The Ripple Effect of Bad Credit: How it Impacts More Than Just Your Finances

Can you file for divorce while in the middle of a Chapter 13 Bankruptcy?

In the labyrinth of financial despair, Chapter 13 bankruptcy shines as a beacon of hope. Read on to learn about this bankruptcy option.

Real estate contracts are fully binding legal documents intended to protect both parties throughout a real estate transaction. For a good reason, these contracts are difficult to get out of. Real estate transactions are typically some of the most high-stakes financial and legal processes most of us will ever go through. Having a contract establishes rules and expectations for the transaction to ensure things go smoothly and everyone follows the law. So, if you want to get out of a New Jersey real estate contract, you will need to work with an experienced lawyer who understands contract law as well as local real estate laws. Breaching a real estate contract can have serious, far-reaching financial and legal consequences. You do not want to break the contract without legal cause to do so. That said, an experienced attorney can help you find legitimate ways to get out of a real estate contract. Here are some of the ways an attorney can help you out of your contract after it is signed: 1. Attorney Review All real estate contracts in New Jersey are subject to the attorney review period. This begins once both parties have signed the contract and lasts three days. The intention of this review period is for both parties to have the chance to give the contact to their lawyer for review. Your real estate attorney may find issues with this contract upfront or advise you to add specific clauses and conditions to protect your interests throughout the transaction. It is possible to back out of the contract at any point during the attorney review period, which makes it one of the easiest ways to get out of a real estate contract. While you are not obligated to have an attorney review your contract during this time, it is advisable. Once the attorney review period is over, you must abide by whatever terms are laid out in the contract. 2. Breach of Terms Every real estate contract includes terms and conditions that must be met for the transaction to progress. The buyer and seller will have to meet specific requirements laid out in the contract. If one of the parties fails to uphold their end of the agreement, they could be considered in breach of the terms. This would allow the other party to get out of the contract through no legal fault of their own. Many of these terms come with due dates, which, if missed, can give you options to terminate a contract. For example, your contract states that the seller must perform a mold inspection by a certain date. The date comes and goes, and the seller has not performed the inspection. This could give the buyer the opportunity to back out of the contract completely. Typically, being behind on dates by a few days is not a deal breaker for either party, and the sale continues to progress without incident. But if you are looking for an out, these dates could be your key. 3. Unfulfilled Contingencies Some contingencies are added to most real estate contracts. These are items on top of the typical boilerplate terms and conditions that must be addressed for a real estate transaction to go through. Buyers and sellers can establish their own contingencies. While you can dispute contingencies prior to signing the contract, once a contract is signed, these contingencies must be met for the sale to go through. If one party is unable to or unwilling to hold up their end of the contingency agreement, they could be considered in breach of contract. So, for example, the buyer can include a contingency that if a home inspection uncovers any significant issues, the deal is off. If the home inspection reveals major repairs, structural damage, or other costly maintenance that was not previously disclosed, the buyer can back out. Typical contingencies include financing, inspections, and even the timing of purchasing or selling other property. Whatever the contingency is, once agreed to, it is legally binding for both parties. Failure to uphold the contingency is an opportunity to end the contract. A good attorney will be able to review the contingencies in your contract to determine if you have any grounds for backing out based on unfulfilled contingencies. Once a contract has been signed, both parties are legally bound to its terms. If you have already signed a real estate contract and need to get out, a real estate attorney can help. Veitengruber Law has an experienced real estate attorney on staff with a deep knowledge of NJ real estate laws. We can help you work through the complexities of getting out of your NJ real estate contract.

