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News / Articles / Blog

June 15, 2011

Newsletter

Strong Credit System Means A Strong Economy

The health, stability, and strength of a nation’s economy is directly linked to its banking system. The health, stability,and strength of a nation’s banking system is directly related to the fairness and accuracy of its credit reporting system. Congress realized how inaccurate credit reports could damage the banking system and consumers, and therefore passed the Fair Credit Reporting Act.

This act is designed to protect consumers by requiring credit reporting agencies (“CRA”), to furnish correct and accurate information to any company requesting a consumer credit history. Any consumer whose credit application is denied must be told specifically the name, address, and telephone number of the credit reporting agency that provided the consumer report.

Any inaccurate information can be disputed at the request of the consumer. If a credit reporting agency is informed that a consumer’s file contains inaccurate information, then the CRA must investigate the inaccuracies.

If the CRA determines that there is inaccurate information in the consumer’s file, it must either remove it or correct the information within30 days.If the Fair Credit Reporting Act is violated then several different federal agencies, including the Federal Trade Commission,may enforce the act. Additionally, consumers may sue in either federal or state court.

In these difficult times, the Fair Credit Reporting Act gives consumers a valuable tool to protect their credit and gives lenders a solid basis for making informed lending decisions.

Our attorneys are experienced in handling credit matters.

Paid Family Leave

By: Maurice W. McLaughlin

Family leave in New Jersey is governed by state and federal law. Both the Federal Family and Medical Leave Act (FMLA)and New Jersey Family Leave Act (FLA) have long provided for 12 weeks of unpaid family leave for most employees who work for employers with 50 or more employees. However, in2008, New Jersey became the third state to offer paid family leave when Governor Corzine signed the New Jersey Paid Family Leave Act.

Paid Family Leave Act

The Paid Family Leave Act provides for 6 weeks of paid family leave to care for a new born.

The Paid Family Leave Act provides for 6 weeks of paid family leave to care for a new born or newly-adopted child or a family member with a serious health condition. Unlike the FMLA and FLA, which are still in effect,the Paid Family Leave Act applies to all employers and all employees of companies subject to the unemployment compensation laws, regardless of size - in other words, most employees.

Eligible employees may receive two-thirds of their salary up to a maximum of$524 per week. The benefit swill be paid by the State and funded through a tax withheld from all employees’ paychecks; it is estimated that the tax will be 64 cents per week, or $33 annually.Thus, employers will not have to incur any direct costs,although large employers will still bear the costs of administration and temporary replacements,which they had already borne under the FMLA and FLA, and smaller employers will bear these costs for the first time(companies which used payroll services may see no new costs at all).

Under all of the family leave laws, employees are only eligible for leave if they have worked at least 20 weeks. Since the Paid Family Leave Act provides for only 6 weeks of paid leave, if the employee wishes to take the remaining6 weeks of their leave under the FLA and FMLA, it will be without pay. Under the Paid Family Leave Act, the employer can substitute 2weeks of vacation time for 2weeks of paid leave; under the FMLA and FLA, the employee can be required to expend all of their vacation time while on leave. The employees required to give advance notice in situations where is it possible, such as child birth or adoptions .Documentation is required. Employers cannot retaliate against an employee for requesting family leave.

It is important to note that while the Paid Family Leave Act provides, it does not expressly protect the employee’s position while on leave. Thus,an employee on paid family leave should also designate the time as leave under the FLA and FMLA so that their position is protected. This protection applies only to employers with 50 or more employees, however, so employee sat smaller companies will not be able to protect their positions while they are on family leave. It remains to be seen if the courts will interpret the Paid Family Leave Act as protecting an employee’s position, but given its language no employee should count on this protection.

Both employers and employees should be aware of their rights and obligations under these laws. Employers need to be aware of the various requirements which the family leave laws place on them. Employees should be aware of their rights, and their requirements as well. Our attorneys are knowledgeable in all aspects of employment law,including family leave, and are experienced in representing both employers and employees.

