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

NJ credit repair attorney

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

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What is a Business Credit Score and How Important is it?

Whether you know it or not, if your business has a business credit card, you also have a credit report. This may be completely new to you, or maybe you’re just trying to find a bit more out about what exactly a business credit score entails. Either way, you’re in the right place, so keep reading!

What is a business credit score?

It’s the key to your business’s financial success. If you’re familiar with a personal credit score, such as a FICO credit score, it’s similar to this. In most cases, it’s a number between 1 and 100 that represents your business’s creditworthiness. Your score tells institutions whether or not they should lend your business money and how much they should be lending. They can also discern how likely you are to repay them in a timely fashion. A higher number on your credit score represents a strong history of taking out loans and repaying them on time.

Why do I need a business credit score?

Most likely, if you’ve just started a business, you’re using your personal credit to get the ball rolling. Using your personal credit indefinitely may not be the best decision for your business. Here are a few examples as to why establishing a business credit score is beneficial:

  • Easier to obtain financing: If you are able to establish a business credit score, it will easier to obtain a loan or line of credit in the future.
  • Potentially lower insurance policy rates: Insurance rates will rise as your business flourishes, but with a superb business credit score, these rates may be lower.
  • Separation of business and personal finances: By creating a credit profile for your business, you’ve added a degree of separation between personal and business finances. This makes it easier to track expenses for the purpose of taxes. Also, you won’t have to worry about personal finances, expenses, and debts intermingling with business finances.
  • Increased borrowing power: Larger amounts of financing may be easier to get if you have a decent business credit profile.

Establishing and growing business credit can reap remarkable benefits and financial advantages for a company. With a notable credit profile, businesses have a better chance at leasing equipment, securing lines of credit, obtaining a company vehicle, and getting a business credit card or loan without compromising personal credit.

Finally, it’s important that you know exactly what affects your credit score.

  • Payment history: Likely the most obvious factor, it’s crucial that you make payments on time and for the correct amounts. A string of late or missed payments will result in a lower credit score.
  • Length of credit history: A well-established line of credit is going to create the best credit score. Even if you have a history of a few missed or late payments, this is better than a short or nonexistent credit history.
  • Company size: Though this may vary, some lenders prefer not to lend to businesses of a certain size.
  • Credit utilization ratio: If you max out on all lines of credit every month, this will send a signal to lenders. Essentially, you want to be aware of how much you owe on current credit lines in relation to their limits.
  • Risk Factors: Some businesses possess risks simply based on their industry. For example, a business located in a town with a low population density may be considered high risk in comparison to a business in a highly populated location.
  • Public Records: Filing for bankruptcy or a history of civil judgments or tax liens against a business have proven detrimental. Since these are public, anyone can view this information.

Like many financial matters, credit scores are constantly changing, some of which is in your control and some is not. By focusing on what you can control and knowing what you can’t, you will be a more effective business owner. A commitment to striving for a great credit score will provide opportunities for improved financing, increased cash flow, and better business breaks.

8 Little Known Credit Score and Credit Report Facts

Cash is quickly becoming a thing of the past, being replaced by plastic and virtual payment methods. Credit cards are now everyone’s new best friend. Along with a credit card comes a credit score and credit report, which leads to the first thing you may not have known.

 

1. Credit scores and credit reports are not the same thing.

Yes, they are two different things. Credit reports include information such as how frequently you apply for credit, data about your credit accounts, your payment history, a few public records, debt collection and a few other related points. Credit scores, on the other hand, are calculated based on the data found on your credit report.

 

2. Specific employers check credit scores.

Did you know that applying for a job in certain industries will most likely cause your credit score to be checked by your potential employer? These industries/jobs include the armed forces, Transportation Security Administrators (TSA), law enforcement, financial planners/accountants, mortgage loan originators, and, believe it or not, parking booth operators.

 

3. You could catch a criminal!

By keeping a close eye on your credit report, you can see if someone runs up a massive credit card bill or draws out credit in your name. If there is an unanticipated change, contact your bank or lender immediately. You may be able to stop a scammer from stealing someone else’s credit information.

 

4. Identity theft can affect your credit score.

Over 8 million people are victims of identify theft each year in the United States. Believe it or not, hundreds of millions of hours are spent each year trying to find the problem, halt the fraud, and wipe credit reports clean. This is yet another reason why it’s crucial to keep a close watch on any changes in your credit report.

 

5. Seven is the magic number.

After about 7 years, negative information will be eliminated from your credit report, with the exception of bankruptcy (find out how long your bankruptcy will show up on your credit report here.)