Do you need a real estate niche to become a successful New Jersey realtor? Many real estate agents avoid narrowing down to a specific niche. New agents starting out often take any work that comes their way and attempt to become a jack of all trades. They fear boxing themselves in, missing out on some opportunities, and making their client base too narrow. However, finding and perfecting a niche as a real estate agent is actually a fantastic way to ensure your success in the industry. A niche is what sets you apart from other real estate agents. Developing a niche is necessary to define your brand and choose a marketing direction. What kind of real estate experience are you offering? Who is your ideal client? What can you do that no other real estate agent can? When you define your niche, you are better able to offer a memorable message about your offerings that will stay fresh in the minds of potential clients. Deciding on a unique niche will help you streamline your marketing so you can reach the right audience. Here are six categories you should consider while developing your real estate brand: 1. Local Areas or Neighborhoods Deciding to focus on one geographic area is one way to develop a strong niche. Depending on the population density or geographic scope of the area, you may find it makes sense to specialize in one county, town, or even a single neighborhood. To be an expert in one geographic area means you will spend time developing deep connections with other industry professionals in that area. You may want to consider an area or community close to where you live to ensure easier networking. There are some things to consider when choosing this niche. For one, if you do not plan to live near your focus area for long, it may be a waste of time to develop such deep ties to one location only to cease business there. You will also be more vulnerable to competition from other real estate agents specializing in your chosen geographic area. To combat this, you should focus on other aspects of your work that set you apart. 2. Customer Type Developing a specialty for a specific clientele is another way to set yourself apart as a real estate agent. There are so many unique groups of people looking for real estate professionals that you can really make your customer type as general or specific as you want. Some examples include seniors looking to downsize, Spanish-speaking clients, LGBTQ+ clients, first-time homeowners, luxury real estate, etc. Targeting one of these client groups will help you grow your business in a direction that interests you. Just because you choose one demographic to focus on does not mean you will never take on clients outside of that demographic again. You will, of course, likely still work with plenty of other clients. However, you can focus your marketing and branding efforts on attracting the attention of your niche clientele. This not only gives your business direction, but makes you an expert in providing an excellent experience of service for your clients. 3. Property Type Specializing in a property type will likely depend on the kind of clients you want to serve and the location in which you do business. You can specialize in more general property types like condos or multi-family properties, or you can specialize in more specific property types like waterfront homes or luxury homes. Clients looking for a particular property will feel that they are in good hands if they work with an expert with demonstrated experience in those properties. You can run into issues with this niche, however. Markets change and some property types may be trending more popular than others for various different reasons. A big enough market change could force you to abandon your property-type niche to remain in business. Combining this niche with another is another great way to ensure you are developing a lasting brand. 4. Experience Level Real estate is a career filled with a lot of ups and downs. Market volatility, housing crises, home value shifts, price fluctuations, interest rate hikes—the experienced real estate agent has survived it all. Seasoned agents should absolutely be marketing themselves as the expert real estate professionals they are. You don't just want to show potential clients how many years you have been in business; you want to portray the depth of your knowledge and why you have been so successful in your area specifically. Sharing your story with your clients gives them insight into your history, experience, success, and how your specific service can help them achieve their real estate goals. Even if you are relatively early in your real estate career, showcasing your triumphs can help clients see the quality of service you provide. 5. Individual Skills So, what if you're a new real estate agent without the years of experience to market yourself to potential clients? Then, defining the unique personal qualities you possess that set you apart from other agents will be very important in your marketing. Even if other agents have the knowledge and experience, they do not have the unique characteristics that make you stand out. Make sure you choose characteristics that appeal to the type of client you are interested in attracting. For example, you can say you are driven and persistent to convey that you get the job done efficiently and promptly. Whatever characteristics you emphasize in your marketing, ensure you are authentic. The clients that connect with you will appreciate the skills and characteristics you emphasize in your branding. 6. Specific Industry Expertise Real estate transactions are so complex and varied that there is an extensive list of areas in which you could develop expertise. Specific industry expertise goes beyond the individual characteristics you possess or the region, community, customer, or property you specialize in. Your industry expertise could be in negotiations, home staging, contracts, financing options, construction, and local maintenance/remodeling regulations. Whatever specific aspect of the real estate deal you have a special knack for, you need to advertise that. If you are entering the real estate industry from another career, think about how the skills and knowledge you learned in your previous job can make you a more powerful real estate agent. Especially if you are from an industry with close ties with real estate, like banking, you can advertise these skills to set yourself apart from the competition. Make sure you choose skills, knowledge, and experience that will represent you well to your target audience. Veitengruber Law is a full-service real estate law firm with years of experience working closely with successful real estate professionals in New Jersey. We understand what it takes for a real estate agent to thrive in our area and are always looking to build partnerships with other industry professionals. Veitengruber Law specializes in property laws, local regulations, contracts, short sale negotiations, mortgage modifications, and foreclosure defense. Reach out to us today to discuss your goals as a New Jersey realtor; let’s work together to help our clients achieve the dream!

