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.

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Attorney vs. Debt Settlement Services: Which One Protects Your Interests?

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If you’re one of the millions of Americans facing a large amount of personal debt, you may have been tempted by the numerous ads you’ve seen for debt settlement companies. Debt relief sounds like a miraculous shortcut to a fresh financial start, but is it too good to be true?

In a word? Yes.

Like the deadly Venus fly trap plant, debt relief companies and consolidation services put up a beautiful, welcoming front, but once you’ve given them your trust and access to your finances, they’ll slowly devour you. This article will show you the truth about debt settlement services and outline the reasons a personal attorney will protect YOUR long-term financial wellbeing at every opportunity rather than using your troubling financial circumstances to endanger you even further.

 

First, let’s take a look at the methods debt settlement services will use to lure you in and subsequently destroy you financially.

 

Emotionally Manipulating Advertising

Debt settlement services rely on their aggressive advertisements to attract individuals who have poor financial literacy and are in dire straits regarding their current personal debt. They know that people who are paying attention to their ads are desperate for help and feel like they have no one else to turn to.

Dishonest Sales Pitches

Once they entice you to make contact, they’ll bombard you with an emotional sales pitch that will purposefully attempt to break down any critical thinking you might be using to analyze whether or not their services are a good match for you. Just when you’re at your most vulnerable, they’ll present a sales contract that seems to promise that they will arrange for you to be able to pay off your debt quickly.

Usually, these debt settlement companies will require money upfront. Alternatively, you may be asked to open a new bank account that you will be required to funnel money into. This money is supposed to pay off your debts.

No one in the financial world trusts or respects debt settlement service companies.

These companies are viewed with distain because they are for-profit. While it’s true that everyone needs to make a living, debt settlement services usually aim to siphon as much money from you as they can without actually helping you resolve your debts. This reprehensible approach is known far and wide in the financial world, so unfortunately for their customers, most creditors refuse to work with these scam services.

Worse yet, debt settlement companies won’t tell you about this huge barrier to success until you have already signed their contract. Once you’ve signed up, they have what they need. You will be left with a plan that won’t help you at all. Your creditors won’t have a good working relationship (or any kind of working relationship) with your debt settlement company, so your chances of being able to successfully get out from under your debts is actually worse once you’ve signed up.

We aren’t blaming consumers for getting tangled up with this awful companies.

Debt relief scams like this are highly skilled at spinning half-truths that we fully understand why people get sucked in. They cherry-pick information about their results and research; they might present evidence that their program helps clients at the 3-month mark. What they DON’T say is that their clients will be drowning in interest for years afterward. This unethical practice further demonstrates that debt relief services exist just to take your hard-earned money out of your hand when you need it most.

Your interest rates and credit score will be destroyed.

The first thing these companies will do is tell you not to make your minimum payments. They will instruct you to ignore any overdue notices or letters you will certainly receive. They’ll tell you that it’s all part of the plan, and that they have everything well under control.

While it’s true that after a long, hard-ball fight with your creditors, they MAY give up and reduce or write off your debts, but only at a great cost to your financial reputation. Your creditors will inform the credit bureaus that your debt has been negotiated, which will damage your credit score. A poor credit rating will raise your interest rates when you apply for credit cards, a mortgage, or a car loan. In some career fields, having a damaged credit score can even prevent you from being hired at all!

Creditors will still come after you directly, and debt settlement services can’t stop them.

The debt settlement company version of debt reduction will drag on for such a long time that creditors might decide to pursue legal action against you. Even if you do everything your debt settlement company has directed you to do, your creditor can gain a court order to seize your home, your vehicle, valuable belongings, and even garnish your wages directly.

If this happens, a debt settlement company cannot defend you in court, or help you with any legal proceedings. They aren’t lawyers. They don’t provide access to legal counsel, and they are not on your side.

Hire a consumer debt relief attorney to represent you.

Debt settlement companies, credit counseling and debt consolidation businesses cannot represent you in court when you are sued by creditors, they can’t give you legal advice, and they can’t represent you in court when you have the opportunity to sue creditors and collectors for violating your rights — ONLY lawyers can do so.

Why Should I Avoid Debt Settlement Companies?

Non-attorney companies that offer debt settlement services have a poor reputation in the U.S., particularly with the very creditors with whom you need to negotiate and who may sue you. And the industry is, unfortunately, plagued by scams.

A debt settlement company may commit to contacting your creditors on your behalf, but fail to do so. They may even succeed in having the debt frozen, but actually fail to negotiate the debt to an amount you can afford and then just withdraw money to pay themselves.

Assuming the debt negotiation company does as promised, they will still face many obstacles that affect you. To begin with, a creditor, most of whom are represented by a large team of attorneys, may up their game when they discover you are working with a debt settlement company instead of a law firm. This means the creditor could accelerate their collections process and file a lawsuit against you more quickly.

What makes an attorney different?

An attorney will represent you in court if your debt negotiations escalate. Your attorney will be able to give you accurate information about your legal options, your rights, and the risks you face during litigation.

Your attorney’s entire focus will be protecting YOU. Your attorney only cares about your immediate and long-term financial well-being.

Furthermore, your attorney will guarantee total confidentiality. Every communication with your attorney, their firm, and any member of their staff is protected. Only attorneys are bound by this confidentiality ethos.

Veitengruber Law can help you resolve your debt. Come in and meet with us at zero cost to you. Let us analyze and assess your current financial situation. We’ll give you the truth about whether hiring an attorney is in your best interest. If we aren’t sure that you need us, or if we aren’t sure we can help you, we will tell you up-front.

If we think there’s a high likelihood that we CAN help, then we will begin to protect you immediately. We will do everything we can to prevent your creditors from dragging you into court. We will carefully and skillfully negotiate and document each settlement to stop creditors from suing you.

In the event that you are sued, we will be prepared to ferociously defend your interests in court. You will not be alone at any stage of negotiation, litigation, or settlement.

Give us a call today to set up an appointment. The stress of mounting debt can start to take over your life; before you lose any more sleep or waste another hour fretting, allow us to step in and take action on your behalf. We can turn the tide and start taking back your life one negotiation at a time.

Image: “Broke” by Christian Schnettelker – licensed under CC 2.0