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New Jersey Debt Relief Blog

How does a foreclosure affect a credit rating?

Foreclosure can happen to pretty much anyone. All it takes is a financial emergency and you get behind on your mortgage. If you are facing foreclosure and see no way to stop it, you may wonder how this is going to affect your credit. To begin with, creditors do not look favorable on foreclosures, according to Financial Samurai. It shows you did not live up to end of the contract with your mortgage lender.

The action will cause a huge reduction in your credit score. Surprisingly, the better your score, the more you will be affected. For example, if your score is 780, then you can expect a drop of up to 160 points once the foreclosure is complete, but if your score is 680, you will probably lose up to only 105 points.

Reviewing other benefits of bankruptcy

We have gone over many bankruptcy-related issues on this blog, from the options that people who are considering bankruptcy may have to the ins and outs of different types of bankruptcy. Many people are aware that filing for bankruptcy can help a person from a financial point of view if they are buried in debt and being held back by what they owe. However, bankruptcy can be advantageous for many other reasons, which we will look into in this post.

Aside from a fresh financial start and new opportunities that were not possible due to debt, filing for bankruptcy can turn a person's life around in other ways. Some people are able to find a sense of mental freedom following a successful bankruptcy petition. For example, they may sleep better at night because they no longer have unmanageable balances in their head, while others may feel inspired to pursue new opportunities and start over. In fact, filing for bankruptcy can open the door to all sorts of opportunities that may have been impossible beforehand. Whether someone is an entrepreneur or needs to be debt-free for any reason, bankruptcy can change life in many ways.

Can you avoid having to file for personal bankruptcy?

You have recently hit hard times and are feeling the pressure of financial strain. The thought of filing for personal bankruptcy in New Jersey has crossed your mind, but first you are wondering if there is anything else you can do before you make such an impactful decision. Fortunately, there are adjustments that you can make to hopefully boost your financial well-being and avoid having to make a decision that could have many long-term consequences. 

According to Fox Business, if you are experiencing the stress of combing through multiple messages from creditors every day, you have other options besides bankruptcy for keeping them quiet until you are able to pay off your debts. Some of the things you can do include the following:

  • Liquidation: Even though it may be difficult to sell off some of your possessions, doing so could give you extra cashflow that can be used to pay down mounting debts. Often, you can find things around your home that while valuable, are not being used. 
  • Avoid temptation: While it may be intriguing to file for bankruptcy and avoid having to pay any of your debts, that decision could ultimately affect your financial security and credit reputation for many, many years to come. 
  • Communicate with creditors: Do not be afraid to ask for an extension on bills that need to be paid. Be flexible in setting up agreements for paying down your debts. Often, credit companies will be willing to negotiate a deal if you can prove that you will stick to your end of the deal.  

Don't get dragged down by student loan debt

If you took out student loans to finance a university or other post-secondary degree, chances are good that you may be feeling the weight of those loans right now. Unpaid student loan debt can be an albatross around your neck when attempting to secure financing for a home, car or other necessary purchases.

Unpaid student loan debt has reached an unprecedented high. As of April of this year, there was $1.48 trillion owed to the government for outstanding student loans. The total delinquency rate on these loans is over 11 percent. Student loan debt is a nationwide crisis.

Understanding Chapter 11 bankruptcy

At William H. Oliver, Jr. & Associates in New Jersey, we know how difficult your life becomes when the business you own begins to fail because it has an overabundance of debt and insufficient profit with which to pay it. Often in these situations, filing for Chapter 11 bankruptcy may be your best strategy.

As FindLaw explains, you likely qualify for Chapter 11 bankruptcy if your business has a debt of less than $2.19 million and you employ fewer than 500 people. Chapter 11’s purpose is not to discharge your company’s debt, but instead to help you make your company profitable again through reorganization. Once you file for Chapter 11, you have the opportunity to renegotiate all of your company’s leases and contracts. Often you can obtain more favorable terms and consequently reduce your company’s debt.

Billionaire shares the most profitable investment you can make

When you look at the most financially successful people, it certainly leaves you wondering: What's their secret? Is there something they know that I don't?

In a recent MarketWatch interview, tech billionaire Mark Cuban revealed a sage piece of advice regarding investment and debt. According to Cuban, the best investment you can make is to pay off your credit cards.

How bankruptcy may help your business

If you own or manage a business in New Jersey that is experiencing financial instability, you will no doubt want to carefully evaluate your options. Depending upon the reason for your situation you may choose to use the financial problems as a reason to close your business and pursue other options. You may also want to find a way to keep your business operating and get it back on healthy financial footing. In either situation, a bankruptcy may be able to help.

As explained by the Houston Chronicle, if you are interested in getting out of the business you are currently in, filing for bankrupty may allow you to do this without serious risk to your personal finances or other personal assets in a way that simply shutting your doors may not do. This may be especially important for you if you want to start up a new operation.

What is predatory lending?

Buying a home that you can call your own is an exciting time for a New Jersey resident. Unfortunately, there are companies and individuals who use this time to prey upon borrowers by offering loans that are unfair and can be financially detrimental to you down the road while padding their own pockets. This should be a rewarding experience and you should have peace of mind knowing that your loan will not eventually lead to losing your home through a foreclosure or financial ruin. Be aware that predatory lenders can be quite smooth in their presentations, so do not be afraid or embarrassed to exercise due diligence when you are going through the loan process.

The New Jersey Housing and Mortgage Finance Agency offers a clearly outlined guide for policies and procedures that a lender in New Jersey must abide by. This includes a list of qualifications that must be met to provide loans, the types of information that must be disclosed to you as a borrower, examples of unacceptable predatory practices and more.

Watch out for these 2 foreclosure scams

If your home is in the throes of a foreclosure, or even if your home is at risk to be foreclosed on, you could draw the attention of a less-than-scrupulous foreclosure-related company. Many of these fraudulent companies refer to themselves as "foreclosure consultants" and "foreclosure specialists."

If a foreclosure consultant or foreclosure specialist is contacting you about your pending foreclosure proceedings, beware. Make sure you thoroughly check out the company before working with them as there's a good chance that it's a scam.

How to spot and avoid a foreclosure scam

Desperate homeowners seeking to retain their homes are a common target for scam artists looking to take advantage of a difficult situation. While there are legitimate programs out there, they are few and far between.

The reality is that when you have few options available to you, even bad ones start to look good. But a scam is always a bad option, so it's important to learn how to identify them before you find yourself in an even worse position.

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With offices in Toms River and Neptune, attorney William H. Oliver is ready to answer your questions and help you find the right debt relief solution. Evening and Saturday appointments are available. Call local: 732-988-1500 or fill out our contact form.

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Toms River, NJ 08753

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