Submitted on Friday, August 20, 2021
Not all debt is seen in a positive light by the credit bureaus. This week on Facebook Live we explain the different types of debt; secured and unsecured. We’ll also caution against certain types of debt that often cause more trouble than they are worth.
they're really cleaning up your next-door neighbor good afternoon everybody it's jeff jenkins and eric claiman here again um with our facebook live presentation which is generally weekly but sometimes it's been bi-weekly lately uh today we're going to talk about different kinds of debt and what happens in a bankruptcy with different types of debt you might have right jeff our clients call us our prospective clients call us people call us with questions all the time and the questions center around debt this is what i owe how can you help me and jeff we can help now there's certain debts that of course the bankruptcy code due to public policy reasons we can't help if it's a major criminal fine the bankruptcy code is limited as to what we can do but there's other debts almost every other kind of debt we can help to some degree for or another based upon the two main facts or relief available in a bankruptcy case number one the automatic stay which stops collection actions and number two the right to obtain a discharge a discharge means you don't owe the creditor any more money even though you won't necessarily pay them back in full or at all now jeff let me just throw one out i got a call today someone has a payday loan okay so basically their money is going to come right out of their checking account as it's direct deposited and as a result they're gonna have trouble paying their utilities this week if a client calls us and has a payday loan can a bankruptcy help um payday loan is basically just an unsecured debt there's no uh a lender for payday loan doesn't have any collateral of yours to secure the debt so it's an unsecured debt if they're taking the money out of your bank account just like other people might be doing that's something that you authorized you did that voluntarily it's your bank account and you can change that election um whenever you want if you don't want it coming out of your bank account you tell your bank stop this don't let them take money out of my account anymore i mean it was voluntary to put it in it's voluntary to take it out the bank has to listen to you um and so not only can you stop the person from taking it out of your bank account but then if you do a bankruptcy we can just get rid of it it can be erased right and if you don't feel comfortable talking to your bank we can talk to you back for you we can tell you how to do that and we could stop the garnishment remember that's the first relief for bankruptcy does stop the money from coming out of your bank account and number two we can put you on the road to a discharge a discharge means you won't owe them any more money even though you won't necessarily pay them back jeff you then leaned it towards the other type of bank account money that comes out that we don't like and we hear about all the time people call us in fact you were we were both talking to the person or you were listening yesterday at like 5 35 o'clock when the client called and they had a bank account levy and they really it was like fourteen hundred dollars well i don't wanna file bankruptcy over fourteen hundred dollars but i owe this creditor twenty thousand and that's the only thing i had in my bank so they just took the fourteen hundred but i can't have this continue and jeff we were the client was surprised that we were able to offer them more than just relief as to the twenty thousand because what about that money that was frozen in the bank account yeah well it depends of course where that money is at the time they file a bankruptcy if if they just took it out of a person's account it's generally going to go to a sergeant-at-arms uh for the superior court and they're the ones that are gonna then pass it on to the creditor so if it's still in the bank and just frozen or if the sergeant-at-arms has it we can definitely get it back for you once we file a bankruptcy because it's it's your money it hasn't transferred hands yet really it hasn't gone to the creditor yet so we can certainly get it back for you and even if it did go to the creditor it's possible that that based on the amount it could be seen as a preference um if you pay if a creditor gets paid more than 600 within 90 days of a bankruptcy filing um we can undo that transaction so eric's talking is giving me an example of fourteen hundred dollars that's certainly over six hundred and even if it it got into the hands of the creditor um but that didn't appear to be the case here but if it did then we could say it was a preference and get it back that way yeah we also have clients who look talking to a bankruptcy attorney we get is one of the last bits of relief but sometimes they've tried to solve things on their own and they have a car so they give a creditor typically in delaware right but new jersey has better laws than this well yes but delaware is like the wild west when it comes to automobile or vehicle title loans so they see us and they owe 4 dollars on a title loan at what two hundred ninety nine percent interest yeah the interest rate is just astronomical and unbelievable unbelievable two hundred percent literally is what we see it's just it's huge um so so what can we do if someone calls us like that to oh um
