How a Credit Freeze Can Prevent Identity Theft

credit freeze

It seems like every time you turn on the news or log on to your Facebook account these days, there is chatter about yet another massive data breach. In today’s increasingly digitized world, our personal information has never been more at risk of becoming compromised. Identity theft is a very real threat to your valuable identifiable data, your credit score and your overall financial security. While it can seem like identity theft is out of your control, you actually do have the power to defend yourself. One of the best ways to do this is with a credit freeze.

What Is a Credit Freeze?

A credit freeze puts an immediate lock down on your credit information and prevents potential cyber thieves from stealing any of your identifying information in order to open an account (anywhere) and start racking up debt in your name. A freeze will disallow anyone who is not actually you from gaining access to your credit file. Since creditors like banks and credit card companies need to see your credit report before they will open a new line of credit for you, they will be unable to do so unless you specifically lift the credit freeze.

When you initiate a credit freeze, the only people who will have unlimited access to your credit report are you and any current creditors and debt collectors you may have. Employers and some government agencies will have limited access to your credit report.


IMPORTANT NOTE: A credit freeze does not impact your credit score and is totally free.


When Is a Credit Freeze Called For?

A lot of people freeze their credit after they have experienced an information breach or have otherwise had all or part of their personal data stolen. The challenge most commonly encountered when freezing your credit report after an incident is the race against time. Who will “get to” your credit report (and all of the personal information contained therein) first – you, or the criminal?

Because of the aforementioned “race against time,” preventative measures, like freezing your credit before an incident occurs, are much more likely to be effective. With a credit freeze, even if your Social Security number somehow becomes compromised, the rest of your data and accounts will be protected. It is also a great idea to freeze your child’s credit report now in order to protect their future.

How Do I Freeze My Credit?

While freezing your credit is free, it does require you to jump through a few hoops. You will need to contact all three major credit bureaus and freeze your account individually. While this is time consuming, it will be worth it when your credit report and score remain safe if (when) another cyber attack materializes.

Each credit bureau will present a slightly different process to freeze your credit, but you will definitely need to provide them with: your Social Security number, birth date, last two addresses, a clear copy of a government-issued ID card, and a copy of a bill or bank statement with proof of your current address. You can request a freeze via phone, e-mail, or through the good old-fashioned Postal Service.

Once you apply for a credit freeze, the credit bureaus will give you a PIN with which to manage your credit freeze. You will need to keep this number in a safe place because you will also need it in order to unfreeze your information when the time comes to open a new line of credit. Your credit freeze will be activated one business day after you make the request via phone or online, with mail requests taking three business days.

What Happens When I Need to “Unfreeze” My Credit?

To unfreeze your credit, you will need to provide the same credentials with which you initiated the freeze, to the credit bureaus. Per federal law, the freeze should be lifted within an hour if you make the request via phone or email. Mail requests to unfreeze your credit will take three business days.

You can also request to have the freeze lifted temporarily, so a potential employer or landlord can do a quick check before your credit goes back into freeze mode.


PRO TIP: Ask which credit bureau they will be contacting and only unfreeze your data at that bureau.


Is There a Down Side to Freezing My Credit?

There are some cons to credit freezes. The process of requesting and managing a credit freeze with three different credit bureaus can be a lot to juggle. You will also have to go through the extra step of unfreezing your information anytime you apply for a new line of credit. Additionally, putting a credit freeze into effect now won’t protect any of your existing accounts from fraudulent activity.

Regardless of any negatives, in today’s increasingly digital world, protecting yourself from a cyber attack with a frozen credit report is a fantastic—and free—way to keep your personal information private.

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5 Credit Repair Hacks that Actually Work!

credit repair

People often don’t realize the value of good credit until they really need it. Typically, it’s when they attempt to buy a house or open a new line of credit that people realize their credit score isn’t quite up to par. When that happens, the gut reaction is to race to fix their credit quickly. The good news is that raising your credit score is possible, regardless of your financial situation. However, this is a process that often takes time. Rebuilding a poor credit score can take months or even years.

