What to Expect in a NJ Bankruptcy 341 Meeting

If you have filed for Chapter 7 or Chapter 13 bankruptcy, you will be required to attend a 341 meeting. Named after the section of the bankruptcy code that defines it, this meeting is where you meet with the trustee appointed to your case by the NJ bankruptcy court. The trustee will be able to question you under oath about your finances, assets, liabilities, and other things related to your bankruptcy case. Here, we will break down what you can expect and how we can help you prepare for your 341 meeting.

You will be joined in your 341 meeting by your attorney, the trustee handing your case, a court-appointed representative, and any creditors who choose to attend the meeting. Most of the time meetings are scheduled in clusters, so you may have a short wait before you are called for your meeting with the trustee. You will be permitted to refer to relevant documents during the meeting if needed.

341 meetings typically only last 10-30 minutes. In that time, the trustee will ask you some standard questions about your bankruptcy petition. The trustee will ask to see a photo ID as well as your social security card. They will also have you confirm on the record that the signature on your bankruptcy petition is yours. Additional questions can include:

  • Verifying your familiarity with the details of your bankruptcy petition.
  • Verifying the accuracy and completeness of the information in the petition.
  • Correcting any errors in the petition.
  • Ensuring all assets and liabilities are included.
  • Any previous bankruptcy petitions.
  • Information verifying employment and confirming the accuracy of your tax returns.

If any creditors are present they may ask some questions, but their scope is limited. Once the trustee has asked all of their questions, you will be free to go. Sometimes, the meeting will be deemed “not closed” if the trustee wants additional documentation. If you submit the required documentation promptly you should be able to avoid having to go to another 341 meeting.

Your attorney will be able to guide you through this process to ensure you understand the questions and provide full answers. You will meet with your attorney before the 341 meeting so they can go over necessary information with you and prepare you for any questions they anticipate will being asked. After the meeting is over, your attorney will let you know next steps going forward.

Veitengruber Law is experienced in handling bankruptcy cases. From your free consultation to the day your debt is resolved, we will be there for you throughout the entire process. We will help you prepare for your 341 meeting and provide caring, effective legal support throughout your bankruptcy case.

How Assisted Living or Long Term Care Can Lead to Bankruptcy

nj bankruptcy

According to the New York Times, the rate of people 65 and older filing for bankruptcy is currently three times what it was thirty years ago. Disappearing pensions, the all-time-high cost of medical expenses, and insufficient savings are all contributing to the financial instability of America’s elderly. It can be easy to underestimate how expensive long-term care and assisted living can be. When this happens, retirees find themselves unprepared to pay for the care they need. This can burden a family’s personal finances and in some cases lead to bankruptcy.

A lot of the issues impacting this crisis come down to sheer numbers. By 2050, there will be about 88 million adults over 65 living in the US. By this point, nearly 62 million of these people will need long-term care of some kind. The medical cost of this group is expected to be very high. A huge chunk of a family’s financial resources will be earmarked for long-term nursing care at home or an assisted living community. Family members will also need to find funds for co-pays, food, physical therapy, and medical equipment (walkers, adjustable beds and chairs, handicap accessories for the bathroom, etc.).

In 2016, the average yearly costs for senior care were:

$82,128 a year to stay in a nursing home

$43,536 a year to receive assisted living care

$20.50 an hour for in-home care

What’s more, many of these costs are increasingly the responsibility of elderly individuals and their family, as federal and state assistance for the elderly is consistently diminishing. Medicaid, for example, will cover most fees associated with short term stays in assisted living—but only for those who meet the program’s strict financial guidelines. Medicare also cannot be relied upon, as it will only pay up to 100 days per illness, leaving the individual holding the bill for any additional long-term care requirements. Similarly, even those with long-term care insurance can find their care is not covered under a policy’s conditions, exclusions, and benefit limits.

Nearly a quarter of long-term care costs are paid directly by individuals and their families. What this means is that when a senior can no longer care for themselves and must move into an assisted living facility or receive in-home care, the burden often falls on their family to pay for it. For many, financial contributions to mortgages, college costs, and retirement savings mean there is little disposable income to cover the cost of their parents’ long-term care. When a family cannot afford a loved-one’s care out of pocket, they are now forced to use their own personal and/or retirement savings. Some adult children of today’s older Americans are taking out personal loans to cover care expenses.

