If filing for bankruptcy is in your near future, you might be worried about retirement or pension accounts you have set aside for your future well-being. The good news is that many of these accounts are protected from bankruptcy. Unfortunately, creditors might still try to seize certain accounts under specific circumstances. When a person files for bankruptcy, various types of accounts meant for retirement are shielded from creditors, lenders, and courts. However, retirement accounts you might have inherited are fair game and might be seized to pay your debts. To protect your vulnerable retirement accounts and other assets, you should talk to a lawyer about how you should approach filing for bankruptcy. Cashing out accounts or savings, including those set aside for retirement, might be tempting but should be avoided until you speak with a lawyer. Certain bankruptcy chapters might allow you to retain your accounts and assets while you restructure your finances and pay back debt. If you are considering bankruptcy but want to protect your retirement accounts, call our Pennsylvania bankruptcy attorneys at (215) 701-6519 to schedule a free case review with our dedicated team at Young, Marr, Mallis & Associates. What Happens to Retirement or Pension Accounts When You File for Bankruptcy in Pennsylvania? While creditors might try to seize various assets during the bankruptcy process, your retirement accounts should be protected. According to Pennsylvania law 42 Pa.C.S. § 5124(b), retirement accounts are exempt from judgment in bankruptcy cases. This means not only are creditors not allowed to seize these accounts and assets, but courts cannot access them during judicial proceedings. The idea behind protecting retirement accounts is that these accounts are intended for the well-being of the bankruptcy petitioner. Courts are not interested in leaving petitioners with zero money to their name and possibly dependent on the state for assistance. The goal of bankruptcy is to help people bounce back from financial problems, not dig the hole deeper. On top of that, money in retirement accounts is often inaccessible to account holders. You usually cannot usually withdraw money from retirement accounts without incurring costly fees. Since even the account holders themselves often cannot access this money until they retire, creditors should not be able to do so either. Recent Pennsylvania Superior Court decisions have left inherited retirement accounts more vulnerable to creditors. If you have retirement accounts that you inherited, they might be seized by creditors or liquidated by bankruptcy courts to pay your debts. In the case of Jones v. McGreevy, the court decided that inherited retirement accounts are treated differently because they are often not set aside for the account holder’s future needs. They are more akin to a windfall or even a checking account. Also, many inherited accounts must be fully withdrawn within a certain period of time, and the money must be placed elsewhere. This means not only do account holders have easier access to this money, but they might be required to pull it from these accounts. How Do I Protect My Retirement and Pension Accounts in Pennsylvania Bankruptcy Proceedings? There is a good chance your retirement accounts are already protected. Talk to a lawyer before you file for bankruptcy. Our Philadelphia bankruptcy attorneys can help you identify which of your accounts, if any, are off-limits to creditors and the courts when you file. If your accounts are protected, do not touch them. People sometimes make the mistake of cashing out retirement accounts to pay off debts to avoid bankruptcy. You do not have to do this. In many cases, people drain their retirement funds to avoid bankruptcy, but doing so only delays the inevitable. You might cash out all your retirement funds only to still end up filing for bankruptcy. It is smarter to just file for bankruptcy anyway and leave your retirement accounts untouched. If you have inherited retirement accounts, you should speak to a lawyer about how to protect them. Depending on how much money you owe, you might have other assets or property that could be used to pay back debts and satisfy creditors before they get to inherited retirement accounts. Alternatively, you might file for bankruptcy in a way that lets you pay back creditors over time, as discussed in more detail below. Filing for Bankruptcy with Retirement Accounts At Risk in Pennsylvania In order to protect retirement accounts that might be vulnerable to creditors, your attorney can help you explore Chapter 13 bankruptcy. Filing for bankruptcy is not a one-size-fits-all process. There are various chapters to consider filing under. While some chapters are intended for businesses, others are meant for individuals. Among the most commonly filed chapters are Chapters 7 and 13. Chapter 7 focuses on liquidating your assets, accounts, and properties and using the proceeds to repay creditors. Remaining debts may be discharged by the court. This might not be the way to go if you want to protect vulnerable assets like inherited retirement accounts. The bankruptcy trustee might seize assets you want to retain and liquidate them with or without your permission. Chapter 13 bankruptcy, on the other hand, does not involve the liquidation of assets. Instead, you and your attorney will devise an aggressive yet feasible payment plan to help you pay back creditors over several years. As long as you remain on the plan, your assets, including inherited retirement accounts, should not be taken. This tends to be a lengthy process, but it can be worth it for those who wish to retain their accounts and assets. Contact Our Pennsylvania Bankruptcy Lawyers to Discuss Protecting Your Retirement Accounts If you are thinking about bankruptcy but are worried about your retirement accounts, call our Allentown, PA bankruptcy lawyers at (215) 701-6519 to schedule a free case review with our dedicated team at Young, Marr, Mallis & Associates.