Use these hacks to repair your credit score:

1. Pay Down Your Balance(s)

One of the best ways to raise your credit score quickly is to pay off a significant amount of your debts. Don’t just throw money at credit cards blindly, but be strategic about how you pay off your debts. A good way to do this is to look at your credit utilization ratio. This is the amount of credit you have used against the amount of credit you have available.

Example: if you have a $2,000.00 balance on a card with a limit of $5,000.00, your utilization ratio is 40%. Most experts suggest keeping your credit utilization ratio under 30%. If you are trying to increase your credit score quickly, you will want to pay off the cards where your credit utilization ratio is above 30% first. One of the best ways to do this is to make two payments a month. If you can swing it financially, making one extra payment a month can quickly reduce your overall debt and your credit utilization ratio.

2. Raise Your Credit Limit

Since we know your credit score is partly based on your overall credit utilization ratio, a quick way to lower that ratio without reducing debt is to see if you can increase your credit limit. In using the example above, if you have a $2,000.00 balance on a card with a limit of $5,000.00 (40% utilization ratio) and your creditor increases that limit to $6,500.00, your new utilization ratio will be at a more desirable 30%.

There are some important caveats when using method. You know yourself best: if you have trouble with overspending, this might not be the best choice for you. Also, if you have missed payments or have seen a steady decrease in your credit score lately, this will likely not work for you. In these instances, your credit card issuer may see the request for more credit as a sign that you are having a financial crisis. If you are a good customer with on time payments and your score is steady, this could be a good strategy to instantly boost your credit score.

3. Become an Authorized User

When rebuilding your credit, it is difficult if not impossible to get approved for a new line of credit. One way to get around this issue is to enlist the help of a trusted friend or loved one. If this person has good credit, they can add you as an authorized user on their current credit card account. This authorized status will show up on your credit report and boost your score.

IMPORTANT: When tying your credit to another person, you MUST make sure they are responsible first. The ideal candidate is someone who makes timely payments and keeps their balance low. If you tie your credit to someone who makes late payments and carries a high balance, you could end up lowering your credit score.

4. Consolidate Your Debt

There are two different kinds of debt: revolving debt and installment debt. Credit card debt is revolving debt, where the balance changes with each new purchase and payment. The FICO formula that determines your credit score favors installment debt, like loans, because this kind of debt tends to be more stable. Thus, consolidating your credit card debt into a personal loan can really give your score a boost. Personal loans also tend to have a much lower interest rate than credit cards, so you will end up paying less money in the long run.

5. Mix Up Your Credit Portfolio

Having a wide array of different kinds of credit is a good way to boost your score.  If you find you only have credit card debt, taking out a personal loan or a car loan isn’t a bad idea. While your credit mix is only 10% of your total score, diversifying your credit can give your score that extra boost it needs to go from “fair” to GOOD. It should be noted that this is a long term approach to better credit and should not be used by those who need an instant boost for an impending big purchase or financial change.

These tips and tricks can give you the boost you need to finally achieve excellent credit. If you are struggling to manage your debts or get your credit score where it needs to be, the team at Veitengruber Law can help. We offer personalized credit repair options to fit your financial needs.

 

5 Mistakes to Avoid After NJ Bankruptcy

NJ bankruptcy

After your NJ bankruptcy, a common concern is how to re-establish your credit score. The real challenge is creating new financial habits so you don’t find yourself back in the same hole all over again. At Veitengruber Law, our holistic approach to financial health means our job doesn’t end after the bankruptcy is closed. We work with you to repair your credit and create healthier financial habits.

 

Top Mistakes to Avoid After a Bankruptcy Discharge:

 

1 – Ignoring your credit report

When rebuilding your credit subsequent to a bankruptcy discharge or reorganization, you will want to be very attentive to your credit report. Your creditors are supposed to report any discharged debts included in the bankruptcy to the credit bureaus. These reports should show a zero balance and include a note indicating the debt has been discharged. It is crucial to follow-up on this and ensure that all creditors are reporting to credit bureaus correctly. If discharged debt is being wrongly reported—as either a charge-off or an open account—late or missed payments can continue to show up on your credit. This can further damage your score and make it more difficult for you to get new credit.

