Archive for September 2011

You Can File A Personal Bankruptcy While Holding On To Assets

Believe it or not, the mistake many people make is not filing bankruptcy sooner.  People are so afraid of the “B word” that they often deplete all their assets prior to speaking to a bankruptcy attorney.  Many assets can be completely protected or partially protected in a bankruptcy.  For example, a pension, IRA, or 401k can be protected in a bankruptcy.  Unfortunately, what I see all too often is that debtors either close out retirement accounts or take very large loans, which they are paying back either weekly or bi-weekly in their pay checks.   Very often what people do when deciding to close out a retirement account is put a very small Band-Aid on a wound that is bleeding-out.   The bankruptcy process permits debtors to hold on to limited amounts of money, equity in property, and household goods, just to name a few of the assets that can be retained.  People must view the decision to file bankruptcy as a reorganization of their financial affairs.  Face your financial situation head-on today and discover what many already know, “there is life after bankruptcy”!!!

Apply For Loan Modifications Through The NJ Bankruptcy Process

The NJ Bankruptcy Court’s Loss Mitigation Program began August 1, 2011.  It is still too early to tell how successful the NJ Bankruptcy Court program will be but the NY’s Loss Mitigation Program in Bankruptcy Court has been quite successful according to a colleague I spoke with in NY.  If you have been attempting to modify your loan and feel like you have been chasing your tail, maybe you should speak to a bankruptcy attorney.  Loss Mitigation Programs have now been introduced in NJ, NY, RI, and VT (VT’s program I here is somewhat limited).  I think the benefit to the program will be the ability for the Court to monitor the parties participation in the program.  If the mortgage company/lender agrees to participate in the program, there will be a Court Order that will require the mortgage company/lender to process the homeowner’s documents in a timely manner and provide the homeowner an answer as to whether a loan modification will be provided.  I am hopeful the mortgage companies/lenders will modify loans through this program but for many an answer one way the other on a loan modification application will be a refreshing change.  If you have received a modification through a Bankruptcy Loss Mitigation Program, I would love to hear from you.  If you live in NJ and would like to consider filing bankruptcy and applying for this program I would also love to hear from you.  Our economy desperately needs this program to be successful.

Filing A Chapter 7 Bankruptcy Versus Debt Consolidation

The large majority of my clients have tried debt consolidation or debt settlement programs prior to coming in for a free consultation.  Many, if not most debt consolidation programs prey on people who have fallen behind on bills most often due to illness, unemployment (or just under employment), divorce or a death in the family.

I had a very close friend try one of these programs (without my knowledge) and she ultimately filed a Chapter 7  Bankruptcy to eliminate her credit card debt.  My friend paid in $20,000.00 over four (4) years only to realize that the debt consolidation company only paid out $13,000.00 on her debt and kept $7,000.00 as its fee.  She did the debt consolidation because she thought she was doing “the right thing” because after all she did incur the debt.

By doing the debt consolidation first she not only lost $7,000.00 but she delayed the opportunity to rebuild her credit.  After the four years of trying to pay her debt she had to file bankruptcy anyway.  Her credit score would have increased greatly over the four (4) years she was in the debt consolidation company if she had just filed for bankruptcy in the first place.  In addition, a Chapter 7 Bankruptcy will cost on average about $1,100.00 (for a basic case) to $2,500.00+(for a complex case). Remember fees are almost always quoted by attorneys on a case by case basis because every case is different.  By the way, my friend was in a program that set her up to fail because there was no way she was going to pay-off all her debt within the five (5) year term of the program.  The math just did not make sense.  She would have still owed money on the debt even after completing the program.

Before you make the same mistake talk to a local bankruptcy attorney.  The consultation is almost always free.  What do you have to lose?  Get your fresh start today!

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