Discharging Student Loans in Bankruptcy.The New York Times has an article titled "Discharging Student Debt in Bankruptcy Is Supposed to Be Easier Than Before"about new processes to discharge student loans in Bankruptcy.  The article can be found athttps://www.nytimes.com/2023/08/09/your-money/student-loan-bankruptcy-discharge.html?smid=nytcore-android-shareJim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me. https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!

What Is a Non-Earnings Garnishment? While nobody sets out wanting a garnishment, they’re entirely uncommon due to child support and other sources of debt. Garnishments are used by creditors to collect payment for unpaid debts, either through earnings or non-earnings. Most people associate garnishments with earnings garnishments, otherwise known as wage garnishments. However, non-earnings can be garnished as well, and it can be just as financially devastating. The good news is that if you are facing any type of garnishment, filing for bankruptcy may be able to help your situation. Review your case for free with one of our experienced Mesa bankruptcy lawyers by clicking here or calling 480-470-1504.  Earnings vs. Non-Earnings Garnishments In a garnishment context, earnings are “compensation payable for work performed by the judgment debtor and not yet paid by the employer.” Regular wages count as earnings, as do bonuses, commissions, pensions, and retirement contributions. Non-earnings are “personal property belonging to a judgment debtor but held by a third party, or money other than ‘earnings’ that is owed to the debtor by a third party.” Examples include the contents of a bank account or safe deposit box, tax refunds, unpaid rent, and more. The processes for garnishing earnings and non-earnings are slightly different.  Before proceeding with either type of garnishment, a creditor must receive a money judgment against the debtor. The judgment creditor, or the plaintiff, is the one seeking repayment from the judgment debtor, or the defendant. However, there can also be a garnishee, or a third party holding money or property belonging to a judgment debtor. Once the creditor receives a money judgment, the court doesn’t begin enforcing repayment automatically. There are multiple options that a creditor has to do with a money judgment, but garnishments are one of the more popular choices.  A judgment creditor will need to have the debtor’s address and the name of their employer or the holder of their assets to proceed with a garnishment. The money or property must be located within Arizona for the judgment creditor to proceed with garnishment through the Arizona court system. The judgment creditor should make sure all of their documents are accurate, as mistakes could mean being held liable for the debtor’s legal fees related to the garnishment.  Once a creditor has obtained a writ of garnishment against the debtor, it will be served on the debtor’s employer. Depending on when the notice is served to that workplace’s pay periods, the garnishment may be taken out of the debtor’s next check or the subsequent paycheck. Although the balance can be increased due to interest and legal fees, only one creditor can garnish a debtor’s paycheck at a time. If more than one creditor obtains writs of garnishments against the debtor, it will be first come, first served depending on who serves the employer first. Any subsequent creditors will need to wait until the first garnishment is fulfilled before theirs can begin. An employer may not legally terminate an employee due to service of a writ of garnishment or for having their wages garnished. However, an employer can terminate an employee for receiving a second writ of garnishment in 12 months.  Common Examples Of Non-Earnings Garnishments Wage garnishments can be stressful, embarrassing, and most of all, financially draining, but non-earnings garnishments can make a financial situation worse as well. Some common examples of non-earnings garnishment situations include: A bank account levy: You may have several accounts through the same financial institution, such as a checking account, savings account, and maybe an attached credit card too. If you incur a debt on any of those, your bank might use a levy on one of your other accounts to collect the funds.  Safe deposit box: Similarly, you may hold items in a safe deposit box at a bank. If you fall behind on one of your accounts with that bank, they might pursue your safe deposit box for compensation.  Tax refunds: Many creditors, including the IRS, might file a non-earnings garnishment to intercept your tax refund to pay a debt.  Lottery winnings: Similarly to tax refunds, a creditor may file a non-earnings garnishment to intercept a payment such as lottery winnings.  Property Exempt From Non-Earnings Garnishment Creditors are somewhat limited in the types of funds and assets they can garnish from a debtor to collect upon a debt. Form 8, which is a Request for a Hearing on Garnishment (Non-Earnings), allows a debtor to indicate if the funds or property the creditor is seeking to garnish is exempt from garnishment. Some funds in bank accounts are statutorily protected in Arizona. Temporary assistance, social security income, veterans affairs benefits, and similar funds can’t be garnished from a bank account through a non-earnings garnishment. Pension, retirement benefits, and worker’s compensation are exempt from non-earnings garnishments. Additionally, certain household goods, furnishings, and appliances, equity in a motor vehicle, personal items, and tools or equipment of trade are exempt from non-earnings garnishment. However, being exempt from non-earnings garnishment isn’t the same as being protected from repossession. For more questions on property exempt from non-earnings garnishment, call our Phoenix bankruptcy lawyers for your free consultation at 480-470-1504.  