The Sheriff just knocked on your door and handed you lawsuit paperwork.

There it is in big bold print:  YOU ARE BEING SUED!

What do you do?

Our associate, Sarah J. Crouch, has made this very helpful video about what to do and what not to do when you are being served with lawsuit papers.

More questions for Sarah?  Give us a call at 732-302-9600 or fill out our online consultation form and we will be happy to talk about all your bankruptcy questions.

A distressing piece of news was released today,  Wal-Mart shoppers are running out of money.   This means the poorest of the poor literally have no money to shop at Wal-Mart once the bills are paid.

There are various reasons this could be.  The big culprit appears to be the increase in the payroll tax credit which sucked 60 dollars a month out of the bank accounts of a person making $40,000 a year. I know that sixty dollars may not seem like much but it can make or break the budgets of some of the poorest Americans.

And let’s face it most Americans are on incredibly tight budgets these days, poor or otherwise.  Between their homes not being worth much, their credit card interest rates doubling (and sometimes tripling), food costs rising, and the government deciding that the payroll taxes needed to go back to where they were, Americans have less and less money to spend on even the most basic items.  Think about it?  When was the last time you bought a pair of shoes that you or your child didn’t absolutely need?

So how do you find extra room in an already barely making it budget?

For some that will mean consulting a bankruptcy attorney.  When it comes to making the call about whether or not to file bankruptcy the decision usually comes down to this, can I pay my utilities and pay my credit card.  The answer is usually no and that is where we come in.

Our office can evaluate your financial situation and see if bankruptcy is the right option for you considering the new economic reality, here is less money and that money has to go further. We can look over your mortgage, your credit card bills, medical bills and other financial obligations and either discharge them or set you up in a plan to help you repay your debts in a way that is feasible.

Interested in how our experienced bankruptcy attorneys can help you with your financial woes?  Give us a call at 732-302-9600 or fill out our online consultation form and we will call you.

So you have talked to a bankruptcy attorney and they have told you that you have to be a Chapter 13 case.  Now you may need to be a Chapter 13 case for any number of reasons, sometimes you make too much money or you have property that is at risk, or you want to pay off or discharge taxes, but the bottom line is that you are going to be filing a Chapter 13 case.  So what does that even mean?

A Chapter 13 case is a re-organizational case.  In a Chapter 13 case you are going to repay some portion of your debt to a Trustee who will than distribute that money to your creditors.  This repayment is laid out in a Chapter 13 plan.  Your Chapter 13 plan will tell the Trustee what creditors you wish to pay, how much you wish to pay them, and what your plan is for the property that you do own.  This plan will be served on the Trustee and all of your creditors.  The creditor’s and the Trustee have an opportunity to object to this plan.  If there are no objections than your plan will be confirmed, you will pay your payment to the trustee for the life of the plan, either 36 or 60 months and when you are done making payments you will receive a discharge, most of the time, and your case will close.

So that is the most basic explanation of how a 13 works.  Your next question is probably, how much do I have to pay in my plan.

That Depends.  (I know, I hate lawyer answers too.)

Your payment to the Trustee will depend on the individual circumstances in your case.  If you are behind on your mortgage you can repay the past due payments through the plan and bring your mortgage current or seek a mortgage modification.  If you owe taxes, you can attempt to discharge those taxes and pay the portion that you will continue to owe through the plan.  In some cases, you just make too much money and your unsecured creditors (credit cards, personal loans) will be paid some portion of the amount you owe depending on the amount of money you make in addition to paying past due payments.  You can pay off car loans in Chapter 13 bankruptcy cases as part of your plan with lower interest rates.

Because a Chapter 13 bankruptcy case can do so much, every payment is different for every client.  It really depends on your individual needs and what you want your bankruptcy case to accomplish.  I have Chapter 13 cases where I am doing a lot and I have cases where all I am doing is paying mortgage arrears.  Make sure you discuss the goals of your case with an experienced bankruptcy attorney to make sure you maximize your Chapter 13.