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A Guide To Property Tax Appeals

By: Jennifer C. Meusel

“Should I appeal my current property tax assessment?” is a question we often hear. Many times the answer is no, but when the answer is yes, a property tax appeal can save the property owner significant sums of money.

The question is not an easy one to answer. You must consider your current assessment, which is supposed to be the fair market value of your property on October 1st during the preceding year, and your municipality’s equalization ratio. You can get this from your tax assessor or call us. Then,in order to prevail in a property tax appeal, your property must be overvalued by more than 15%. These determinations must be made shortly after receiving your Assessment Notice. Property tax appeals must be filed within 45 days of the bulk mailing of the Assessment Notices. When you appeal your property tax assessment,the burden of proof is on you to rebut the “presumption of correctness” of the assessment.

To determine if you may have a valid appeal, determine the fair market value of the property. Then multiply the fair market value of the property by the municipality’s equalization ratio. Then compare that number (“the equalized fair market value”) to the municipality’s assessment. If the municipality’s assessment exceeds the equalized fair market value of your property by more than 15%, you may have a valid tax appeal.

When you file an appeal it is important to have an appraisal of your property prepared by a competent appraiser based on comparable sales to back up your determination of the fair market value of your property. Without an appraisal,it is very difficult to rebut the presumption of correctness. However,in the end, it could save you a significant amount of money, quite possibly for many years to come.

Our attorneys have extensive experience in handling tax appeals.

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Harassment and Anti-Discrimination Policies

By: Maurice W. McLaughlin

New Jersey protects employees from discrimination or harassment in employment,and many other areas, for many reasons, including race, creed, religion, color,national origin, sex, pregnancy,age, handicap, membership in a labor organization,liability for service in the United States armed forces,gender identity or expression,affectional or sexual orientation,marital status, family status, nationality, civil union status, domestic partnership status, genetic information,disability or atypical hereditary cellular or blood trait of any individual, because of the refusal to submit to a genetic test or make available the results of a genetic test to an employer, and any other characteristic protected under federal, state, or local laws. It also prohibits retaliation because an employee objected to illegal conduct.

The firm’s attorneys are very experienced in representing both employers and employees in claims of discrimination and harassment. However,the best outcome is if the discrimination is prevented in the first place. Therefore, an effective, written anti-harassment and anti-discrimination policy is a valuable tool for every business.

These policies should lay out exactly what discrimination and harassment are, that it will not be tolerated, and procedures for employees to follow if they believe that they were discriminated against or harassed because of their background or objections. Ideally this should prevent the problem, but even if it does not, it gives the effected employee a means to solve the problem before it gets out of hand.

Moreover, New Jersey’s Supreme Court has issued many rulings on these policies.For instance, if a company has a policy with procedures to report harass mentor discrimination and the employee fails to utilize it,the company may use that failure as a defense.

Our attorneys are available for employers to help them write anti-discrimination and anti-harassment policies, and to defend against claims of harassment or discrimination.We are also available for employees to counsel them on their rights, and to represent them if those rights have been violated.

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Sale of Industrial Property

By: Maurice W. McLaughlin

The sale, purchase or closure of industrial property involved with “hazardous waste” — including merely storage — is controlled by New Jersey’s Industrial Site Recovery Act, commonly called“ISRA.” ISRA, through several amendments, has been governing industrial sites since 1983.

The United States Supreme Court

The United States Supreme Court. The Courthouse was designed by Cass Gilbert and completed in 1935. Upon the laying of the cornerstone, Chief Justice Charles Evans Hughes commented, “The Republic endures and this is the symbol of its faith.”

The Legislature’s goal is to limit the cost of abandoned contaminated sites by requiring that industrial sites be inspected and a cleanup plan put in place before industrial property is transferred or abandoned. Owners and operators of the site are responsible.

The first step is to determine whether the property is considered an “industrial establishment.”If it is then, ISRA is triggered.