For many American families, it simply is not possible to cover the rising cost of long-term care for an elderly loved one. Bankruptcy can result when medical debt becomes unmanageable. Veitengruber Law is a full-service estate planning, debt management, and bankruptcy law firm. We can help you plan for the future, make your debts more manageable, and discuss your options when medical debt becomes overwhelming. Bankruptcy can help alleviate stress from medical debt and help you get your finances back under control.

How to Buy a Home After NJ Bankruptcy

NJ bankruptcy

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

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

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

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

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

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

Federal Housing Authority (FHA) Loan

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

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

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

Conventional Loans

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

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

Can a NJ Bankruptcy Forgive Gender Reassignment Surgery Debts?

NJ Bankruptcy

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

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

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

 

What Chapter Is Right for You?

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

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

 

The First Step

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

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

 

Chapter 7

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

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

 

Chapter 13

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

 

Post-petition Debts

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

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

Filing for Bankruptcy in NJ = Finding Financial Freedom!

filing for bankruptcy in NJ

If you find yourself facing unmanageable debt from credit card bills, loans, medical expenses or a variety of other potential issues, bankruptcy can provide a path towards a brighter financial future. Filing for bankruptcy in NJ can be an excellent way to take control over your finances and make the process of repaying your debts much more affordable. Unfortunately, despite the many benefits of filing for bankruptcy, many people are hesitant to file when they should. Some debtors feel a sense of failure or shame in filing for bankruptcy and wait years to file, while their financial situation becomes more unmanageable in the process. This delayed filing can be disastrous for your financial future.

A recent study by the Consumer Bankruptcy Project (CBR) found that nearly two-thirds of those who eventually file for bankruptcy report struggling under the weight of their debt for two or more years before filing. The study found that most people are filing for bankruptcy only after years of significant financial hardship. This period of time is commonly referred to as “the sweatbox.” While in the sweatbox, debtors are constantly bombarded by debt collectors, face the threat of losing their homes, and many even experience wage garnishment. Debtors in the sweatbox can find themselves in lawsuits over unpaid debt and may even be unable to pay for basic needs like food and electricity. Often times, these financial situations could have been avoided by filing for bankruptcy earlier.

When we meet with clients in the sweatbox, they almost always wish they had talked to us sooner. Often, those who wait to file for NJ bankruptcy do so with fewer assets and a much higher debt-to-income ratio than those who file earlier. Essentially, the longer you wait to file, the worse your financial situation is likely to be. On top of this, the stress and uncertainty of struggling through years of unmanageable debt will take a very real emotional and mental toll on anyone. And yet, many of our clients who finally file for bankruptcy long after the pros greatly outweigh the cons still express feelings of failure and shame.

At Veitengruber Law, our goal is to help people see bankruptcy as an opportunity for positive financial change—not as the end of the line. We work with our clients to dispel some of the prevailing myths about bankruptcy. We know that many of our clients face bankruptcy due to a number of circumstances outside of their control. Loss of employment or underemployment, divorce, medical expenses, and student loan debt are some of the most common obstacles to financial security that our clients face. We understand that no two clients are the same, which is why our debt relief solutions are created to fit your particular needs and goals. Bankruptcy is just one of the many tools we can help clients use to restore financial health.

Struggling through years living under the enormous weight of crushing debt is not a measure of personal integrity, nor is it financially advisable. Waiting too long to file for bankruptcy can put your financial security at greater risk. Don’t spend years struggling in the sweatbox. Veitengruber Law’s holistic approach to debt management and bankruptcy strategies will ensure that you receive personalized service for your specific needs. Filing for bankruptcy can be an intimidating process, but you do not have to do it alone, and working with us will not put you further in debt. Don’t wait until it’s too late.

When you call us for your free consultation, we will answer any questions you have and help you decide if bankruptcy is the right choice for your circumstances. If bankruptcy is not the right option for you, we will offer you alternative solutions that are viable in your specific situation. No risk – no obligation. We’re here to help!

Image: “FREEDOM!” by Gonzalo Baeza – licensed under CC by 4.0

Filing for NJ Bankruptcy isn’t the Only Solution to Unpaid Debt

nj bankruptcy

School loans, medical bills, mortgage payments, credit card bills, auto loans, past due utility bills, overdue taxes: what do they all have in common? They’re all forms of debt. If you’re dealing with multiple types and sources of debt, you know that they can deplete your bank account and tank your credit score. If the concept of getting out of debt feels like scaling Mt. Kilimanjaro, it’s beyond time to take action. Fortunately, filing for NJ bankruptcy isn’t your only option, even if your debt mountain feels insurmountable.