we have to pay them they're a secured creditor but we don't have to pay their interest rate the court can change that and we can also pay them the value of the vehicle if the more more is owed on the car than what it's worth we need only pay them the value of the vehicle at a reasonable interest rate like five percent not 205 just five percent and um we've done that a lot and i don't know if there's any other states right in this area that do these title loans delaware certainly does and um i mean it's that kind of interest is illegal in new jersey okay new jersey wouldn't put up with it but we we've never had these people chase us into bankruptcy court and say well we think the value you put on the vehicle is too low or we don't like five percent we want more or something like that they're afraid to come here they're afraid to stand in a bankruptcy court in front of a bankruptcy judge and tell them how they want their 200 interest on this title um in other words if you have a title loan for an automobile and you call us we can make that we'll get rid of all your other debt you'll keep the car and we'll make the payment much much more affordable um what about a buy here pay here situation where sometimes we see you can't even calculate the interest because it's very hard to figure out exactly what the person's paying but a lot of times they're paying 300 299 bi-weekly you know it's not 300 that would be a lot bi-weekly it's always 299 bi-weekly can we do anything to a buy here pay-here car loan situation sure
we could do with any car loan um and and the buy here pay here thing usually you see people whose credit isn't great going to um purchase that kind of vehicle that good credit you never go to a buy or pay your place you go to a dealership or something like that where you get a decent interest rate um but we could do similar things to that that we talked about with the uh title loan we need only if if they've um had the car for more than like two and a half years it's 910 days three a half years two and a half years um then we can pay the value of the vehicle uh through the bankruptcy with a reasonable interest rate again five percent is the judge is considered pretty reasonable um and it can be so it's paid in we can pay it in full through the trustee and and when we have somebody come in and you see that that uh buy or pay your loan you know the interest rate is going to be high so generally we always kind of we talk to them about how we can reduce the interest rate and it's going to save a lot of money in the long run so almost always we end up paying a vehicle like that through the bankruptcy and it would just be part of their trustee payment and they wouldn't pay the buy or pay or place directly anymore the trustee would send the money as they pay it monthly and you made a good point jeff if someone has a buy your pay here uh car loan they probably have uh financial difficulty in order to push them into that kind of debt so what we're trying to do when we talk to our clients is get a holistic solution we're saving you a little bit of money on the car alone for sure we're making sure the car won't be repossessed for sure but what else are we doing is we're getting rid of all your other debts generally for medium income people without a lot of equity in your house generally we can get rid of all the credit cards all the medical bills all the payday loans and they don't have to be paid at all so we work on a plan to pay back the car but the car is more affordable for two reasons number one we're reducing the payment as jeff described by the interest rate and sometimes by the to the value number two the car is more affordable because we got rid of all your other debt so yeah just at that point you just focus on paying your rent or mortgage your utilities and your car insurance and you make this new payment to a trust date all those other bills that people call you the people right to you they're completely stopped you don't have to write those little checks anymore press a button on your phone to pay them you're done you're getting that fresh start which congress intended when it wrote the bankruptcy code and jeff let's talk about that i said no matter what you pretty much have to resume your payments to rent or your mortgage we've talked about this a lot but if you're behind with your rent in new jersey we can help you up to a point so you have to call us soon right yeah let's talk about that don't just say yes help me
you're the expert our governor governor murphy has decided that people can't be evicted until the end of this year that more moratorium evictions kept changing dates all along every like every month you push it back another month you know and so now it's it's uh pushed back to a year however the supreme court stopped landlord tenant trials for residential tenants and they're saying that they'll probably resume those sometime late in the summer they did resume um landlords in court for commercial properties vacant properties uh perhaps if a property is unsafe or there's some danger to public safety somehow um but regular landlord tenant things aren't happening right now but if they do do that at the end of the summer but you can't be evicted till the end of the year it's quite possible that if you don't deal with that particular situation you're going to have a the judge is going to sign
an order saying that the creditor can have possession of the property and they're going to be all poised as soon as the evictions can take place to evict you and and there's nothing we can do to stop that in a bankruptcy proceeding because the way the bankruptcy code reads right now we have to file the bankruptcy before there's a judgment for possession entered and once that happens and describing to you what may happen in new jersey um then we can't do anything except if you don't want to live there anymore uh and you want to move someplace else we can get rid of the rep that was paid right we can discharge the debt there's less of the automatic stay to stop the eviction if you wait until there's a judgment for possession but remember we've emphasized today the two benefits of the two um realities how you're helped by in a bankruptcy filing by two things the automatic stay which stops collection action now if you wait until after there's a judgment for possession we can't stop it but the second thing is a discharge discharge means you don't owe the credit or any more money and by filing the bankruptcy at any time we can get rid of that old landlord debt so we've talked about cars we've talked about evictions a little bit mentioned one more thing about landlord tenant cases there's nothing that's been done to stop landlords from filing a complaint even in a residential context um and a lot of them have been filed i don't even know what the number is last april so we're talking about more than a year ago there were like 40 000 that hadn't been resolved in new jersey and that was just that that was the build up over a couple months i have no idea what it might be now 100 000 or more something like that um
