Veitengruber Law: Reviews

We can talk about our experience until we’re blue in the face, but you’ll still want to know what our former clients have to say, right? It’s only natural! Everyone here at Veitengruber Law looks for reviews on professionals we’re considering working with (whether privately or professionally) as well.

Here’s what some of Veitengruber Law’s online reviews say. Names have been abbreviated to initials for client privacy.

“George is that rare species of professional possessing a fierce intelligence and a generous heart. He really does act as a “cornerstone for financial justice” in the lives of his clients. Couple this with impeccable integrity and you have an idea of George’s value to his clients. He is the complete package in legal representation.” – E.A.

“I first hired George to help with some collections for my business. After he handled that with such great results, he reviewed our billing procedures. He made some changes to the invoices which helped to minimize future problems. He is very thorough and [I] highly recommend George. He has reasonable fees and a high level of integrity.” – M.H.

“George is a very experienced collections attorney. He is a cool negotiator and gives me consistently solid advice on our collections issues. Many times, based on his advice, we are able to settle even without having to retain him. When we do retain him he applies the same negotiation skill plus his vast legal experience to get us a positive outcome. I highly recommend him.” – D.G.

“George is someone who performs beyond the level expected of him. He is self-motivated, inquisitive, and goal-oriented. While working for me, he demonstrated a strong work ethic, met tight deadlines and was very resourceful in the manner in which he managed client expectations.” – V.O.

“George has advised me on several business organizing efforts and was also the determining force in collecting a delinquent account for my company within 90 minutes of my retaining him. Yes…90 minutes. Not 90 days. He recouped several thousand dollars. George is my go-to guy!” – K.C.

“George took a bad situation […], and within days had all of the details worked out and problems solved. All during this process he communicated with me, eased my worries and assured me all would be well. He delivered outstanding service and I will most certainly call on George again should the need arise.” – K.D.

“Great mortgage lawyer. Down to earth and to the point.” R.G.

I am an attorney in Arizona, and from time to time I have needed information regarding New Jersey law. I have found Mr. Veitengruber to be very knowledgeable, and still friendly and approachable. I am glad that I will never have to try a case against him.” T.C., Esq.

Want to read more what our clients are saying? Visit our Testimonials page for more reviews.

 

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Should I Pay my Debts or Hire a Bankruptcy Attorney?

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When you are face to face with a huge pile of unpaid debt, you might wonder if it would be more cost effective to put a pay-off plan into effect or to make an appointment with a bankruptcy attorney. Naturally, both options are going to cost money – but there are a few questions you can ask yourself to help you determine which option will end up costing you less in the end.

Firstly, it must be said that there isn’t a cut-and-dry, cookie cutter answer to this question, so please take the advice herein with that knowledge. There are a number of variables that will affect the direction you ultimately choose to take, like:

  • How much debt do you have?
  • What type(s) of debt do you have?
  • What is your current income?
  • Do you foresee your income increasing in the near future?
  • Is there a potential financial windfall in your near future (like a work bonus)?
  • How long do you want to spend paying off your debt?
  • Are you ok with losing credit score points (temporarily)?

If you are currently not even (or barely) able to make the minimum payment each month on sky high credit card debt, you’re looking at a very long road ahead and you will have paid a huge amount of interest at the end of your debt pay-off journey. In this case, filing for bankruptcy looks like it would be a better decision, because your bankruptcy attorney’s fees are likely to cost you less than how much you’ll be paying in interest over the years. Also, by filing for bankruptcy, you can rid yourself of your burdensome debts as soon as you case is approved for a discharge. This will allow you to start a savings account, put your child through college, or otherwise focus more of your income in a way that you weren’t able to before.

The bankruptcy route will knock your credit score down for awhile, but if you’re working with a bankruptcy attorney in NJ who knows what he’s doing, you’ll be counseled on how to potentially bring your score even higher than it is now. This can usually happen in 12-18 months after a bankruptcy discharge if you follow the recommendations given.

