Nathan Horowitz, Esq.

Business Client

The Wall Street Journal reports that payments have been missed on over 100 million loans student, cars and personal loans. Many are in deferment, which means payments have to be made up. Be ever mindful to be zealous in keeping your protected assets. Without legal counsel, you should never use retirement or other protected funds to pay debts which you can be relieved from. Keep Social security, pension and unemployment compensation in a bank account, separate from wages or other funds. While you can, and should, use this money to pay necessary living expenses, if you consider bankruptcy to be relieved of debt, these funds are protected.

Mortgage payment suspensions. Mortgages backed by Fannie Mae and Freddiemac should be agreeing to put the payments suspended at the back end of the loan. However, as reported by the NY Times, banks holding their own mortgages, or servicing mortgages owned by private investors, are making no such promises. The Times reported one homeowner whose mortgage lender told her she would have to make up the payments in a lump sum at the end of the suspension period. Their g...enerosity is not so generous and can be a trap for the weary. One can only hope the banks, with or without government pressure, will be more realistic. Even in traditional payment defaults, banks usually give homeowners six months to catch up. Even this can be very unrealistic. You have OPTIONS: Under the Bankruptcy Code, you can have sixty months 5 years to catch up on mortgage payments. Do not let the banks force you to promise what you cannot do. See more

Know Whether and When to File Bankruptcy How Bankruptcy Can Help. Federal law provides you the right to file bankruptcy and this is a powerful tool to deal with your financial issues. Bankruptcy at least temporarily stops foreclosures, repossessions, utility terminations, garnishments, and other collection actions. Bankruptcy can restore your utility service. It allows you to keep your home or car even if you are behind. To keep your home and car, you still have to keep up wi...th new mortgage and car payments creditor as they come due. Bankruptcy gets rid of medical, credit card, and many other debts, but it cannot eliminate child support, alimony, most student loans, court restitution orders, criminal fines, some taxes. Bankruptcy is effective dealing with court judgments, stopping wage garnishment, bank seizures and enforcement of judgment liens. It protects household goods. If bankruptcy discharges a debt whose non-payment led to suspension of your driver’s license, you get your license back. Common Misconceptions. Despite what you might think, typically you lose little or no property in bankruptcy. Bankruptcy may not hurt and may even help your standing with creditors. Your reputation in the community is NOT likely to suffer. Housing authorities, licensing departments, and other government agencies cannot discriminate against you for having filed for bankruptcy. When to File Bankruptcy. Bankruptcy is not really a last resort for those in financial trouble. Legal rights can be lost by delaying a bankruptcy. Get early advice about bankruptcy if you are concerned about saving your home or your car or protecting your bank account or wages from seizure.

Stretch Your Dollars If you cannot pay all your debts, try to reduce your monthly payments. Even if you must pay the full amount eventually, delay can help, particularly if your financial problem is caused by unusual expenses or a short-term drop in income. Low priority debts (medical, credit card, private student loan) can wait if payment endangers higher priority debts. ... Mortgage payments. You may be able to skip a few months through programs offered by most banks. If your taxes and insurance (escrow) are included in payment, pay at least that amount, followed by the interest portion and the principal portion last. Federal student loans. Call your servicer about special programs and for income based repayment. Utility Call the company for payment options. Car loans. Call Lender for payment suspension options If you are struggling to pay necessary living expenses and debts are just adding stress and anxiety, I am here to assist you in obtaining relief from those debts, while protecting your assets and belongings.

The National Consumer Law Center is a great source to learn about Consumer Rights. They have published a series of articles about debts and how to deal with those debts, with a particular accent on the current economic situation. I will post those in coming days. Should you have particular questions about how to protect your assets and belongings; and how to obtain relief from rising debts, please contact me for a consultation, which we can do with a video conference. N...CLC's first article was about prioritizing what debts or bills to pay. A prior post of mine discussed where your focus should be if your income is being impacted - Food, medicine and mental health. If your income is not impacted, or you have savings, your home and car payments should be next on the list. Should you have questions about other items of concern, please contact me. See more