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New Jersey Debt Relief Blog

How to slow or avoid foreclosure

Purchasing a home in New Jersey is an exciting experience. Unfortunately, medical debt, loss of employment and other changes to a person’s financial status can lead to foreclosure. Many people facing a foreclosure may believe their banks are eager to evict them from their homes and seize the property. However, banks often stand to lose more from taking this route than trying to work something out with the homeowner. Because of this, if creditors are calling, it may be beneficial to take the call.

According to USA.gov, the first step when avoiding foreclosure is to communicate with the lender. In fact, it is better not to wait until they start calling. Be proactive if there is any reason to believe there may be some difficulty with making upcoming payments. This provides the opportunity for creditors to adjust payment terms, even temporarily. Some options on the table may include refinancing, forbearance, loan modification or a repayment plan.

Bankruptcy may only delay—not derail—home ownership dreams

One common misconception causes debtors who could really benefit from bankruptcy relief to delay or shun filing for Chapter 7.

Many consumers mistakenly believe that filing for bankruptcy precludes their ever qualifying again for a mortgage. While it's true that bankruptcy proceedings can make your plans to purchase a home simmer on the back burner for awhile, if you use that time wisely and pay all of your bills on time each month, you will improve your credit score and be ever closer to your dreams of owning your own home.

What are New Jersey's homestead exemptions?

Most states have homestead exemption laws that prevent homeowners from losing their homes in bankruptcy by protecting all or some of the equity in their primary residences. Unfortunately, New Jersey has no such laws. Instead, residents of The Garden State who want to avoid destitution in tough financial times must turn to the federal government exemptions.

According to FindLaw, the bankruptcy courts generally consider the equity in a home an asset which they can use to repay creditors. Equity, in this case, refers to the overall dollar value of a home less the remaining mortgage balance. The federal homestead exemption, which the government last adjusted in 2016, protects up to $23,675 in equity for single filers and up to $47,350 for married individuals or those who file jointly.

What are the basics of Chapter 13 and Chapter 7?

Are you a resident of New Jersey with too much debt and no way to bail yourself out? William H. Oliver Jr., & Associates, can provide you with a basic rundown of Chapter 13 and Chapter 7 bankruptcy options. One of them may be exactly what you need.

Chapter 13 bankruptcy is based around the notion of having a stable enough source of income to make and stick to a repayment plan. This plan will be decided together with those you owe, as well as your bank. Over a period of time, you will pay off the debts owed on your own. It can take a long time and may not be feasible for those without stable income, but can help you avoid the major problems of Chapter 7.

How are budgeting and chapter 13 linked?

If you’ve been granted chapter 13 bankruptcy in New Jersey, you probably know how important it is to keep current on your payment schedule. You may even create a budget for spending to ensure your creditors continue to be paid, and it can be difficult for many families to stick to the budget they create. To help you along, U.S. News & World Report offers the following advice.

Make a plan ASAP

You must reaffirm your mortgage during bankruptcy proceedings

Many people don't really understand the bankruptcy process. What they know about it comes from movies or stories that they hear, which may not be accurate. The lack of public knowledge about bankruptcy leads to the dissemination of misinformation about what happens during different forms of bankruptcy.

One of the biggest worries reported by those considering bankruptcy is the impact that it can have on their homes. The truth is that different forms of bankruptcy can impact your home ownership in different ways. Those who pass the means test and qualify for Chapter 7 need to look carefully at the amount of equity that they have in their homes.

Resolving tax debt without going financially bust

For many New Jersey residents, tax time is a time to rejoice, as it means a return on all the excess money they paid into their taxes throughout the year. For others, however, such as higher earners, small business owners and freelancers, tax time is a time to dread. These individuals often end up owing taxes. Some tax debts are as little as a couple hundred to a few thousand dollars, while others are well over $10,000. For those who owe money, tax time means refiguring their finances to pay off a large debt they cannot realistically afford. 

NerdWallet details three common ways debtors can repay the IRS without going financially bust. One such way is to request a payment plan. The IRS offers long-term payment plans to those who owe less than $50,000, including penalties and interest. Penalties and interest start accruing after 120 days, which is why the financial site suggests that debtors pay off their balances in full within that time frame.

Protecting a business from having to file for bankruptcy

When a company realizes that its financial situation will no longer allow the support of organizational processes, they may be considering alternatives to get rid of the debt. Unfortunately, if they have exhausted all other efforts, their only option left may be to file for bankruptcy in New Jersey. However, these types of situations can usually be prevented when company leaders take the initiative to strategically and wisely manage their finances. 

According to Actsoft, companies should be doing everything in their power to minimize the debt they accumulate from operating processes. They should be looking for innovative ways to fund business operations without spending extensive amounts that require significant credits to be opened. They should also create a reasonable budget that is cushioned by a safety net that may allow for a bit of support if something happens that requires money to fix. If they find themselves in a compromised situation, they may benefit from working with their lenders to renegotiate the terms of their loan or making the effort to consolidate as much of their debt as possible. 

Can you prevent foreclosure from destroying your future?

If you are facing a potential foreclosure on your property in New Jersey, it can be unsettling to think about your future and how this decision may impact your ability to get credit in the future. While foreclosure undoubtedly has consequences, you have the ability to overcome its effects by carefully planning your next steps and taking precautions to prevent similar risks from happening in the future. 

If you have been delinquent on your payments and are unable to continue to pay your mortgage, you may have been informed by your lender that they will be foreclosing your property. In these situations, you may have the chance to slow or even stop the process if you are able to negotiate the terms of your contract with your lender. If you are lucky, you will be able to modify the original contract to reflect how payments will be made going forward. However, if your inability to pay becomes a repetitive offense and is left unattended, your home will undoubtedly foreclose. 

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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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