On the flip side of the coin – maybe you have more debt than you’d like to have but you’re not drowning in debt. This is not an uncommon situation to be in. If your income is substantial enough to handle your monthly cost of living plus (give or take) double your minimum payments on at least one of your debts, you may be a good candidate for avoiding bankruptcy.

It’s impossible to give you a completely straight answer to this question, as mentioned earlier, because everyone’s financial situation is so unique. The above general tips are just that – general – and you should base your final decision off of the in-person advice you get from an experienced NJ bankruptcy attorney. He will be able to comb through your debts and assets in order to properly guide you toward making the choice that will best fit your finances.

Get in touch with a reputable New Jersey bankruptcy attorney today – most offer free consultations, so you have nothing to lose but debt!

I Received a Bankruptcy Discharge – Why am I Being Sued?

Filing for bankruptcy can be a momentous decision for many people, and it usually isn’t a decision that is made lightly. Most people don’t want to have to file for bankruptcy and have genuinely tried in earnest to reduce their debts on their own.

Once you’ve decided to move forward with a bankruptcy filing, you’re likely to feel a certain sense of relief – especially as the case progresses and everything is going as planned. After your debts have been successfully discharged by your bankruptcy court judge, all of your dischargeable debts will be erased, lifting a heavy weight off your shoulders.

After a debtor receives a bankruptcy discharge, every creditor listed on their bankruptcy paperwork will receive notification of the bankruptcy. Creditors are no longer allowed to contact you to collect on debts that have been discharged. Just knowing that those aggressive phone calls are going to stop is a huge relief.

That being said, sometimes you may receive the unpleasant surprise of being sued by one of the creditors you thought you had seen the last of. This is a scary moment for anyone! Thinking that you’ve gotten out from under your debts only to discover that one of them is still after you for money is disheartening.

Can a creditor really sue me after my debts have been discharged?

Oftentimes, if a creditor is still trying to get you to repay a discharged debt, it means they didn’t receive proper notice of your bankruptcy. It’s also possible that your bankruptcy information was not shared through the right channels within the company – even if they did receive notice. Attempting to collect on a debt that has been discharged via bankruptcy is against the law.

Do I have to respond to a post-bankruptcy debt-related lawsuit?

This is where is gets kind of tricky. Even if you are no longer responsible for the debt in question, if a creditor has initiated a lawsuit against you, it cannot be ignored. Doing so will only prolong the lawsuit’s life.

Your bankruptcy attorney will be able to advise you on how to respond to any creditors who attempt to contact you after your discharge, including any that attempt to sue you for money you no longer owe. It is important to consult with your bankruptcy attorney to ensure that the debt(s) in question were actually discharged and you truly are no longer responsible for them.

An answer to any lawsuits should state the fact that you filed for bankruptcy, including a copy of your discharge and a list of all creditors. In doing so, virtually all lawsuits of this type will immediately dismissed by the court. Even if you inadvertently left a creditor off of your bankruptcy paperwork, generally all dischargeable debts will be forgiven as long as the creditor knows you’ve filed for bankruptcy.

Although you will almost never be responsible for any debt that was discharged, it is important to notify your lawyer if you are sued by one of your creditors after bankruptcy. Some debts are non-dischargeable, and you need to know what they are so that you continue making payments on them. However, chances are good that your NJ bankruptcy lawyer discussed any debts of this type with you prior to your filing date.

 

NJ Mortgage Help for Single Parents

Going through a separation and divorce is never easy, but the complication level increases when you add children to the mix. Establishing a stable family life for your kids is something every good parent strives to do, and divorce can throw a wrench into even the best laid plans.

Supporting the expenses required as a newly single parent is a daunting task as you attempt to maintain as much constancy and normalcy for your children as possible. To that end, the marital/family home is most often where divorced parents elect for their children to remain living.