More questions about filing a bankruptcy case in New Jersey, give my office a call at 732-302-9600 or fill out our online consultation form and we will call you!

I know, I know.  You are up to your eyeballs in math and receipts right now and the last thing you want to do is spend yet more time with those receipts but I have to make the following suggestion/assertion:

Now is the PERFECT time to update your budget.

Please hold the groans and just hear me out here.  You have all the documents you need to do this in front of you.  They are organized into neat piles and you have annual numbers to use.  This is going to be easy!  All the work is done, you just have to divide by twelve and you are all set!

Ok so maybe it isn’t quite that easy and I know that budgets are hard to make an even harder to live so I have tried to make your lives a little easier by writing this article about creating a perfect and realistic budget.  Check out the article, gather you documents and check update the budget off of your to do list today.

Interested in how our experienced bankruptcy attorneys can help you with your financial woes?  Give our office a call at 732-302-9600 or fill out our online consultation form and we will call you!


Many chapter 13 Debtors are catching up on mortgage arrears and property taxes in their bankruptcy cases.  Their Trustee payment each month is being distributed by the Trustee to, among others,  the mortgage company and the taxing authorities.  But that is all the Trustee is doing, he is distributing YOUR MONEY.  YOU are still making the payments!

If you are repaying business expenses through your Chapter 13 Case whether you are still operating your business or if you operated a business that failed before you filed your case, you may be paying sales taxes, vendors and landlords through your bankruptcy case.

In New Jersey, and probably everywhere else, the Trustees are on line and the information about who has been paid in your case last year and how much they have been paid is available.  Your accountant needs that information to properly prepare your tax return and give you the best service.  Make your accountant aware of these payments.

Keep the printout you get from the Trustee’s website showing what was paid in your case last year.  It is likely the mortgage lenders the Trustee is paying are not issuing 1098 forms that include the mortgage interest debtors are paying when it is the Trustee who is sending them the checks.   The IRS will not have gotten a matching report from the mortgage lender who received the money and has not reported it to the IRS (or to you).

I am a bankruptcy attorney and I am not a tax professional.  Take this information to your accountant before you file your tax returns.  Let your accountant analyze the information and prepare your taxes with ALL the information available.  If you have been in your bankruptcy case for several years, you may want to go back and look at prior years for amounts paid by the Trustee to mortgage lenders, taxing authorities or in connection with a business.  Your accountant may decide after seeing the payments made by the Trustee in previous years, that it is worth filing amended tax returns for those years.  You can generally amend prior tax returns for up to 3 years.

Interested in how a bankruptcy can help you with past due mortgage payments and taxes?  Give our office a call at 732-302-9600 or fill out our online consultation and we will call you!

The Student Loan Debt Series: Part 1
Where We Are Right Now

Most of us have them.  Most of us try really hard to pay them.  Most of us don’t understand our rights when it comes to them.

No, I am not talking about credit cards or medical bills.  I am talking about student loans.  Student Loans recently beat out credit cards as the largest portion of consumer debt out there, topping 1 trillion dollars.

That is trillion, with a T.

But while the amount of student loan debt Americans are taking on may be distressingly high, what is more distressing is that student loans are incredibly difficult to deal with when the borrower is struggling financially.

Student Loans are only dischargable in bankruptcy in cases of extreme hardship.  In New Jersey, the borrower has to quote a Chapter 7 trustee at a recent conference “in an iron lung.”  Some other states have slightly more generous standards for student loan borrowers in bankruptcy, but here in New Jersey a bankruptcy is probably not going to help you.

The federal government doesn’t offer much in the way of assistance either.  Federal student loan borrowers can defer their student loans but only in cases of unemployment or pursuing other degrees and these deferment are limited in time.  Once the deferments are used up debtors can go into a forbearance but during this time the interest will toll and debtors are limited to under two years of forbearance.  Neither of these options reduces the debt owed or solves the lack of affordability problem.

