Filing Your NJ 2019 Taxes: Go it Alone or Use a CPA?

Everyone knows April 15th is tax day. For months you’ll see the ads everywhere for tax filing services. If you’re reasonably good with numbers you may be wondering if you can handle filing your taxes yourself or if you should use an accountant. There are a lot of factors to consider so it’s best to know all of the options before you file.


When should you go it alone?

Filing taxes yourself is best when you’re taxes are fairly simple. If you are filing singly and taking the standard deduction your tax preparation will be fairly straightforward. However if you have dependents, student loan interest, a mortgage, or own a business you will want to itemize in order to get the maximum benefit. That can get complicated quickly. Certain itemizations can raise red flags for an IRS audit. In that case you will have been penny wise and pound foolish. You’ll have to hire a CPA to represent you in an audit in addition to back taxes and fees you’ll have to pay.


Not all accountants are created equal.

Anyone who studied accounting can call themselves an accountant. Your college roommate who took a few accounting courses is an accountant. Your cousin’s wife who read Accounting for Dummies is an accountant. Does that mean you should put your tax preparation in their hands?


You may think that going to an office like Jackson Hewitt or H&R Block means that you’re putting your taxes in the hands of professionals. The term ‘professionals’ is misleading. Their websites don’t even call their employees accountants or professionals, they call them ‘tax pros.’ Workers filing your taxes are trained on how to use accounting software, that’s it. Hiring one of these companies is hardly a step up from filing yourself using TurboTax.


An Enrolled Agent, or EA, is an accountant who has been certified by the IRS. To become an EA, several requirements must be met:

  • Must have a Preparer Tax Identification Number (PTIN), which must be renewed annually
  • Must achieve passing scores on all three parts of the Special Enrollment Examination (SEE) within two years
  • Apply for enrollment
  • Payment of enrollment fee
  • Pass a background check
  • Pass a suitability check of past tax filings
  • Renew EA certification every three years
  • Obtain continuing education after certification

An EA does not have to have a college education. When choosing an accountant to file your taxes, an EA will probably be more affordable than a CPA. An EA is also capable of legally representing you in the event of an audit.


A Certified Public Accountant, or CPA, must have a bachelor’s degree from an accredited college or university with 150 total semester hours. Of these, 24 must be in accounting and 24 in business. In order to be licensed in New Jersey, a candidate must pass the CPA exam and provide evidence of at least one year of experience working for a CPA. During that term, 25% of your time must be spent auditing and accounting and the remaining 75% on tax services. Maintaining a CPA license requires 120 hours of continuing professional education to be completed every three years including a New Jersey Law and Ethics course.


A CPA is the most well-educated and experienced person you can have handling your taxes. If you need help finding an NJCPA, Veitengruber Law has close relationships with CPAs with impeccable reputations. George can recommend a CPA that will handle your taxes with accuracy and honesty beyond reproach.


Who should use a CPA?

Anyone not taking the standard deduction should have their taxes prepared by a professional. When itemizing your taxes, a CPA can help you find deductions you might have missed, express concerns about possible red flags, and let you know about upcoming tax law changes for the new year that you can prepare for.


In the event of an audit, you’ll want a CPA on your side. They will have experience navigating an audit and won’t be intimidated by the IRS officials. They may even have worked with the IRS agent before on other cases and know what to expect.


While most tax returns could benefit from the eye of a CPA, these are some categories of filings that definitely should be itemized:

  • Buying or owning a home
  • Owning a rental property
  • Moving and moving expenses
  • Moving to a new state and filing 2 sets of taxes
  • Medical expenses and medically related travel
  • Owning a business
  • Working from home in a home office
  • Paying student loan interest


It’s best not to leave your tax returns to chance. Hiring a CPA for your filing is the best way to ensure you get the maximum benefit on your return.


Do I Have to Pay Rent if My Landlord is in Foreclosure?

for rent sign

As a renter in New Jersey, you may wonder exactly what rights you have if the home you reside in happens to go into foreclosure. First and foremost, you need to know if and when you’ll need to look for a new place to live. Hopefully, the property owner (your landlord) has been forthright with you about any foreclosure on the home, along with your rights during said foreclosure.

