How to Tackle Debt as a Married Couple

nj debt relief

Marriage is about two people joining their lives together. Making the decision to spend the rest of your life with someone also means sharing financial decisions and taking care of debts together. Both parties may be entering the marriage with student loans, credit card debt, or personal loans. While in New Jersey you are not legally responsible for debt your spouse accrued before your marriage, you will become a financial team with your spouse. This means helping each other tackle debts both from before and after you say “I do.” Here are some tips on tackling marriage debt and subsequently reducing the financial stress in your relationship.

While ideally you should enter into a marriage with a full understanding of your spouse’s financial situation, it is never too late to sit down and have the money talk. Overcoming debt together requires open, honest communication about what you bring to the marital table financially. Don’t just talk about your debts, talk about your goals, too. What will paying off this debt allow you to do as a couple? Setting financial goals together will allow you to both motivate each other and hold each other accountable.

It’s important to keep in mind that you are in this together. After marriage, individual debt becomes “our debt.” Couples who have the most success tackling debt together tend to face their financial situation as teammates. Focus less on who brought more debt to the table and more on how each of you can contribute towards the goal of paying down the debt. Instead of only focusing on your debt individually, you will be able to stretch your money farther. Paying off debt when you’re working with two incomes will be easier than doing it alone.

Learning how to budget for two people (or more if you have children) will be very important to paying down your marriage debts. Don’t assume you and your spouse are on the same page about sticking to a specific budget. Sit down and determine how much money is coming in and out of the household on a weekly and monthly basis. You should both have a good understanding of your living expenses, debts, and financial goals. Be honest with your spouse about any financial difficulties you might be facing and see how you can fit this into your budget as a couple. After you know what your shared budget is, you will be able to come up with a realistic plan to pay off your debt.

Once you have a budget in place and a plan to pay off your debts, make sure you keep the conversation going. Check in with each other to make sure the budget you set is still in line with your financial realities and that you are making progress towards your goals. Like marriage, paying off debt is a long-term commitment that requires a lot of dedication and flexibility. Be patient with yourself and your partner as you take on the task of ridding yourselves of debt.

Make tackling debt together part of your goals as a couple. Financial difficulties are the leading cause of marital stress. If you have been struggling to pay down your debts and it is creating a strain within your marriage, it may be time to seek outside help. Veitengruber Law offers debt solution services to help you manage your debt and get back on track to financial health. Don’t hesitate to reach out to us for a free consultation.

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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

Common Causes of Debt and How to Avoid Them

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Almost every household in the USA carries at least some debt. The simple explanation for debt is that you spend more money than you make, but there may be some less obvious factors that have contributed to your accumulation of debt. Taking the time to think about how you got into debt could help you avoid similar mistakes in the future. These are 6 of the most common causes of debt and how to avoid them:

1. Loss of Income

The sudden loss of a steady income can quickly lead to debt and financial troubles. You may be laid off, fired, or experience a decline in your personal business. You may need to take time away from work or leave the workforce completely to care for a child, an aging family member, or attend to your personal health needs. After the sudden loss of income, you may become overwhelmed by everyday expenses, and debt can easily build up.

One of the best ways to defend against this kind of debt is to build an emergency fund. In times of financial health, live below your means and put any extra money into savings. An emergency fund should be able to cover at least six months of expenses, so even if your income declines unexpectedly you will have the financial support you need to get back on your feet

2Medical Expenses

As one of the leading causes of bankruptcy in America, medical costs can easily push someone into debt totaling tens of thousands of dollars or more. With expensive treatments and high premiums, even those with health insurance can struggle with medical debt. When facing medical expenses, people will turn to savings or even credit cards to pay for their care. Since you can never predict what your health will be like in the future, it is best to take precautions now to prevent medical debt. Enroll in a good health insurance program. Even if paying for health insurance will cost you more now, trying to pay out of pocket for a medical emergency in the future could be financially devastating. You can also plan to include potential medical expenses in your emergency fund.

3. Expanding Families

The cost of raising a child is estimated to be around $250,000.00 from birth all the way through to adulthood. So, even if you feel you have plenty of extra money, having a kid can quickly change that. The new financial responsibility of raising a child can also be affected by the need for childcare. Paying for childcare can be so expensive that it can be cost prohibitive, causing some cases families to live on one income so one parent can stay home to care for the child(ren).

Whether you are a single-income or multiple-income home, the expenses of raising a child can quickly add up. Start saving before you have kids and prioritize saving throughout your child’s life. Prepare yourself by investigating the best childcare options for your specific financial situation before having children. Ideally, wait to have kids until your income will support adding a little one into the mix.

4. Divorce

A lot of financial changes take place after a divorce. With each person going from two incomes to one income and the added expenses of alimony, child support and legal fees, getting divorced can be very expensive. When facing divorce, it is important for couples to look critically at the financial impact of their decisions.

Often, the more amicable the split, the less likely it is that the divorce will have disastrous financial consequences for both people. If couples can agree to work together financially through a divorce, they can lower their legal costs and normally find more mutually agreeable results. Working through an arbitrator or divorce mediator can further save money on legal fees that accumulate when working within the court system. By working together, couples can come up with a solution that is financially best for everyone involved.

5. College Costs

For many young people today, crippling college debt has become the norm. Student loans add up quickly and sometimes recent graduates are not prepared to make the loan payments they accumulated getting their degree.

As a parent, you can help your future college graduate by starting to save for their college education as soon as possible. If you are student facing the expense of college alone, there are ways to reduce your student loan debts. Make smart choices about the schools you attend. Private schools may have the name or the prestige you think you need, but remember they offer the same degree that you will be getting from a state school. You also don’t have to start college right after high school or go to college full time. Working before and during college is a great way to offset expenses.

6. Lack of Insurance

Both in the case of individuals and businesses, not having adequate insurance can send people scrambling during an emergency. Home owners insurance, car insurance, and medical insurance can all make a huge difference when disaster strikes. Insurance is an essential aspect of financial planning. Take the time to understand your insurance policy. What does it cover? Would that coverage be enough to get you through an emergency? Being uninsured or under-insured can land you in huge debt if you are faced with a sudden unfortunate event.

 

It can be easy to fall into debt. Taking the time now to analyze your financial situation and plan for the future can reduce your risk of falling into the above debt traps. No two people have the same debt problem. At Veitengruber Law, we offer individualized debt management services to help you get back to financial health and security if you have occurred debt that you can’t seem to shake. We can also help you set up a plan to avoid accruing debt in the first place. Call us today at 732-852-7295 for your free debt management consultation!

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

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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.