No matter how old you are, planning for old age right now is the best way to ensure you are prepared for retirement and beyond. But by the time you are 55, you should have five essential legal documents in place. Ensuring these documents are in place can help you avoid end-of-life issues and legal headaches in your golden years. As an estate planning attorney, Veitengruber Law recommends following the five by 55 rule. Having these five documents in place by the time you are 55 will cover most of your estate planning. The five documents include: 1. Healthcare Advance Directive  A healthcare advance directive will give your chosen loved ones the power to make healthcare decisions on your behalf if you are unable to make those decisions yourself. The person designated in your healthcare directive will be able to choose what kind of medical treatment you receive if you are unconscious, incapable, or otherwise incapacitated. This can help you ensure your healthcare wishes are respected. Having this kind of directive in place can ease the burden of these situations when they happen and ensure your trusted loved one is legally empowered to make the right medical choices when necessary. 2. Living Will A living will is a comprehensive legal document indicating what kind of medical interventions you want if you cannot vocalize your wishes. Many living wills include personal preferences concerning pain management, organ donation, the use of CPR, mechanical ventilation, tube feeding, or other life-sustaining treatments. Living wills can also include information on medical interventions you do not wish to have based on religious or personal beliefs, like vaccines, antibiotics, or blood transfusions. A living will let your doctors, loved ones, and legal professionals know without a doubt what your wishes are concerning your healthcare. 3. Power of Attorney A power of attorney is an important legal document that allows someone else to act on your behalf legally if you cannot do so. This substitute decision-maker will have the ability to make financial and legal choices for you if you are incapacitated. A power of attorney is a great tool to protect yourself and your loved ones in the event of a coma, traumatic brain injury, long-term mental health crises, dementia, Alzheimer's, and other unfortunately common scenarios. 4. Last Will and Testament When people think of estate planning, they usually think of a last will and testament. This legal document is meant to convey your wishes for your assets and possessions in the event of your death. A will can spell out exactly how you want your assets distributed after death. It can also detail your desires regarding any dependents, your business, or other financial matters. This gives you some control over what happens to your assets after your death. 5. Authorization for Electronic Records and Social Media Sites Technological modernization has pushed so much of our lives online. Most people manage the vast majority of their lives through the internet or apps. Banking, paying bills, managing utilities, socializing, retirement planning—all of these things have moved in some way to an online platform. And most of these platforms have enacted strict privacy and security protocols to limit identity theft. This means that if someone needs to access these sites to cancel services or disable profiles after your death, they will need legal authority. Authorization to access these crucial accounts can ensure they can keep your life in order during a temporary setback or terminate/monitor these accounts after you are gone. The five at 55 estate planning rule will help you prepare for an easy, stress-free life post-retirement. Everyone says they will eventually get to it, but life happens quickly. Veitengruber Law can help you create these essential legal documents and ensure you avoid costly and emotionally draining surprises later in life.

Non-citizens or those in the process of becoming citizens can absolutely file for bankruptcy in the United States. The US bankruptcy code requires those who file to have residence, business property, or own some US property. Established status as a US citizen or a permanent resident is not a prerequisite for a successful NJ bankruptcy filing. There is generally a lot of confusion over immigrant rights, and when you combine that with the complexities surrounding bankruptcy law, many folks are intimidated by the process. But Veitengruber Law can help! Here, we will lay out what your rights are as a non-citizen when it comes to seeking debt relief in New Jersey and across the US. Can non-citizens file for bankruptcy in the US? While you do not have to be a citizen or a permanent resident to file for bankruptcy in the US, you will need to present a social security number or an individual taxpayer identification number in order to file. These items are meant to confirm your identity. As long as you have one of those identifiers, you will be able to file for bankruptcy in the US regardless of citizenship status. If you do not have a Social Security Number (SSN) or an individual taxpayer identification number (ITIN), you will need to acquire one or the other. The IRS can issue ITINs for people who are not eligible for a Social Security Number. An ITIN can be issued regardless of immigration status. Can filing for bankruptcy prevent citizenship approval? There are no legal precedents in either immigration law or bankruptcy law that would automatically disqualify an individual from