Who is the typical Bergen County New Jersey Bankruptcy client?

The first thing people say when they walk through my door is that “this is the last place I thought I would be.”  After doing this for more than 10 years I can tell you financial distress does not discriminate among race, ethnicity, sexual orientation, profession or gender.  To quote a recently retired bankruptcy court judge, “life happens.”

What I can say is that the large majority of client come to office after what I call a trigger.  These triggers are beyond the control of my clients (who I call “victims” of circumstance) fall under the category of “life happens” and include: divorce, illness, separation, death in the family, unemployment, and underemployment.

The government claims that unemployment has gone down.  Do you believe it?

The government claims that unemployment has gone down. Do you believe it?

It is not their fault they fell victim to these life altering circumstances.  For example, despite the government’s claim that unemployment has gone down and the economy is slowly getting better we hear that Walmart and many other retailers are simply laying-off employees and closing down hundreds of stores.  Yahoo is laying off 15% of its workforce.  AIG announced cuts of about 23% of its senior management.  AIG’s cuts have been part of what I would characterize as rolling lay-offs in 2014, 2015 and continuing into 2016.  These are just some examples of how larger companies are fairing so imagine how smaller companies are doing.

Bankruptcy filings for 60+ year-olds continue to rise at an alarming rate.  More often than not they seek bankruptcy protection after being late off after working for decades at the same company.  They know all to well that they will likely never work again and if they do work they will be underemployed because someone much younger (and who will work for a lot less) will replace them in the newly created position (created to force out the 60+ year old).  This same group has often signed parent-plus loans and/or co-signed student loans for their children totaling as much as $50,000.00 to $250,000.00.

Most people who are employed at this point consider themselves lucky and raises are infrequent and often non-existent.  What happens when someone receives a raise is that their health care contribution usually goes up a minimum of 10-20% thereby causing the “raise” to evaporate.

I understand the reluctance of filing and the sense of guilt and shame that is associated with even the prospect of filing.  My office is caring and compassionate and together we can come up with a plan that will give you financial relief.  There is hope and life after bankruptcy!


How Can I Be Sure My Bankruptcy Case Is Approved And That I Receive My Discharge? (Bergen County)

Many times clients ask what their chances are that their case will be successful.  The best chance for success is being completely honest with your attorney and do everything you are told to do when you are told to do it.  It really is that simple or is it?

Clients want smooth sailing and so do attorneys.  Attorneys expect to work and they work hard but in order to do their work they must rely the cooperation of their clients.  Clients must provide documents that are requested.  That usually means giving your attorney a stack of paper.  Attorneys do not have an fascination with paper.  We HATE it!  But, paper is a necessity in the law and the documents requested are to help and protect our clients.

The bankruptcy process is paperwork intensive.  My office provides clients with a specific list of documents that are needed.  We provide the list at the time we are retained and it is discussed at the initial appointment.  We are thorough and know what we need in each case so that our client will sail smoothly through the process once the case is filed.  The goal is the discharge.

Help us help you!  If we did not do our job as thoroughly as we do it would case delay and additional expenses after filing your not to mention it could actually put your bankruptcy discharge in jeopardy.  The Court expects that we will have supporting documents before we ever file a case and quite frankly our reputations depends on it.

Both clients and their attorneys want smooth sailing.

Both clients and their attorneys want smooth sailing.

We try to make the process as smooth as possible but clients MUST provide the documents requested.  It is unhelpful and a waste of time for a client to come to an appointment without the information requested.  If a client has a question they should call and ask.  If they cannot locate a particular document they should call and explain the problem as we might have suggestions or alternatives that may be substituted.  We are here to help and want you to be successful!  Help us make the process as smooth as possible for you as we know it is a stressful time.

If you are considering filing bankruptcy you can begin gathering 4 years of federal tax returns, proof of income for six months from all sources (or as many as you can locate as your attorney may be able to assist with suggestions if you are missing a few pay stubs).  The List of Required Documents  which I provide to my clients is attached here.  Additional information may be added as needed based on individual cases.  Please note some requirement may not be applicable to every client.


Why Should I File A Bankruptcy Instead Of Taking A 401k Loan?

Unfortunately, our educational system was fundamentally flawed when I was in school and probably still is but not in the way you might think.  Americans are not taught, at least on any consistent basis, the fundamentals of personal finances.   We are young and do not have to worry about tomorrow.  So when people are given the option to contribute to a 401k all too often they opt out because, after all, they need more money in their weekly paycheck just to make ends meet.  Then there is a segment of the working population that opt to contribute to their 401k (usually minimally).  Perhaps, they are single or living with their parents and they won’t really be impacted by receiving a few dollars less on a weekly basis.

Life continues and perhaps, the once single person contributing to an 401k is now married with a family.  They are still faithfully contributing to their 401k but they need a replacement vehicle as their vehicle just suddenly died or the escrow portion of their mortgage increased due to a tax increase and now their mortgage is $150.00 more than it was last month.  How does the Average Joe deal with the daily increase in living when their pay checks only consistently go down?

Please do yourself a favor and consider Bankruptcy before you take your next 401k loan.

Remember, “Life is 10% what happens to you and 90% how you react to it.” ***Charles R. Swindoll

The answer is far to often, they take a 401k loan just to make ends meet.  When you are living pay check to pay check sometimes it seems like it is the only answer.  There are several reasons you should not take a 401k loan.  The most important one is that the loan is just that, it is a loan.  You have to pay it back.  You may say to yourself I need the loan to fix the car now so I will just pay myself back out of my check.  You may say no problem we can cut back on a few things but then the hot water heater needs to be replaced and then what?  That is life, right?

The problem is that you did not have the money to fix the car and you were barely making ends meet.  Now after the 401k loan you have less money coming home every pay period.  Based on my experience, 401k loans repayments unusually average $150.00 to $300.00 or more per pay period.   The loan period can range from very short term to 5 or even 10 years!    I have even seen pay checks that have had as many as 4 loan repayments at one time which leaves very little to actually live.

Another think you must consider before taking a 401k loan is that if you are unfortunate enough to lose your job before the loan is paid back the loan has important and severe tax implications for that pending tax year.  If you are in this situation you should consult with a Certified Public Account who can advise you how to best handle your situation.  Filing a bankruptcy after taking a 401k will be helpful but bankruptcy does not eliminate the need for you to repay the 401k loan.

If you file a bankruptcy before taking a 401k loan it may free up money pretty quickly if you are spending hundreds if not thousands of dollars on credit card payments each month.  A 401k is a protected asset in a bankruptcy which means you get to keep it.  Congress deemed retirement accounts to be so important that it protected accounts from creditors.  The retirement account cannot be liquidated to pay your creditors. So there is no need to feel guilty or ashamed because protecting your 401k is the law.  Many people believe taking 401k loans is the right thing to do but you must consider your personal finances a small business, allowing you to do the right thing to keep your business a float.  Chapter 7 and Chapter 13 filings are personal restructuring.

Whether you choose to file bankruptcy or not, we all must do our best to save for retirement and in doing so must also be diligent for saving for the next emergency “because life happens.”  A good suggestion is to set-up a savings account and have a certain amount deducted automatically from your check (kind of like paying yourself for the future).  Open an account at a small out of the way bank.  Somewhere were you are less likely to go out of your way to dip into the funds in your savings account.  Although there are pros and cons consider not linking it to an ATM card to limit the likelihood of an impulse withdrawal.

Trust me I know it is very hard to save; however, we need to save and teach our children and grandchildren to do the same.

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