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BANKRUPTCY
While over one million American families file for bankruptcy protection each year, many more would benefit from doing
so, but don’t. Their debts continue to mount, they lose their home, mostly because they don’t understand the real opportunity
that the bankruptcy laws offer.
Some of the reasons people file for bankruptcy include the ability to eliminate
debts, protect their home, and improve their credit rating in the long run.
1. CAN I FILE FOR BANKRUPTCY? The new
law change in October of 2005 did not prohibit you from filing a bankruptcy. The law change did add a requirement that you
obtain debt counseling prior to filing your bankruptcy petition and prior to any discharge being granted. These courses take
approximatley one half hour and two hours to complete and can be done on line, by telephone, or in person. The new law change
may also have changed the type of bankruptcy you can file if your income exceeds the median income of the state. Currently
in New Jersey the median income of a single person is $53,557 for a single person with no dependents. If your debts exceed
your income and you do not believe that you will be able to meet your debts in a timely fashion, you may be able to seek relief
under bankruptcy law. That said, insolvency is not a requirement to file.
2. WHAT’S THE DIFFERENCE BETWEEN CHAPTER
7 and CHAPTER 13? The more common bankruptcy is Chapter 7, in which you, the debtor, file a petition asking the court to discharge
your debts. The basic idea in a Chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for you giving up your
property, except for exempt property which the law allows you to keep. In many cases, much or all of your property may be
exempt. Property that is not exempt is sold and the money is distributed to your creditors.
In a Chapter 13 case,
you file a plan detailing how you will pay off some of your past-due and current debt over an extended period, normally 3
to 5 years. This is different from Chapter 7 bankruptcy, where you ask the court to actually discharge your debts. The important
thing about Chapter 13 is that it will allow you to keep valuable property - especially your home, which might otherwise be
lost.
Filing a Chapter 13 plan may be the right option if you: A) own your own home and are in danger of losing
it because of money problems, or B) are behind on debt payments, but will be able to catch up if given some time.
3. HOW WILL BANKRUPTCY AFFECT MY CREDIT? If you successfully complete your bankruptcy, and receive your "discharge", it
is unlikely that the bankruptcy will have any long-term effect on your credit. The fact that you have filed bankruptcy can
appear up to ten years on your credit report, but there are several reasons why completing a bankruptcy may actually help
to restore your credit in a fairly short period of time.
4. HOW LONG DOES BANKRUPTCY TAKE? A normal Chapter 7
takes about three to four months, but the relief is granted the moment your bankruptcy papers are filed. A Chapter 13 is usually
a 36-60 month payment plan and is over about the time you make your last payment.
5. WHAT STEPS SHOULD I TAKE TO
DECIDE IF BANKRUPTCY IS RIGHT FOR ME? Start by making a list of all of your debts (overdue bills, loans, etc.). Then make
a list of your assets and your monthly income. With that, contact a lawyer who practices bankruptcy law for advice. Most lawyers
will consult with you up front for no fee at all. Once you have the opportunity to objectively asses how bankruptcy will affect
your financial future, you may choose to make your own plan to consolidate your debt or work with an attorney to file for
bankruptcy.
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LEMON LAW
1. WHO IS PROTECTED? The Lemon Law
applies to anyone who buys, leases or registers a new car or motorcycle in New Jersey. The consumer is protected for two years
after the original delivery date of the vehicle, or 18,000 miles, whichever comes first. The lemon law does not cover commercial
vehicles or the living quarters of motor homes.
2. HOW DO I KNOW IF MY VEHICLE IS A LEMON? A new motor vehicle
is presumed to be a lemon if it has one or more defects that continue to exist after three attempts to repair, OR after the
vehicle has been out of service for a total of 20 cumulative calendar days. The defect must substantially impair the use,
value or safety of the vehicle.
3. HOW DO I GET IT FIXED? It is important that you report any defect to the manufacturer
or dealer immediately. You should also keep a record of all written and verbal contacts. By law, each time your vehicle is
brought in for repair, you should receive a dated, detailed statement that includes a description of the problem, work performed,
charges, time of drop off and pick up, and an odometer reading at time of repair.
4. WHO PAYS FOR REPAIRS? Most
manufacturers will pay if you are still covered under the original warranty. However, if the repairs are needed after the
warranty expires, you must pay for them, but can recover your costs if the vehicle is later proven to be a “lemon”. Be sure
to keep your receipts.
5. HOW LONG SHOULD THE REPAIRS TAKE? The Lemon Law allows the manufacturer a "reasonable
amount of time" to repair or correct the defect. A "reasonable amount of time" means three repair attempts for the same defect
or a total of 20 cumulative days out of service because of one or more defects or repairs.
