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Essex County Bankruptcy Law Blog

The Repo Man Goes High-Tech

Maybe you've had some bad luck with your finances in the past, and your credit rating isn't what it should be. However, if you scraped together a few bucks for a down payment on a used car, you may have been relieved to find a dealer who would offer to finance you despite your high risk. You may flinch at the label such dealers use to describe borrowers like you: subprime. But you need a vehicle, and this seemed like your only option.

In the past, if you fell behind on your car payments, you could expect threatening calls from your lender. You may have even found yourself looking over your shoulder for the repo man or finding a place to hide your vehicle to protect it from repossession. These days, lenders are using more sophisticated ways to harass you.

Charging Ahead To Conquer Credit Card Debt

Do you remember the first time you received a credit card in the mail? You may have put it somewhere for safe keeping to use for an emergency, or you may have grabbed your car keys and headed for the mall or the electronics store. The feeling of freedom you had with those first purchases may be far from the feeling of entrapment that follows you now because of your overwhelming credit card debt.

Even if you have resolved not to add more charges to your account (or your cards are maxed out), you may still wonder if you will ever pay down the balance, especially if you can only make the minimum payment or you have multiple cards. However, there are ways to deal with credit card debt.

Debt Collectors: How Far Can They Go?

Facing a mountain of debt means many areas of your life are uncertain. You may find you are not yourself, and your emotions become unpredictable as your situation worsens. Work may suffer, and your home life may become tense.

It certainly doesn't help when your creditors constantly remind you of your unpaid obligations. Phone calls, voicemails, emails, texts and letters are some of the means a creditor may use to keep your debt in the front of your mind. There are federal laws protecting you from unfair debt collection methods, but how do you know when creditors cross the line into harassment?

Wage garnishment can turn payday into mayday

You probably look forward to payday. For some, payday means an extra splurge or perhaps chucking a little aside for a rainy day or a college fund. For you and for many, payday means getting by. Even with overtime or bonuses, you may have just enough to cover what you owe, or maybe what you bring home doesn't even make ends meet.

In this situation, a wage garnishment may devastate your budget. Wage garnishment occurs when a creditor receives permission from the court to deduct a certain amount of money from your paychecks to repay a debt you owe. Your employer will have no option but to withhold that money from your earnings.

Unsettling Facts About Debt Settlement

Are things a little tight? When you paid your bills last month, was there less money in your account than you expected? Are you worried about being able to meet your obligations next month? If you answered yes to these questions, you may be at risk of serious financial difficulties, but you can probably work your way out of them before they get to the critical stage.

However, if you are already at the critical stage, you probably feel like there is no way out from under the mountain of debt. Of course, there are dozens of options available to help you out of financial trouble, and some of them promise quick fixes and little risk. The problem is that many of these organizations offering debt solutions prey on people like you who are feeling desperate enough to try anything. One example of a potentially risky venture is debt settlement.

Secured debt versus unsecured debt in the bankruptcy process

Many, if not most, New Jersey residents have debt of some kind. You may be one of the many people who carry a normal amount of debt, only to find yourself slowly losing control of your financial situation after an emergency or unexpected circumstance. If you are currently dealing with a debt balance that is taking over your life, you have options.

Making the choice to file for bankruptcy is a serious decision, but it could be the right choice for you. If you are eligible, this process can allow you to discharge certain types of debt and emerge from bankruptcy protection with a strong financial future in sight. Before you decide to file, it can be useful to understand how bankruptcy deals with different types of debt.

Common bankruptcy myths should not be a deterrent to debt relief

Various recent surveys found that approximately 50 percent of U.S. citizens have savings accounts containing less than $1000 and that an unforeseen emergency expenditure of just $400 would be almost impossible to pay. With so many people in dire financial straits, it is no wonder that many in New Jersey and across the country turn to bankruptcy. Yet despite the financial relief that bankruptcy can offer, some individuals hesitate to take advantage. This may be due to some common – and false – myths about the bankruptcy process.

Many people fear that bankruptcy will mean the loss of all of their belongings. While Chapter 7 bankruptcy – generally considered the quicker and easier type – does mean a trustee will sell some assets to distribute the profits to creditors, there are items that are exempt, and an attorney can offer insight. With Chapter 13 bankruptcy, debts are reorganized into a manageable payment plan, often protecting against the loss of a home or vehicle.

What is a means test?

If you are struggling financially but are unsure if you qualify for relief through legal means, there is a test you can take to figure it out. It is called a means test. This is something that is available to all New Jersey residents who are considering bankruptcy as a way to resolve their monetary struggles.

Rebuilding credit after the debt relief of bankruptcy

New Jersey residents struggling with out-of-control debt may be considering bankruptcy. While Chapter 7 and Chapter 13 offer debt relief via different methods, there are ways with each to begin working toward financial stability almost immediately after a petition has been accepted. An attorney can help offer insight into any legal restrictions related to applying for credit after a declaration of bankruptcy, but generally, it is up to a lender to determine who qualifies for what particular types of loans or credit card.

While Chapter 7 bankruptcies are typically discharged within about three months, Chapter 13 repayment plans may take up to five years to be completed. During that time, it is not unusual for filers to need to apply for a new line of credit or credit card before their bankruptcies are fully discharged. Applicants are advised to be cautious, however. While it is wise to begin attempting to rebuild credit following bankruptcy, cards with high interest rates or built-in fees – likely the only types initially available to bankruptcy filers – may end up causing the same debt problems as before if not carefully managed.

Putting an end to creditor harassment in New Jersey

For residents of New Jersey struggling under the weight of insurmountable debt, every day can be a hassle. Particularly in instances where an individual lives under the constant strain of creditor harassment, the situation may feel hopeless. No matter how bleak, though, the good news is that there are options for tackling credit card debt and there are limits to what a creditor or collector can legally do or say when they call.

The Fair Debt Collection Practices Act explicitly forbids deceptive or abusive behavior. Regardless of how much money the caller is attempting to collect, there are a number of prohibited practices. First and foremost is harassment. Creditors are not allowed to swear or threaten the person they are calling, either physically or with threats of arrest. Debt collectors are also not permitted to lie; they cannot pretend to be someone they are not – like a lawyer or a police officer – and they cannot claim legal expertise, telling the person that he or she has committed a crime or claiming that certain papers are or are not legally binding documents if the opposite is true.

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  • NACBA | National Association of Consumer Bankruptcy Attorneys
  • NACA | National Association of Consumer Advocates
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Goldman & Beslow, LLC

Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

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