What Is The Automatic Stay? Automatic Stay is a legal protection that becomes effective when a debtor declares bankruptcy. In most bankruptcy cases, the automatic stay lasts from filing until discharge or dismissal. The automatic stay is a powerful tool in defending against creditors. The automatic stay stops several types of creditor collections, like lawsuits, repossessions, foreclosures, utility shut-offs, and more. Most relevant here, the automatic stay contains most types of wage garnishments. A creditor also can’t proceed with a non-earnings garnishment when the automatic stay is in effect.  Most wage garnishments stop when a debtor files their bankruptcy petition in court. If the case is successful, the debt associated with the garnishment may be discharged. If the debt behind the garnishment is cleared by bankruptcy, the creditor has no legal right to resume garnishing the debtor’s paychecks after the bankruptcy case is discharged. Some debts, like student loans, won’t be removed by filing for bankruptcy. Here, the garnishment will pause during the bankruptcy but resume after discharge or dismissal. Many parents have wage garnishments to pay child support. A child support wage garnishment doesn’t stop a Chapter 7 bankruptcy filing. A child support wage garnishment only stops if a debtor files a Chapter 13 bankruptcy that will fully pay off their child support arrearages. For more information about the automatic stay, call our firm for your free bankruptcy consultation at 480-470-1504 or click here.  Our Mesa Bankruptcy Team Can Help You Protect Yourself From Garnishment Bankruptcy can help protect your funds and assets from earnings and non-earnings garnishments. Depending on your situation, you may have ample time to prepare your filing, or you may need to get it done quickly. Regardless, My AZ Lawyers can guide you through bankruptcy so you come out on the other side with all of your assets and little to no debt. If you qualify, we can file your case for as little as zero dollars down. Get the process started by scheduling your free consultation- contact us through our online form or call 480-470-1504.   Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: [email protected] Website: https://myazlawyers.com/ Phoenix Location: 343 West Roosevelt, Suite #100 Phoenix, AZ 85003 Office: (602) 609-7000 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post What Is a Non-Earnings Garnishment? appeared first on My AZ Lawyers.

The New York Times has reported that WeWork, the co-working company, has declared that "its ability to endure as a business is in doubt. The article can be found at https://www.nytimes.com/2023/08/09/business/wework-explain.htmlThis suggests that WeWork might be considering filing for bankruptcy. In this case, the company would either attempt to reorganize or liquidate. Under section 365 of the Bankruptcy Code, WeWork has the right to reject its office leases, and commercial landlords should prepare for this possibility.Jim Shenwick, Esq., possesses significant experience in real estate leasing and bankruptcy law. Landlords or creditors who have questions about WeWork's bankruptcy filing should get in touch with Jim Shenwick, Esq.Jim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!

For many individuals with debts that they cannot adequately pay, bankruptcy offers a solution that lets both the debtor and creditors get what they want over time. The creditor gets paid, and the debtor can start fresh after bankruptcy proceedings are over. An important component of bankruptcy is making sure that the debtor is not destitute when proceedings end and can adequately move on with their life. However, just because bankruptcy strives to preserve a debtor’s livelihood does not mean that they should act as if nothing is going on. Bankruptcy is still a process that should be taken very seriously. While debtors in bankruptcy are still allowed to spend their own money on whatever they want, they should do everything possible to avoid spending beyond essential purchases. Any luxury assets the debtor has when they file for bankruptcy can generally be sold to satisfy their debts to creditors during bankruptcy proceedings. Moreover, filing for bankruptcy under certain chapters allows debtors to take assets you obtain after you file. For assistance navigating the complex process of bankruptcy, call our Bucks County bankruptcy lawyers with Young, Marr, Mallis & Associates at (215) 701-6519 for Pennsylvania or (609) 755-3115 for New Jersey to get a free case review. What is Bankruptcy? Bankruptcy is a process by which the court puts together a plan for debtors to pay back their creditors. There are a lot of misconceptions about bankruptcy, thanks to the common public perception that it is a decision made by desperate people or companies that have poorly managed their assets. The reality is that bankruptcy is designed to make sure that the needs of debtors and creditors are met. Debtors cannot be harassed by creditors or be left destitute, and creditors get their debts paid over time. Thus, both sides will end up satisfied and able to move on with their lives in an ideal bankruptcy proceeding. One of the most important aspects of bankruptcy is