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Manhattan Chapter 7 Bankruptcy Attorney discusses the emotions behind filing for Bankruptcy

Monday, August 9th, 2010

When you’ve dealt with as many Chapter 7 Bankruptcy cases in Manhattan or Brooklyn or Queens as I have, a particular type of client emerges. You know, almost within the first few minutes of walking into the door, whether that person will be filing Chapter 7 Bankruptcy at that time….or not. You know because its an emotional response.

The first type of client, lets call him/her, “The Filer” (I didn’t go to Law School for originality) comes in and says “Hi, Im in debt way over my head and I need to file for Bankruptcy”. That person, as is pretty obvious, is likely filing for Bankruptcy right then and there. They’ve gone through the options, figured out they don’t make sense and has decided to take control and get out of this debt.

The second type of client is the “Meh” client. This client comes in and knows that Bankruptcy will likely be their best option, but they still have a multitude of concerns. Everything to “When is my credit coming back” to “What happens if I get a higher paying job after filing for Bankruptcy.” However, this client, emotionally, is also ready to file. They just need some reassurance that this is not financial armageddon.

The third type of client is the “Cmon” client. Ive had two of these in the past week. It’s an odd situation. This type of client is different from 1 and 2. They want to be re-assured that Bankruptcy ISNT right for them. And for some people, its not. People who have a small amount of debt and a large amount of income. People who have a large (over $100,000) amount of equity in their homes. People who own brand new cars outright. But many of these people that come see me do not have this issues. They simply believe that Bankruptcy is a trick. “What do you mean I get to get rid of this debt.” “Why wouldn’t everyone file for Bankruptcy then?” “Are you a cop? (j/k)” In any event I explain to these clients that they arent emotionally ready to file (like Jennifer Love Hewitt in the Ghost Whisperer) and that they should take some time to think over their options again. Many of them are in such financial dire straits that there is literally nothing that will get them out of their hole other than Bankruptcy, but they refuse to accept it, and there is only a limited amount I can do as a Bankruptcy attorney to get them there.

Its my pleasure and realistically I am blessed that so many clients meet with us on a weekly basis to discuss their options. Its just that at the end of the day Chapter 7 Bankruptcy in Manhattan is as much an emotional decision as it is a legal one.

No matter what client you are, we’d be more than willing to talk to you about your options.

Posted in Cars in Bankruptcy, Co-Op, Credit Cards, Debt Settlement, Gersh Blog, Homes in Bankruptcy, Jobs and Bankruptcy | View Comments

Updated New York Bankruptcy Limits Means Thousands more will be able to keep their homes and cars and still file

Thursday, July 15th, 2010

You may now be able to file a Chapter 7 Bankruptcy in New York City and keep your home if you have under $300,000 in equity in it under proposed new limits in New York.  Under the new law, waiting to be signed by the Governor, the exemption limits for a house would be increased from $50,000 for a single filer to $150,000 and from $100,000 for a joint filer to $300,000 for joint filers.  That, my friends, is huge.  What that effectively means is that if you own a condo, or home in New York City, and your mortgage is, for example, $300,000, your home could be worth up to $600,000 and if you file the Trustee is not allowed to take your home!  I can’t tell you how many more clients will be able to get a fresh start in Bankruptcy when this bill goes into effect.  Additionally, the exemption for equity in a vehicle will rise from its current exemption of $2400, to $4000!  Again, while that may not seem like a ton, most vehicles do not have over $4000 in equity in them, unless you put down a huge downpayment.  Lastly, and perhaps most importantly, when you file Bankruptcy in New York, you’ll now be able to chose between the New York laws surrounding Bankruptcy OR the Federal exemption limits.  New York previously did not allow you to make this choice. Practically speaking, this helps those without a home more than anything else, because there is a wildcard exemption under Federal Rules.  In English, that means that if you have some cash, but no home, chances are you’ll get to keep the cash under the Federal exemption laws (of course each case is different).  Very very excited and happy about this as you all should be.  Once we hear more news, we’ll absolutely pass it along to you.

Posted in 401k, Bankruptcy, Business Bankruptcy, Cars in Bankruptcy, Gersh Blog, Homes in Bankruptcy, Jobs and Bankruptcy, Mortgages | View Comments

When should I file for Bankruptcy in New York City?

Tuesday, May 11th, 2010

Most of my clients come into my New York City Bankruptcy office and say “I should have done this a while ago and saved myself thousands of dollars.”  They say this and I believe what they’re saying is completely accurate.  The reason is this:  Many people view filing for Chapter 7 Bankruptcy in New York as a completely emotional decision.  They figured that they would “never find themselves in this situation:.  Or some other clients would say that they  felt guilty about discharrging credit card debts when they believed they owed money.  While some others mistankanely believed that they would lose their house, car, jobs, pets (yes im serious), you name it.  The truth is that had they made the step to file for Bankruptcy months earlier, they would saved hundreds and likely thousands of dollars in minimum payments to credit card companies (when mathematically speaking they wouldnt have been able to pay off the balances for decades (yes im serious).  They would have also realized that they could keep their property in almost all instances.  And finally, and I think most importantly, they would start rebuilding their credit almost immediately.  Because thats what bankruptcy allows a client to do.

Look, no one ever thinks they are going to be the ones sitting in a Bankruptcy meeting and having their debts discharged.  Its clearly not a life goal.  But that doesn’t mean that once you are in a situation like this, that you should do everything you can to avoid it, even at your emotional and financial peril.  had clients who weren’t sleeping for months prior to filing.  Clients who refused to use their own checking accounts for fear of having it frozen, or having their wages garnished.  What I’m saying is that Bankruptcy affords you a way out of this financial mess with a very straightforward procedure.  it allows you to restart your financial life, and in all honesty, your entire life, all over again.  So before you fork over your next minimum payment of several hundred dollar to a credit card that you know you’ll never be able to pay Ive off, at least speak to a Bankruptcy attorney as one of your options.

Posted in Bankruptcy, Business Bankruptcy, Cars in Bankruptcy, Gersh Blog, Homes in Bankruptcy, Jobs and Bankruptcy | View Comments

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