 

6. Maxing out is not as fun as it sounds.

Did you know that maxing out your credit card can lower your credit score anywhere between 10 to 45 points? Aim to keep your debt to income ratio between 28 – 33% (this means that your monthly debt and spending is no more than 33% of your total monthly income).

 

7. Closing out an account is actually a bad idea.

Are you aware that closing credit card accounts can damage your credit score? Even if you only use the card once or twice per year, keep the credit card active. Your credit score will be more positively influenced the longer you keep the account open. A longer credit history, which determines 15% of your credit score, makes you look more responsible, and will boost your score.

 

8. Five Factors

There are five factors that go into formulating your credit score, also known as your FICO score. Your payment history makes up about 35% of your score. This is why it’s so important to make all of your monthly payments on time. Responsible for 30% of your score is how much you owe, so don’t leave debt hanging on your card. Your credit history length is responsible for 15% of your credit number. Accounting for 10% of your total credit score is your last application for credit (how long ago it was, what type of credit and the amount). The final 10% is calculated based on the types of credit you use.

If you have more questions about your credit score and/or report, please check out our many other blog posts on the topic. Happy reading!

 

How To: Overcome Financial Stress and Get Your Finances in Order

Before the Great Recession, financial stress was the number one worry of over 70% of Americans. Since the Great Recession, money issues have become increasingly depressing for some people. With the loss of a job or a decrease in income, many people can have a prolonged stress that sits like a ton of bricks upon their shoulders. This chronic financial stress is extremely detrimental to the body, and you will begin to affect the lives of those around you. Before you know it, you may start to rely on bad habits to relieve your stress. How can you get a foot in the door of overcoming your financial stress and straightening out your money matters? Well, it obviously doesn’t happen overnight, but if you keep reading, you may gain some insight as to how you can begin.

Setting Goals. 

Though you can’t control all of your circumstances, you can initiate steps towards improving them. One of the most important first steps is setting a goal. This might sound simple, but that’s because it is! Before you can even think about your goals, you need to take a step back and review your finances. Doing this on a monthly basis could be beneficial for you, and don’t forget to check out your budget to know where exactly your money is being delegated.

Once you’ve had a chance to look over and get really familiar with your debts and income, set some goals. We are always setting goals in life – (financial, fitness, education, etc) and this goal is just like the others. It should have a purpose and a particular plan of action that will help you to attain the goal. Rather than setting a broad goal, attempt to set specific goals. Maybe your goal is to have $5,000 in your bank account within the next 2 months. You can break that broad goal down into smaller goals, like making yourself more valuable to your employer or improving your business plan. No matter the goal, review your financial state, set a goal, and clearly define the parameters and steps needed to reach it.

Make it measureable.

As covered in the last paragraph, clearly defined goals will be of more benefit. A goal such as “having a lot of money” does not have clear parameters. Some financial professionals suggest keeping 3-6 months of expenses in your bank account. Rather than setting a goal of “I want to always have 6 months of expenses in my account, sit down and put an actual value to that 6-month amount. This will focus your mind on a specific number instead of a vague sum.

Realistic and Reachable.

When you are setting your goal, it’s crucial to ensure that it’s one that you can actually attain. If you don’t have a good chance of reaching the goal, what was the point in setting it? Since you’ve already reviewed your finances and budget, you know whether or not a goal is realistic. If the goal is realistic, in your mind, you know that it’s attainable. Maybe your goal is adding $500 to your savings account each month. If you’re currently struggling to pay rent and have a low income, that goal may be a little out of reach. Work with what you have.

Deadline.

If you have no time limit on your goal, it might take you forever to reach it, which in turn makes setting the goal a waste of time. Part of defining a goal is listing a deadline so that you are able to separate your one big goal up into smaller chunks. Focusing on reaching your goal week to week can be mentally easier than seeing a huge number in front of you and stressing about how to climb that mountain.

Financial stress can take a toll on your mental, physical, and emotional state, which is why it’s so crucial to alleviate at least a small portion of that worry. Now that you have a few pieces of advice on how to overcome your financial stress, don’t wait until you find yourself in a desperate financial state. If you aren’t sure how to go about everything on your own, don’t hesitate to get in contact with a professional debt resolution/credit repair expert. They will be able to help you in setting a proper budget as well as raising your credit score and negotiating with any creditors to whom you may owe outstanding payments.