First and foremost, it’s crucial to be aware of exactly how much money you owe. It can be challenging to really SEE the true culmination of your debts, but trust us when we say that facing the reality of your situation is the only way to make a change. Ask yourself if you are more inclined to stay on top of a digital plan or if the act of physically writing things down works better for you. Then, sit down with a pad and pencil or your laptop. Compile a comprehensive list of your debts, being sure to include the following information:

  • Type of debt (Ex.: Mortgage, Student Loan, Credit Card, etc)
  • Name of creditor (Ex: Bank of America, Sallie Mae)
  • Total amount of each debt
  • Monthly minimum payment amount
  • Interest rates applicable to each debt
  • Due dates for each debt

IMPORTANT NOTE: Don’t disregard the list once you’ve made it. Refer back to it often, especially when paying the bills. As your amount of debt fluctuates, and hopefully decreases, make sure to update the list. Watching your total debt amount go down is immensely rewarding and can be the motivation you need to continue making progress.

Your next step is to determine how you will manage and pay off your existing debt. There are many different strategies, tactics and approaches that can help you chip away at your total debt amount before you even formulate a repayment plan. For example: if you currently pay monthly or quarterly utility bills, contact your provider(s) and negotiate a more manageable payment plan. If you show that you are being proactive, they will be more inclined to work with you.

Another way to make your debt more manageable right off the bat is via loan modification. If you can get the monthly payment reduced on one or more of your largest debts, your jumping off point will be much more advantageous. Additionally, you may want to explore settling a debt through a lump-sum payment.

As you create your debt resolution plan, you should employ (at the very minimum), the four following strategies:

1. Prioritize the debts that need to be paid off first.

Primarily, you want to consider the interest rate. Eliminating debts with a higher interest rate first will reduce your overall amount of debt faster. If the interest rates on all of your debts are all similar, you could choose to pay off the debt with the smallest balance first to give yourself a goal that is achievable.

2. Pay your bills on time each month.

By doing this, you’ll not only boost your credit score and keep your account in good standing, but also sidestep the possibility of having to make late payments, which will increase the amount of money you have to pay out.

3. Pay something, even if you can’t make the minimum payment.

Sometimes it’s a reality that you may not be able to pay the full bill on time or even the minimum payment. If this is a temporary situation, call your creditor and tell them how much you can pay that month. Paying even the smallest amount is putting forth a good faith effort that many creditors will look upon favorably. This doesn’t actually decrease your amount of debt, but it can sometimes buy you a month without late fees as long as you reach out to the creditor and explain your situation.

4. Create a monthly payment calendar.

This will give you a better idea of how and where to allot each paycheck. If your paychecks fall on the same day each month, for example the 1st and 15th, you can keep the same calendar from month to month. If payday varies for you, we suggest making a new calendar every month until your debt is under control – and even beyond.

If this all seems like more than you can manage, consider working with a professional. Many people balk at the idea of a debt-relief attorney because they don’t want to be “coerced” into filing for bankruptcy. However, in the same way that physicians don’t treat every patient with a one-size-fits-all remedy, attorneys don’t nurture financial health with a blanket answer.

Our goal at Veitengruber Law is not to see how many people we can get to file for NJ bankruptcy! Rather, we take the time to formulate an individualized plan for each and every client, particularly when they’re seeking advice for running a household or business. With this goal in mind, we will strive to restore your financial health to its optimum function. We have significant experience in dealing with creditors to negotiate debt resolutions other than bankruptcy. We will, however, give you our honest opinion if filing for bankruptcy truly is your best option. Call, email or FB message us today – let us know where you are in your debt struggle, and we’ll get started formulating a plan post-haste.

5 Mistakes to Avoid After NJ Bankruptcy

NJ bankruptcy

After your NJ bankruptcy, a common concern is how to re-establish your credit score. The real challenge is creating new financial habits so you don’t find yourself back in the same hole all over again. At Veitengruber Law, our holistic approach to financial health means our job doesn’t end after the bankruptcy is closed. We work with you to repair your credit and create healthier financial habits.

 

Top Mistakes to Avoid After a Bankruptcy Discharge:

 

1 – Ignoring your credit report

When rebuilding your credit subsequent to a bankruptcy discharge or reorganization, you will want to be very attentive to your credit report. Your creditors are supposed to report any discharged debts included in the bankruptcy to the credit bureaus. These reports should show a zero balance and include a note indicating the debt has been discharged. It is crucial to follow-up on this and ensure that all creditors are reporting to credit bureaus correctly. If discharged debt is being wrongly reported—as either a charge-off or an open account—late or missed payments can continue to show up on your credit. This can further damage your score and make it more difficult for you to get new credit.