6. HOW DO I FILE A
LEMON LAW CLAIM? Before you can file a claim under the Lemon Law, you must give the manufacturer one final chance to repair
the defect. A letter to the manufacturer (not the dealer) must be sent by certified mail, return receipt requested, stating
that you may have a claim and that you are giving the manufacturer one last chance to repair the defect. After receiving your
letter, the manufacturer has ten days to repair the vehicle. You will need to provide the Division of Consumer Affairs’ Lemon
Law Unit with a copy of the letter, the return receipt verification, and the final repair invoice before you can file your
claim.
7. WILL THEY GIVE ME A REFUND OR A NEW CAR? You can choose either. The manufacturer may offer to replace
your original vehicle, however you do not have to accept the offer and can demand a refund. If the manufacturer refuses to
give you one, you can pursue the matter through a hearing or in court.
If you choose to take a refund, you will get the
full purchase price of the vehicle, minus a “reasonable allowance for vehicle use.” You can also be reimbursed for expenses
such as cost of sales tax, registration fees, finance charges, towing, cost of repairs, rental expenses, attorney’s fees,
and the Lemon Law filing fee.
8. WHAT IF THEY DON’T REPLACE THE LEMON OR OFFER ME A REFUND? If the manufacturer
does not accept your Lemon Law claim, you have three options: 1) ask for a hearing through the Division of Consumer Affairs;
2) send your complaint to the manufacturer’s own Dispute Settlement Program; or 3) file a civil action in court.
Consult
an attorney experienced with New Jersey Lemon Law for advice on which option is best for you and what to do next.
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REAL ESTATE
1. WHAT HAPPENS ONCE I’VE AGREED
ON A PRICE WITH THE SELLER? Once you, the buyer, and the seller agree on a price, a contract is written. The contract is a
legally binding document spelling out the key issues of the sale. It should include basics such as the property address,
the names of the parties involved, the purchase price, proposed financing, any mortgage contingencies, and the projected closing
date. It also spells out what items the seller agrees to leave in the house. Fixtures (doorknobs, ceiling lights, etc.) and
built-in furniture (bookcases, etc.) are generally included in the sale. Appliances must be named in order to be part of the
sale.
Under NJ law, a buyer or seller has three days to have the contract reviewed by an attorney. The attorney will
frequently modify the contract to include important items not addressed in a standard form agreement. Both parties must sign
the contract in order for it to be legally binding.
The contract is usually accompanied by a deposit from the buyer
- a small percentage of the purchase price of the house. It is primarily a show of good faith between parties.
2.
WHAT ARE SOME THINGS THAT I SHOULD BE SURE TO PUT IN THE CONTRACT? The contract should include a clause that allows you to
have an inspection made of the property. It should permit you to terminate the deal and receive a full refund of the deposit
if you: are unable (despite good faith efforts) to obtain financing within an agreed upon time at prevailing interest rates;
discover any serious mechanical problems or environmental hazards with the house; or find any other serious problems that
were not obvious before signing the contract.
3. WHAT HAPPENS AFTER WE SIGN THE CONTRACT AND BEFORE THE “CLOSING”
ON THE PROPERTY? This time frame is typically a set period of 30, 60, or even 90 days. This is when you need to take care
of all the terms of the contract, which probably includes inspection and financing contingencies, and a provision that you
can and will confirm a title to the property free of defects.
The inspection provision allows you to have the property
professionally inspected. The financing provision gives you time to secure your mortgage. Since this is often a lengthy process,
you should begin seeking financing as soon as the contract is signed.
Your attorney will order, receive and review
the title report. You need to be sure to get clear and marketable title to the property.
During the closing period,
be sure to comply with the NJ state and local ordinances that come into play in property ownership transfers. Line up the
appropriate insurance and schedule a final walk-through inspection.
4. WHAT KINDS OF INSURANCE DO I NEED? The
two most common forms of insurance for your home include liability and title insurance. Liability insurance, or homeowner’s
insurance, provides coverage if someone is injured or harmed on your property or as a result of your ownership of the property.
Typically it includes a variety of coverage - such as liability, fire, property theft, and defense against lawsuits. Also,
you may be required to obtain flood insurance if your property is in a designated flood zone.
Title insurance provides
coverage if, in the future, it is discovered that there was a defect in the title and the homeowner did not get clear title
to the property.
Required by mortgage lenders, this type of policy covers the costs of defending your title against
the claims of another. It is a one-time premium based on the price of the home and amount of the mortgage.
Mortgage
insurance protects the lender against the risk of nonpayment by you. The only reason to buy this insurance is if your lender
requires it – usually because the buyer is borrowing a large percentage of the purchase price or has credit problems.
5.
WHAT HAPPENS AT THE CLOSING? The closing is the meeting between you and the seller; at which time all remaining documents
are signed. The deed to the house is transferred from the seller to you. Title insurance is paid, you sign the mortgage papers,
and any transfer taxes are paid to the state. In addition, you pay the seller for any miscellaneous expenses that had been
agreed upon, such as appliances, the remaining oil in the oil tank, or any real estate taxes that the seller had prepaid.
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