Of course, there are many less-than-desirable landlords in New Jersey – plenty of whom only care about their bottom line. If your landlord falls into this category, s/he probably isn’t too concerned with where you and your family (if you have one) are going to stay if s/he fails to make mortgage payments on the home.

In this circumstance, you may not even find out about the foreclosure from your landlord; rather, you may read about it in the newspaper or hear about it from someone you know. It’s possible that you won’t know that the home you’re living in is in foreclosure until you see the foreclosure notice taped to the door. Some renters who do not live in the main building often never even see the notice, thereby leaving them completely in the dark until the foreclosure has occurred. If that happens to you, seek counsel immediately to get your belongings back and to sue your landlord for failure to alert you.

If, however, your landlord lets you know about the upcoming foreclosure, the question remains: Should you continue to pay rent?

It would seem that the obvious answer would be “Of course not!”

If your landlord isn’t paying the mortgage, why should you then be required to pay him rent money every month? Alas, it may not make perfect sense, but in this case, you must continue paying rent to your landlord as your lease dictates. Failure to do so could give him or her a case to evict you or sue you for the rent you didn’t pay. Furthermore, if you retain your tenancy throughout the foreclosure, new owners may allow you to continue renting from them, unless you have a history of not paying your rent.

The bottom line in this case is that you should continue to pay rent even if you discover that your landlord isn’t paying the mortgage. Keep your house in order by making timely rent payments so that your record looks good. This will ultimately make it easier for you to continue living as a tenant in New Jersey. For more information about what to do if your rental home is in foreclosure, you can read more here.

Always seek professional legal assistance in NJ if you feel that you are in danger of being evicted without cause, whether due to your landlord’s financial issues or otherwise.

 Image credit: Beatrice Murch

Avoid Payday Loans! Try These Alternatives Instead


Payday loans are an almost guaranteed way for the poor to get poorer – FAST.

What exactly is a payday loan?

Essentially, payday lending is an easy way for people who are strapped for cash to borrow enough money to tide them over “just until their next paycheck.”

Those who are desperate enough may be enticed by one of the 20,000+ payday lending institutions in the U.S. The idea may initially sound like it could work: you’re out of money, you’ve got bills to pay, you can borrow what you need and pay it back as soon as you next get paid.

The problem with this type of short term lending is that the borrower is often unable to repay the full amount borrowed right away, which immediately causes all kinds of finance charges to start accruing. Unable to make good on their original payday loan, many people take another loan to pay off the first one, and the cycle begins.

The average interest rate charged on a payday loan is somewhere around 400%. Some states have some regulations in place, but many do not. Would you take MasterCard up on a credit card offer that charged 400% interest?

What are the alternatives?

So, instead of creating a gigantic financial mess for yourself, what can you do when you’re short on cash? Here are some responsible ways to get your bills paid until you can get yourself back on track:

  • Credit Union Loan – If you’re a member of a Credit Union, you may be able to take a small loan from them – either a payday advance (at a much more reasonable interest rate of around 12%), or a small traditional loan with interest rates that usually don’t go above 18%. Credit Union loans are a great option for members because they also allow additional time for loan repayment, including installment plans.
  • Ask your employer directly – In certain emergency situations, you may be able to speak directly to your boss about giving you a one-time advance on your paycheck. Since it’s your own money, there will be no one to pay back, and no interest.
  • Small Dollar Bank Loan – Several years ago, the FDIC ran a Small Dollar Loan Pilot Program that allowed banks to grant smaller amount loans while being insured by the FDIC. The Pilot was successful in showing many banks that smaller dollar amount loans can be successful. More banks are now willing to grant smaller loans – ranging from $500 – $2,500.
  • Negotiate with your current lenders – If your main financial struggle is paying your current creditors, or even making your monthly utility payments, you may be able to negotiate lower payments that work for you.
  • Credit counseling – Instead of jumping at the chance for a payday loan that will inevitably end with financial crisis, reach out to a professional who can actually help to get your finances functioning better for the long haul. Your best bet is to look for someone in your state who has a lot of experience and success in assisting clients with money and/or credit problems.  This is likely to be a bankruptcy attorney in New Jersey or the state that you reside in. Hiring a bankruptcy attorney does not mean you have to file for bankruptcy! They have a vast amount of expertise in getting people back on their feet in a variety of ways, and their fees will be much lower than you’d spend on a payday loan.