something called an “automatic stay.” This is put in place immediately after you file for bankruptcy and prevents creditors from taking action to try and collect their debts. Instead, you pay off your debts in a controlled fashion over the course of bankruptcy proceedings. Spending Money During Bankruptcy You can spend money after you file for bankruptcy. However, it is not advisable to sell any assets or buy new ones prior to or during bankruptcy proceedings. Doing so can make you look bad in both the eyes of the court and your creditors. Creditors cannot monitor your everyday spending during bankruptcy, so they will not know if, for example, you go out for a nice dinner or take a road trip. However, creditors can request bank statements at any time during bankruptcy, so they will be able to see your spending habits if they care to look. Ultimately, bankruptcy proceedings only care about getting the creditor paid. The best way to do that is to only spend what is necessary during bankruptcy proceedings. Afterward, you will have a fresh start and be able to spend as you please. Claw-Backs You should be extremely wary of selling off any assets that are not exempt from bankruptcy proceedings. When you sell off an asset that can be “liquidated,” or sold for cash to satisfy debts, the creditors can do something called a “claw-back.” A claw-back is when a creditor can take something you sold from the person it was sold to. For example, if you have a nonexempt car and sell it to your friend during bankruptcy proceedings, the debtors may be able to take that car from your friend and sell it to help pay your debt. This is likely to make both creditors and your friend very unhappy with you. After-Acquired Property You should also be careful about obtaining any new assets during bankruptcy proceedings. When you file for bankruptcy, all of your current assets are tallied up and marked as either exempt or not exempt. Exempt assets cannot be sold off, while non-exempt assets can. The assets that can be sold off become part of what is called the “bankruptcy estate,” which is managed by a trustee. Anything you obtain after bankruptcy proceedings have started is called after-acquired property. After-acquired property is not listed as exempt. However, the after-acquired property is not part of the bankruptcy estate, so it is generally shielded from being sold off to pay your debts. That being said, if you file for bankruptcy under Chapter 13, the after-acquired property is part of the bankruptcy estate and can be sold off. Make sure you take note of the Chapter of bankruptcy you file under with our Philadelphia bankruptcy lawyers so that you appropriately manage your spending expectations. Spending Prior to Filing for Bankruptcy It is a good idea to avoid making any purchases that are not necessities just before filing for bankruptcy. Not only does it look bad in the eyes of both creditors and the court, but those purchases then become assets that can be liquidated in bankruptcy proceedings. Therefore, it is advisable to avoid making expensive or frivolous purchases prior to filing for bankruptcy. Do not invest in a new house or new car, avoid activities like expensive vacations, and do not transfer assets to friends or family just before filing. If you transfer assets in this way, it will not look good in the eyes of the court or creditors. If you have recently acquired significant assets just before filing bankruptcy, you should speak with our Pennsylvania bankruptcy lawyers about what to do in your situation. Talk to Our Bankruptcy Lawyers Today Young, Marr, Mallis & Associates’ bankruptcy lawyers can help with your case when you call (215) 701-6519 for Pennsylvania or (609) 755-3115 for New Jersey.

Going through foreclosure can be a painful experience, but lenders must follow strict legal procedures for the foreclosure to be considered valid. Pennsylvania is not a non-judicial foreclosure state, meaning all foreclosures must go through the courts. Pennsylvania is a judicial foreclosure state, meaning all foreclosures must go through the courts, and lenders must file lawsuits against borrowers to foreclose. While this might make the process a bit complicated, it also allows borrowers to defend themselves and try to hand on to their properties and avoid foreclosures. The judicial foreclosure process requires lenders to adhere to strict procedures, including requirements for notice and mediation. To avoid the foreclosure process, a lawyer can help you file for bankruptcy, which should initiate an automatic stay on any legal proceedings pending against you. Call our Pennsylvania bankruptcy attorneys at (215) 701-6519 and set up a free review of your situation to begin fighting foreclosure with our team at Young, Marr, Mallis & Associates. What Does Nonjudicial Foreclosure Mean in Pennsylvania Bankruptcy Cases? When faced with foreclosure, one of the first things you should talk to an attorney about is whether your state is a judicial or non-judicial foreclosure state. Pennsylvania is a judicial foreclosure state, meaning foreclosure proceedings happen in the courts. A judicial foreclosure requires that lenders file a lawsuit against borrowers in the courts. Being in a non-judicial foreclosure state has a variety of pros and cons you should discuss with your lawyer. One advantage is that every move the lender makes must go through the courts. This greatly limits what lenders can do to secure the foreclosure, and you are less likely to encounter shady tactics from unsavory lenders. On top of that, you have