If ISRA applies, the owner or operator must notify the Department of Environmental Protection(:NJDEP”) prior to a transfer or closure. The owner of operator must then either obtain a “no further action letter” from the NJDEP or enter into a remediation agreement with the NJDEP. Generally, this means that the owner or operator will need to have an engineer conduct a preliminary assessment of the property to identify any “areas of concern” and a site investigation to see if hazardous materials require remediation. If contamination is found, a “remedial investigation” must be completed and a “remedial action work plan” entered into between the owner or operator and the NJDEP. These requirements are quite technical and generally require lawyers for legal compliance and environmental engineers for the technical details.

Compliance with ISRA is not optional. Failure to comply with ISRA can result in a fine of up to$25,000 per day. Responsibility to comply with ISRA is always on the seller, but buyers and sellers can agree to shift responsibility to the buyer.This makes the contract for sale extremely important. Negotiations are critical — both buyers and sellers need to ensure that they have protected themselves.

Our attorneys have extensive experience in the sale of industrial property.

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Personal Bankruptcy

By: Boris Peyzner

Our nation has had laws providing for bankruptcy protection since its founding;indeed, the Constitution specifically allows Congress to enact bankruptcy laws. Congress long ago decided that society was better served by giving debtors a “fresh start” to continue as productive citizens rather than drowning in debt. However, Congress also determined that creditors should recover the maximum amount possible while still giving debtors their fresh start. Our bankruptcy laws have been amended many times over the centuries,but this is still the basic framework by which our bankruptcy system operates.

United States Bankruptcy Court

Bankruptcy proceeds in the United States Bankruptcy Court

There are two main types of personal bankruptcies: Chapter 7 and Chapter13. In both, collection efforts are“stayed” during the bankruptcy proceedings.Also, in both people must complete credit counseling before filing.

Bankruptcy proceeds in the United States Bankruptcy Court. Proceedings in New Jersey take place in the United States Trustee’s office and United States Courthouse in Newark, Trenton,and Camden, depending on where the individual lives.

Filers must include all their debts. Creditors will be notified and must file a claim with the U.S. Bankruptcy Court. Debts which are not listed cannot be discharged or reduced. Likewise, all assets must be listed; assets not listed cannot be protected. Misrepresentations on a bankruptcy petition are federal crimes.

Chapter 7 provides debtors a “fresh start.” However, the means test forces people into a Chapter 13.

In Chapter 7 (“liquidation”), debtors receive a discharge of their dischargeable debts; debts such as taxes and student loans cannot be discharged. However, in return for the discharge debtors must surrender all of their“non-exempt” property. Typical exemptions include$20,200 in equity in a debtor’s home (or $40,400for married couples);$3,225 in equity in a vehicle;social security; unemployment benefits; veterans benefits; alimony; child support; and tax exempt retirement accounts. If property is exempt, it maybe retained by the debtor;if it is not, it will be included in the“bankruptcy estate” and used to pay creditors. Property not listed on the petition, is not exempt.

Chapter 13 (“reorganization”) allows for retention of more assets, but also requires at least partial repayment of debts. Secured debts (debts with collateral,such as home mortgage or auto loans) must be paid in full if a person will keep the home or vehicle. Unsecured debts can often be reduced under Chapter 13 Plans.

Most people prefer Chapter 7 because of the “fresh start” discharge. However,many people are forced into Chapter13 because of the “means test”adopted by Congress in 2005, which requires a person whose income is above the state median income to file Chapter 13, not Chapter 7. In New Jersey the median for a single person is currently $58,107, and $99,474 for a family of four. Chapter 13 requires that a portion of debts be paid back over time before discharge. However,Chapter 13 can be preferable in cases where there is significant equity in a home.