citizenship because of a bankruptcy filing. However, that doesn't mean that aspects of your financial and personal life that are brought to the attention of the court during bankruptcy won’t influence your citizenship application. During the bankruptcy process, the court will take into account the "good moral character" of the filer. This test is meant to determine if the filer accrued their debts with the prior intention to file for bankruptcy, which, if proven, can disqualify you from bankruptcy. Of course, what constitutes "good moral character" is subject to the interpretation of the specific court in which you are filing. If you racked up thousands of dollars in debt for a destination wedding you couldn't afford only to file for bankruptcy immediately—this may be a red flag to the court. Similarly, using bankruptcy law to avoid paying alimony or child support despite having the income to cover these expenses could result in the court dismissing your bankruptcy case. Since your application for citizenship will also consider your moral character, the information uncovered in bankruptcy court information could be used to reject your citizenship application. However, those filing for bankruptcy for legitimate reasons should not be concerned that their bankruptcy case will impact their citizenship, visa, or green card status. The vast majority of those who file for bankruptcy are honest, hardworking people, and we at Veitengruber Law know that. It may be beneficial to discuss your intention to file bankruptcy with an experienced immigration attorney in your local area. Bankruptcy is a matter of public record, meaning anyone can access it. An immigration attorney will be able to help you determine if filing for bankruptcy is a smart move in your specific situation. How could bankruptcy affect my citizenship case? The only time bankruptcy would impact your citizenship case is if, through the bankruptcy process, it is found that a crime was committed. For instance, if you provide false financial statements, are found to lie under oath, or omit key information or assets from your application, your bankruptcy petition may be denied. This could lead to criminal prosecution. You could even be removed from the US and barred re-entry. This is why it is essential to be completely honest on all bankruptcy documentation. Will my bankruptcy case increase my risk of deportation? Bankruptcy judges, court workers, and attorneys are unconcerned with your immigration status. None of these individuals are required to report to immigration services if they suspect you are undocumented. Again, the only way a bankruptcy filing may impact your status is if you are not truthful with the bankruptcy court. This includes any attempt to defraud the court, perjury concerning your status, or the use of illegally acquired identifying information. Otherwise, filing for bankruptcy is no more likely to lead to your deportation than a speeding ticket. How will bankruptcy affect my employment? As with all bankruptcies, yours will be reported to credit reporting agencies and will have an effect on your credit score. Regardless of your citizenship status, your credit score will take a hit. Depending on your credit score before filing, your score can decrease a lot or a little, but it will decrease. Bankruptcy w ill also remain on your credit report for ten years if you file Chapter 7 and seven years if you file Chapter 13. The good news is that it's possible to start repairing your credit score right after your bankruptcy discharge, but it will take some time. As long as your bankruptcy remains on your credit report, it may limit your future financing opportunities as well as prohibit some employment offers. However, continuing to hold on to unmanageable debt could have a similar negative effect on your credit score and credit report. Even if filing for bankruptcy initially prohibits you from some financial or employment opportunities, it will open the door to a fresh path moving forward. Should I file for bankruptcy if I am sponsoring someone trying to get a visa or citizenship? If you are sponsoring a spouse or significant other's visa, filing could impact their application, although not always. The federal employee who reviews immigration cases will consider your financial situation when they are examining your significant other's case. If they believe that you have a precarious financial situation, this can impact how they view the application. However, a previous or current bankruptcy case is not an automatic reason for a visa to be rejected. Discussing your options with a bankruptcy attorney and an immigration attorney will help you determine if filing for bankruptcy is right for you. Can I file for bankruptcy if I do not read or speak English? Yes! You are not obligated to read or speak English with any fluency to file for bankruptcy in the US. An experienced bankruptcy lawyer and their legal team will work with you to complete paperwork, provide documentation, and ensure you understand the process. Bankruptcy is a legally viable debt relief option for non-US citizens. As long as you can provide proper documentation, your citizenship status will not impact your bankruptcy case. Similarly, your bankruptcy case will not prevent you from keeping or obtaining citizenship, a visa, or a green card. If you are considering bankruptcy as a non-citizen, please reach out to Veitengruber Law today. We can help you navigate bankruptcy law and get on a better financial path.