Choose the alternative(s) above that work for you, but please avoid payday lending at all costs (no pun intended). Payday loans are definitely no laughing matter. Call Veitengruber Law for a FREE assessment of your finances now.

Image Credit: LendingMemo (Flickr)

What to Expect When Your Debt’s in Collections


Did you know that 29% of New Jerseyans have a debt in collections? That’s a pretty significant number, and if you happen to be in that 29%, there are some important things you should know about what to expect.

If you’re being hounded by one or more debt collectors, the very first thing you need to do is make a plan. Before making any moves toward getting out of debt, you have to figure out:

  1. How far in debt are you?
  2. What are your monthly obligations (other than the debt)? and
  3. What is your monthly income (and can you make more)?

After you’ve taken a good look at your current financial obligations and income, you’ll have a better idea of how much you can afford to put toward paying back your debts. Naturally, you’ll want to put all of your efforts into paying off one debt at a time, which is known as a debt snowball. Focus on any debts that have been sent to collections first, because these are the ones that are affecting your credit the most, and if not resolved, will eventually affect your ability to buy a home or take out any other loans. Long-standing overdue debts may even prevent you from getting hired or promoted.

Going it Alone

It is possible to negotiate with collections agencies yourself, but it isn’t going to be pleasant or easy. As you may have already experienced, the people who are employed by collections companies are trained to get as much money out of you as possible. They are usually extremely aggressive, and can often manage to talk you into an agreement that you realistically can’t fulfill.

Asking for Professional Help

Turning to an experienced New Jersey attorney who specializes in debt relief services will make the whole process much less painful. Believe it or not, by hiring an attorney to help you organize your debts,  you’ll actually end up spending less money in the long run. How is that possible? After all, don’t attorneys charge outlandish fees?

As it turns out, not all attorneys in New Jersey want to overcharge you. Some actually want to help people like you, and have a reasonable flat fee or hourly rate that will not see you dipping further into the dark recesses of debt.

George Veitengruber, Esq. is one prime example of a debt relief attorney in New Jersey who prides himself on helping people turn their financial lives around. He even offers a free consultation to anyone who mentions this blog post! (You can also ‘like’ Veitengruber Law on Facebook for a free consult).

Sitting down with a professional is the perfect way to lay out all of your debts, expenses and income. You’ll have a second (highly trained) pair of eyes working with you to create a plan that WORKS.

A real plus of working with a professional in debt relief is this: Your attorney will do all of the negotiating for you. This means you won’t have to make any nerve-racking phone calls which will lift a huge weight off your shoulders. Yes, you will still be financially responsible for the plan that your attorney negotiates for you, but he will give you expert guidance along the way, helping you to decide the most effective plan of action.

Finally, the best reason to hire someone to help you eradicate your debts is that he has the experience and practice in negotiations needed to bring the total amount of your debts DOWN. He’ll do all the work, and you’ll still pay LESS than if you dealt with the problem on your own.

Call today and set up your free consultation. (732) 695-3303. You won’t be sorry you called. 🙂

Image credit: StockMonkeys

Is Your Home ‘Under Water’?

8224569761_fd4d816a21_zImage Credit:

The loss of 1,300 jobs in New Jersey this March, means that New Jersey’s job market is once again in a slump. When compared with New York, New Jersey has had a very weak recovery from the recent recession. NJ lost around 258,000 jobs during the recession, and has only been able to recover around 36% of those jobs.

Because of this and several other factors, many New Jerseyans continue to struggle financially, with some families living off of unemployment checks or much lower salaries than they were accustomed to before the recession hit. The financial struggles faced by many new Jerseyans means that they are struggling to pay their bills and make good on their debts.