2 – Applying for multiple new credit lines

It can be tempting after bankruptcy to rush out and apply for a gaggle of credit cards or loans in an attempt to quickly repair credit. However, it is important to give your credit score time to rebound before applying for new credit. The impact of a bankruptcy is strongest in the first year after filing, although it can stay on (and affect) your credit report for up to ten years. Instead of rushing into opening several credit lines at once, be patient and take the time to research your best options.

3 – Failing to read the fine print

When you do start applying for credit cards, it is important to remember that not all credit cards are created equally. Some credit cards will be more helpful to those rebuilding post-bankruptcy. A secured card, for instance, allows you to deposit cash as collateral up front to create a line of credit. That way, you are not able to charge more than your initial deposit. With any card you choose, it is important to read the fine print of your terms to make sure the card will work in your favor.

4 – Falling for credit repair scams

Many unethical “credit repair companies” make big promises about performing miracles to improve credit scores, but they rarely ever deliver the results promised. These companies rely on misinformation to scam those that don’t know much about how credit works. Some of their tactics may even be illegal. Keep in mind that if something seems too good to be true, it probably is.

5 – Making things too complicated

Ultimately, when it comes to rebuilding your credit after bankruptcy, you need to go back to the basics. What bad habits caused you to file for bankruptcy in the first place? An unflinching assessment of your spending habits will help you determine which factors led to the bankruptcy and determine where you need to make changes. Figure out what your credit-bingeing triggers are and work toward setting spending limits for yourself. Simple things like making on time payments, keeping debt to a minimum, and sticking to a healthy budget are excellent foundations of any financial strategy and will get you on the road to financial health quickly.

You’ve been through the hard-fought financial battle of bankruptcy and come out victorious on the other side. Now is the time to think positively about your financial future. Rebuilding your credit after bankruptcy takes time and patience, but you can use the knowledge and financial savvy you’ve learned along the way to move forward to a brighter future. Veitengruber Law is here to help. We are skilled in advising clients and creating easy-to-follow strategies to rebuild credit. Call for your free consultation today.

Getting Nowhere with Your Debts? You Need a Debt Resolution Plan!

Debt Resolution

If you find yourself burdened with unmanageable credit card debt and struggling to make minimum payments each month, Veitengruber Law’s debt resolution services may be the perfect option for you. Following a debt resolution plan can be an effective strategy for anyone who has experienced a financial hardship like divorce, job loss, a significant reduction in household income, or medical debt resulting from serious accident or illness. Our team is experienced in debt management solutions and creating effective debt resolution plans.

George Veitengruber is an attorney with a strong focus on finances. All of our team members understand the personal heartache people can experience from overwhelming debt. We work toward real and appropriate solutions that provide relief and peace of mind for our clients. We will sit down with you to review your income and expenses and evaluate your debt to get a blueprint of your finances. No two people have the same debt issues and there is no one-size-fits-all solution to debt issues. We provide individualized advice for each client. Bankruptcy is not the only option for people seeking debt relief, and we will never push you into bankruptcy if that is not your best option.

Debt resolution can be an excellent alternative to bankruptcy or debt settlement. After we sit down with you to get a clear understanding of your financial situation, we can create a comprehensive budget that will allow you to get a handle on your debt. We will also use that budget to negotiate with creditors on your behalf. We will work to settle on new payment terms with each individual creditor, negotiating to eliminate penalties, reduce interest rates, and secure lowered monthly payments. The goal of a debt resolution plan is to resolve your debts for less than what you owe on your outstanding balance and to create a payment plan you can more easily manage.

There are some major incentives to working with an attorney to create a debt resolution plan over other debt settlement services or trying to manage debt alone. While your overall score will still likely drop at least slightly, our debt resolution services have the potential to limit damage to your credit score. Because you can continue to pay creditors throughout the negotiation process, there is little opportunity for late payments to further decrease your credit score. Veitengruber Law can also negotiate with creditors in how they report the payment of the debt, working with creditors to ensure your credit score is impacted as minimally as possible.

Another major benefit to debt resolution is the support you get from a qualified, experienced attorney. Our legal team can use their knowledge of the financial world to negotiate on your behalf. Creditors are more likely to take an attorney seriously and an attorney can assure your creditors are working in your best interest. We know all the tricks of the trade and how to work the situation in your favor. When you work with us, you know you will receive the quality know-how and financial expertise you deserve. Our advanced knowledge and years of experience also means less time spent negotiating with creditors, ensuring that you will start paying off debt sooner rather than later.