In today's gig economy, self-employment, freelancing, and contract work are increasingly common ways of generating income. If you are self-employed and experiencing unmanageable debt, you may be unsure of your debt relief options. Whether you are self-employed as a gig worker, sole proprietor, or independent contractor, you will qualify for personal bankruptcy with either Chapter 7 or Chapter 13—even if your debts are associated with your business. If you operate under a separate business entity like a corporation or an LLC, you will also have the choice to place your business into bankruptcy. Here, we will go over your options for bankruptcy while being self-employed. What is considered "Business Income"? Even if you do not consider yourself a business owner, some of your income may still qualify as business income under bankruptcy law. There are three categories of income: 1. Employment Income This money is earned by working as someone's employee and includes wages, tips, bonuses, and commissions. If you receive a regular paycheck, taxes are withheld on your payment, and you receive a yearly W-2 for your taxes, you are likely classified as an employee with employment income. 2. Business Income This is any money that you earn through working. If you do gig work, freelance, or receive a 1099 tax form, you are likely considered an independent contractor. All money gained from this work is considered business income. 3. Other income This includes all other sources of income that are not generated through work, such as Social Security, alimony or child support, pension or retirement income, disability income, lottery or gambling winnings, etc. During bankruptcy, you must disclose all income you've earned from any of the above sources, even if it is not your primary income source. What is your business structure? If you have business income, you must disclose how your business is structured. This can help determine which kind of bankruptcy you can file. For instance, if your business income is earned under a corporation, LLC, LLP, PA, or PC, it is deemed a distinct legal entity from you as an individual. These business entities can file their own bankruptcy, separate from the individual tied to the business. If your business is not structured as an entity, you are considered a sole proprietor. How does business structure affect bankruptcy? Because sole proprietors are legally considered personally responsible for any debts incurred under the business's name, they will file bankruptcy as individuals. This means that the bankruptcy case must include all business assets and debts as well as all personal assets and debts. A sole proprietorship cannot file business bankruptcy. If you are a sole proprietor with little business assets or debts, your side hustle is not likely to have much of an impact on your bankruptcy. However, if your side business does have a lot of assets and debts, it can make things complicated when determining exemptions. An experienced bankruptcy attorney can advise on your exemption options. If your business is officially registered as a separate legal entity, then you can file a business bankruptcy. This kind of bankruptcy will only consider the assets and debts associated with the business entity, not your personal assets or debts. Conversely, you can file personal bankruptcy without your business being included. Regardless of your self-employed status, you have bankruptcy options available. However, determining how to file for bankruptcy when you are self-employed can be complex. Veitengruber Law can help you find the best path forward for you and your business.

Many divorcees cite financial problems as the pivotal issue that leads to divorce. Similarly, many who file for bankruptcy point to their divorce as the major financial setback that led to their bankruptcy. With these two legal issues frequently going hand in hand, it is common to see folks who file for divorce also file for bankruptcy. However, how you file for bankruptcy amidst your divorce can significantly impact your overall financial well-being. Filing for bankruptcy with your spouse before divorce may benefit some while waiting to file alone after divorce will work out better for others. Your unique position will determine what kind of bankruptcy is best for you and if it is better to file alone or with your soon-to-be ex-spouse. Below, we will explore some of your options. Option #1: File a joint Chapter 7 bankruptcy before divorce. Filing bankruptcy with your spouse before divorce will save you and your former spouse money on attorney and court fees. Because you are liable for debts incurred during the marriage—even if you did not incur the debt yourself—taking care of your debt issues before exiting the marriage can make sense. Chapter 7 bankruptcy will let you discharge some or all of your marital debt, giving you a clean financial slate before you exit the marriage. It can also make dividing assets (and debts) more straightforward during the divorce. It is also possible that you will be able to protect more property using bankruptcy exemptions when you file Chapter 7 together. However, filing Chapter 7 before divorce can be difficult if you cannot work well with your spouse. Bankruptcy requires a lot of paperwork, patience, and teamwork. If a joint bankruptcy would lead to more stress than it is worth, you may want to consider filing after your divorce. Filing for bankruptcy will also permit you to enter the automatic stay period, which stalls all court proceedings. The