Reports now show that almost 20% of New Jersey homes are considered ‘underwater’ in terms of equity.

What that means is that more homeowners are falling behind on their mortgages, unable to keep up with the high payments due to the “economic pause” that’s occurring in our state along with several other states in the US.

Those homeowners who feel like their house is “underwater” regarding equity, are forced to consider losing their home to a foreclosure. However, because foreclosure is so devastating to a credit score, other options should be considered before going down that road.

Two good options for struggling homeowners are: deed in lieu of foreclosure and short sales.

A deed in lieu of foreclosure involves the homeowner voluntarily relinquishing their home to the bank or lender in order to have the loan canceled. The bank takes ownership of the home and does not pursue foreclosure proceedings. Additionally, if any foreclosure proceedings have already been started, the lender in this case agrees to put a stop to them. In a deed in lieu of foreclosure, some lenders will forgive deficiencies (overdue or late payments), and some will not.

Another option for homeowners who are trying to swim to the surface and get ahead of their debts, is to sell the home as a short sale. A short sale must be done with the permission of the bank or lender, as they will be agreeing to take less money than is currently owed on the property. Often, the difference is forgiven, allowing the homeowner to walk away after the short sale, and work on rebuilding their credit without an overly expensive mortgage hanging over their heads. It is an important to make sure that you are clear on all of the terms of your short sale before you sign any documents. Homeowners must be sure that the deficiency balance is not going to be their responsibility.

Remember, there are options that can help you get out of the unfortunate situation you may have found yourself in. At Veitengruber Law, we can help you decipher the differences between a short sale and a deed in lieu of foreclosure so that you can make the best decision for your life and circumstances. We negotiate with your lenders for you. Get out from underneath a sinking property now! Give our office a call – we’ve helped many like you and we guarantee that we can help you as well.

How to Keep Your Holiday Spending in Check

Every November in recent history, consumers have been sounding off, becoming increasingly agitated about the fact that retailers seem to want us to forget Thanksgiving altogether.

In the past, Black Friday has traditionally started off the yearly holiday shopping season. It’s called Black Friday because in years past, it could often give retailers the push needed to tip them over into profitability (being in the black), instead of ending the year unprofitable (in the red).

In order to encourage shoppers to spend money on more than just one day, many big box stores have been shifting the beginning of their holiday sales further and further back on the calendar. This year, many of these stores are seemingly ignoring Thanksgiving altogether, keeping their stores open for all or part of the holiday.

If watching the holiday shopping season slide earlier and earlier leave you scratching your head, well, there’s a reason why retailers want to blur the lines between Thanksgiving and Christmas.

The National Retail Foundation forecasts that holiday shoppers plan to spend less money this year, which has been a trend since 2008. Every year since then, consumers have been spending approximately 2 to 4% less on their holiday shopping, pushing stores toward more drastic action. Although complaints about blending the two holidays together have been ricocheting around the Internet, (and even employees who will be working on Thanksgiving have expressed their unhappiness), more and more consumers have reported that they plan to participate in early holiday shopping events.

Why would consumers participate in something that they’re ultimately against? It boils down to what “makes the world go-round”: money. If you’re one of those consumers weighing the pros and cons of saving a few dollars versus not wanting to encourage retailers in their efforts to create a holiday mash-up, take a minute to come up with an alternative that works for you.

When we really stop and think about it, doesn’t everyone we know already have everything they need? Aside from a million dollars and a yacht, I mean. With some exceptions, most of us give gifts just to give them, which means they often end up being meaningless, useless and in the end, a pointless reason to spend money that we don’t have lying around.

3576571288_8f088880c1Photo courtesy of Isaac Wedin

Every day, we make it our mission to help our clients get their finances in order. One piece of advice we give is to avoid spending money that you don’t have. Especially this year, if you’re upset and/or angry about stores opening up for the holiday season on Thanksgiving, make a statement by doing something a little different.

