Bankruptcy and Insolvency Services
Throughout history, from the earliest writings in Babylon to the Old Testament (Leviticus …) each society grappled with individuals overwhelmed by debt. In fact The Old Testament contained a Sabbatical Year when all debts were wiped out every seven years. In fact, the number 7 comes into America Bankruptcy Law as the Chapter 7, wiping out most common debts.
With the current economic situation, plunging stock market, falling house values, job losses, predatory lending practices, many New Jersey consumers are being helped by the Bankruptcy laws. Filing for bankruptcy is not as uncommon as you think. You probably know someone that did, for there were over 40,000 bankruptcies filed last year in NJ alone.
Our firm has helped thousands of people like you: individuals and small businesses. Our caring staff, our experienced attorneys and our computerized system make filing for bankruptcy easy during this difficult period of your life.
The Bankruptcy Laws changed in 2005. While the intention of these changes was to make Bankruptcy less available to consumers, we are pleased to report that most cases are still being approved, although the process has become more complicated. For that reason, anyone contemplating a solution to debt problems should consult a competent lawyer with experience in Personal Bankruptcy.
What Alternatives Are Available to Bankruptcy
Unfortunately, just as predatory lenders took advantage of consumers to ensnare them in debt, there are companies lurking to take advantage of people overwhelmed by debt. They offer to reduce debt, negotiate with creditors, save your home or perform some other wanted task. Unfortunately, most promises are unmet other than charging high fees. True non-profit agencies, such as Consumer Credit Counseling Service, Inc., have and continue to perform valuable service in working out a Debt Management Program, whereby the creditors are paid back in full, with reduced interest, over 4 or 5 years. Others masquerade as non-profits and such companies have been shut down by the Federal Trade Commission and NJ Attorney General. Perhaps the most abusive are “debt adjusters”, which offer to settle debts for reduced sums and charge a percentage, usually 25%, of the savings. The consumer pays into the plan a monthly amount calculated to pay the estimated settlement and fee, but the first payments go to the debt adjuster as its fee leaving nothing to pay creditors for many months. Most realize the folly of such arrangement and stop paying. One fact that is rarely explained is that IRS Tax Law makes debt reduction as income, and the creditor must send you a 1099 for any reduction over $600. Many have been shocked to find a large tax bill April 15th after paying large amounts to settle debts.