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I'm Unemployed and I Have No Idea What to Do: A New Jersey Bankruptcy Attorney's Perspective on Consumer Bankruptcy

May 11, 2020 | Posted In Recent News |

The highest unemployment filings since records have been kept starting in 1938 was recorded in April in the United States. There were more than 20.5 million additional new filings for unemployment benefits. So, what does a consumer do if they find themselves unemployed? Contact a New Jersey bankruptcy attorney for help with determining the best option for our specific situation.

File for Unemployment Benefits Immediately

First, file for unemployment benefits ASAP, as almost all states are seeing such an influx of applications that their internal computer servers and overall general procedures were never designed to handle so many applications for benefits in such a short period of time. There is the real likelihood that your first unemployment check will take a long time to arrive or be deposited; so the earlier you apply, the sooner you will get the money.

The CARES Act also allocates another $600 per week on top of your state unemployment check. Currently, the additional $600 per week is scheduled to continue through the end of July. As of now, Florida has the worst record in the US for processing unemployment applications and then issuing a check. New Jersey, though not on the bottom of the list, is still averaging much longer than usual wait times from application to the first check payment.

Give the IRS Your Direct Deposit Information

Second, make sure the IRS has your bank information to direct deposit the $1,200 per person and $500 per child stimulus check. But take note: if you have a judgment(s) and the creditors have already or are about to issue an execution against your bank account, you may lose that stimulus check by a garnishment of that account. New Jersey allows for an up to $1,000 cash “exception” under NJSA 2A:17-19 which will stop any bank execution, but only on the first $1,000.

Also, beware that credit unions have, by law, the right to seize any and all funds in your savings and checking account with that credit union to pay any credit card balance, personal loan or a car loan held with that bank. If you have judgments against you or you have had a bank garnishment already, you could go onto the IRS website (www.irs.gov - go to “Get my Payment”) and change your bank account to another new account with a different bank. This is very important to do if you have accounts and debts with a credit union. Alternatively, you can delete your past bank account information and wait for a paper check in the mail and then cash that check rather than depositing it.

Additionally, although the CARES Act stimulus checks are exempt from seizure for back IRS taxes and student loan arrears, they can be seized for arrears in child support. Many states have signed Orders ceasing all garnishments against the stimulus funds; however, to date, New Jersey has not. The Federal Bankruptcy Code, upon a filing of a Bankruptcy Petition, will stop the bank from turning over funds in consumers bank accounts once seized by creditors; however, a very short time is available to stop the turnover, so timing is crucial.

Speak to a New Jersey Bankruptcy Attorney

Discussing your options with a New Jersey Chapter 7 and Chapter 13 bankruptcy lawyer as we go through and exit this never-before-seen-in-history event will give consumers and small business owners the opportunity to be informed of their choices and options under the Federal Bankruptcy Code.

It continues to be the hope of all involved with creditor/debtor rights that the private debt collection companies, mortgage companies, credit card companies, utility providers, car lending companies, unsecured loan providers, cell phone carriers, Internet/cable providers, etc. will offer options to help all consumers and small business owners catch up on late payments or restructure payments. However if they do not, then all consumers and small business owners need to know their rights for debt relief through bankruptcy.

Discuss your options under Chapter 7 or Chapter 13 with one of our New Jersey bankruptcy attorneys in confidence. To schedule a free, no-obligation consultation at Helmer, Conley and Kasselman, call us at 609-281-8581 or tell us how we can help online today.

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