automatic stay is excellent if you want to stall a foreclosure or wage garnishment, but it is not so great if you are in the middle of a divorce. This is another reason you should file for bankruptcy before or after divorce, but not during. Option #2: File an individual Chapter 7 bankruptcy after divorce. If you and your spouse are not on decent enough terms to file Chapter 7 jointly, it is possible to file after divorce. Especially if you are escaping a difficult situation with your spouse, getting the marriage behind you as quickly as possible is likely in your best interest. Because bankruptcy can stall other court proceedings, you will want to ensure your divorce is finalized before filing Chapter 7 as an individual. It may also be in your favor to file Chapter 7 individually after the divorce if you can only file Chapter 7 with your individual income as a separate household. Your spouse's income could disqualify you from eligibility for Chapter 7, and divorcing them can reduce your household income enough to ensure your eligibility. Filing as an individual will also allow you to use more bankruptcy exemptions to protect your personal property instead of jointly owned marital property. However, waiting until after the divorce to file bankruptcy individually can become complicated when you consider debts you and your ex-spouse are jointly responsible for. If one spouse files bankruptcy post-divorce, the spouse who does not file can still be liable for the joint debt even if the debts are discharged during the bankruptcy. This can create a very complicated legal situation and lead to more time in court with your ex-spouse. Option #3: File a joint Chapter 13 bankruptcy before divorce. Chapter 13 bankruptcy cases are generally more complex, time-consuming, and expensive than Chapter 7 bankruptcy cases. The biggest thing to note about filing a joint Chapter 13 bankruptcy case is that it takes 3-5 years for a Chapter 13 bankruptcy case to be completed. This is due to the payment plan you and your spouse will set up to repay your debts. Filing for divorce while in the middle of a court-ordered Chapter 13 repayment plan can be a convoluted legal headache. So, if you are on the brink of divorce, filing Chapter 13 jointly with your spouse may not be the best plan. That being said, if you and your spouse are amenable and can work together for 3-5 years on a Chapter 13 repayment plan, there are some significant benefits to filing Chapter 13 with your spouse. Bankruptcy can help you tackle some or all of your marital debt. Chapter 13 could also allow you both to walk away from jointly-owned property that neither of you want. Option #4: File an individual Chapter 13 bankruptcy before divorce. Filing Chapter 13 bankruptcy alone before or during divorce is not impossible, but it can unnecessarily complicate an already stressful time. Not only will it stall your divorce proceedings, but you will also have to include your spouse's income and expenses in your bankruptcy paperwork. This can set you up for an unrealistic repayment plan that does not accommodate your circumstances after separation. You also cannot sell any assets or incur further debts during Chapter 13 bankruptcy, which can be difficult, if not impossible, while you are going through a divorce. Option #5: File an individual Chapter 13 bankruptcy after your divorce. Filing for Chapter 13 bankruptcy after your divorce is finalized will make the most sense in most situations. This way, you will not need to work with your ex as you make decisions about your financial future. You also will not have to include their income or expenses in your bankruptcy paperwork, giving the court a more accurate picture of your financial situation. Chapter 13 will also enable you to eliminate any legal responsibility for shared debts or debts incurred due to the divorce. If you are considering bankruptcy and are either going through a divorce or plan to divorce, Veitengruber Law can help. We understand NJ bankruptcy laws and can help you make the best decisions to give yourself a fresh start.

If you are struggling with major debt, Chapter 7 bankruptcy is one of the most effective yet formidable financial tools available to US citizens. Many who have experienced financial hardship or unmanageable debt have benefited from bankruptcy. The most common form of bankruptcy for individual consumers is Chapter 7 bankruptcy. It is sometimes referred to as "liquidation" bankruptcy because it can involve liquidating or selling off your assets in order to pay off creditors. However, most folks do not lose any property through Chapter 7. If you are considering an NJ Chapter 7 bankruptcy, Veitengruber Law can help. Here are some benefits and drawbacks of Chapter 7 bankruptcy. We hope these facts can help you determine if this is the right choice for you. Benefit #1: Hit instant pause on collections attempts and foreclosure proceedings. One of the most significant benefits of bankruptcy, including Chapter 7, is that it stops the clock on other legal proceedings like collections or foreclosure. The moment your case is filed, collections efforts must cease. Collections agencies and creditors must pause all collections actions. This will pause phone calls, letters, and wage garnishments. Similarly, you will enter the automatic stay period on foreclosure, repossession, or eviction. These legal processes cannot proceed until the bankruptcy case has been resolved or dismissed. Often, this allows enough time to come up with a more agreeable