Many New Jersey residents who struggle with meeting their financial obligations on a regular basis can't help but imagine how less complicated life would be if their net worth were somehow miraculously increased. People with money, as the theory goes, don't worry about every penny, don't lose sleep over what unexpected setback is lurking around the corner and can actually look forward to the future. The truth, however, isn't that black and white. Many individuals who earn a solid living, have a nice home and outwardly appear affluent also struggle with credit card debt.
New Jersey residents who are struggling to make ends meet will likely know how persistent debt collection companies can be. While debt collectors are permitted to contact borrowers by mail or telephone, they must abide by strict rules laid down by the Fair Debt Collection Practices Act. The 1977 law does not allow debt collectors to call borrowers before 8:00 a.m. or after 9:00 p.m., and collection companies are required to comply when requests to cease contact are made in writing.
Before people struggling with debt in New Jersey go forward with a bankruptcy, they typically want to know what the long-term effect of that action will be. Although bankruptcies present a negative item on people's credit histories, they still have opportunities to improve and maintain their credit scores as years go by.
According to a report from Clever Real Estate, Americans have twice as much credit card debt as they did in 2000. Households in New Jersey and throughout America have an average of $31,420 worth of debt, which is more than the average American salary in 1950. In that year, the typical American household had $533 in debt. Researchers say that credit cards are one of the three primary factors for such a significant increase over the past 70 years.
Bankruptcy was once rare among older adults, but now people 65 and older account for 12% of personal bankruptcies compared to just 2% in 1991. Medical debts produce much of the financial hardship among older people in New Jersey as they grapple with dwindling incomes and depleted savings. Among those 65 and older who filed for bankruptcy, 60% of them cited high medical bills as their reason for seeking a discharge or reorganization of debts.
People living in New Jersey and around the country are sometimes contacted by debt collectors regarding very old accounts. In many cases, this kind of contact is legal, but it does not mean that the debt is valid or that the debtor is at risk of a lawsuit or other adverse actions.
You may be considering filing for Chapter 7 or Chapter 13 bankruptcy if you are struggling with your finances. While both options may provide some relief from your debt and give you a better financial future, it is important to note the ways in which these bankruptcy types differ. Chapter 7 bankruptcy gives New Jersey residents a “clean slate” from most of their debt, while Chapter 13 bankruptcy involves a repayment plan.
Once you have filed for Chapter 13 bankruptcy, you may feel as though you are getting back on track with your finances. Chapter 13 helps debtors set up a payment plan to repay their debt over a certain period of time. In some cases, the bankruptcy decreases the amount of debt you owe through negotiations with creditors. A bankrupcy, however, can affect your credit score and may make it difficult to apply for loans or qualify for other financial items as well. Some people may turn to using a credit card as a way to rebuild their credit once their bankruptcy has been discharged. You should be extremely careful when doing this, as some credit cards are not designed to help you financially.
Owning and running your own business can be a thrilling experience, which is why some New Jersey business owners may not like the idea of going back to being an employee and taking orders from someone else. And yet if you are going through Chapter 13 bankruptcy, becoming an employee again may actually be helpful and could help save your business from being sold to pay your debts.
At Goldman & Beslow, we know that when you owe a significant amount of debt in New Jersey, you may start experiencing annoying behavior by creditors that sometimes reaches the level of harassment. Examples include calling you several times a day and making threats against you. As a last resort, creditors may even bring lawsuits against you.