Getting Back on Your Feet After Bankruptcy

nj bankruptcy

You’ve finally crawled out of the deep, dark, seemingly unending hole of debt. After this exhausting journey, you’re more than ready to get back on your feet. Many people wonder how exactly how to get back to “normal” after bankruptcy. If you filed for Chapter 7 bankruptcy and your debts were discharged, or you filed for Chapter 13 bankruptcy and you developed a payment plan, you can see the light at the end of the tunnel. Now you have a fresh start, but before you get too excited, you need to be aware that it does take effort on your part to make sure you stay on the right path for good.

The state of New Jersey requires all individuals that receive a bankruptcy discharge to take a debtor education course that focuses on personal financial management. A bankruptcy discharge will not be given unless the debtor completes this class. The course must be done through a certified counseling agency and an Official Form 23 must be filed when the financial management course is finished. If a married couple files for bankruptcy, both individuals must attend counseling and submit an Official Form 23.

Here are a few post-bankruptcy steps you can take that will get you standing on two feet in no time.

1. Make a budget.

The first step is to track your spending for a few months to get an idea of how much you’re bringing in and where your money is going. Once you do this, you can come up with a monthly spending plan based on your income and the tracking results you gathered. It’s important to also become acutely aware of what exactly you’re spending your money on; if it’s mostly necessities, it’s crucial to have money set aside for that, but if you’re still spending significant amounts on unnecessary items, you’ll need to rethink your budget. Discipline in setting boundaries for yourself is vital.

2. Love cash; like credit.

Once you’ve gone through bankruptcy, it might be a good idea to develop the mindset of paying with cash more often than paying with credit. If you allow yourself to only carry a specific amount of cash in your wallet, you will be able to limit your purchases to necessities. On the other hand, there is no reason to fear credit. Following bankruptcy, it’s crucial to reestablish your credit, especially if you eventually want to purchase a house or car. Future employers, banks, and potential landlords will want to be reassured that you have been able to reestablish a decent credit score.

3. Pay bills on time.

Whether the bill is big or small, make sure you pay it on time. If you have bank fees or are bouncing checks, these will show up on your credit score, which can be detrimental to your financial health – knocking your credit score down incrementally when it needs to be moving upward.

4. Don’t fall into the scam trap.

Be aware of anyone that offers to “fix” your post-bankruptcy credit situation. You are completely capable of fixing your credit on your own, therefore you don’t need anyone else’s assistance. There are a plethora of scammers who will claim to be able to repair your credit overnight, (but for a fee – and believe us when we tell you it won’t be a small fee). Building credit requires time and patience.

If the offer from a credit repair “company” seems too good to be true or they request money upfront, be incredibly careful. When in doubt, don’t hesitate to check with the credit bureau or state regulatory agency. If you’re truly in need of help, reach back out to your NJ bankruptcy attorney – he will be the best source for reliable post-bankruptcy assistance.

Bankruptcy can be a long and trying process, but once you make it through, be assured that there is a light at the end of the tunnel. Knowing how to get back on your feet and actually “doing” it are two different sentiments. Be self-disciplined in working towards a financially healthy state. If you’re feeling unsure or a little bit lost, don’t be afraid to contact your bankruptcy lawyer who can help you after bankruptcy as well as during it.

Should I Pay my Debts or Hire a Bankruptcy Attorney?

bankruptcy attorney nj

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!

Divorce Doesn’t Have to Ruin Your Credit Score!

While the act of separating and/or getting divorced from your spouse won’t affect your credit score on its own, it is likely to cause indirect damage to your finances. So, while there won’t be a giant mark on your credit report that says “GOT DIVORCED, automatic 100 point deduction,” your score can and will begin to drop after a divorce if you aren’t hyper-aware of the potential damage.

In order to take proactive steps to maintain a good or excellent credit score during and after a divorce, you first have to know what you’re up against. Some of the biggest factors that cause divorcees financial strife include:

  • Suddenly dropping from two incomes to one income
  • Joint debt that goes unpaid by your soon-to-be ex-spouse
  • Shared bank accounts that can be drained by either party
  • Spiteful actions of one spouse, like running up a joint credit card balance
  • Lack of an independent financial identity and/or credit history
  • Divorce expenses
  • Child support and/or alimony

Even if the split is something that will ultimately make you happier, the process of getting to that end goal is undoubtedly going to be stressful. It is much easier to miss a bill payment or make other financial errors when you are stressed to the max.

Why is My Credit Score so Important After Divorce?

Losing a few credit score points shouldn’t make or break anyone, right? In many situations, this may be true. However, for those people who are going through a divorce, maintaining a solid credit score is IMPERATIVE.