  • Make your own photo cards. Instead of shelling out tons of money to have a photo company make them for you, set up a backdrop in your own home using a sheet or solid curtains. Take a family photo with a tripod, then import the photo to Powerpoint to add text and designs. Print them on photo paper at home if you can, or simply send them to your local printer to be printed as regular photos instead of cards. Even cheaper: send an e-card!
  • Give the gift of experience. Instead of following through with your “obligation” to buy gifts that may ultimately end up on the recipient’s yard sale table next year, give someone the gift of time with you. Plan a day of fun adventures for young children who are close to you (zoo, aquarium, movies with popcorn, visit family out of state). Adults could pool their money and take a vacation somewhere warm with the entire family!
  • Give the gift of food. Especially if you love cooking or baking (and have a knack for it), sharing the wealth of delicious food or baked goods is a wonderful way to stay in the tradition of gift giving without the risk of your gift being unwanted or unneeded.  Everyone loves food!
  • Offer up your services. If you’re not the chef in the family but have another admirable talent, give the gift of your services FREE of charge. Give out homemade coupons offering to babysit so friends can spend a night out alone, for example.
  • Shower them with flowers. For those who live in warmer climates (or those who keep a greenhouse going year-round), consider creating a luscious arrangement of your home grown blossoms. Giving arrangements that can thrive indoors is the best idea, so your gift recipient can brighten up their home’s interior through the cold winter months.
  • Use your words to create a gift. Have a talent for writing? Write a short book about a child near to your heart, or perhaps some framed poetry for your adult friends.
  • Make a Craft-in-a-Bag. Hit up a few craft stores and peruse their clearance sections. Some thrift stores often have bags of miscellaneous craft items for extremely affordable prices, too. You can give a child hours of fun for a mere few dollars.

If you’ve got children who also want to get into the holiday spirit, help them come up with gift ideas that won’t take a huge bite out of their allowance, or, in many cases, your own wallet once again.

  • Frame it. Help your child create a meaningful picture collage to put in a pretty frame as a gift for grandparents, their other parent, or aunts and uncles.
  • Play it up. What kid doesn’t like hamming it up for the camera? With your help, they can act out a fun play while you man the camera. Their first dramatic debut will be a unique gift that close relatives won’t soon forget.
  • Go extreme. Couponing isn’t only good for groceries! Children and teens who are on a spending budget can make coupons offering their services for almost anyone. Things like car washing, raking leaves, making dinner, one free night of babysitting, snow removal and cleaning are all things that many people would be quite happy to receive.

Most importantly, plan ahead so that you can execute some or all of these money saving suggestions. While these ideas may require more time, if you plan well enough in advance, you’ll never have to charge another thoughtless gift to your credit card again. As a result, after the holidays are over, you’ll be left in good spirits about the great gifts you gave, and your credit score will be in good standing, too.

Maybe you can have your turkey and eat it, too!

Will I Lose My Timeshare if I File for Bankruptcy?


Photo courtesy of Krystal Vacations

Many Americans are able to enjoy fairly lavish getaways through a partial ownership of a vacation property known as a timeshare. Timeshares are essentially vacation homes that are owned by a number of people who share usage of vacation time at the home, condo, apartment or townhouse. Also shared are the maintenance responsibilities in the form of monthly or yearly payments. Investing in a timeshare makes what may otherwise be an unaffordable getaway attainable for average households around the world.

As you are not the sole owner when you invest in a time share home, you may be wondering what will happen to your percentage of the timeshare if you file for bankruptcy. This is actually a pretty common concern and question among bankruptcy clients, because of the fact that a timeshare simply isn’t a straightforward property ownership situation.

In our experience, clients who are already deep into debt often just want to be relieved of the timeshare responsibilities and upkeep payments. If this is the case for you, unloading a timeshare is possible but be prepared to lose money. According to financial experts – a timeshare is a poor investment even in the best financial market.  They simply don’t increase in value. In fact, many desperate timeshare owners just want to be out from under the yearly maintenance fees, which can easily add up to thousands of dollars.