Don’t wait to start working on a solution to your debt troubles. Call us today to arrange a free consultation with a debt negotiation lawyer. Our comprehensive approach to debt resolution will allow you to breathe easier again. We can work with you to create an individualized debt resolution plan that works for you, helping you tackle unmanageable debt and avoid further financial troubles.

Wallet Full of Plastic: Do You Need Credit Counseling?

credit counseling

Many people enjoy the flexibility of credit card spending, but the more credit cards you have, the easier it is to develop destructive spending habits. The convenience and ease of credit spending can be a slippery slope to overspending and unmanageable debt. If you find yourself with a wallet filled with plastic, it might be time to seek credit counseling to get expert advice on debt management and credit repair. At Veitengruber Law, our credit counseling team can work with you to improve your individual financial situation and help you gain control over your money and credit.

Credit counseling is a great way to receive expert financial advice and support to help manage your debt and organize your finances. It is important to make sure you are getting advice from true experts and not financial scammers. Our legal team provides debt management and credit repair services to get you back on the road to financial health. Many of our clients developed unhealthy spending habits over time, slowly building debt until suddenly finding themselves overwhelmed with payments. Out of control credit card debt can seem overwhelming, but you don’t have to face it alone.

At Veitengruber Law, we understand how the credit industry works. We strive to instill in our clients a holistic understanding of their finances and how the credit system works. Our team can give you the tools and insider advice to take control of your credit. In your individualized consultation, we will provide easy-to-follow strategies to rebuild your credit, even after major financial set-backs. Our attorneys can also help you establish a realistic and manageable budget by looking at your monthly bills, expenses, debts, and income and devising the best plan forward. We can give you the knowledge to negotiate better terms on your credit cards to make your payments more impactful.


You may be surprised by how much a few budget changes can massively improve your financial situation.


It is important to note that you don’t have to be in dire straits to seek credit counseling. Maybe you have a decent credit score, but making payments on time has recently become a struggle. Don’t wait to address your financial situation until debt collectors are knocking at your door. If your current budget isn’t comfortable or you find yourself struggling to make your payments, it might be time to reassess your financial situation. If you are feeling overwhelmed, be proactive about your debt and address your problems before they become emergencies. Credit counseling can help you avoid future financial woes like bankruptcy.

IMPORTANT FACT: Credit counseling and debt management are excellent alternatives to bankruptcy and can often even prevent it.

Even novice consumers can benefit from credit counseling. Seeking advice from experts when you first start living on your own is a great way to make sure you are starting on the right foot as you make plans for your financial future. We offer individualized counseling to help you understand how credit scores work, financially healthy ways to build credit, and how to make the most out of your credit right now. Establishing healthy spending habits and formulating a budget early on will set you on the path for a healthy financial future.

It’s our goal to help you become a stronger financial consumer. From helping clients out of extreme credit card debt via NJ bankruptcy to keeping homeowners in their homes via mortgage modification, and even simply offering advice to struggling novice consumers, we can get you back on track. We care about your financial future.

How Identity Theft Affects Your Credit Score

NJ credit repair

What (all-too common) crime can happen to you without your knowledge, making virtually everything in life more difficult? Two dreadful words: Identity Theft. Unlike some medical diseases, identity theft doesn’t discriminate; it can strike anyone at any time. The worst part about being a victim of identity theft is that it can have a seriously negative impact on your credit score and it can prove to be difficult to fix.

More people than you realize have been severely impacted by identity theft. When an impostor uses another person’s identity to make a purchase and fails to pay the bill, a storm cloud rolls in. The scammer has zero intent to ever pay the debts they accrue under your name; therefore, you’re left to clean up the aftermath. You may not even realize that your identity has been stolen until a credit agency contacts you. By this point, your credit has likely already taken a major hit.

