Daniel Gershburg

Countless Bankruptcy cases come through my doors and I’m happy to help.  I learned Bankruptcy, primarily, by doing Pro Bono work for the Brooklyn Bar Association Volunteer Lawyers project.  I still do. It allowed me to hone my skills while also giving me an opportunity to give back to the community.  But, for the most part, what we do is reactionary.  In other words, we help people in New York City file for Chapter 7 Bankruptcy after they ‘ve fallen into the financial pit which they can’t come out of.  It’s too late for them.

For years now, I’ve thought there must be a better way to deal with some of the endemic problems surrounding money management in New York City.  You see, many of us don’t know what “credit” really means.  We don’t understand how, even a 100 point difference in your credit score, can mean the difference between being able to afford a certain home or not.  Or how a judgment on your record can come back to bite you ten years down the line, with interest.  Or how saving money in your 401k from the time you start working, can help you out tremendously down the line.  Or…about spending (COUGH).  And so I began searching for a way to educate people about these common pitfalls.  Simple, small things which we need to learn in order to live better lives.  Literally, better lives.

Over the past several months, we met with a wonderful organization, Pencil.org.  PENCIL teams private businesses with local schools in need of teachers, leadership, hands on training, etc.  We discussed the problems facing children today in education.  And we realized that children were really never taught a thing about saving or investing.  No one explained how compounding interest can make them thousands over their lives, and how important keeping a solid debt/income ratio would be for their college loans. There were too many other issues children faced.   But if we were going to do this, we realized we wouldn’t have been able to do it alone.  We partnered up with The Street Academy for Financial Literacy, where I am a proud Board Member.  Street Academy is a grass roots organization comprised of some of the most dedicated people I know.  Their goal is to educate kids about financial literacy and prepare them for the complex world we live in.  In other words, getting to the problem early.  Teaching proper money habits.  We’re teaching the next generation about the mistakes that many have made, and how to avoid them.  I don’t remember the last time I’ve been so genuinely excited to start a Pro Bono program.  But here we are.  We’re teaching the kids at the NorthStar Academy, in Flatbush, Brooklyn starting next week.  We want to expand the program to various schools around New York.  We want to make a small difference in these childrens lives.  We want to, and will, help in any way we can.

We encourage you to learn more about Pencil.org and The Street Academy for Financial Literacy.

Many times, being a Bankruptcy attorney in Brooklyn affords me an opportunity to deal with clients that want to use the process to get rid of most of their unsecured debts and start anew. Having said that, some clients need to understand, that, on their end, this is not a business. That the meaning of the Bankruptcy Code is to provide people with a Fresh Start. If that sometimes entails you having to give up some property, then that doesn’t mean the process itself is tainted. It just means you may have to give up some stuff in a Bankruptcy in New York, sometimes.

Most Bankruptcy attorneys have ads which say “Keep your home and car and still get rid of your debt.” In essence, thats typically true. Since January, when the Bankruptcy laws for exemptions changed in New York, most everyone could keep their home and their car if they file. What those ads don’t tell you, however, are instances where someone has an inordinate amount of cash and still wants to file. Or when someone just received a large sum of money and they have a car that is paid off. In other words, there are various instances where it’s still absolutely to your benefit to file a Bankruptcy (because you owe, you know, like a boat load of money) and get rid of property that isn’t exempt. In other words, filing and giving up $2000 in excess that you have in your bank account. Or, keeping your home, but cutting the Trustee a check for $1000 for the vehicle you have paid up.

What kinds of instances? #1- When you have thousands in credit card debt and you need to file but if you hold off until you spend the money you have in a legitimate legal way, you wont qualify for Bankruptcy. Thats the most important one. Sometimes, I’ll have clients that will qualify under the Means Test, but they have to file, like, now. Like, right now. Because if they wait, even a week, they wont qualify for a Chapter 7. But in order to do that, they have to likely cut a check for a few bucks. Sometimes the clients get upset. But if I told you I’d trade you $100,000 in debt for $2000 over two months, you’d JUMP at the opportunity. JUMP. But, sometimes, when you’re in the midst of a Bankruptcy, you don’t want to do it. You feel like you shouldn’t pay a thing. Get a hold of yourself. You’re being offered the chance of a lifetime.

Sometimes, in this process, you have to step back and realize just how much you’re getting in return. So, my advice is never try to game the system. Never try and take more than what is legally allowed to. Because, in the end, it just doesn’t make any financial sense at all.