With that being said, finances don’t always stretch far enough for one parent on their own to pay the mortgage on that family home, along with all other monthly expenses. If both parents are able to pitch in financially to keep the children and one parent in the home, the chances of losing the home are lower. However, the threat of foreclosure for recently divorced single parents is real, and although frightening, it is not something that will go away if you ignore it.

If you are a single parent fighting to keep the home your children have thus far grown up in, you may be overwhelmed by the responsibility of making that monthly mortgage payment on your own. Missed payments are common after significant life events like job loss, illness, death, and, you guessed it – divorce.

The bank will never throw me out since I have young children, right?

Unfortunately, too many people simply give banks and lenders a lot more credit than they deserve. Your bank does not care if you have children, an elderly parent, three sick dogs and a chronic illness – their bottom line is money. You may think, “But there are people working at that bank; surely there is someone there with enough empathy to see that I am struggling.”

While that may be true – of course there are kind people working in banks and lending institutions – they must follow the instructions they are given by their superiors. A mortgage loan that is not being paid on time or at all WILL be sent into foreclosure by the lender. The question is not “If” but “When.”

How can I keep the bank from foreclosing? I just need a little more time!

The best move you can make if you’re in a similar situation is to take action before your home is foreclosed upon by your lender. You may qualify for a loan modification or refinancing. A New Jersey foreclosure and bankruptcy attorney should be the next person you call. Not many attorneys specialize in both areas, so it is important that you work to find a certified NJ attorney who has the experience you need.

Why do I need a bankruptcy attorney? I’m not broke and I want to keep my home.

An experienced NJ attorney who handles both foreclosure defense and bankruptcy matters will be able to stall your foreclosure by using the Automatic Stay. This tactic can only be utilized if the debtor files for bankruptcy.

Even if filing for bankruptcy was not on your top ten list of things to accomplish in life, it is a means to an end that has helped a multitude of people in your exact situation before.

 

Image: “Mother’s Moment” by Leonid Mamchenkov – licensed under CC 2.0

Should I File for Bankruptcy Before or After my Medical Procedure?

If you plan to file for bankruptcy and you also have plans to undergo a medical procedure, you will most likely benefit from delaying your filing until after you have had your procedure. Bankruptcy only discharges debt incurred prior to filing; if you first file for bankruptcy and then add medical bills incurred at a later date, those medical bills will not be covered by your existing bankruptcy agreement, even if you are unable to pay your medical bills.

Medical debt is eligible for forgiveness under both Chapter 7 and Chapter 13 bankruptcies, which are the two most common types of individual bankruptcy filings. Chapter 7 bankruptcy is a complete forgiveness of debt, whereas Chapter 13 bankruptcy includes a plan for partial repayment of the debt and forgiveness of the remainder. Which type of filing is best for you depends on your income, amount of debt, and types (and the value of) assets you have in your possession.

It is generally inadvisable to generate debt with the intention of having it forgiven through bankruptcy; it can be determined that the additional charges were incurred fraudulently, and such debt will be exempt from the bankruptcy agreement. If you’re about to petition for bankruptcy, it would be unwise to go on a shopping spree or take off on a blowout Vegas vacation, for example. However, medical bills are not subject to this type of scrutiny. There’s no cap or limit on how much medical debt can be forgiven in a bankruptcy.

There is, however, a limit on how often one can file for bankruptcy. The number of years varies, depending on the type of bankruptcy filing and how the debt was discharged. If you have previously had debt discharged in a Chapter 7 filing, you must wait eight years from the date you filed for that bankruptcy before you can qualify to file for another Chapter 7 bankruptcy. If you filed a Chapter 7 and now wish to file for a Chapter 13, there must be at least four years between your Chapter 7 date of filing and your new Chapter 13 case if you are looking to discharge more debt.