You can sell your timeshare on the open market on sites like eBay if your goal is to be rid of the maintenance fees at a time when your finances are already unmanageable. More specific websites focus solely on timeshare sales, making it quite simple to unload your vacation time – if that’s what you’re aiming for.

Keeping a timeshare through a bankruptcy is a little tricky, but it can be done if you follow some rules, and if there is an exemption available for timeshares in your bankruptcy filing. You may find the most success in transferring your timeshare over to your bankruptcy trustee, if s/he is open to the idea. This solution may permit you to still enjoy taking a week-long vacation during the year in which you are filing for bankruptcy, if you can work out an agreeable deal with the trustee. If the trustee is unable to sell the timeshare right away, it’s possible that s/he may be amenable to renting to your family for your vacation week.

The above scenario will most likely only occur during the first year after transferring ownership of your timeshare to your bankruptcy trustee, because chances are high that the trustee will want to sell it as soon as possible to avoid accumulating debt of his/her own.

If you happen to own the timeshare completely, another scenario may present itself: repurchasing the timeshare back from the estate. In order for this to work out in your favor, you’ll need the right bankruptcy attorney to ensure that the right investor purchases the Note in order to bring in enough money to satisfy creditors, and giving you the ownership of the timeshare once again. It is vitally important that you find a qualified attorney who has solid working relationships with a variety of investors, and respectable experience handling bankruptcy matters.

For more information regarding filing for bankruptcy, timeshares, and getting your financial life back in order, call our office today, or click on over to our contact form. Want a free consultation? All you have to do is “like” us on Facebook!

Keep Your Business Out of Bankruptcy with These Tips

Photo courtesy of F33

All entrepreneurs who have ever started a business share at least one common motivator: money.  While there are, of course, other reasons to get a business off the ground, a significant profit is definitely high on the list for many, if not all, business owners.  Therefore, when the money stops rolling in, what’s the next step?

Is it your only option to file for bankruptcy?  Don’t be too quick to rush into filing, if that is your present line of thinking.  After all, you’ve put a lot of effort into making your business successful! Financial problems do not have to immediately signal the end of your company.

First and foremost, you will need the help of a bankruptcy attorney who is ready to be aggressive in order to keep you out of the red.  Savvy business owners know that they should have an attorney on retainer before any sign of trouble, but if you haven’t already done so, call one now. Look for an attorney who also specializes in credit repair and loan modifications. These attorneys will be most able to help you avoid bankruptcy.

Working with your attorney, it is important that you act fast.  Many business owners end up waiting to take action until it is simply too late, and bankruptcy is their only option.  An experienced attorney has connections with lenders and can make important deals that may lower the amount of money you owe them, because lenders know that if you file for bankruptcy, they won’t get anything at all.

Your attorney will be able to advise you about many other methods you can use to lessen your chance of needing to file for bankruptcy and giving your business another chance at success. You will probably be advised on some less than ideal company restructuring that may be quite difficult for you to deal with.  Also, be prepared to let go of some of your assets if you really want to make a last ditch effort to save your company.

It is also possible that your attorney will be able to find you new private or higher cost lenders that will essentially bail you out – at the very least, buying you enough time to get your plans in order to keep the business afloat.

Most importantly, contact a qualified bankruptcy attorney today in order to move forward with salvaging your company.  There are many effective steps that can be taken, but you must take action now for them to work.

The Truth About Trial Loan Modifications

As more and more homeowners are facing financial hardships, the number of loan modification applications being processed by mortgage lenders continues to rise. In an effort to avoid foreclosure, many strapped homeowners are being granted trial loan modifications with the promise of approval for a permanent loan modification in three months.  Many mortgage lenders have been accused of giving false hope to many of these borrowers by offering them a trial loan modification with no intention of ever offering them a permanent modification.

There have been many cases recently in United States Court systems wherein homeowners have been granted trial loan modification periods by their lenders, went on to successfully make their three mandatory trial payments with no indication of ever being granted a permanent modification! Some of these homeowners have even been served with foreclosure notices in the middle of their trial periods while they were successfully paying their mortgages.