greater opportunities to legally challenge the foreclosure in court. Judicial foreclosure proceedings also take longer, meaning you might have more time to devise a plan with your lawyer. A non-judicial foreclosure does not involve the courts. While the lender might be required to send certain notices to the borrower about the foreclosure, the process generally skips the courts. Non-judicial foreclosures are faster and often leave borrowers scrambling. The Judicial Foreclosure Process in Pennsylvania The judicial foreclosure process in Pennsylvania can largely be broken down into several broad yet distinct categories. The process begins with certain pre-foreclosure proceedings before moving on to foreclosure. Once the foreclosure is official, the property may be auctioned off or sold. Pre-Foreclosure The non-judicial foreclosure process begins before you are in default or foreclosure. Typically, lenders must send notice to borrowers about foreclosure ahead of time. If you miss a payment, you often get a written notice alerting you to the missed payment and how you can make up for it, but this does not mean you are in default. If you have missed multiple payments, the lender might notify you and try to work with you to avoid foreclosure. Remember, lenders would rather you continue paying your mortgage than foreclose. Under federal law, lenders can begin foreclosure proceedings once you are at least 120 days past due on payments. At this point, the lender should notify you again of what is happening. Typically, they send a demand letter informing you that you are in default and that foreclosure will begin if the loan is not paid. After all that, the lender is required to send additional notices informing you of the forthcoming foreclosure. These notices, referred to as Act 6 Notices in the State of Pennsylvania, should inform you of the foreclosure 30 days in advance. If your lender in Pennsylvania did not properly notify you before they began foreclosure proceedings, tell your lawyer immediately. Foreclosure When foreclosure begins, the lender must file a complaint against you in court, like a lawsuit. Typically, the lender must file in the county where the property is located. If they file in the wrong court, the lender might have to start the process over. The complaint filed by the lender should contain information similar to a lawsuit, including your personal information, a description of the property in question, and details about the mortgage and missed payments. Just like with pre-foreclosure proceedings, the lender must serve you notice after they file the complaint. This notice serves to inform you that foreclosure proceedings have begun. The notice must be served to you in accordance with notice requirements typical in civil lawsuits. If the lender fails to provide notice, alert your lawyer immediately, as this is a huge violation. After the lender files the complaint, you must respond or risk a default judgment against you. A default judgment may be entered when the borrower does not acknowledge the complaint, meaning they automatically lose and enter foreclosure. If you receive a foreclosure notice, talk to a lawyer immediately so they can begin working on your answer. Auction If you lose your foreclosure case, the lender may begin preparing to auction off the property. While an impending auction might make you feel as if all hope is lost, your lawyer might still be able to help. Pennsylvania allows for a reinstatement period lasting up until right before the auction begins. A reinstatement involves curing the default and having the loan reinstated, thus stopping the auction and avoiding foreclosure. Reinstatement is not always possible, but it might be worth discussing with your lawyer. How to Avoid the Judicial Foreclosure Process in Pennsylvania One way you can avoid a foreclosure is to file for bankruptcy. This might seem counterintuitive, as people often lose their homes in bankruptcy proceedings like in foreclosure proceedings. The truth is that filing for bankruptcy halts foreclosure and gives you time to plan with your lawyer to keep your home. When you file for bankruptcy, the court should issue an automatic stay. The automatic stay immediately halts all legal proceedings pending against you regarding the defaulted mortgage and your home. You might already be in foreclosure with the lender moving toward selling your home, and the automatic stay puts everything on pause. When you file for bankruptcy, your attorney can help you avoid losing your home. For example, by filing for Chapter 13 bankruptcy, you can devise a payment plan to help you catch up on missed mortgage payments and other debts. Your lawyer can also help you take advantage of federal homestead exemptions so your home is not seized in bankruptcy proceedings. If You Are Facing Foreclosure, Call Our Pennsylvania Bankruptcy Lawyers for Help Today Call our Philadelphia bankruptcy lawyers at (215) 701-6519 and arrange a free review of your case to begin fighting foreclosure with our team at Young, Marr, Mallis & Associates.

US credit card debt surges to more than $1 trillion for first time ever.  See the full story at https://nypost.com/2023/08/08/us-credit-card-debt-surges-to-more-than-1-trillion-for-first-time-ever/?utm_source=gmail&utm_campaign=android_nypCredit card debt of this magnitude may indicate more bankruptcy filings in the future. Jim Shenwick, Esq  917 363 3391  [email protected] Please click the link to schedule a telephone call with me. https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!