These are just a few examples, but as you can see, no type of bankruptcy filing can be arranged back-to-back to cover new debts, medical or otherwise. This means that if you file for bankruptcy, then incur more medical debt, you’ll be saddled with it until you can pay it, or until enough years have passed that you can qualify to file for an additional bankruptcy discharge.

You will have the option of filing for a Chapter 13 bankruptcy before four years have passed since your Chapter 7 discharge, but only if you are looking to reorganize your remaining debts. These remaining debts cannot be discharged for another four years.

Finally, if you are currently receiving ongoing medical care that will be resolved in a matter of months, it is most likely advisable to wait until your course of treatment is complete before filing for bankruptcy. The debts incurred during your treatment can all be included in your bankruptcy filing, and will be eligible for complete forgiveness.

 

Image: “Medical/Surgical Operative Photography” by Phalinn Ooi – licensed under CC by 2.0

Purchasing a New Jersey Home from a Bankrupt Seller

In today’s housing market, there are still a significant number of homeowners who are in danger of foreclosure. These homeowners usually owe more than their home is currently worth, so they are said to be “upside down” or “underwater.” If they are unable to refinance, and cannot keep up with their payments, they will be foreclosed upon, and are likely to declare bankruptcy at that point.

Should you pursue a short sale on a home that is awaiting foreclosure?

If you already own a home, are pre-approved financially, have plenty of available cash, and at least several months to spend devoted to the complicated process that is a short sale on a foreclosed home, only to have the seller declare bankruptcy and possibly even cancel the whole thing, then yes, a foreclosure might be the right gamble for you.

Beware, though, because as stated, it is highly likely that the seller will declare bankruptcy before the sale is completed, greatly reducing the likelihood that a short sale will close. Short sales rarely yield substantial profits for the seller, so the seller was likely pursuing a short sale in order to reduce the damage to their credit that would result from a foreclosure. However, if they’ve decided to go ahead and file for bankruptcy, the negative effect it will have on their credit is likely to overshadow any benefit from the short sale.

If they were to continue with the short sale despite having filed for bankruptcy, the seller could actually be negatively affected. Their filing for bankruptcy places their belongings, including their house, into a bankruptcy estate, so they don’t have the power to close a short sale easily. If the owner is determined to complete the short sale–normally against the recommendation of their bankruptcy attorney–they will need to pay said attorney an extra fee to pursue permission from the court.

If they obtain permission to close on the short sale, the owner will need to move out of the home much more quickly than if they were to wait out their bankruptcy proceedings. The only potential benefit to the owner comes from the peace of mind that may result from having avoided foreclosure.

With all these complications, it may seem like it’s not worth it to pursue short sales in foreclosure situations at all. However, there are a number of benefits that might be quite appealing: competitive pricing, smaller down payment and closing cost, and a shorter escrow period, to name a few major advantages.

So, if you are going to attempt to purchase a house that has been foreclosed upon, or a house that is in bankruptcy court, don’t go it alone. You will need the expertise and guidance of an experienced bankruptcy attorney. Your real estate agent will be happy to help you find advantageous listings, but consult with a bankruptcy attorney to have help navigating the complicated process to follow. A real estate agent is NOT an attorney, and can in no way fill that role.

Never skip inspections! They may be even more necessary in a short sale situation, but never less so. A 2011 survey conducted by Harris Interactive reported that 72 percent of U.S. homeowners agree the home inspection they had before they purchased their current home helped them avoid potential problems; 64 percent of respondents reported that their home inspection saved them money.

While it is a bit of a gamble to invest in an inspection when you don’t yet have signed contracts, it’s a much bigger gamble to sign papers on a home you haven’t had inspected. If a homeowner didn’t have the money to pay their mortgage, it’s unlikely that they’ve been able to keep up with regular maintenance. If you can’t arrange an inspection, and you don’t have hundreds of thousands of dollars to spend on potential repairs, don’t close the deal on a property, no matter how enticing the price tag.