In some cases that have made it to bankruptcy court, it has been found that many lenders do not respond to homeowners’ attempts at contact during the three-month trial in an effort to get as much money as possible from the borrowers before finding a glitch in the application and foreclosing anyway.  Some lenders have also been caught manufacturing information, such as “missing paperwork” that caused a denial of a permanent loan modification, wherein the “missing paperwork” never even existed.

 If you are in loan modification hell, be persistent. Call your lender daily until you get the answers that you need to make your loan modification permanent.  If you continue to get the runaround or are being told false information (one homeowner was told that her application was denied because she is no longer living in the home – which was false), try calling the Treasury Department to complain about the lender’s actions. (If your lender is a state-chartered institution, contact your state banking regulator.)

 Individuals who have filed lawsuits against their lenders for bad-faith practices in small claims court have had the most success in being granted the permanent modification they desire. If you are not getting the answers that you need and you have been faithfully paying your mortgage every month with no response from your lender about a permanent modification, call the Veitengruber Law Firm to check over your mortgage agreement  language. Let us deal with your lender directly; sometimes just the threat of a lawsuit will spur them into action. Rest assured that by contacting a qualified attorney, you’ll get the help you need to avoid foreclosure.

Photo courtesy of Bogie Harmond

Chapter 7 or Chapter 13: Which Bankruptcy is Right for You?

Photo courtesy of Steve A. Johnson

Many people who are contemplating filing for Bankruptcy are misinformed on many important issues surrounding how to file, when to file, and which type of bankruptcy is most appropriate. Today, we will clarify the differences between Chapter 7 and Chapter 13 Bankruptcy to help readers understand specifically what is involved and required in each type.

Chapter 7 Chapter 13
Simple description Personal/business assets are liquidated because of a person’s inability to pay debts. Payment plan is created by court for people with reliable incomes to pay all or part of their debts.
How it works No more than 180 days before filing, credit counseling should be obtained. When petition is filed with the court, a trustee will be appointed. All assets that are nonexempt must be surrendered, and the money from these assets will be split between all creditors. No more than 180 days before filing, credit counseling, and, if applicable, a debt management plan should be obtained. File petition and plan together. A repayment plan will be established and should conclude in 3 to 5 years. Payments made are to come from disposable income. Assets are retained.
Financial limitations Anyone filing Ch. 7 must pass the “means test”, ensuring their eligibility based on their income being lower than the state median. Ch 13. filings are reserved for debtors who owe less than $360,475 in unsecured debts and less than $1,081,400 in secured debts.
How often you can file Individuals are ineligible if their debts were discharged under Ch. 7 within the past eight years. Individuals are ineligible if they received discharge under Ch. 7, Ch. 11, or 12 within the past four years, or if they received discharge under Ch. 13 within the past two years.
Resulting effect on debts owed Aside from limitations noted in the Bankruptcy (student loans, child-support, taxes), most existing debts will be wiped out and responsibility to current creditors will end. Aside from limitations noted in the Bankruptcy (student loans, child-support, taxes), a portion of debts will be paid under a repayment plan, and the remaining debt amount will be wiped out.
Can you keep your home? You may be able to keep your home if mortgage payments are kept current and if there isn’t substantial nonexempt equity. Additionally, spousal ownership may help you keep your home. If your repayment plan is thoroughly completed and there is not substantial nonexempt equity, you will keep your home. Spousal ownership may also help you keep your home.
Can you keep your vehicle? Your car or truck may be repossessed by creditors unless you can absolutely prove it is necessary for work. If your repayment plan is thoroughly completed, you will be able to keep your vehicle.
How will this affect your credit? A Ch. 7 Bankruptcy will stay on your credit record for up to 10 years and will be visible by prospective lenders and employers. A Ch. 13 Bankruptcy may remain on your credit report for up to 10 years. Some creditors only report a Ch. 13 for 7 years.

For more information about filing for Chapter 7, Chapter 13, or another type of Bankruptcy, contact Veitengruber Law for a free consultation, and check back soon for more details about life after Bankruptcy.