Submitted on Thursday, December 23, 2021
The moratoriums in the state of New Jersey are officially over.
That means that residents who have fallen behind are foreclosures, evictions, and utility shutoffs are starting again. For homeowners who had a pending foreclosure before the pandemic, Sherriff Sales have also resumed.
Suppose residents are not aware of the process to work through these challenges. In that case, many could be left without power, heat, or water unexpectedly. Even worse, finding themselves without a home after the new year in the dead of winter.
good afternoon everybody this is jeff jenkins and eric clayman it's been a little while since we've had one of our facebook live uh programs because we thought we covered just about everything there was to cover right we started it as a little as a little coveted interview interlude for the two weeks that we would be locked out of the office but it did continued in the gym yeah it did we're still not over it um so anyway what we want to talk about today is uh in new jersey the state government and the federal government in some cases um have imposed moratoriums on certain things and they're due to expire at the end of december just a few days away and and some in some cases things are being done already but uh
before we start talking about those i just saw in in the paper that i mean one of the moratoriums was on student loans you didn't have to pay on your student loan the interest wouldn't accrue and it would that moratorium was supposed to expire at the end of january so the federal government just moved it till may 1st so they added 90 days on to that one
the others that uh we're going to talk about i guess evictions would be a good one to start with do you think right and just to be clear on the student loans that also they can't show up on your credit report if you uh don't pay the student loan right so it's an interest-free loan from the government jeff you know there is a law in place to deal with student loans and other defaulted documents and other defaulted debts yeah that's right it's called the bankruptcy code and sometimes congress forgets what it that which it has already created um but besides that you want to start let's talk about evictions sure evictions make sense that's that's really probably the one or two or three things most dramatically dealt with by our government as a result of covid and it's been a lopsided deal in the sense that we have many clients who are landlords right yes we do anytime you help a tenant and i use that in quotes because you allow the tenant to reside in the property without paying because they can't you sometimes hurt the other side of that which is not every landlord is a large um real estate investment trust that's right there are many many landlords out there that might just have uh their home and one investment property something like that and um if they don't get the rent how are they going to pay the mortgage on it right so let's talk about tenants first but this is a good topic so what happened during um the covered moratorium is that landlords and landlords were allowed to evict their cli their tenants if and only if they could prove that the property was in hazardous conditions right right otherwise they could file a complaint and it was going to mandatory mediation right and this is just for residential tenants that we're talking about because it didn't stop for commercial tenants uh the eviction rule didn't apply to them and there's in fact there's many many rules that don't apply to commercial attendance there's self-help there's lockouts there's things like that yeah so it's not it's not surprising there'd be separate rules and coveted for uh residential attendance but jeff's right to keep me focused on residential tenants so what they had was um these little arbitration hearings or mediations between the landlord and the tenant and if the tenant didn't show up or quite frankly the landlord didn't show up not much would happen even if they did show up they were given suggestions on how they might be able to work a payment arrangement but there was no fear of being evicted and there was no hammer for the landlord to use unless the landlord wanted to say that the property was in hazardous condition so now we are graduating from that and we're beginning to see clients who are being evicted but the original transition jeff depended on the tenant's income yes which sometimes the landlord doesn't even know the tenant's new income so it's very strange but if the tenant's income was below a certain level uh which was having less than 80 of the median income for a household that size in that county yeah so the county income of that salaries if the income was below that then the the tenant was protected anyway right so if the landlord could prove that he knew or she knew or it knew that the tenant's family had income greater than 80 of the county's average income then the lieutenant action could start yes and now i think starting this year that particular um delay is no longer in place so we're not going to see as many of the arbitration mediation things we're not going to see a statement from the landlord that the tenant makes a certain amount of money and we are going to see landlord-tenant actions and jeff what can we do to help people if they're basically attending action well we're bankruptcy attorneys and and so um we think about filing bankruptcies for people but not it's not always appropriate uh sometimes it's not the right answer and we would never put somebody in a bankruptcy if we didn't think they really needed it but um if you can't work so if if you're in this situation that we're talking about you're you're uh facing an eviction um you should certainly consult with a bankruptcy attorney to see what can be done they've had um programs where they've given landlords or tenants rent money uh but those they had real problems with them in new jersey and pennsylvania um it just i don't know it didn't function very smoothly it would be a way to put it i suppose you're very kind yeah but um what eric was trying to have me say is that we could always do a bankruptcy if we need to um and and you're you're facing eviction you're behind with your rent and you want to stay in your your uh dwelling whatever it is a house an apartment um we can pay the rent arrears through we would do a chapter 13 for you um we pay the rent arrears through the chapter 13 trustee and you'd resume making your normal monthly rent payments after the bankruptcy was filed and the key of course jeff is the timing here you must see a bankruptcy attorney before there is a judgment against you before the landlord