Your credit score is your representation as a responsible individual regarding money matters. Unpaid bills can have a lasting, damaging impact on your credit report, which can then snowball to affect other areas of your life (obtaining housing, buying a car, getting a decent job). Because payment history makes up about 35% of your credit score, late or nonexistent payments have a momentous effect on your “credit worthiness.” In addition to unpaid bills, identity theft can leave other negative marks on your credit report. Here are five ways that identity theft packs a punch:

1.      New Accounts

Adding a new account to your credit report or getting a new loan shouldn’t affect your credit score as long as you aren’t adding a plethora of new accounts all at once and you’re making regular payments. However, when an impostor opens a new account in your name and fails to make any payments, your credit score will slowly begin to tank. Every month that passes without payment received will lower your credit score further.

2.      Inquiries

If an identity thief is applying for new credit with your personal information, the lender is going to check your credit report. These are known as credit checks, or “hard inquiries” – each of which show up on your credit report. Each inquiry will affect your credit score by dropping it a couple of points. Your score will drop because credit scoring models regard “hard inquiries” as a sign that the consumer is shopping for credit.

3.      Collections Accounts

After no action occurs for 6-12 months on an unpaid debt, the lender will turn it over to a collection agency. This causes a “second action” to be taken, and a collection account will appear on your credit report. Unfortunately, this will have an extremely harmful effect on your credit score. Often, medical identity theft leads to the appearance of a collection account. This occurs when an impostor uses your identity to obtain medical services or treatment, but has no intention of paying the bill(s).

4.      Greater credit utilization ratio

Another significant piece that counts toward your credit score is the amount of debt you carry. When the scammer “goes shopping” and adds charges to your account (unnoticed), your overall amount of debt rises. Even if the scammer opens a phone plan or house utility but doesn’t pay the bill, the provider will report it to the credit bureau. A negative ding will appear on your report, damaging your credit score. A continuously increasing amount of debt will continuously drop your credit score. The higher your credit utilization ratio, or the amount of your available credit that you use, the lower your credit score will fall.

5.      Higher Auto Insurance Rates

In every state except California and Massachusetts, auto insurers utilize your credit score to set rates. A low credit score can cause a 20 to 50% increase in auto insurance premiums. Even if you have a depressed credit score, an insurer can’t reject you, but they do have the ability to hike up your premiums without an explanation.

Nobody wants to find out that their identity was stolen, but it can and does happen. Being knowledgeable and prepared as to how it can affect you is crucial. If you’ve been the victim of an identity thief, Veitengruber Law can help you deal with the emotional and mental frustration as well as the financial damage that has been done. No matter how low your credit score has gotten – we will guide you through getting it back to a respectable number again.

6 Steps to Repairing Your Credit

nj credit repair

In today’s economy, it is imperative to maintain a decent credit score. There are many reasons why you simply must work to repair your credit if it is currently less than fair (below 560-580.) A higher credit score will allow you to obtain a higher credit line. Also, if you have an excellent credit score, you will receive offers for credit balances with lower interest. A better credit score will also empower you with more buying power, so you can purchase a house, car, or make other large purchases. There are a multitude of things you can do to improve a low credit score. Six of the most important steps are detailed below.

 

  1. Pay your bills on time. While this may seem like an obvious course of action, it is extremely beneficial to improving your credit score. Conversely, if you do not pay your bills on time, your credit score will take a significant hit. Some people falsely believe that making late payments will not affect their credit score as long as they aren’t MISSING payments. It’s important to realize that late payments will incrementally drop your score.

 

  1. Maintain an appropriate debt-to-credit ratio. This is a way for creditors and lenders to see that you are able to use your credit responsibly. Your debt-to-credit ratio is essentially how much money you owe creditors compared with your overall available credit. For example: If your overall debt (money you owe creditors) is $10,000, and your total available credit is $20,000, your debt-to-credit ratio is 50%. A low debt-to-credit ratio indicates that you are not overspending. It also shows that you are closer to being able to pay off your debt than if you owed a higher percentage of your available credit line.

 

  1. Pay more than the minimum balance due each month. This shows that your income is steady and you have more purchasing power. Plus, when you make more than the minimum payment each month, you will be able to pay more on the principle amount due as opposed to simply paying off interest.