The takeaway: if you have the time and money to spend on a home that may never be yours, and you find a house that is listed at a price that might make it all well worth the hassle, then take your attorney with you–and buckle up for a wild ride!

Image: “Mortgage Rates” by Mark Moz – licensed under CC by 2.0

 

What is an Involuntary Bankruptcy?

A little-known type of bankruptcy is the involuntary bankruptcy. Most people have never heard of it because it is quite rare. With that being said, it’s still an important facet of bankruptcy law that debtors with substantial assets should be aware of.

The involuntary bankruptcy exists to protect creditors who are owed significant amounts of money. In fact, creditors are the ones who file for involuntary bankruptcy against the debtor who owes them money. This type of bankruptcy almost always applies to businesses rather than individual debtors.

Who can creditors force into bankruptcy?

While it is legal for creditors to file an involuntary bankruptcy against an individual, the creditor would be hard-pressed to squeeze any money out of a debtor with no assets and no cash. In fact, filing for an involuntary bankruptcy against a single debtor would almost always be counter-intuitive, leaving the creditor with even fewer options through which to recover their money.

On the other hand, sometimes a creditor is owed money by a business or corporation that is able to repay their debt. When a business has the assets that would allow them to repay their debt but they choose not to, their creditor(s) have the right to file for involuntary bankruptcy.

How does involuntary bankruptcy work?

The majority of involuntary bankruptcies are filed jointly by more than one creditor. This is because this type of bankruptcy typically applies to business owners, and they often have a number of creditors. For debtors (business owners) with more than 12 creditors (unsecured), at least 25% of them must agree to file for an involuntary bankruptcy.

The creditors who collaborate to petition for involuntary bankruptcy will file for this action with the court. Debtors can respond within 20 days if they do not agree to move forward with a bankruptcy. Failure to respond means the debtor will be forced to move through the bankruptcy process.

A hearing will ultimately decide either in favor of the debtor/business owner or the creditor(s). If the bankruptcy judge decides in the favor of the creditor(s), the bankruptcy will be approved and the debtor will be ordered to pay the creditor(s) the monies owed.

When an involuntary bankruptcy hearing settles in the debtor’s favor, the bankruptcy case will automatically be dismissed and the creditors responsible for the filing of the case may also be ordered to pay the debtor for their court costs and fees.

Can a single creditor file for involuntary bankruptcy against a business owner?

Involuntary bankruptcy can only be filed by a single creditor if they are owed a significant amount of money. As of 2016, that amount is $15,775. Again, this is only possible if the debtor in question does not have more than 12 unsecured creditors.

For debtors with more than 12 unsecured creditors, at least three of them must collaborate, as mentioned above, in order for an involuntary bankruptcy to be heard at trial. These three creditors together must be owed a minimum of $15,775.

Can an involuntary chapter 13 bankruptcy be filed by creditors?

As of right now, the only types of involuntary bankruptcy that are permissible are chapter 7 and chapter 11. Also noteworthy: an involuntary bankruptcy may not be filed if the debtor is a nonprofit organization, bank, insurance company, credit union or farmer.

 

Image: “Bankruptcy” by new3dom3000 – licensed under CC by 2.0

Is My Bankruptcy Trustee Entitled to My Upcoming Financial Windfall?

When you file for chapter 7 bankruptcy in New Jersey, your bankruptcy case will be assigned to a trustee. The bankruptcy trustee works independent of both your bankruptcy attorney and the NJ bankruptcy court. The trustee’s job is that of bankruptcy case “inspector,” if you will. Their duties are essentially: to review all paperwork, hold the 341 hearing (also called the Meeting of Creditors), liquidate any of your assets that are not exempt, and to prevent bankruptcy fraud from occurring.

Many people wonder how bankruptcy trustees get paid. After all, who would want to take on the intense responsibilities associated with the job if it were an unpaid position?

How does a bankruptcy trustee get paid?