path out of these situations if they are not resolved via bankruptcy. Con #1: Your income can exceed the eligibility requirements. Those eligible for Chapter 7 must pass the means test. The means test determines if your household makes more or less than the NJ state average. If your household makes less than the average, you qualify for Chapter 7 bankruptcy. If your household makes more than the average, you must examine your expenses to determine if you have "disposable" income. This is income above your total expenses. If you are determined to have too much disposable income, you will not be eligible for discharge under Chapter 7 bankruptcy. In that case, you could be eligible for Chapter 13 bankruptcy instead. Benefit #2: Bankruptcy discharge is permanent debt relief. Chapter 7 bankruptcy is the total discharge of all eligible debts. Credit cards, personal loans, medical bills and other debts will be eliminated. You will no longer be obligated to pay these debts, instantly freeing up your income to go towards other expenses. You also cannot be contacted by collections for these debts in the future. Con #2: Not all debts can be discharged under Chapter 7 bankruptcy. Some types of debts cannot be discharged through Chapter 7 bankruptcy. Alimony, child support, tax debts, and most student loans are often exempt from being discharged during bankruptcy. In some circumstances, bankruptcy courts will allow student loans to be discharged if you prove that paying back student loan debts would cause undue hardship. If your debt issues center around any of these kinds of debts, Chapter 7 bankruptcy will likely be unable to help. Benefit #3: You are likely to keep most—if not all—of your property. The myth that you will lose your house, your car, and other valuable property through bankruptcy is one of the top concerns listed by those afraid to file for bankruptcy. But even under Chapter 7 bankruptcy, 95% of those who file will keep all of their belongings. Federal and state property exemptions allow Chapter 7 filers to exempt specific property from entering into the bankruptcy estate. In New Jersey, filers can choose federal or state exemptions based on which set of exemptions will benefit them the most, but you cannot mix and match exemptions from both. Federal and state exemptions include protections for your personal property, including your home, car, qualifying personal items, and investments or savings up to a certain amount. However, if you choose to protect your home or car, you still owe money on these items. You will resume regular payments on this property after the bankruptcy case. However, you often do not need to sacrifice these possessions to get your debt discharged. Con #4: You can lose nonexempt property. There will be property not covered under bankruptcy exemptions. The bankruptcy trustee can utilize high-dollar items to be sold to pay down debts. This is typically not the case with most Chapter 7 bankruptcy filings, as most people who qualify for Chapter 7 do not have the disposable income to purchase such items. Some nonexempt property can include secondary properties like vacation homes, secondary vehicles, valuable collections, savings and investments not covered under exemptions, and even expensive musical, sporting, or other equipment unrelated to the individual's profession. The ultimate purpose of Chapter 7 bankruptcy is to give creditors some return on their investments while giving the filer a fresh financial slate—not to leave them utterly destitute with no possessions. Sometimes, it is not in the individual's financial best interest to exempt these possessions even if they qualify. In that case, these things can be liquidated to pay down debts. Benefit #5: Quick processing for reasonable fees. The process from initial filing to discharge can take between four and six months on average. This quick processing means you get rid of your debts and begin working towards rebuilding your credit as soon as possible. You must pay a case filing fee of $245, a $75 administrative fee, and a $15 trustee surcharge. You must also pay attorney fees if you work with a NJ bankruptcy attorney. However, working with an attorney makes it more likely that your filing will proceed quickly and smoothly, giving you a better chance of discharge. Con #5: Your credit report will take a temporary hit. Your credit will take a dip after getting a Chapter 7 bankruptcy discharge. If you were able to maintain your monthly payments and keep your credit score relatively high before filing for bankruptcy, you would likely notice a much bigger dip than those who were already losing points on their score due to late payments and default. You may also notice your interest rates rise in the initial years after bankruptcy. But while a Chapter 7 bankruptcy will stay on your credit report for up to ten years, filing for bankruptcy is often better for your credit score in the long run than languishing under years of unmanageable debt. As soon as your debt is discharged, you can begin working to improve your credit score immediately. A secured credit card is a great way to do this. Bankruptcy filers who focus on rebuilding their credit are often able to get a loan or even a mortgage within a few years of discharge. Veitengruber Law is an experienced New Jersey bankruptcy law firm. We can work with you to determine if Chapter 7 bankruptcy is the correct choice for you. Do not spend another day stressed out over your financial future. Call us today for your free consultation.