Recording calls with debt collectors to document or deter abuse-watch out for these and other traps!

We have all heard the recordings telling us that our call “may be recorded for customer service”… Many of our clients in financial distress are dealing with debt collectors. Although there are well-established rules about what collectors can or cannot do, we hear all the time about abuses, such as threats of criminal action, repeated calls at late or early hours, calls of employers or relatives.

We suspect that these abusers think that most people will put up with the abuse and if they do pursue legal remedies, it will be a “swearing contest” in court. While debt collection is legal and proper, we have recommended that our clients document each call and consider recording such calls, but only if certain procedures are carefully followed.

In many states, including California and Pennsylvania, it is illegal to record a call or other interaction without the consent of all parties. So if the call originates in one of those states, a violation could trigger criminal action, or civil penalties. See Tape-recording laws at a glance

.

So here is our recommendation: Start the interaction and your recording with a statement something like “I am recording this call, and will record any further calls from you. If you do not want to be recorded hang up and do not call again. If you continue or call again, I will assume you and your company consent”. If the person says they do not consent then hang up.

If a collector leaves a message on your answering service, save the recording. They knew they were being recorded and cannot complain.

Watch out for debt collection scams. Whenever dealing with a collector, be sure to get the name or extension number of who is calling, the name and address of the collection agency, the name of the creditor, the account number, and a telephone number to call back “in case we get disconnected”. Never give any information over the phone, such as Social Security or credit card numbers, dates of birth where you work etc. They are calling you. If they do not have this information that is their problem. Do not fall for the “we need this for verification” scam. Your goal is to get information from them. If they want further information, tell them to put it in writing and send it to the address they have so you can review it with an attorney.

Finally, most old debts have been sold off to debt buyers. While this is legitimate, sometimes companies or collectors who do not really own the debt may try to defraud the true owner by trying to collect on someone else’s debt. Or phony debt collectors. Be wary.

More importantly, if you are having trouble with debt collectors, get legal advice about your rights and options. And please note, every state and situation is different. This post is intended only to alert you in a general way to the potential issues and problems. It is no substitute for qualified and individual legal advice.

Contact Neuner & Ventura, LLP

We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

The New Jersey Motor Vehicle Exemption in a Chapter 7 Bankruptcy

When you seek protection in bankruptcy under Chapter 7, the law allows you to permanently discharge certain debts in exchange for the sale of non-exempt assets. As a general rule, you can’t discharge student loan, tax and family law arrearages. In addition, you can choose either the New Jersey state exemption or the federal exemption, and you’ll be able to keep certain property.

Choosing the Right Exemption for Your Motor Vehicle

The state exemption in New Jersey allows you to keep some up to $1,000 of equity in your car, van, truck or motorcycle. If your equity in the vehicle is less than $1,000, the trustee cannot take your car and sell it. However, if you have more than $1,000 in equity, the trustee will likely choose to take your car, sell it and give you the $1,000 exemption, and use any additional proceeds to repay creditors. In New Jersey, if you file a joint personal bankruptcy protection, you can double that exemption to $2,000.

If, instead, you opt to use the federal exemption amount, you can protect up to $3,775 of the equity in your motor vehicle.

Determining the Equity in Your Vehicle

The equity in your vehicle is essentially that amount you would personally receive and keep if you sold the vehicle and satisfied any debts related to the vehicle. If you have paid off the loan on the vehicle or there’s no debt, the equity in the vehicle will be its fair market value (usually calculated using the blue book value). If there’s any amount remaining on your motor vehicle loan, the equity will typically be the fair market value minus any amount still owed.

It’s important to understand that it’s the equity in your vehicle that counts, not the fair market value. Accordingly, you could be driving an expensive vehicle, but if the amount you owe is more than you could sell it for, you have no equity and the bankruptcy trustee won’t be interested in it.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we know that the bankruptcy process can be intimidating and confusing. We offer a free initial consultation to every client. For an appointment, call our office at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

Can I Keep the Proceeds of Lawsuit if I File for Chapter 7 Bankruptcy?

Often, one of the consequences of a personal injury is a bankruptcy filing. You may be unable to work and meet your financial obligations and you may have no other sources of income. But what happens if you file for bankruptcy protection and then receive a settlement or a verdict in a personal injury lawsuit? What if your lawsuit is not resolved before the bankruptcy filing is finished? This blog outlines the rules governing if you can keep a settlement or verdict and, if so, how much you can keep.

When you file for protection under Chapter 7, you get to discharge certain debts, but you must also turn certain property over to the bankruptcy court, to be part of your bankruptcy estate. The proceeds of your bankruptcy estate are then used to pay part or all of the debt you owe your creditors.