well you were going to say that if you receive one of those sums in complaints yeah that's right if you get in your script right there right um you if your landlord did file a an action in landlord tenant court you got something saying that he did you got a copy of the complaint what you didn't get probably is a summons saying that you've got to go to court on a certain date if the supreme court opens up landlord tenant court again um you're going to a whole bunch of these things are going to issue from landlord tenant court putting dates on uh a landlord-tenant trial and as soon as you see that if you want to stay there you you need you'll have to pay the back rent or you can file a bankruptcy you can see a bankruptcy attorney can see us and we can file a bankruptcy for you and stop the eviction right so we've talked about cars a lot we talked about people whose bank accounts have levied uh we talked about people who are being evicted and how we can help all those people jeff there's there's other kind of debts people see us about um i was just looking at your list and now i'm going to need your help there we go uh oh utilities that's what i wanted to say uh again as jeff pointed out earlier if you do buy your pay here situation you probably have some other debt problems similarly if you're behind with your electric and gas people usually know to pay that so if you can't pay that you're having a financial crunch um we can help you right now they aren't turning the lights off or turning the heat off but they will soon yeah i mean the date now is the end of the year the uh that's the latest word from the governor he's giving people until the end of the year to try to work things out with utility companies and the amount of utility rear edge is significant and in 2020 uh the payments that weren't made on utilities increased by 89 in pennsylvania anyway and the amount of money that's owed over in pennsylvania is 709 million dollars um in new jersey probably a little bit less but uh it's still the same the same situation and um so uh you want to do something before they shut your utilities off although if they do you can still come to see us we can file a bankruptcy and can turn back on for you so you're saying if we file bankruptcy before they're shut off we can get rid of that debt for you yes we can if you come to see us after it's shut off we can get rid of that debt for you and get your utilities turned back on without paying it back right that's right in the utility companies what they do is they'll open a different account for you you have a different account number and so the old account uh if we're paying nothing to unsecure creditors that's going to get erased in the bankruptcy proceeding all you pay for with a new account would be service that you used after the bankruptcy was filed so uh if you're having utility problems and a lot of people are there's a lot of things that we can do to help you out and the utility companies uh i don't know what kind of arrangements they're gonna make with people but it's gonna if if you stop paying your utilities when covid started you've got more than a year's worth of payments that are have been missed a year and a quarter now really and um you know the amount could be pretty high and what is pretty high pretty high is a dollar more than you can afford really it's uh whatever it is it's relative to you and of course we're attorneys and when you speak to us it's in confidence we're not judgmental we're not going to say wow that you owe that much money or you only owe that much money or well you should be able to you should you made this mistake you made that mistake look we've all made mistakes we're here to find solutions you know jeff i like telling the story that i tell the clients oftentimes which is seeing you and me is like driving a car and in the front of a car is a large dashboard and you can a large windshield part large dashboard too but has nothing to do with my story a large windshield why the windshield is very large is because you can see the future and how we can help you and there's a little tiny rear view mirror to see the mistakes we've all made in the back we don't care about your mistakes we care about your windshield we're going to have you looking good in the future and a path to financial security and people come in here crying when they see us and they walk out i can't say they're all smiling but we try to give every client a path to financial security which gives you the opportunity to sleep well it helps you with socialization it helps your health mental and physical and you walk out of this office feeling look better and it's very rewarding absolutely and all our people here at the firm are the same or like that or i wouldn't have hired them they're kind people they're empathetic they're not going to be judgmental with you ever so because it's what we do and and uh good people have money problems sometimes it's not necessarily somebody's fault it could be just the way things worked out i mean this pandemic has uh and business closures and so on and so on has devastated a lot of people um it's not the people's fault it's just it's the way things worked out with the government and their little rules about what you have to do and what you what you can and can't do um so but there's there's help there it really is all right if you're having debt problems right now they're going to show you the phone number on the bottom okay look at that give us a call and tell the person on the phone it's probably going to be robert sylvia roman or miranda that you watched us today on facebook we're going to send you jeff's free book and talk to you about how we can help you all at no charge so give us a call we're here to help absolutely i guess that's we're good for today then so i don't know what we'll do next week or not but we may were
if we do we'll see at two o'clock next thursday so until then stay safe and god bless