New Jersey Bankruptcy Law Blog

Will holiday spending derail your financial stability?

The holidays are an exciting time of year, but for many, it can lead to financial strain. From buying gifts to hosting parties, it can be an expensive season for New Jersey consumers. You may find yourself spending more than you should, and as a result, you may accumulate a significant amount of credit card debt. 

Many Americans carry at least some credit card debt. Because of interest rates and minimum payments, it can be quite easy for these balances to spiral out of control. Fortunately, there are relatively simple steps you can take to keep your spending in check. If the holidays and other reasons for spending lead to a precarious financial situation you cannot manage on your own, it may be beneficial to consider the benefits of bankruptcy.

What are the different types of debt?

Falling into debt in New Jersey is relatively easy, but getting back out can be much harder. One important step in figuring out how to pay back your debt is identifying different types of debt. 

According to FindLaw, not all debts are the same, and some have harsher penalties for defaulting or falling behind than others. In order to prioritize which debts to pay off first, you need to recognize the different types of debt you may owe.

Former mine employees concerned about pension benefits

When employees are given information about how their benefits will function throughout their term at a company, they expect to receive nothing less than they were promised. In situations where retirement benefits such as pensions, 401K's and other options are available to people in New Jersey, they often pay their dues to receive their entitlements upon their retirement. 

However, a concerned group of former employees who have retired from a mine in Montana is facing uncertainty with the payment of their pensions following an announcement that the Kemmerer coal mine where they used to work has filed for bankruptcy. After restructuring plans were announced and it was determined that $1.5 million would be saved for bonuses throughout the bankruptcy period and that nearly $6,000 would be reserved for the retainment of upper-level managers, union leaders demanded that other solutions be arranged to protect the retirement plans of previous employees who sacrificed decades of work to build a savings they anticipated would last them throughout their later years. 

Can credit counseling save my assets?

When it seems you just cannot stay on top of your bills, you might fear the next step is the repossession of your assets. Some may turn to New Jersey credit counseling as the answer to their mounting debt. Credit counseling can be helpful, and while it does not guarantee the salvation of your car, home, etc, it can still open doors that may lead you back to financial solvency.

As U.S. News and World Report explains, initially your credit counselor will likely conduct a review of your present income and your current rate of expenses. This is to establish a profile composed of your assets, debts and your present budget. From there, your counselor will look for ways you can improve your financial standing, such as cutting expenses or promoting better savings.

Can you reduce business debt without filing for bankruptcy?

If you are running into financial difficulties with your business in New Jersey, you may have entertained the thought of filing for bankruptcy. While you know it will take a hit to your credit and potentially destroy your company, you are not sure if there are any other options. Fortunately, you may have a second chance if you can effectively reduce your debt and reallocate your resources to reorganize your financial expenditures. 

Reducing the amount of money you spend may increase your cash flow and allow you to optimize what you have to be able to close out the debts you have that are outstanding. According to Quickbooks, you should communicate your concerns with the people who are lending you money. If you are delinquent on payments are have outstanding balances, consider reworking your contracts and negotiating new terms so you can pay off your debts before your creditors send the collections companies after you. 

What are your Chapter 13 debtor's obligations?

When you consider filing for bankruptcy in New Jersey under Chapter 13, you are taking a sensible step to relieve your burden of debt and make a fresh start financially. However, according to FindLaw, as a debtor, you have responsibilities to meet when you reorganize your debt with a Chapter 13 filing. If you fail to live up to the plan that you establish, the court may dismiss your case at any time. 

Perhaps the most obvious obligation you have under Chapter 13 is that you must repay your creditors. When you file Chapter 13, you and the court work together to formulate a plan to repay your outstanding debt over the course of three to five years. Within 30 days of filing for bankruptcy, you must begin making payments according to this plan. The court will assign a trustee to handle your bankruptcy and distribute the funds that you pay according to specific priorities. Unless your payments are automatically deducted from your payroll, your responsibility is to make payments to the trustee on either a monthly or bimonthly basis, depending on the terms of your repayment plan.

Are you one of many New Jersey residents facing financial crises?

It's probably not the first time you've encountered financial challenges in life. In fact, if yours is like many other New Jersey households, you've likely been having ups and downs with money ever since you got married and started having children. Some years may be better than others. However, if something unexpected occurs, it can really rock your financial standing and, perhaps, even turn into an all-out crisis.  

How do you know whether your current financial struggles are more on the line of a par-for-the-course situation that will right itself in time or something more serious where you may need to reach out for added support or find an immediate debt relief solution to your problem? There are several key factors that may help you determine whether you should ride it out or start researching debt relief options.  

Keeping yourself out of debt with smart financial strategies

Debt is something that you may not recognize immediately, but it can accumulate much faster than you realize. If you do not set boundaries for yourself and stay aware of the money you are spending, it is very easy to quickly sink into financial debt and suffer damage to your credit score, reputation and financial future. At Goldman & Beslow, LLC, we have helped many people in New Jersey to weigh their options for managing significant debt. 

While the easiest way to get out of debt is to avoid getting into it in the first place, chances are you will need to make some exceptions for large purchases such as a home or vehicle. However, there are ways to go about funding those types of necessities that will not put you in a situation where your financial security is compromised. No financial plan will work the same for two different people. Discovering what works best for you, your lifestyle and your spending habits are important so you can put together a plan that accommodates your needs. 

How can Chapter 13 bankruptcy save your business?

New Jersey business owners like you can't predict every ebb and flow of your business. Unfortunately, sometimes circumstances outside of our control make it so that we fall into debt. If you find yourself in that situation, there are still ways you can get back out of debt.

The Balance Small Business takes a look at three different types of bankruptcy options that are available to business owners. Today, we'll take a look at Chapter 13: personal bankruptcy. Though this is generally meant for individuals and not business entities, it can still apply to you if you have a sole proprietorship. This type of bankruptcy is similar to Chapter 11 in that you work with others to create a new repayment plan, which must then be approved by a bankruptcy court.

Addressing your debts proactively may prevent further problems

Buying new assets can be exciting and you may feel confident about your ability to pay down the debts and eventually be the sole owner of your new car or home. However, if you run into issues with financial stability and are unable to make your payments on time, the consequences can quickly add up and leave you facing costly consequences. At Goldman & Beslow, LLC, we have helped many people in New Jersey to address debts with solutions that may help them to regain independence.

There could be many reasons why you are unable to pay your debts including losing your job, overspending on your initial investment or poor management of incoming cash flow. Fortunately, there are ways to recover your losses, especially if you address your debts proactively and make modifications as soon as you recognize an issue. According to time.com, if you are facing financial problems that you do not know how to fix or that is going to be a long-term issue, you may consider asking a professional for help in reorganizing your debt. They may also be able to provide you with advice on how to better manage your money to be able to save a bit and pay your debts on time and with consistency. 

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