything and anything of value in your home that could potentially reap a decent profit.

If these are some of the thought processes that you deal with on a daily basis, what you need is some guidance. It may be possible to make that one job work for you. (It also may be a good idea to take on a short-term, part time gig until you’re not right on the precipice of late bills.) At Veitengruber Law, we’ve made it our business to teach people like you how to make your money work more effectively.

We’ll sit down and talk with you (in a FREE consult if you like our Facebook page) so that we fully understand the financial issues you’re dealing with. No problem is too small or too large for us to tackle. We can negotiate with any and all of your bill collectors so that your monthly payments are lower. If you have a mortgage on your home or another type of personal loan, we will work with your lender(s) to modify your interest rate, monthly payments, length of the loan, and/or mortgage insurance.

If your credit score has been damaged due to overdue payments or unpaid balances, we’ll work with you to teach you how to bring that score back up with no gimmicks.  There are legitimate things you can do to steadily raise your score, and we’ll help you do just that. As we watch your credit score rise, we’ll be able to negotiate your loan terms down even further in a few months, because lenders will see you as less of a risk once you have a higher credit score.

We’ll help you set up a monthly budget that you can manage, and if you are in real dire straits, we will of course discuss the option of filing for a New Jersey bankruptcy with you. If your mortgage is truly unmanageable, we’ll explain your options of selling your home via short sale and moving to a more affordable apartment or smaller home. Can’t afford your car payment anymore? We will negotiate with your car loan lender as well.

Bottom line: there are always possibilities and things we can do to help you out of your current financial situation. Call our office today and set up your consultation appointment. You’ve got nothing to lose, and a lot to gain. (732) 852-7295