tenant hearing date you must file bankruptcy they changed this law in 2005. and we used to right we used to be able to say to the judges possession is nine tenths of the law and if our clients are still on the property it's theirs to keep them we'd file bankruptcy while the court officer was throwing them out of their house they'd be hanging on and we'd file bankruptcy stop it that changed if there's a judgment for possession a judgment as a result of landlord tenant court we can't stop it anymore except under using extraordinary means yeah not with bankruptcy yeah so um the key here and jeff was being modest about how we help people most people by filing a bankruptcy petition but you should always learn your options so that if you receive a summons and complaint particularly from your landlord you must consult a lawyer chances are your landlord has and even if they haven't they've chosen to use court proceeding you're silly to try to contest a court hearing without a lawyer right and the uh even with this moratorium in place many landlords have filed complaints and uh sent the complaint and a summons to the tenant but the summons doesn't have a court date on it and that's a big difference you know before we had uh before covid the summons would have a court date on there and um what eric said we've we've talked about this before how important it is for tenants to do something before that court date because once that the judge signs the judgment for possession there's nothing that we can do with a bankruptcy anyway to stop what's going on that's correct so that's an important so jeff talk about a chapter 13 so we file the bankruptcy before the hearing date and then the next month the landlord will accept regular monthly payments my house must yeah if you want to keep the lease right then um you would start paying the landlord again and the landlord really doesn't have a say in the matter it's federal law the bankruptcy code that allows us to do that and then we kind of divvy up the arrears over a couple years and you make a new payment to a trustee we'll repay the arrears meanwhile you're protected from all your other collection actions and this might transition us well into utilities jeff because i'm guessing what i was going to say is generally all your other creditors are stopped from collection actions and generally not always we can make sure you don't have to pay back any credit cards medical bills driving surcharges and the like and utilities but utilities have always had a special designation in bankruptcy cases um and many many people are behind with you if you're behind with your rent you are very likely to be high with utilities if you think about it um the things you have to pay are your rent food car car insurance and utilities those are those are the basics and if you're behind with any one of those basics you're probably behind with many of them so let's talk about people who are whether you're behind with rent behind with a mortgage if you're behind with utilities there's been a moratorium that also ends this year right yes uh it it was supposed to end when at the end of september but the governor said he was going to give everybody another 90 days to try to work things out with the utility companies so i you know for all intents and purposes it's uh it ends at the end of this month you're right it ended september 30th but the utility companies weren't allowed to shut anything off right it was crazy yeah and of course the uh this this doesn't change the rules that have been in place for a while where if you're below a certain income level the utility companies can't disconnect your heat source during the winter once
and i i want to mention one more thing about the landlord just skip back to the landlord tenant situation it may be that if you're a tenant you don't want to stay there anymore and if because we've been talking about like as if you want to remain there if you want to leave you're going to owe the landlord a lot of money unless you pay them and so if if that's the case we would look at perhaps filing a chapter seven and just erasing your liability which could be pretty significant i mean you could have not paid rent for uh almost two years right right and again most of our clients who come in to see us to do a chapter seven if they're behind with their rent they're ready to move move back in with family often or find a less expensive place to live or they just never liked where they were living and this gives them a fresh start but if you're behind with your rent you probably have other bills and jeff we have ways to help people with credit reports getting a credit report and making sure that they get all their bills the key to a successful bankruptcy is to include all the bills clean everything up so you'll get that fresh start that congress promised you yes that's exactly right and we we're back to utilities i guess and um if you file a bankruptcy what utility companies will do whatever you owe them when the bankruptcy's filed we can erase or you could pay some of it back it just depends what's going on but the utility company will leave that account alone and create a new account for you for the for the service that you use after the bankruptcy's filed which of course you're you've you need to pay for and if you don't then you could have a problem but the bill is much smaller than it was before yeah everything going backwards is just zeroed out more or less yeah keep things simple and everything uh going forward it's your responsibility just like rent just like a mortgage quite frankly excuse me the beauty of a bankruptcy is you're transitioning into the fresh start so the moment you file bankruptcy especially at chapter 13 but either one you then have to take responsibility to start paying your rent again start paying your mortgage again or start paying your utilities again but what got you into the problem beforehand we're going to help you fix that problem and one of the fixes is you don't have to make this huge payment to catch up on any of those bills right it really does help people most people who fall behind with their rent or utilities have had a catastrophe a catastrophic event that caused them to fall behind unemployment illness divorce something but these catastrophic end uh events for most of us do end not for everyone but for most of us to end but you're still left with what the event caused our jobs as bankruptcy attorneys is to make sure the path going forward you won't have that catastrophic event uh pulling you down eric why don't we talk about um foreclosures and sheriff's sales i think that might be next on the list uh the there there has been