Ast & Schmidt, P.C.
We Focus Exclusively On Protecting Your Rights In Bankruptcy And Foreclosure. Call Us In Morristown Today.
Email 973-984-1300

Morristown Bankruptcy Blog

Owing IRS back taxes could get your passport revoke or denied

When U.S. citizens in New Jersey owe the IRS money, the last thing it wants is for them to fly the coop. CNBC notes that the remedy Uncle Sam may take is to revoke the passport of the debtor. This may not happen for smaller debts. However, debts in excess of $52,000 could cause the agency to take action whether the individual is at home or abroad. If the person attempts to apply for a passport for the first time or renew an old one, that may get denied as well.

The IRS has been enforcing this law since 2018. However, it now refers these cases to the U.S. Department of State. Since the program first began, the agency informed over 400,000 people that they risked losing their passport. Taxpayers who have not resolved the remaining debt may receive a letter from the IRS letting them know that the revocation request may now be forwarded to the State Department. Debtors reportedly have a 30-day window to respond.

It is all too easy to accrue debt after job loss

Finding out that you are losing your job can be a devastating blow. You may have intended to make a career out of your current profession, and now because of layoffs or another reason for your dismissal, you have found yourself back in the pool of trying to find employment. Understandably, you have worries.

Many people face job losses, which can easily cause serious issues, especially when it comes to your finances. You undoubtedly do not want to end up in a situation in which your lack of steady income causes you to accrue considerable debt, but this type of outcome is not uncommon.

How to build your credit after a foreclosure

When homeowners in New Jersey lose their home to a foreclosure, they may have two main concerns. The first is where they will live and the second is how they will rebuild their credit score. Without rebuilding a good score, even finding a place to rent may prove difficult. Once the score is up again, however, the individual may even be able to purchase a new home.

Fox News reports that the higher a person’s credit score was before a foreclosure, the longer it may take them to get their score back to normal. For example, it might take three years to regain a credit score of 680, but seven years to return to a 780 score. The best way to build credit is to keep credit accounts open and make payments on time. People who may forget may consider setting up automatic payments to reduce this possibility.

The pros and cons of filing for Chapter 13 bankruptcy

New Jersey is one of the most expensive states to live in, in America. It comes as no surprise then that many Americans in the Garden State have become overwhelmed by debt. When this happens, some people consider the possibility of filing for bankruptcy. However, the thought of losing their assets and having the ding on their credit report may not sit well with them.

While there may be no avoiding the temporary credit score scar, Forbes points out that people may be able to keep their assets when they file for Chapter 13 bankruptcy. With this type of bankruptcy, rather than sell assets to repay debts, debtors negotiate a repayment plan for some of their debts.

Understanding unsecured claims in bankruptcy

If you are considering filing for Chapter 7 bankruptcy in the state of New Jersey, it is helpful to understand the different terms associated with a bankruptcy case. One of those terms involves the kind of debts creditors claim against you, known as unsecured claims. These kinds of claims involve no collateral and may end up being discharged in bankruptcy, although some unsecured claims will have to be paid in any case.

According to How Stuff Works, an unsecured claim is a debt that is not backed by a claim on property if you do not pay. The good or service is offered by creditors based upon a promise or an assumption that you can pay the money at a future date. If you fail to pay the amount at an agreed upon time, the creditor can try to collect that money from you. But without a collateral agreement, creditors are limited to collecting the money without taking anything from you to compensate for the debt.

Debt collectors’ bark may be louder than the bite

New Jersey is one of the most expensive states to call home in America. This makes falling into debt an especially terrifying experience. What makes it worse is all the debt collectors calling to reclaim their money by any means available to them. This can make people feel afraid and may cause them to become depressed.

CNBC estimates that debt collectors called one in three consumers in the year preceding July 2016. These collectors harassed people at any hour of the day or night, with no consideration for their rest or peace of mind. They made threats, even including criminal prosecution. Some went as far as to physically threaten consumers or their beloved pets. Not surprisingly, a quarter of the grievances filed with the Consumer Financial Protection Bureau involves debt collection.

Are you worried about your IRA in bankruptcy?

Building up your retirement fund has likely been an important goal for you almost as long as you have had a job. You understand the importance of having those funds tucked away for the years that you will no longer have to work. However, you now face a difficult financial situation that may lead to you file to bankruptcy.

Hopefully, you already know that taking money out of your retirement account to cover outstanding debts is not the best idea because penalty fees could make your financial situation worse in the long run. Still, you may worry that filing for bankruptcy could result in you losing those funds entirely.

What to do when fighting to keep your home

As many people in New Jersey learned during the recession, if the market crashes or someone loses their job even financially responsible homeowners may find themselves facing foreclosure. While the American economy has come a long way since then, there are still many homeowners facing foreclosure due to falling behind on payments. What can people do when this happens?

According to Forbes, the first step is education on the foreclosure process. The more information a person has about foreclosure, how it works and what the process entails, the better position they may be in to rectify the situation. Believe it or not, the best starting point is the foreclosure letters that were mailed.

How to pay your tax bill to the IRS

Many people in New Jersey were concerned about the outcome of filing their 2018 tax returns. According to CNBC, 30 million in America received a tax bill instead of a tax refund. Unfortunately, many people choose to ignore the bill, but there may be serious consequences for doing so. These may range from a ruined credit score to criminal prosecution.

While Americans are still grappling with the changes in the new tax reform, it is important to file early going forward. The balance does not need to be paid until April 15, but if people wait until the very last minute to file taxes and then they owe, that deadline may be impossible to meet. For those who do owe on taxes now or may owe taxes in the future, here are some ways to take care of that bill.

How can I create a bankruptcy budget?

When faced with massive debt, bankruptcy may be the best option to get your finances back on track. With chapter 13 bankruptcy, you must make payments as obligated by the court to ensure you remain in good standing. This entails creating a reasonable budget, which can be difficult for many people. In this case, U.S. News & World Report offers the following tips. 

The first step is to track your expenses. This will give you a good idea of your debt to income ratio. If you commonly use cash to make purchases, try switching over to a debit card for the period you're tracking. That way you can use your bank statement as a guide for how much you typically spend. It's best to get a general idea of your finances, so don't worry about tracking every little expense at this point. 

Ast & Schmidt, P.C.

Ast & Schmidt, P.C.
222 Ridgedale Avenue 3rd Floor
P.O. Box 1309
Morristown, New Jersey 07962

Phone: 973-984-1300
Fax: 973-984-1478
Morristown Law Office Map