Getting a loan from the bank or another lender can be challenging, and securing the loan with a pledge of collateral might make things easier. Unfortunately, your property pledged as collateral might be seized if you default on loan payments. When you pledge property or assets as collateral, you are offering your property as a way of securing a loan. Ideally, you should repay the loan, and your collateral will remain in your possession. If you default on the loan, the lender can seize the collateral to pay your debt. If you are having trouble keeping up with loan payments, filing for Chapter 13 bankruptcy might help prevent the lender from seizing your collateral assets. Simply having the loan discharged might not prevent you from losing your collateral. Talk to a bankruptcy lawyer if you are afraid of losing collateral property. To schedule a free review of your financial situation, call Young, Marr, Mallis & Associates at (215) 701-6519 and speak with our Philadelphia bankruptcy attorneys. What Happens When You Pledge Property or Assets as Collateral? Some people have trouble getting approved for a loan for a variety of reasons. To make the process a bit easier, you have the option of pledging collateral. Pleading collateral involves offering some property or assets to the lender. The collateral should be valuable enough to help pay a significant portion of your loan back if you default. Many people pledge something as collateral because it assures the lender that they will get their money back one or another, and borrowers are often given better interest rates. A loan obtained using collateral is referred to as a secured loan. Ideally, you should be able to repay the loan over time, and any property you pledged as collateral will be released. If you default on the loan, the lender may seize the property pledged as collateral and use it to cover your debts. In such a case, you would lose your property. Generally, borrowers retain control over the pledged property. For example, if you pledge your house as collateral, you can still live in the house and continue paying the mortgage. However, if the lender seizes the collateral property after you default, you would have to vacate the home. Will I Lose Assets or Property I Pledged as Collateral? As described above, you might lose the property you pledged as collateral. However, the lender cannot take the collateral until the borrower defaults. The lender cannot seize the property at any time they want. This is important to understand, as missing a single payment might not automatically put you in default. If your lender is making moves to seize the collateral before they are legally allowed, get in touch with a lawyer immediately. If you are having trouble keeping up with the loan payments but do not wish to go through the bankruptcy process, you might be able to elect to let go of the collateral property. If you surrender the collateral, it will become the property of the lender, and they will use it to fulfill your debt. Depending on what kind of property was pledged as collateral, this might be a viable option for some people. How to Prevent the Loss of Property Pledged as Collateral Secured debt involving pledged assets or property may be discharged through bankruptcy, and you would no longer be liable for repayment. However, if a secured debt is discharged, you do not get to retain any assets or property you pledged toward it. This creates a tricky situation for borrowers who cannot afford to repay debts but want to retain the property they pledged as collateral. This is incredibly frustrating for people who might have pledged their home as collateral, as they might have nowhere to live after bankruptcy proceedings are complete. Filing for Chapter 13 bankruptcy might be the solution you are looking for. Rather than liquidating assets to pay debts and discharging secured loans, Chapter 13 allows you to set up a payment plan. Chapter 13 filers tend to be on payment plans for several years, but the plan might allow you to repay your secured loans instead of discharging them. This way, you get to keep your pledged assets. What Do I Do if I Cannot Repay My Loan Involving Pledged Collateral? If you do not believe you can keep up with your loan payments and default is imminent, call a lawyer as soon as possible. Our Pennsylvania bankruptcy attorneys can review your financial situation and help you figure out how to protect your assets and get out from under your debt. One possibility is to look at your other properties or assets, if any, and decide if you would rather liquidate one of them to avoid losing the property you pledged as collateral. For example, perhaps you placed your home as collateral for a loan to start a business, but you are having difficulty keeping up with loan payments. Rather than lose your home as collateral, you might liquidate an investment property you were sitting on or a vacation home if you have one. Doing so would allow you to pay your loan back and keep your home. If you do not have other assets to liquidate, as many people do not, filing for Chapter 13 bankruptcy might be a good option. While bankruptcy is a bit of a dark mark on your credit, it can help you in the long run. Chapter 13, as mentioned above, focuses on restructuring your finances and developing an aggressive yet feasible payment plan. Our team can help you devise a plan that helps you pay off your secured loan in a few years, so you keep the collateral you pledged. Call Our Bankruptcy Lawyers for Assistance Right Away Call Young, Marr, Mallis & Associates at (215) 701-6519 and speak with our Bucks County bankruptcy attorneys to schedule a free review of your financial situation.

