When a New Jersey resident files for bankruptcy, something called an automatic stay is instituted. This means that as soon as the person filing for bankruptcy receives a case number, all creditor activity to collect a debt is required to stop.
The most recent data is showing that the number of people filing unemployment claims for the first time is down nationwide. However, here in New Jersey, that number rose an alarming 70 percent in one week. This influx of unemployed people in our state could cause a corresponding rise in bankruptcy filings over the next few months as it becomes more difficult for some people to pay their bills.
Credit card debt plagues a vast number of people around the country and here in New Jersey. At this point in our history, much of that debt was incurred during the recession when people used their credit cards to pay for the food they put on the table and the electricity that many used to cook it. There is a lot of advice available regarding how to reduce credit card debt, but it may not work for everyone. In many cases, bankruptcy might be a more useful option.
The overall number of foreclosure filings may be dropping, and the housing market may be rebounding, but the mess left by the crash of the real estate market is still being cleaned up. Thousands of homes in which the homeowners were unable to stop foreclosure are sitting empty. These so-called "Zombie Foreclosures" have increased an astounding 58 percent in New Jersey in the last year.
Sometimes the first thing in the morning or the last thing at night that many New Jersey residents do is receive calls from creditors or debt collection agencies. Debt collectors can be relentless in their efforts to get individuals to pay. However, it is possible to stop harassing phone calls from creditors, and how that is done depends on each individual's financial circumstances.
On Dec. 31 of last year, the Mortgage Forgiveness Debt Relief Act, which made it possible for many homeowners to avoid paying taxes on debt forgiveness due to foreclosure or short sale, expired. Many are hopeful that Congress will renew the Act, which became law in 2007. Even though the law appears to have sufficient support, Congress has yet to make a determination regarding renewal of it. This has -- and may -- cause numerous homeowners in New Jersey and across the country to file for bankruptcy after a short sale of their homes.
Anyone in New Jersey who has been to a doctor recently, paid an insurance premium or obtained a prescription understands the rising costs of medical care in the United States. In fact, many bankruptcy filings are due to medical debt -- either directly or indirectly. Patients who suffer from chronic conditions requiring monthly regimens of pills most likely feel as if there is no end in sight to their financial obligations.
Financial advisers often recommend that college students here in New Jersey and around the country begin building their credit history by obtaining and using a credit card. Building a credit history may be important, but that goal could easily be sabotaged by misusing credit. It is possible, however, to stop harassing phone calls from creditors before they start.
Numerous New Jersey residents have a significant amount of medical bills that they are unable to pay. One source suggests that one out of every three people in the United States has trouble paying medical debt. Many of these patients are looking for ways to stop harassing phone calls from creditors regarding medical bills.
Two main factors push the interest rates on credit cards up. The first is the fact that no asset secures the debt, and the second is the 2009 law limiting the amount of penalties companies can collect on delinquent balances. With interest rates soaring into the 21 percent range for those with less than stellar credit, the monthly payments have become unmanageable for some New Jersey residents. When the credit card debt a person owes reaches this point, filing for bankruptcy could be the answer.