Creditors can attack exemptions or reductions in many ways. For instance while a debt may be discharged in Chapter 7, a secured creditor can still foreclose on the collateral — such as a home. Also, creditors can attack exemptions as fraudulent or claim that there are hidden assets. The trustee may attempt to seize: Assets which were transferred in anticipation of the bankruptcy; judgments for child support; alimony; student loans; drunk driving or criminal fines; and judgments for fraud,malicious injury or embezzlement cannot be shielded. Creditors may object to discharge of debts through “adversary proceedings”which are essentially a lawsuit within the bankruptcy case. However,time limits are short and strictly enforced. Rich debtors used to move to Florida and buy expensive homes to take advantage of its unlimited homestead exemption; however,in 2005, Congress required a 2year period of residence to take advantage of a state’s homestead exemption,and 3 years and 3 months to shield more than $125,000 in equity.

In 2005 Congress passed the Bankruptcy Abuse and Prevention and consumer Protection Act. This stiffened many of the requirements for obtaining bankruptcy protection, particularly under Chapter 7, such as the “means test.” The fear was that consumers would lose their protections. However,while the “means test” leads to more people being prevented from obtaining Chapter 7’s discharge and forced into Chapter 13, bankruptcy remains a valuable tool to get out from under the crushing burden of debt.

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Spotlight on Our Attorneys: Jennifer C. Meusel

Jennifer C. Meusel

Jennifer C. Meusel

Jennifer C. Meusel is of counsel to the firm.

Jennifer joined us after a career as a civil litigator in Manhattan. Prior to her career in law, Jennifer was an assistant treasurer at a large international bank.

Jennifer handles a wide range of matters with an emphasis on real estate,estate planning and administration,commercial transactions, and civil litigation. While Jennifer spends much of her time on transactional and estate work she also has an exceptional record as a litigator, particularly in property and estate matters.

Jennifer received her bachelor’s degree in psychology with a minor in business from the State University of New York at Albany. She received her Juris Doctorate from New York Law School, cum laude. At New York Law School she was a member of the Moot Court Association. Jennifer is fierce in oral argument.

Jennifer is admitted to the bar in New jersey and New York.

Jennifer lives in South Orange with her husband and two sons.

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Elder Care Planning

By: Jennifer C. Meusel

There are many things mature persons need to plan for. An often overlooked area which requires careful planning is potential long term care. More than half of the population aged 65 and over will require some form of long term care. The cost of healthcare continues to increase and government support programs are being cut. The median cost of a one year stay in a nursing home in New Jersey is approximately$100,000.

The Old Essex County Courthouse

The Old Essex County Courthouse, in Newark, was designed by Cass Gilbert and built in 1906. The Courthouse recently reopened after an extensive renovation lasting several years.

The five possible sources for payment of long term care are: personal funds, long term care insurance, Medicaid,Medicare, and Veterans Administration programs. If you are a veteran entitled to those benefits, are eligible and can afford insurance, or are able and willing to pay for the care, then perhaps you do not need to plan. However, the majority of the population does not fit into any of those three categories.

Medicare will only provide coverage up to 100 days. The patient must have spent three days in a hospital and enter long term care within30 days of the hospital stay. The care must qualify as medically necessary. This is avery limited option.

Medicaid is more often utilized to pay for long term care. But there are still specific rules to qualify for Medicaid coverage—rules with negative consequences.

In addition to other requirements,an individual must:

  1. be a resident of the state of New Jersey;
  2. be 65 or older (unless blind or disabled);
  3. be medically eligible;and
  4. have extremely limited income and assets.

Typically, planning is required to ensure the limited income and assets requirement is met without having to lose the things applicants worked for all their life to acquire. Under the Medicaid “Look-Back” Rule for the transfers of assets, any transfer of assets for less than fair market value during the five years prior to the Medicaid application must be reported on the application and are subject to penalty, and if an asset results in the imposition of a penalty it also constitutes a criminal offense. Failure to plan properly may thus result in losing property to the government.

Planning and counsel are thus imperative when making provisions for the possibility of long term care.

Our attorneys are available to assist you.

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