Filing fees

Every bankruptcy petitioner must pay a filing fee to the court system. Your NJ bankruptcy trustee will receive $60 of that fee. That doesn’t sound like much money, does it? Keep reading to learn more.

Commission

Bankruptcy trustees are motivated to find as many assets to liquidate as possible in every bankruptcy case because they receive a percentage of all of the collected assets that are paid to your creditors. They’ll make:

  • 25% of the first $5,000 they collect and disburse to your creditors
  • 10% of the next $45,000
  • 5% of the $950,000 after that, and
  • 3% of any assets collected and disbursed that total over $1,000,000

Costs

If your bankruptcy trustee incurs costs relating to your case, they can request reimbursement for those costs via the NJ court system. You will be notified if this happens, but you will not pay them directly. They will be reimbursed from any money that is freed up in your estate, but for this to happen, it must be approved by the court first.

Financial windfalls

After you file for chapter 7 bankruptcy, let’s assume that you come into some money. This could be due to an inheritance, lawsuit or repayment of a personal debt, etc. You may wonder if you’ll be able to keep this financial windfall or if your trustee will have access to it first in order to pay off your debts.

When you filed for bankruptcy, you essentially handed over your estate (all of your assets and debts) to the trustee. It is the trustee’s duty to lawfully pay back as much of your debt as possible. Therefore, any financial settlements or inheritance monies received while your bankruptcy case is active must be paid to the trustee. There are exemptions, of course, and you should always check with your bankruptcy attorney to ensure that you have the correct and up-to-date information.

If you are interested in reading more about the ‘windfall provision’ section of bankruptcy code 541, you can do so here. Section 541 of the bankruptcy code will also help you can find out exactly which property and assets will be included in your bankruptcy estate.

As always, remember that even if you are entitled to receive a financial windfall during your chapter 7 bankruptcy case, you will almost certainly never receive it in full. This is because once you have filed for chapter 7 in New Jersey, anything outside of the income you earn at your job will be subject to disbursement to your creditors, your trustee’s commission, and your attorney’s fees.

Have a specific question about a NJ chapter 7 bankruptcy case? Call or write us today! We are happy to consult for one half hour with a new client free of charge.

 

 

Image: “bling bling” by Frankie Leon – licensed under CC by 2.0

 

What to Look for in a NJ Bankruptcy Attorney

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If you’ve finally reached a point where bankruptcy looks like your best option, you’re probably trying to figure out how to choose the right bankruptcy attorney to help you through the process. Finding the best NJ bankruptcy lawyer for you is much easier when you know what qualities to look for. You may have to consult with several attorneys before you find the one that feels like a good fit, but taking your time during the selection process will mean you’ll be more likely to have a better outcome.

Look for a bankruptcy attorney who demonstrates the following qualities:

  • Personability: While this may seem like a given, too many people are willing to accept less when it comes to working with professionals. You do not have to work with someone who does not treat you well! Look for a bankruptcy attorney who welcomes you into his office and makes you feel like a friend right away. Personable staff members are important, too. You will be entrusting your attorney and his legal staff with very personal and private information. If they don’t seem like genuinely nice people, it’s time to move on.
  • Experience: Naturally, everyone has to start somewhere, but in general, the best bankruptcy lawyers are those who have significant experience under their belts. Find out how long he’s been practicing law – specifically how long he’s been specializing in NJ bankruptcy. Ask how much of his practice is dedicated to bankruptcy law versus other practice areas and be wary of those attorneys who spread themselves too thin. An attorney who focuses on a smaller number of practice areas is more likely to have honed his craft in those domains.
  • Knowledge: You want a bankruptcy attorney who is up-to-date on all local district bankruptcy rules and regulations as well as federal bankruptcy laws. A good bankruptcy attorney will also be familiar with local bankruptcy trustees including any special requirements they may have during the bankruptcy process.
  • Open communication: While you can’t predict how your attorney’s office will behave in the future, you can definitely inquire about their communication process with clients. Your bankruptcy attorney should be able to give you a clear description of how to get in touch with him at all times. He should also give you a good estimate of how long it takes him to return phone calls and emails. Look for attorneys who are willing to talk freely about their communication style and those who seem honest about how often they will be in contact with you.
  • Passion: Ask your bankruptcy attorney why they started practicing bankruptcy law and listen very carefully to their response. Watch for body language that indicates excitement and passion for the field. An attorney who cannot give you a direct answer to this question or glazes over it with a quip or joke has probably either burned out or entered the legal field for the wrong reasons. The right attorney will respond with answers about helping others get their lives back again, doing good in the community, and feeling rewarded by what he does.