2 – Applying for multiple new credit lines

It can be tempting after bankruptcy to rush out and apply for a gaggle of credit cards or loans in an attempt to quickly repair credit. However, it is important to give your credit score time to rebound before applying for new credit. The impact of a bankruptcy is strongest in the first year after filing, although it can stay on (and affect) your credit report for up to ten years. Instead of rushing into opening several credit lines at once, be patient and take the time to research your best options.

3 – Failing to read the fine print

When you do start applying for credit cards, it is important to remember that not all credit cards are created equally. Some credit cards will be more helpful to those rebuilding post-bankruptcy. A secured card, for instance, allows you to deposit cash as collateral up front to create a line of credit. That way, you are not able to charge more than your initial deposit. With any card you choose, it is important to read the fine print of your terms to make sure the card will work in your favor.

4 – Falling for credit repair scams

Many unethical “credit repair companies” make big promises about performing miracles to improve credit scores, but they rarely ever deliver the results promised. These companies rely on misinformation to scam those that don’t know much about how credit works. Some of their tactics may even be illegal. Keep in mind that if something seems too good to be true, it probably is.

5 – Making things too complicated

Ultimately, when it comes to rebuilding your credit after bankruptcy, you need to go back to the basics. What bad habits caused you to file for bankruptcy in the first place? An unflinching assessment of your spending habits will help you determine which factors led to the bankruptcy and determine where you need to make changes. Figure out what your credit-bingeing triggers are and work toward setting spending limits for yourself. Simple things like making on time payments, keeping debt to a minimum, and sticking to a healthy budget are excellent foundations of any financial strategy and will get you on the road to financial health quickly.

You’ve been through the hard-fought financial battle of bankruptcy and come out victorious on the other side. Now is the time to think positively about your financial future. Rebuilding your credit after bankruptcy takes time and patience, but you can use the knowledge and financial savvy you’ve learned along the way to move forward to a brighter future. Veitengruber Law is here to help. We are skilled in advising clients and creating easy-to-follow strategies to rebuild credit. Call for your free consultation today.

Seeking Legal Counsel When You’re Out of Money and Out of Time

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You have reached that critical point; you can no longer keep up with your bills. You might have a mountain of credit card debt, a house going into foreclosure, a looming sheriff sale on your property, shut off notices for services, a garnishment or repossession on a vehicle, or all of the above! Perhaps you are considering bankruptcy. The point is that you need the help of a legal professional. You need it done well, you need it now, AND you need to find a way to pay for it.

 

How Can You Afford It? (How Can You Not??)

You’re going to have to spend money to save money.  HOWEVER, you’re going to save your peace of mind and hopefully some assets too.

 

  1. Take advantage of a free consultation. A qualified attorney can give you your options. Is bankruptcy right for you? Is your situation ripe for credit consolidation or negotiation? How far along are you in the foreclosure process? Is it possible to stop a pending sheriff sale? Be honest and you’ll receive realistic expectations for your individual circumstances.

 

  1. Use Your Tax Refund. Uncle Sam has been holding on to your money, but now it’s the perfect nugget of cash infusion to save you bigger money in the long run.

 

  1. Ask family and friends. It’s difficult to swallow your pride, but you never know what your support net is until you ask. If it’s a gift, then that’s great. If it’s a loan you can let your loved one know that he or she will be listed as a creditor if you file bankruptcy. For other situations; set up a plan of when and how much you can realistically repay. It’s much easier to keep your job if you have stable housing and a solid financial plan under your belt.

 

  1. Stop Paying Your Unsecured Debt. If, after your consultation, bankruptcy is in your future, stop making payments on credit cards or other unsecured debt. The total owed will be dealt with as part of the bankruptcy, so those monthly minimums can now finance your legal fund.

 

  1. Reduce your expenses and minimize outgoing expenses. Fancy coffee every morning, premium cable channels, gym membership, daily lunches “out” – all gone. It adds up fast!

 

  1. Try to earn some extra money aside from your primary occupation. Sell old electronics or find a temporary part time job. Go through your attic or basement and have a yard sale, or hit eBay. Lighten your load while filling your wallet.