You may need to buy or rent, initiate utility services for, and completely furnish a new home. In order to do so, your credit must be fair to good at minimum (ideally in the upper 600s or above).

Additionally, many divorcees seek higher-paying jobs in order to make up for the second income that was lost in the split. These days, it is common practice for employers to check the credit history of all potential hires before extending a job offer. If your score tanks during or after your divorce, it may prove difficult to make even a lateral employment move.

What Can I Do to Maintain a Good Credit Score After my Divorce?

As soon as you know that divorce is in the cards, your first move should be getting a current credit report from each reporting agency. This will allow you to know precisely what debts and recurring payments are officially your responsibility as opposed to your spouse’s.

“Knowledge is power, but only wisdom is liberty.” ~ Will Durant

After you have current credit reports in hand, it’s important that you take smart action based on the information contained in your report(s). For example, you may not have realized that your spouse listed you as an ‘authorized user’ on a credit card. If the card’s balance gets maxed out due to extra expenses during your divorce and your ex-spouse stops making payments, you could be held responsible for the balance. In addition to removing yourself from any joint accounts, you should:

  • Create an amended budget using your adjusted spending limit.
  • Make it a priority to make all of your payments on time.
  • Closely monitor any accounts that you’re unable to separate immediately.
  • Get educated on the topic of good financial habits.
  • Seek the help of a financial advisor or NJ credit repair attorney, if needed.

 

 

 

 

Can I be Evicted Due to my Roommate’s Poor Credit?

Moving in with a roommate can be a great way to split expenses – both rent and utilities. It can also be an extremely fun time in your life as you venture out on your own and begin to explore the world as an adult.

Naturally, deciding to live with someone, whether in your early 20s or later in life, is a big decision and one that must be taken seriously. It’s in your best interest to make sure that the person you choose to live with is trustworthy and easy to get along with. Failure to take the time to find a roommate who meets these criteria can lead to a very miserable living situation.

However, the single most important trait to look for in a potential roommate is financially responsibility. The following “red flags” indicate a deficiency in the money department and should give you significant pause in selecting your cohabitant:

  • Poor credit score (under 620)
  • History of being evicted for non-payment of rent or utilities
  • Frequent moves from one rental to another – This indicates that they may be more likely to break the lease they sign with you.
  • Tells “horror” stories about all past roommates – The whole “it’s not me, it’s them” scenario – if it keeps repeating itself in someone’s life, this is probably not a person you want to live with.
  • Poor references – Ask potential roommates if you can get in touch with someone they used to live with. Today, this can be as simple as a Facebook introduction and a five minute online chat. Look for answers about paying rent, utilities and security deposits as well as paying for any damages that occurred during the length of their lease.
  • Doesn’t hold a steady job or is only employed part-time – Make sure that they pull in more than enough income to pay their portion of the monthly bills.
  • Inability to put down a deposit

If you plan to apply for a joint lease once you find the right roommate, the property owner (landlord) will almost certainly check both of your credit scores. Even if you have a sparkling credit history and a high score, a landlord can decide not to rent to you if your roommate has dings on their credit report.

Typically, landlords won’t turn away potential renters who only have a few dings in their credit history, but if your roommate is saddled with a significant amount of debt, their credit score has likely suffered because of it.

Perhaps you already have an apartment rental and you want to take on a roommate without adding their name to the lease. Depending on the language of your specific lease agreement, you may be required to add any official occupants’ names to the lease. If this is the case, your new roommate’s credit score can prevent them from joining you in your rental.

Knowing that your possible bunkmate has a dubious financial history, you may be tempted to lie by omission and have them “move in” without officially telling your landlord. While this may temporarily avoid a credit check, it may end in disaster if your landlord discovers your covert roommate. If this happens, you and your undisclosed roommate will likely be evicted for failure to follow the rules set out in the lease agreement.

If you feel that you have been evicted unjustly, you should make yourself aware of your rights as a New Jersey tenant.

 

Image: “Moving Day Boxes” by Nicolas Huk – licensed under CC by 2.0

I Received a NJ Bankruptcy Discharge: Now What?

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Having all or many of your debts erased in a New Jersey chapter 7 bankruptcy is referred to as a bankruptcy discharge. Most people filing for chapter 7 feel a great relief when their discharge is granted.

While you are deeply immersed in the bankruptcy process, it can be easy to view your discharge as the finish line. However, once you’ve passed that finish line, you’ll have new goals to reach for, and achieving these goals will be the true measure of your future financial success.