a moratorium on mortgage companies um conducting a foreclosure generally for most government-backed loans where the united states government guarantees the loan and that uh takes care of about 70 percent of the mortgages that are out there the other 30 percent are not backed by the us government and we never did anything in new jersey to stop those companies from doing a foreclosure they just didn't do it and one of the reasons is well a couple of reasons i think that maybe they felt that it would be a political faux pas to be foreclosing when other mortgage companies couldn't and we had the no eviction rule in place so even if they if even if they did a uh a foreclosure and could have a sheriff's sale and that's another matter the sheriff's in new jersey generally stopped doing normal residential sheriff sales they didn't they just they couldn't they conducted commercial uh foreclosures or if there if the property was unsafe somehow but for the the normal person who's living in a house and they're behind with their um their mortgage the sheriffs would had no sales but they're starting to do that again yes they have they already have started sheriff's sales and i guess jeff beginning in january we're going to see a rush of foreclosures of the none of the government bank mortgages right yes that's going to start going to start again the foreclosure process in new jersey is judicial it's legal it means that there's a summons and complaint a lawsuit is filed if you receive a summons and complaint your mortgage company has hired a lawyer you need a lawyer to help you as well that's the first step second step is at the end game we have to file if you choose to file bankruptcy we can talk about that in a moment but if you file bankruptcy we have to file before the sheriff's sale that's very important again that was changed in 2005 as well yes at possession nine tenths of the law eventually that doesn't work it used to be such a great way to practice bankruptcy law but they really put some handcuffs on us anyway if you receive that newspaper clipping that there's a share of sale against your residents you must speak to a lawyer right away it's better if you speak to an attorney as soon as you get the summons and complaint but you must speak to an attorney before the sheriff's sale date because after the sheriff's sale date a bankruptcy can't help you and you should have certain rights under new jersey to pay the under new jersey to pay the whole balance off but some of the rights are just they're theoretical more than they are practical or realistic so jeff what do we do for people as bankruptcy attorneys if they see us and they've just received the summons and complaint in foreclosure and they want to save their house yeah that's yeah if you want if you want to stay in your house uh then we can certainly file a chapter 13 for you and it would be very similar to the rent situation whatever you're behind on your mortgage we can pay through the chapter 13 trustee over time and the month after we file you're after you have to start paying your mortgage again and the mortgage company has to accept it yes must yeah that's fine and it really works um we've helped tens of thousands of people save their home right did we ever do the math and figure that out well that's a good that's a good uh tens of thousands of people have saved their house through chapter 13 that we have filed and i guess over the last you say five ten years ten years the mortgage company in addition to doing what jeff just described the um arrears cure bankruptcy the arrears are cured over five years three to five years we also see more mortgage companies willing to do loan modification or what they call loss mitigation through chapter 13. basically what that means is they see that you're serious that you're saving your house you filed bankruptcy you're resuming payments the next month rather than do a arrears cure they might rewrite your mortgage and allow you to keep it keep your home through a new monthly mortgage payment and then we just reduce the trustee payment convert your case to chapter seven there's so many there are many tools in our toolbox as long as you see us before the sheriff's out date right i don't want to get too far into the weeds but basically i just wanted to try to explain to people jeff that there are many many options available even if you're behind with your mortgage loan and even if the mortgage company can now start with a summons a complaint right if you want to keep your house we can help you yeah and of course during the uh this moratorium on foreclosures um the mortgage companies have given forbearance agreements to a lot of people yes and told them you know you don't have to pay your mortgage right now that's ending or has ended but certainly at the end of this month it's over with and um the mortgage company doesn't have to do any special deal with you once you're required to pay that money back they could ask for all the money now or if uh they could put it on the end of the mortgage loan if they want to or like eric was talking about you could they could do a loan modification where they might not just put it combine it with what you owe the arrears with what you owe it might actually change not only the term of the loan but also the interest rate to try to keep your payment affordable right um if you are in a loan um forbearance agreement it's very very important that you keep in touch with your mortgage company at least twice a month so that you understand their requirements they understand your ability to pay we recommend you call them twice a week a month they get the name of the person you're dealing with it's very very important yeah now eric and i have talked about these things probably a number of times really in our facebook live presentations but we thought it was appropriate to do it again this week and we're going to have another facebook live next thursday at two o'clock to to go over with people what this means the moratoriums are over with so what can you do and we'll give you some ideas about what you can do and also what the consequences are potentially if uh something's not done right that's the key do something because it's very uncomfortable if you're behind with your mortgage behind you right behind with your utilities we know it we hear it all the time it's very uncomfortable but just pick up the phone give us a call we're here to help you there's the phone i love when they do that pick up the phone there it is yes awesome richard's right on the ball yep so i think that concludes our program for today um if you've been watching thanks for tuning in and uh we'll see you next thursday