Category Archives: Bankruptcy

Bankruptcy protection is a constitutional right and our attorneys have a wealth of experience to share with you.

Why Are More Senior Citizens Applying for Bankruptcy?

Bankruptcy occurs when the “legal status of a person or other entity cannot repay debts to creditors.” In the U.S., filing for bankruptcy is usually a last resort for people after they have failed to pay off their debts. However, a recent study by the Social Science Research Network highlights a trend of bankruptcy increasing among older Americans. According to the study, the bankruptcy rate for senior citizens increased by 200 percent from 1991 to 2016. Why Are Senior Citizens Filing for Bankruptcy? Lower incomes, unaffordable health care costs and a national drop in pension fees contributed to this new trend. Although Medicare provides great coverage for senior health care, it is unable to cover everything. Medicare may not cover dental care, hearing aids, eye exams and other procedures. Medicare often requires copays, coinsurance, and other deductibles that can prove to be difficult to afford. Forty-one percent of the average…
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Understanding the Brunner Test for Student Loan Bankruptcies

According to Federal Reserve data, student loan debt has reached more than $1.5 trillion in the United States, with more than 44 million loan borrowers. Among those with student loan debt, 19 percent are behind on payments, up 5 percent since 2014. Now, student loan debt is the second highest consumer debt category behind mortgage debt. Even so, student loan debt continues to be one of the most difficult debts to get discharged in bankruptcy. Under the United States Bankruptcy Code, student loans are an exception to discharge. This means student loans are usually not exempt from personal liability when undergoing bankruptcy. However, if the debtor can prove that the loan repayment will cause “undue hardship” on the debtor and/or the debtor’s dependents, the student loans could be discharged without legal obligation to repay them. Because “undue hardship” is a subjective term and is undefined within the law, many courts…
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Fear of Losing Your Home? Bankruptcy Can Help Stop Foreclosure

Owning a home and managing your mortgage can be a difficult task that takes a large amount of financial planning and preparation. If you’ve fallen behind more than three months, your property may be threatened by foreclosure. Foreclosure means that the creditors repossess any property and sell the house at an auction. The profits go to repaying the mortgage, taxes, and any legal fees associated with your foreclosure. Why Bankruptcy? When you file for bankruptcy, the court will issue an Order of Relief to create an automatic stay. This informs any creditors that they must cease collection attempts until the bankruptcy is completed The two options for a consumer bankruptcy are Chapter 7 bankruptcy and Chapter 13 bankruptcy. With Chapter 7 bankruptcy, it may be more difficult to keep your home due to New Jersey exemption rules. On the other hand, a Chapter 13 bankruptcy could be the right choice…
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What If I Cannot Make My Student Loan Payments?

Student loans are one of the most widely held types of debt in the US. An estimated 44 million Americans owe more than $1.4 trillion in higher education debt. For some people with student loans, payments are problematic. The Brookings Institute estimates that 40 percent of student loan debtors will default by 2024. If you are experiencing difficulty paying back your student loans, there may be measures you can take to avoid default. However, your options will vary depending on whether you have private or federal loans. Federal loans. You may be able to lower your payments on federal student loans by enrolling in an income-driven repayment program. These programs limit monthly payments to a percentage of your income. Income-driven programs include the Income-Based Repayment (IBR), Pay As Your Earn (PAYE), Revised Pay As You Earn (REPAYE) and Income-Contingent Repayment (ICR) programs. Eligibility for these programs can vary depending on…
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Five Common Bankruptcy Myths

Bankruptcy is a helpful debt relief option for people struggling with their finances. Common misconceptions about the process may keep people who could benefit from bankruptcy from filing. Some of the most common bankruptcy myths include: Bankruptcy permanently destroys your credit. Your credit scores are not permanent. You can begin to improve your credit scores after bankruptcy by paying your bills or any remaining credit obligations on time. Although bankruptcy will remain on your credit reports for up to ten years, you may still receive offers from lenders if you can show financial stability. Student loans are non-dischargeable. It is very difficult to discharge student loans in bankruptcy, but it is not impossible. You do have to show that repaying the loans would impose an “undue hardship” on you or your dependents. Some bankruptcy filers, such as those with permanent disabilities, may have an easier time showing undue hardship than…
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