If you have filed for protection under the provisions of Chapter 7 of the bankruptcy laws, any monetary award you receive, or will receive, becomes part of your bankruptcy estate. In fact, even if you have not filed a lawsuit at the time your bankruptcy is complete, if you are entitled to do so while your bankruptcy is in process, any money you would be entitled to receive in a lawsuit is the property of your bankruptcy estate.

The amount of the settlement or verdict that will be exempt from your bankruptcy estate depends on whether you choose the state or federal bankruptcy exemption. The New Jersey state bankruptcy exemption allows you to keep $1,000 of any judgment or settlement. The federal exemption is substantially higher–$23,675.

Contact Neuner & Ventura, LLP

We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

Being resilient in midlife debt crises

Many of the people we see and help are facing a debt crisis in midlife. This should not be surprising. Being laid off or having medical problems with high medical bills are common causes.

This article from the New York Times caught our eye as particularly helpful: “How to Boost Resilience in Midlife”. It contains many of the nuggets of advice we provide to clients.

We hope it is useful and helpful. If you are in a debt crisis, or are not sure whether a crisis is looming, I looking at your monthly net income and comparing it to what you have to spend to live and stay employed. We can help guide you and if you come to meet with us, we will ask you to do this beforehand so that we can help you get a handle on the finances. As always, we will explore the non-bankruptcy options, and if we recommend a bankruptcy we will explain why and what is involved.

Drowning in debt? Losing your home? Here is how to overcome the stress and take back control of your life.

Are you drowning in debt that threatens your life and livelihood? Facing the loss of your home from foreclosure? No doubt you are feeling scared, angry, ashamed or in denial. These are understandable and common reactions, but will they make the problem worse not better. The New York Times recently posted a series of articles which point out how stress does not have to get you down and provide ways to deal with it, reduce its harm and even use your daily stress to make you stronger. NY Times, 7/30/2017- How to be Better at Stress

If you are in this situation, this series of  articles is a must read. It reinforces the approach we try to take in guiding people through these situations. First, take a deep breath and don’t panic or grasp at “too-good-to-be-true” promises. Secondly, take a good look at what the problem is, and plan. Get professional advice from people who are experienced and whom you think you can trust and who can help you map out alternatives. Consider and accept the worst case outcomes, but plan and hope for the best. Third, talk about the situation, with your spouse, children, family, and legal or financial advisers.

If you are in this situation, it may well not be one of your own creation. Even if it is, learn from what you might have done wrong, accept your own role, then stop obsessing over it. Time to move on.

Likewise, recognize what you may not be able to control (decisions by others to hire you or not, expenses greater than income), and work hard to make things happen that you can control (eg job search, cut back spending where possible). Maintain hope and confidence.

It’s not easy but done right, it achieves results. Most of our clients get back on their feet and move one to financial stability and happiness. The hardest thing is often controlling spending and accepting necessary down-sizing. But being able to afford the basics of living and supporting your family is a great achievement, and cause for celebration.

If you need our help or guidance, we are available to help you map out the choices and options that are right for you.

Being sued on student loans? Demand documents to support the loan

A recent New York Times article reports that certain student loan creditors have had their cases dismissed because they could provide proof to support the loan, and to support that the plaintiff suing on the loan actually owned it. As Paperwork Goes Missing, 7-18-17, Private Student Loan Debts May Be Wiped Away . As the authors point out, these loans have been sold off or handed off to loan servicers who did not get and cannot find the supporting documents. Many cases have been dismissed. Nevertheless, many suits simply result in default judgments because the borrowers being sued did not bother to respond and demand paperwork, or go to trial. So the lenders may still file suit, to see what happens when they do.

The lesson? Demand to see the signed loan agreements, and the endorsed promissory notes or assignments to show who owns and has the right to sue to collect. Better yet, be sure to get or keep all your paperwork from the get-go, including documentation of all payments or notices of transfer.

A caution is in order here, though. Not all loans will suffer from this problem, and defending these cases will cost money. But it may often pay to demand that the lender provided the documents to support their claim in order to be paid. Many may ignore these requests. You have a right to see the documents.

Also, if you file a bankruptcy where creditors file claim, eg a Chapter 7 with “assets” or  a Chapter 13, you can challenge the student loan creditor’s claim and demand the same documents.

Since student loans are almost always non-dischargeable, it pays to make sure.

Happy Independence Day

Happy Independence Day

The New Jersey Bankruptcy Exemptions

When you want to liquidate debts in a bankruptcy proceeding—permanently discharge them so that you no longer owe anything—you must do so through a Chapter 7 petition. When you file, you’ll immediately get the benefit of the automatic stay, which prevents your creditors from calling, writing or taking any other action outside of the bankruptcy proceeding to collect the debt. You’ll be able to permanently discharge many debts—student loans, certain tax debts and family law arrearages are generally not subject to discharge. In exchange, you will be required to sell non-exempt property, with the proceeds used to pay your creditors, in part or in full.