After bankruptcy, you’ll be aiming for repairing your credit score, which will take a hit when your bankruptcy is reported. Lenders will want to see that your credit score is slowly rising post-bankruptcy. While this isn’t always easy to do, it’s definitely not impossible. You can:

Apply for a secured credit card – While significantly different from a traditional credit card, secured cards are backed-up by money you pay up front. While few banks will see you as an ideal borrower right after bankruptcy, some offer secured card programs to borrowers who need help rebuilding their credit. This is a temporary solution that you should only use until your score rises enough to make you eligible for a traditional credit card.

Apply for a secured loan – This type of loan typically involves a credit union or a local community bank. You can either “borrow” from funds that you supply to your own loan account, or borrow money wherein you must make certain necessary payments before any funds will be released to you. While not a typical loan, these baby steps help your credit score because your loan activity will appear on your credit report, helping other lenders to see that you’re moving in the right direction.

Ask a family member to co-sign a loan or credit card – It’s true that we typically do not advise our clients to co-sign loans for friends or family members. A co-signer is putting a lot of faith into you, because they are essentially letting you “borrow” their good credit. The only times we recommend considering co-signing is after bankruptcy and when you truly have zero other options.

Request to be an authorized user – An alternative to finding someone to co-sign a loan or credit card is to request to be listed as an authorized user on a family member’s credit card. This is probably the option that will have the least positive effect on your credit score, but it can help a little bit. However, ensure that the lender in question reports all payment activity to credit bureaus for all authorized users, not just the main account holder.

As you begin your journey post-bankruptcy, the most important thing you do will be to make every single payment you owe to anyone ON TIME. This includes the aforementioned secured loans as well as utility bills and any other monthly expenses. Bankruptcy discharge should have given you a huge break from significant debts, leaving you with enough money to pay for your living expenses with a little bit left over each month. This means there are no more excuses for late payments.

When we work with a bankruptcy client, we also offer credit repair assistance after your discharge. If you’ve received your NJ bankruptcy discharge and you’re still struggling, we’re here to help you figure it all out.

Image credit: John Eisenschenk

Evicted with No Lease in NJ: Will it Damage My Credit?

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If you’re a renter in New Jersey, you may have signed a long and detailed lease with your landlord. Rental leases are used to set out specific terms that must be adhered to by the tenant(s) as well as the landlord (property owner). Signing a lease can give renters the security of a guaranteed place to live for a specified length of time. A lease also stipulates the amount of monthly rent to be paid to the property owner throughout the duration of the contract.

Can I move in with my friend without signing his lease?

Oftentimes, a rental lease specifies whether or not the tenant may take on a roommate during their stay in the rental property. Some leases require that any new roommates sign their name to the lease; however it is more commonly found that tenants can obtain a roommate without having them sign anything.

If you are a roommate who has been living in a rental without having signed any lease paperwork, you may have questions about your rights. Since the original tenant signed the lease, he or she has a clear understanding of their renter’s rights. Although you don’t have the benefit of a written lease, since you are renting in New Jersey, you have what is known as a verbal lease.

Non-leased renters in NJ who are staying in a rental unit with the permission of the property owner are granted an automatic 30-day verbal lease. The oral agreement you and the original tenant formulate with your landlord constitute the contents of your verbal lease. Naturally, verbal leases are much more difficult to uphold, and tend to be quite problematic.

It is recommended that you get some kind of written agreement from your landlord so that you don’t end up in court over what may very well be an inconsequential issue. Landlord/tenant disputes can turn into bitter court battles, and without anything in writing, you’ll have a much harder time defending yourself and your position as a non-leased renter.

Can a landlord evict a tenant who doesn’t have a written lease?

Property owners can definitely evict tenants without a written lease in place, but the process is a lot messier for all parties involved. Whether you moved in with a leased renter or if you were simply granted verbal permission to stay in a property with no lease, you are not safe from eviction.

There are a myriad of reasons that justify evicting a renter of any kind, including:

  • Violation of health, safety or conduct laws
  • Damaged property
  • Missed or habitually late rent payment(s)
  • Illegal activity (drug use, assault) in the rental property
  • Theft or destruction of landlord’s property
  • Disturbing the peace
  • Decision of property owner to stop renting

Even if you did not sign a written lease, you can be evicted for any of the above reasons.

Will an eviction damage my credit score?

Generally, being evicted in New Jersey will not be indicated on your credit report. However, unpaid rent or lawsuits that were filed against you by the landlord may show up on your credit history. Additionally, the next time you apply to rent an apartment in NJ or elsewhere, your new landlord or property manager is likely to perform a background screening, during which they may discover that you’ve been evicted before.

Image credit: Angela Rutherford