Archive for the ‘Bankruptcy’ Category

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Filing Chapter 7 Bankruptcy in Brooklyn when you have a small business

Thursday, February 11th, 2010

Many of my New York City clients have a common question:  Can I file for Chapter 7 Bankruptcy in Brooklyn, Manhattan, etc., if I own a small business.  The answers, with some caveats as always, is yes.

If you own a small business, the Trustee will likely ask you for tax returns for the last few years the business filed, as well as 6 months to one years worth of bank statements.

The first thing you need to ask yourself is:  Does the business have any assets that can be liquidated to pay creditors.  Most individuals do not.  You have an office and a few computers, but you likely dont have 20k servers or John Deere machines.  In that case the Trustee wont care at all about the business and likely wont liquidate a thing.  However, keep the type of business you run in mind.  If you have a dry cleaning business, youre likely to have a bunch of materials that can be sold for some money.  Same goes for a grocery store or a hardware store.  Real estate business is more unlikely (unless you have a considerable amount of comissions going in.)

The Chapter 7 Trustee in Brooklyn or wherever will also want to know how much the business has in the operating account.  Remember, unlike personal bankruptcy itself, listing your business in a Chapter 7 personal Bankruptcy doesnt come with any exmeptions.  If you have 10k in your business account, you cant protect a cent of it (unless its spoken for by other creditors or its their money.)  Keep that in mind.

Also look out for incoming monies.  Just because your business is flat broke now doesnt mean the Trustee wont ask about monies coming in.  If for instance you’re a commission based business, and you have $100 in the bank, but a 20k commission coming in, the Trustee is going to ask about it and want it, so be sure to be cognizant of that before you go see a Bankruptcy Attorney in Brooklyn.

Finally the Trustee will ask if you have partners in the business, as the Trustee cant technically touch the partners share.  If the assets in the business are worth 20k but you have three other partners, the Trustee might not touch the assets given the headaches that would come with it.

The bottom line is dont get scared about filing personal Chapter 7 Bankruptcy in New York City if you own a business.  Just make sure to speak to us about it before you file so that we can guide you about the proper way to file.

Posted in Bankruptcy, Business Bankruptcy, Gersh Blog | View Comments

Staten Island Bankruptcy Lawyer Daniel Gershburg discusses the inevitability of Bankruptcy

Sunday, February 7th, 2010

Ive handled many Chapter 7 Bankruptcy cases for clients in Staten Island, as well as everywhere across New York.  One of the things that I notice the most when a potential Chapter 7 client walks into my office is that clients emotions.  What I mean by that is whether theyve accepted the fact that it is literally mathematically impossible to pay off the amount of debt they have, and therefore that Bankruptcy may be the only realistic solution for them.  I just wish that many of these individuals were able to discover that sooner, as it could have saved them literally thousands of dollars.

Here is what I mean as an example.  If youre someone who makes about $40,000 a year in gross wages (before tax) and you have approximately $20,000 in debt or more, chances are you will NEVER pay off this debt.  If you havent missed a payment, you’re like paying the minimum on many of these cards since it would be implausible that youd be paying the entire amount of the balance and living on 40k a year BEFORE taxes.  If you’re keeping a balance, youre likely paying a rate of anywhere from 10-20%.  If you’ve missed a payment, that percentage likely went up to 30%.  If you do the math, there simply is no way at all that you could possibly make a dent in this debt while continuing to support yourself.  I understand that there are just so many emotions involved in something like this.  Fear, shame, embarrassment.  In any case, you need to realize that when you made these purchases that you had every intent to pay them back (I imagine).  And many of my clients who have finally come to grips with the fact that they need to file have contacted the creditors, but they are simply unwilling to compromise to payment plans that you can afford.

Also, when you settle a debt, you can be taxed on the amount you save as regular income.  So if you settle a 10k debt with a creditor for 5k, you may be responsible for taxes on the 5k you saved as ordinary income.

Look at the end of the day this area of law has more to do with your emotions than anything legal.  We are able to get the vast majority of people through a Chapter 7 case in Staten Island, Brooklyn, Manhattan or anywhere in New York with little or no problem.  But this issue is an emotional one.  Once you come to grips with the fact that there is no way you could possibly pay back this amount of debt you have, the decision can become a much clearer one for you.

Posted in Bankruptcy, Debt Settlement, Gersh Blog | View Comments

Manhattan Bankruptcy Lawyer Daniel Gershburg discusses the Meeting of the Creditors

Wednesday, January 20th, 2010

I am a Manhattan Bankruptcy attorney and have seen my fair share of 341 meetings (better known as the meeting of the creditors).  One of the most important responsibilities I have to my clients, as a Manhattan Bankruptcy attorney, is to prepare them for this meeting.  Why?  Because this is the meeting that really generally decides whether the trustee will close your case or keep it open.  It depends on whether that trustee believes or trusts the answers that you are giving.  Basically does everything make sense or not.  One of the most important facets of this is meeting the bankruptcy debtor or speaking with them on the phone to ensure they are prepared for the questions that will be asked.

What are the most common questions you’ll hear in a New York City Bankruptcy case:

1.  When was the last time you used credit cards.

2.  Whats the most amount youve had in your bank account in the past year.

3. Have you ever owned a business.

4. Is anyone sick or dying and leaving you money.

5. Do you, or have you ever owned any real estate?

6. Do you own a car.

There are plenty more, however, the key, again, is to make sure I prepare my client for that meeting.  If you’re reading this and you’re planning to file for Bankruptcy in New York City, you may think “These are easy questions, no problem.”  The issue is that you generally feel fine at home, but you tend to get nervous at the time of the meeting.  Its normal.  Its somewhat intimidating.  But thats the key to preparing for that meeting.  If we’ve gone over the questions together, you’ll feel much more comfortable on the day of the meeting.  Furthermore, I always tell my clients to show up at least 30 minutes before their meeting time so they can sit in the room and listen to the questions that will be asked.

If you’re prepared for a Chapter 7 Manhattan Bankruptcy meeting, then the trustee will know it, in my opinion, and your case may move smoother along.  Think about it, the trustee has to interview dozens of people a day, many of which are not prepared and are thinking about answers for a long period of time.  If you come in, and already know the typical questions and answer quickly and truthfully, it will lessen the burden on that trustee.  Its what I do for all of my clients and it helps everyone involved in the Chapter 7 bankruptcy process.

Posted in Bankruptcy, Gersh Blog | View Comments

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