The New Jersey Bankruptcy Exemptions

When you file a Chapter 7 bankruptcy petition in New Jersey, you have a choice—you can take the exemptions available under New Jersey law or under federal law. You can’t, however, pick and choose between the two. Here’s an overview of the New Jersey exemptions:

  • The Homestead Exemption — Most states allow you to exempt some equity in your home. New Jersey does not. If you want to claim a homestead exemption, you’ll have to use the federal exemption schedule.
  • Cemeteries and burial plots — Burial plots and cemetery property are fully exempt
  • Motor vehicles — You can claim up to $1,000 in equity (the difference between the fair market value and anything you owe on the vehicle) on a car, truck or motorcycle
  • Pension and retirement accounts — All public pension funds are fully exempt
  • Life insurance proceeds — These are exempt if there’s a clause in the insurance policy that prevents it from being used to pay the beneficiary’s creditors.
  • Personal property — There’s a $1,000 exemption for household goods and furnishings and all clothing is fully exempted

Contact Neuner & Ventura, LLP

We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

The Homestead Exemption in a New Jersey Chapter 7 Bankruptcy

When you seek to permanently discharge debts in a Chapter 7 bankruptcy filing, part of the deal is that you get to claim some property as exempt, so that it can’t be taken by the bankruptcy trustee and sold to satisfy your creditors. The exemption customarily identifies how much equity can be protected in your home, as well as how much personal property can be kept. Each state has its own schedule of exemptions or you can choose the federal exemption.

The Homestead Exemption in New Jersey

Unlike many other states, New Jersey does not have a homestead exemption for people seeking bankruptcy protection under Chapter 7. Accordingly, if you want to protect any of the equity in your home during a Chapter 7 proceeding, you must choose the federal exemption.

That’s not to say, however, that a homeowner cannot protect any interest in a homestead in New Jersey, but it’s a fairly complicated legal process to do so. Under New Jersey law, a married debtor can claim an exemption for any survivorship interest in property, provided the property is held “by the entirety” with his or her spouse. “By the entirety” is a legal term that refers to a specific type of property ownership, where the parties are not allowed to sell or transfer their individual interest without permission from the other parties.

You can, of course, choose the federal exemptions, but you must use the federal exemptions for all your property (you can opt for the New Jersey exemption on some and the federal for other property). Currently, the federal homestead exemption amount is $22,975, but it is subject to change every three years. You can use the federal homestead exemption for a wide range of real property, including homes, co-ops, condominiums, mobile homes and even burial plots.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we provide a free initial consultation to every client. To set up a meeting, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

Third Circuit Court of Appeals: Chapter 13 debtors may have a grace period to complete their plan after 60 months

The Bankruptcy Code specifies that Chapter 13 plans must provide for payments over no more than 5 years or 60 months. Yet it is not unusual even where the debtor has made all payments to end up with a shortfall at the end of the case due to increased fees or other expenses or other reasons. In Klaas v Shovlin, the Third Circuit Court of Appeals, in a ground-breaking ruling at the circuit court level, held that a bankruptcy court can give debtors in this situation a short but reasonable grace period to pay what is needed.

At the end of their 60 month plan, the Klaases owed another $1123 due to an increase in the trustee’s fee while the plan was underway. The Trustee moved to dismiss the case for that reason. Had that occurred, the Klaases would not have received the discharge they had paid for. Within 16 days after the motion was filed, they paid the difference and the Trustee withdrew the motion. However, a creditor who had joined in the motion objected that the late payment was invalid. The Bankruptcy Court disagreed.  The Creditor then filed a separate lawsuit in the bankruptcy court to deny the Klaases their discharge.  A year later the Bankruptcy Court ruled that as a matter of law the discharge was properly issued.

Both rulings ended up before the Third Circuit Court of Appeals, which ruled that a bankruptcy court has discretion, even after 60 months, to give debtors a grace period to complete plan payments and get a discharge. It found support for this in both the statutory language which limited the length of plans without a specific cutoff for completing payments, and in the purpose of Chapter 13 to afford debtors more flexibility in achieving a fresh start. It rejected the argument that a bankruptcy plan is akin to a contract, and strictly governed by its terms.

The Court cautioned that debtors do not have an absolute right to cure an arrearage after 60 months. Instead, a bankruptcy court can grant a grace period in its discretion applying various factors including how diligent the debtors have been in paying, the time needed to complete payments, what prejudice to creditors would be in allowing the late payment,  how late in the plan term did the issue come up, and whether the shortfall was caused by something the debtors did or failed to do.

Because the Klaases had been diligent and were not at fault, the Third Circuit held that the Bankruptcy Court got it right.

Chapter 13, in the right circumstances, can provide welcome and much-needed relief. However, it requires knowledgeable guidance, and care in fashioning a payment plan, diligence in payment, and attention to detail. We handle these cases regularly and are available to help those who need this special form of relief.

Recognized Quality & Experience