 

  1. Request a payment plan. Your bankruptcy attorney may allow you to list them as a creditor in a Chapter 13 filing, thus allowing you to pay them over a period of months. Chapter 7 fees can be paid over time as well, although without the federal court supervising. (Keep in mind that you must be paid in full before your attorney will file the case.)

 

  1. Withdraw from your retirement account. Only do this as a last resort. Those funds are otherwise protected, but you could be facing a large tax consequence if you withdraw early. That being said, in some circumstances it may be the best option. Also, consider options where you essentially “borrow” the funds from yourself and replace them with a payroll reduction each pay period going forward.
    IMPORTANT NOTE: Always discuss this option with your credit repair attorney BEFORE taking any money from your retirement fund(s).

nj bankruptcy attorney

How to Find the Right Attorney

You want someone with a proven record of results who can and will act in a timely manner. You could call your local bar association or attorney referral number. You could get a referral from a friend. Or, you could count one problem solved and realize that you already know a top legal representative for all types of financial duress – Veitengruber Law.

 

Don’t represent yourself.

This isn’t small claims court, or a traffic ticket. This is your entire financial future. Your chance of successfully completing a Chapter 13 bankruptcy without legal counsel is less than 1%; the chances of completing a solo Chapter 7 is less than 50%. Besides, you might end up losing more money trying to navigate your financial issues alone than you would have spent on legal counsel in the first place.

 

You wouldn’t ask a podiatrist to work on your car, or the babysitter to fix your plumbing. You need the right person for the job – you need an expert! When you’re looking for a NJ lawyer with experience who you can trust, you need Veitengruber Law.

Debt Limits in a Chapter 13 Bankruptcy

NJ bankruptcy attorney

For most people, the word bankruptcy doesn’t incite a positive response, especially if it’s a personal obstacle that you’ve faced. Despite its often negative reputation, bankruptcy does provide a second chance to start fresh. It’s not the easiest monetary maze to navigate, but in a Chapter 13 bankruptcy, a significant emphasis is placed on devising a repayment plan, which offers direction to a financially divergent individual.

When a debtor files a petition through the bankruptcy court, the bankruptcy case is initiated. Though there are various types/chapters of bankruptcy, Chapter 13 can only be filed by individuals. In order for you to qualify for Chapter 13 bankruptcy, your total debt cannot exceed a specific limit according to the bankruptcy law. At first glance, if your debt exceeds the set amount, don’t panic. It’s still possible to qualify for Chapter 13, and we’ll explain what that looks like.

Some parts of debts can be contingent, disputed, or not yet liquidated and therefore will not be combined with the rest of your debt. Unliquidated debt occurs when the amount that you may be required to pay has not yet been determined or cannot easily be determined. This can be a common occurrence in personal injury or auto accident claims. A debt that you are not mandated to pay unless a specific event takes place is known as contingency debt. If the event never occurs, you will not be obligated to pay the debt.

Every 3 years, the Chapter 13 debt limits are altered. Set on April 1, 2016, if your secured debts, such as mortgages and liens, amount to more than $1,184,200 or unsecured debt totals more than $394,725, you may not be eligible for Chapter 13. These amounts are not negotiable, but there are steps you can take in order to get your debt total below the limits.

Review and Separate Types of Debt

1.      Distinguish which debts are not counted into the debt limit.

You are not obligated to pay contingency debts unless the contingency event occurs. Be careful; cosigned debts are not contingent.
Example: You cosign on your sister’s car loan with the assumption that she will repay the debt. Legally, you are just as responsible for the debt, even if you and your sister are in agreement that she will be responsible for repayment.

Unliquidated debts are easy to understand, but know that breach of contract claims are not normally deemed unliquidated.

2.      Separate debt into unsecured and secured categories.

What is the difference between unsecured and secured debt? Connected to a property, mortgages and car loans are standard examples of secured debt. Since the borrower has an incorporated motivation to make payments, the property linked to the debt is said to “secure” the loan. If the individual ceases to make payments, the lender can take hold of the property that is associated with the loan.

Unsecured debt includes credit card debt and student loans. In other words, it’s debt that is unattached to property. The creditor can take action against the debtor, but they are not able to seize property to make up for ignored payments.

If you have secured property in bankruptcy, it’s possible to strip down a lien or part of a lien. Any portion that is removed turns into unsecured debt. The conversion of some secured debt to unsecured debt can assist you in remaining beneath the debt limit.