Finally, don’t base your NJ bankruptcy attorney selection process on their fees alone. While it can be stressful to contemplate spending even more money when you are on the brink of filing for bankruptcy, hiring a “bargain basement attorney” will lessen your chances of achieving the outcome you desire. It is definitely important to ask about pricing before signing any paperwork, but keep in mind that, as with many things in life, you get what you pay for.

 

 

 

Did I Spend Too Much to File for Bankruptcy?

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Like so many Americans, you’re realizing that you overdid it yet again this Christmas season. “Over-gifting” has become commonplace, and leaves us feeling like we have to outdo ourselves year after year after year. Common lines of thinking include:

“I bought three gifts for each of my nephews but only two for my niece. She needs another gift!”

“Last year, the pile under the tree was so impressive. I want to do that again so my kids aren’t let down.”

If you’ve caved in to the pressure of over-gifting, you’re not alone. Millions of Americans spend more money than they actually have around Christmastime, charging hefty sums to their credit cards. For some, paying off their excessive December expenditures in the new year will be doable.

However, if you were already struggling to make ends meet before this year’s holiday season rolled around, you had an error in judgement if you decided to go ahead and over-gift anyway. The Veitengruber Law mantra for all of our beloved clients is: “Do not spend more money than you have.” Keeping up with the Joneses is so….expensive.

Can I file for bankruptcy? I can’t possibly pay back what I charged to my credit cards this season!

December is often the tipping point for debtors. Once January blows in and those credit card bills materialize, panic emerges. Looking back and forth between your bank account and your credit card bill(s), you realize that you can’t even pay your new monthly minimum payments. THAT is a scary moment, and it is completely understandable that you’re now reaching out for help.

Here’s the deal. Bankruptcy laws have been put into place to prevent debtors from racking up a ton of credit card debt that they actually have no intention of paying. Therefore, if you’ve charged more than $500* on a single credit card within the past 90 days, a bankruptcy judge is going to assume that you’re trying to pull a fast one. Any large sums charged recently (within the 3 months leading up to your filing date) are likely to be considered nondischargeable. That means you can’t wipe them out in bankruptcy, and you will need to pay them back in full.

Even if you never seriously thought about filing for bankruptcy until after you finished your holiday shopping, the bankruptcy court has no way of reading your mind, so they have to make presumptions in order to prevent bankruptcy fraud.

If I charged too much and can’t file for bankruptcy, what can I do?

The best course of action is to wait to file for bankruptcy until the presumption period (ask your attorney how the presumption period applies to your unique case and debt amount)* passes. If you charged an excessively large amount to any one credit card, it’s possible that the credit card company may still object even beyond the presumption period, but the chances are much lower that they will do so.

If you consulted with a bankruptcy attorney prior to your shopping spree, the court will take that as a sign that you intended to file for bankruptcy before you made the charges. Therefore, it’s in your best interest to wait until the presumption period ends to consult with a bankruptcy attorney and attempt to make at least some kind of payment(s) toward the debt. Taking these steps will lower the chances that your credit card debt will be deemed fraudulent and nondischargeable.

Image credit: Alberto Cerriteño