 

  1. Avoid opening too many accounts in a short amount of time. The rationale for this step is that more inquiries indicates to creditors that you may be in serious financial trouble. Even if you aren’t approved for every account you apply for, there will be credit inquiries made each time you apply that will ding your credit report.

 

  1. Pay off your balance instead of transferring debt to other credit cards. Not only do most balance transfers typically involve a fee, but this can lead creditors to view you as a volatile debtor who simply shifts debt around rather than actually paying it down.

 

  1. Keep a keen eye on your credit report. If you discover any errors, you should immediately report the issues to the reporting agencies and have them rectified right away. This should be completed at least once per year. If you find errors on your credit report that the agency(ies) refuse to remove, take legal action in order to prevent false information from dragging your score down unnecessarily.

 

Following these steps to repairing your credit score are excellent ways to start planning for the future. Knowing that you have financial security will improve your overall health and well-being. While there are many other steps you can take to improve your credit score, this list is a basic overview of the most trusted ways to achieve your goals.

How to Raise Your Credit Score: Hire a Trusted NJ Attorney

NJ attorney

When hear the word ‘credit’, a number of images may pass through your mind. Maybe you think of a situation in which someone owes you money or perhaps you picture a bank. You may consider your education and the credit you received for each assignment or even a situation at work where you deserved credit for your hard work or a good deed. If you’re involved in the financial world, your mind might immediately jump to credit scores: good credit, bad credit, and everything in between.

No matter what you envision when the conversation turns to ‘credit,’ toss in a bit of everything mentioned above and you’re on your way to completing the puzzle of what’s known as a ‘credit score.’ A credit score is a three-digit number that is computed using an algorithm and is based on information gathered from your credit report. Its purpose is to predict risk. Ultimately, your credit score represents the likelihood that you will neglect your credit obligations in the next 24 months.

Though there are a multitude of credit-scoring models that are utilized, the most well-known is the FICO credit score. According to myFICO.com, 90 percent of all financial institutions throughout the United States use FICO credit scores when making a number of important decisions. The three-digit number ranges anywhere from 350 to 800, with the lower number representing a less-desirable credit score.

How do you avoid ending up with a low credit score? What factors play into the algorithm? There are five categories that influence a credit score. The percentages represent the weight of each factor in determining the score.

·        Payment history (35%): Paying your bills on time is crucial. By not paying your bills by the deadlines, you will cause your credit score to decrease. Also involved in this category are any delinquencies or public records.

·        Amounts owed (30%): The amount that you owe on each of your credit accounts heavily affects your credit score. Also, the amount of possible credit that you have on accounts is strongly considered.

·        Length of credit history (15%): The amount of time and number of accounts you have open will boost your credit score, as long as you’re paying the dues on time.

·        Types of credit used (10%): Having a variety of types of accounts will help you out. Two examples are revolving and installment.

·        New Credit (10%): How often you pursue opening new accounts and new credit, including inquiries (whether you’re approved or not), will have an impact on your score.

Now that you know what goes into a credit score, you realize how malleable it really is. If you don’t give the three-digit number a little bit of TLC, it can quickly bottom out on you. On the other hand, if you are careful with your finances, you shouldn’t have a real issue keeping your credit score in line.

We know that establishing or reestablishing good credit is key to a secure financial future and we want to help you move toward that goal. As you read before, many financial institutions use credit scores and reports to make decisions, manage risk, and increase profits. On the downside, they don’t have any interest in looking out for your personal credit score and overall financial health. That is where Veitengruber Law steps in. Our holistic approach to building credit is at the center of everything that we do. The guidance we provide doesn’t end with a negotiated debt solution or court case. Instead, our goal is to set you up to be a successful financial consumer with well-rounded money smarts.

When your credit score drops following a short sale, a bout with bankruptcy, settlement, or other issue(s), we will walk with you to educate and counsel you. A sturdy financial foundation will give you the power to develop and maintain financial health.

The only way that you will mature in your knowledge of money is to work with experienced professionals. Credit scores and financial health is nothing to mess around with. Your confidence will rest in how well the professional counsels you along this path. With years of experience working successfully within a multitude of situations, we know that we can help you no matter what kind of financial “mess” you may have landed in.

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!