Other Filing Requirements

In order to file for Chapter 13 bankruptcy, it’s not only necessary that you meet the debt limits; there are a few additional requirements. It’s suggested that you have a steady, reliable income. This is crucial because a repayment plan occurs over the course of 3 to 5 years and you need to be sure that you will have a paying job throughout the life of your plan.

A credit counseling session is also mandated before an individual can file for Chapter 13. You’ll be required to submit a certificate that states that the counseling was completed before your bankruptcy case can be opened.

If you find that you do not meet the debt limits for Chapter 13 bankruptcy even after taking our suggested steps, there are other options that you can pursue. Chapter 11 bankruptcy offers reorganization and many of the benefits of Chapter 13 bankruptcy, but it’s typically less stream-lined. Chapter 7 would also be an option, but it only provides liquidation.

If you’re considering filing for Chapter 13 bankruptcy and have questions about the process or even more specifically, debt limits, be sure to contact our office. We offer all new clients a free, holistic debt evaluation, which will help you determine what action(s) will help your financial situation the most.

How Filing for NJ Bankruptcy Affects Your Credit Score

NJ bankruptcy

One of the biggest fears people have when it comes to filing for bankruptcy is how it will impact their credit score. The fear of losing good or even mediocre credit sometimes causes those struggling with debt to avoid filing for bankruptcy long after they should. While bankruptcy will negatively impact your credit score and can stay on your credit report for up to ten years, it is still sometimes the best option for those struggling to manage their debt. There are many benefits to filing for bankruptcy sooner rather than later when it comes to your credit score and overall financial health. The experienced legal team at Veitengruber Law provides personalized bankruptcy and credit repair counseling based on years of insider knowledge of how the credit industry works.

Depending on which kind of bankruptcy you file, your credit score will decrease on average between 160 and 220 points. This is enough to take a good credit rating down to a fair or poor rating. The consequences of having a low credit score are numerous. Credit card and loan applications may be denied or higher interest rates may be applied and you may face difficulty purchasing a car, getting approved for an apartment, or getting a cell phone contract. Our skilled team will help you understand how your specific bankruptcy case will affect your credit score before you file.

Under Chapter 13, the bankruptcy will appear on your credit report for up to seven years and any discharged debts will stay on your report for up to seven years after they have been discharged. Because many debts stay active during the payment plan timeline designated under a Chapter 13 bankruptcy, it is possible for discharged debts to appear on a credit report longer than the bankruptcy itself. Under Chapter 7, the bankruptcy will appear on your credit report for up to ten years. Because all debts included in a Chapter 7 bankruptcy will be discharged within a few months of filing, the discharged debts should fall off the credit report before the bankruptcy.

It is important to remember that as the items associated with a bankruptcy age, they will appear less and less on a credit report and therefore have less and less of a negative impact on your credit score. This is a big reason to consider bankruptcy instead of allowing debt to grow and go to collections. Instead of continuing the struggle to keep up with your debts, bankruptcy is a chance for you to start rebuilding and repairing. The sooner you begin the process of bankruptcy, the sooner you can start the process of improving your credit score and becoming a stronger financial consumer.

Rebuilding your credit score after filing for bankruptcy takes time and patience, but the Veitengruber Law team is here to help you every step of the way. We offer counseling on the steps you need to take to improve your credit after bankruptcy. Our holistic approach to debt relief means our job does not end once we have settled your bankruptcy case. We are there for you after bankruptcy, providing expert advice on how to repair and rebuild your credit. It is our goal to create a forward-looking plan to improve your credit based on our real-world experience and expert knowledge of the consumer’s rights in the credit industry. We provide our clients with the tools they need for a brighter financial future.

While we will always analyze other debt relief alternatives, your specific circumstances may make bankruptcy the best option. The main thing to remember is that avoiding filing for bankruptcy in order to hold on to your credit score—and allowing your debts to linger and go to collections in the process—will also very negatively impact your credit score. When it comes to debt management, being proactive and filing for bankruptcy should not be considered the end of the road. On the contrary, it is absolutely possible to achieve an excellent credit status after bankruptcy. We are here to help you turn a bankruptcy into an opportunity to establish a healthier financial future.

Filing for bankruptcy can be a confusing, intimidating, and emotional decision—but you do not have to go through it alone. Working with Veitengruber Law means working with experienced attorneys and legal professionals who have a solid understanding of bankruptcy law and credit repair solutions. We approach every bankruptcy case on an individual basis and there are many ways we can help mitigate the impact bankruptcy has on your credit score. Contact us today to find out if bankruptcy is the right path to your brighter financial future.