The government response has been to create extended repayment options, income based payments, and income contingent payment options.  This means that a borrower will pay less each month but will be paying the debt for twenty to twenty five years.  So if the debtor starts out making not much money and this is the only way he or she can pay for the time being there are some options.  However, remember that if the borrower’s income goes up so will that payment and often income based repayment can be problematic for borrower’s living in high cost areas like New Jersey and New York.  These income based models are not going to take into account the fact that rent in the Garden State can top $1000.00 a month.

As far as general hardship waivers, the federal government only offers a true hardship waiver in cases of severe disability.  Borrowers who are permanently disabled can have student loans waived but must remember that if they take this option they will be ineligible for more federal student loans down the road.

The other thing to remember about the above two options is that they are available for federal loans ONLY.  These are not options for those private student loans taken out by some borrowers when the rates were low.

Adding insult to injury in the student loan world are the punishments for default.  Defaulting on a student loan can be devastating to your financial existence.  A defaulted student loan can drop a credit score up to 100 points meaning you will pay higher rates on everything else you can purchase.  On top of that defaulted student loans are subject to harsh penalty fees and increased interest rates on the loans that can make a $20,000 student loan double and become a $40,000 student loan.

And the loan companies aren’t going to be the only ones chasing student loan borrowers anymore.  Recently, three major universities, Yale, Penn, & George Washington University, sued their students that defaulted on student loans!

So there is a problem and I know what you are thinking… the bankruptcy lawyer just told me there is nothing I can do and that nobody can help me.  That is not the case.  There are options out there and Congress appears to be finally taking notice and attempting to propose solutions.

This is just the first in a series of blogs I am going to be doing on student loans.  Next week we will review the bills floating around Congress, including a possible change to the bankruptcy code, that could help student loan borrowers with private debt.

Stay tuned!


Interested in how bankruptcy can help you with your finances?  Give our office a call at 732-302-9600 or fill out our online consultation form and we will call you!

I am inevitably asked this question either during the initial bankruptcy consultation or immediately after the hearing:

“What do I do now?  How do I rebuild my credit?”

My response is that each person handles the rebuild after a bankruptcy case a different way.  Some of my clients don’t want to see a credit card again for the rest of their natural life, others want to get a credit card right away and have to be reminded that they have to wait for their case to be over.

The most important thing to remember about rebuilding after a bankruptcy case is that there is more to it than just going out and rebuilding your credit.  You need to rebuild a financial existence that includes emergency savings, retirement savings, careful budgeting to avoid getting into the same financial situation that caused your bankruptcy case.

I know, this is easier said than done, but we are here to help.  New Jersey Bankruptcy attorney, Bruce C. Truesdale recently wrote this article on how to rebuild your financial house after a bankruptcy, not just your credit.

Remember, if you ever have questions you should feel free to call your bankruptcy attorney and ask questions about how to rebuild.  We are happy to help you before and after your case.

Interested in how a bankruptcy case may help you get a fresh start on your financial future.  Give us a call at 732-302-9600 or fill out our online consultation and we will call you!

Our associate, Sarah J. Crouch, takes a few minutes to explain what to expect at your 341 meeting of creditors and how to conduct yourself at this hearing.

Recently I started getting the question….the same question I get at least 100 times at this time of year, every single year…

“Sarah, I am getting a tax refund.  What is going to happen to it?”

So this year, I am being proactive.  I am putting this information out for all everyone to see in advance because the answer to this question isn’t as easy as it may seem. It is a complicated by how we as taxpayers view our tax refund, how much you are getting, and which chapter of bankruptcy you are filing.

The short answer to this question is that we can probably protect your tax refund, or have already, the long answer is the most annoying of all lawyer answers, “It Depends.”

For more information about how a tax refund may be affected in your bankruptcy case, give our office a call at 732-302-9600 or fill out our online consultation form and we will call you.