If you have creditors coming after you to have their debts paid, they may take you to court to try and have you ordered to pay those debts. If you cannot pay right away, the court may order that some of your income be directly given to your creditors. This is a process called wage garnishment. Wage garnishment can have a significant impact on your income and your ability to lead your current lifestyle. Garnished wages may leave you unable to pay some of your current expenses and make your current debt problem even worse. In New Jersey, wage garnishments stay in place until the debt is paid. This means that if you can pay off the debt, you can avoid wage garnishment. However, another way to stop wage garnishment is to file bankruptcy. Filing bankruptcy stops all debt collection and wage garnishment. If you are having issues regarding wage garnishment and considering bankruptcy, talk with Young, Marr, Mallis & Associates by calling (609) 755-3115 and get a free case review with our New Jersey bankruptcy lawyers. What is Wage Garnishment in New Jersey Wage garnishment is a court order that requires your employer to send a certain portion of your paycheck directly to your creditors. Essentially, you are no longer trusted to pay your debts, so the court will do it for you. The garnishment is in place until your debts are paid. There are federal protections in place for workers who have their wages garnished. For example, an employer cannot fire you for garnishments based on any single debt. However, if you have garnishments for multiple debts, that protection goes away. How Wage Garnishment Works in New Jersey Your wages cannot simply be garnished out of the blue. There are steps that your debtors have to take in order to garnish your wages and then obtain part of your wages to pay off debts. We will go through some of the things creditors must do in order to garnish wages below, but if you believe that your creditors did not follow these laws, you should discuss your situation with our Egg Harbor, NJ bankruptcy lawyers. Court Judgment In order for debtors to get garnished wages from your employer, they need to obtain a judgment against you from the court. What this means is that your creditors need to go before the court, explain why they deserve the garnish your wages, and then the judge has to agree with them and allow the garnishment. There are, however, some cases where your wages can be garnished without a court order. Student loans, child support, and unpaid income tax can all be garnished from your wages without a court order. Garnishment Amounts A wage garnishment will also indicate how much of your wages are being taken to pay the debt. Generally, wage garnishment in New Jersey will take up to 25% of your net salary. This is your salary after your employer has deducted the appropriate tax amounts and other fees. However, the amount can be much higher. For example, garnishments for child support can be up to 50% of your net salary. While the amount of your salary that can be garnished is quite high, there are some restrictions. The garnishment amount cannot be so high that you are unable to pay monthly expenses like costs of rent or food. Additionally, some forms of income cannot be garnished. For example, military pay to members of the armed forces is exempt from being garnished. That being said, wage garnishment is still a significant dent in your finances, and it can seriously hamper the way you live your life. Ways to Prevent Wage Garnishment in New Jersey If your wages may be or are currently being garnished, there are several things you can do to remove or modify the garnishment. Our Cherry Hill Bankruptcy lawyers can figure out the best course of action for your wage garnishment situation. File for Bankruptcy One of the fastest ways to stop wage garnishment is to file for bankruptcy. Many plaintiffs will be nervous about filing for bankruptcy because it has a reputation for coming from financial mismanagement or irresponsibility that leaves the filer destitute. That is not true. Bankruptcy is best thought of as a reset button. It is a way to give a debtor breathing room to pay off their debts in a controlled, court-mandated fashion. After bankruptcy proceedings have run their course, you have a clean slate without any debts and are free to go about your life how you see fit. One of the primary benefits of filing for bankruptcy is something called the “automatic stay.” When you file for bankruptcy, the courts place an automatic stay on any debt collections against you. This means that creditors can make absolutely no attempt whatsoever to collect debts from you while you pay them back over the course of bankruptcy proceedings. Automatic stays are so comprehensive that they even prevent creditors from making soliciting phone calls asking for you to pay their debts. Wage Garnishment Modification If you wish to avoid filing for bankruptcy, another option available to you is to request a modification to the wage garnishment. To have a wage garnishment modified, you have to prove in court that you cannot afford your basic expenses with the wage garnishment set at the current amount. If you wish to pursue this path, our lawyers can help you file a motion for reduction so you can better manage paying off debts through wage garnishments. Talk to a New Jersey Wage Garnishment Lawyer Today Young, Marr, Mallis & Associates has East Brunswick, NJ bankruptcy lawyers available at (609) 755-3115 to give free analyses of your case today.

 Misuse or Misapply SBA EIDL Loan Proceeds and Chapter 7 Bankruptcy FilingsAs many readers of our emails and blogs know, we have developed a practice representing individuals and businesses that have defaulted on SBA loans. We either want to do a workout with the SBA or file for bankruptcy.The first question we are asked is whether SBA loans are dischargeable in a Chapter 7 bankruptcy filing. The answer to that question is yes. The SBA (depending on the amount of the loan) is either an unsecured or a secured creditor, and those loans are dischargeable in a chapter 7 bankruptcy filing.The second question we asked is: if the business files for chapter 7 bankruptcy, is the business owner who guaranteed the loan (if the SBA loan was greater than $200,000.00, a guarantee is required) still liable to pay for the defaulted loan? The answer is yes.The third question is, What happens if the business that received the SBA EIDL loan misuses or misapplies the SBA loan proceeds?The SBA EIDL loan requires borrowers to use the funds only for eligible expenses like payroll, fixed debts, accounts payable, and other regular business expenses (working capital).Using funds for unauthorized purposes violates loan terms.If the SBA determines a borrower misused the funds or did not use them as required, it can demand repayment of the loan. It can also commence litigation against the borrower to collect the monies. The SBA can foreclose against business assets if they are secured or sue the guarantor. The SBA can obtain a judgment, garnish wages, place liens on property, and liquidate assets to recover the unpaid loan balance. The SBA can also refer the defaulted loan to the Treasury Department for further collection efforts.The fourth question we are asked is: if the business that received the SBA EIDL loan misused or misapplied the SBA loan proceeds, can that entity file for chapter 7 bankruptcy to discharge the loan?For example, what if the borrower did not use the money for working capital or operating expenses but instead used the money for personal expenses such as the purchase of real estate, an automobile, or a stock or bond investment?The misuse or misapplication of the SBA EIDL loan proceeds may prevent the borrower from receiving a discharge in bankruptcy for the reasons provided below.First, the dischargeability of SBA EIDL loans in Chapter 7 Bankruptcy is governed by bankruptcy law under 11 U.S.C.  § 523(a)(2)(B).Section 523(a)(2)(B) pertains to the non-dischargeability of debts arising from "false pretenses, false representation, or actual fraud, other than a statement respecting the debtor's financial condition. If the SBA determines that the borrower engaged in fraud, the SBA could commence an adversary proceeding objecting to the business’s bankruptcy discharge (an adversary proceeding is litigation commenced by a party after a bankruptcy filing).COMMENTS:Adversary proceedings in Bankruptcy are expensive and time-consuming, and creditors do not frequently commence litigation in bankruptcy cases, in this author’s experience.Will the chapter 7 Bankruptcy Trustee inquire about the misuse or misapplication of funds and notify the SBA? Generally, that is not the concern of a Bankruptcy trustee.The larger the loan amount, the more likely the SBA will object to the discharge.If there is a guarantee, the SBA will be less likely to commence litigation.The SBA employees are busy, and they may just write off the loan and move on to the next case.We were unable to find any Bankruptcy cases involving the misuse or misapplying of SBA EIDL loan proceeds or adversary proceedings by the SBA (although those cases may exist).If the SBA commences litigation, they need to prove fraud (which is difficult), and there may be opportunities to settle the case.Finally, the Debtor needs to do a cost-benefit analysis regarding the cost of the chapter 7 bankruptcy filing and the risk of an adversary proceeding being commenced by the SBA.Businesses or creditors with questions about the misuse or misapplying of SBA EIDL loans should contact Jim Shenwick, Esq., at 917-363-3391  [email protected] Posts by James Shenwick, Esq. regarding SBA EIDL LoansSBA EIDL HARDSHIP PROGRA Mhttps://shenwick.blogspot.com/2023/07/sba-eidl-hardship-program.htmlDefaulted SBA EIDL Loans, Limited Liability Company (LLC) and Cancellation of Debt Income (COD) under Section 108 of the Internal Revenue Codehttps://shenwick.blogspot.com/2023/07/defaulted-sba-eidl-loans-limited.htmlOffers In Compromise ("OIC") for Defaulted SBA EIDL loans and Section 108 of the Internal Revenue Code ("IRC"), Relief of Indebted Income, a Trap for the Unwary!https://shenwick.blogspot.com/2023/05/offers-in-compromise-oic-for-defaulted.htmlEIDL LOAN WORKOUTS AND BANKRUPTCY    https://shenwick.blogspot.com/2022/07/eidl-loan-workouts-and-bankruptcy.htmlEIDL Loan Default Questions & Answers https://shenwick.blogspot.com/2022/10/eidl-loan-default-questions-answers.htmlEIDL LOAN DEFAULT DOCUMENT REVIEW, WORKOUT, BANKRUPTCY FILING & OFFER IN COMPROMIS Ehttps://shenwick.blogspot.com/2022/07/eidl-loan-default-document-review.htmlEIDL Defaulted Loanshttps://shenwick.blogspot.com/2022/07/eidl-defaulted-loans.htmlNew Relief Program for SBA EIDL Borrowers Who are Having Difficulty Repaying EIDL Loans " Hardship Accommodation Plan"https://shenwick.blogspot.com/2023/05/new-relief-program-for-sba-eidl.htmlEIDL LOANS and SBA OFFER IN COMPROMISE PROGRA Mhttps://shenwick.blogspot.com/2022/07/eidl-loans-and-sba-offer-in-compromise.htmlPPP & EIDL Fraudhttps://shenwick.blogspot.com/2022/08/ppp-eidl-fraud.htmlBetter to connect-What small business owners need to know about repaying loans tied to pandemic relief from the SBA EIDL Loanshttps://shenwick.blogspot.com/2022/11/better-to-connect-what-small-business.html