The Co-Op, although in my opinion being the red headed step-child of the Real Estate world where “The Board” comes together to eat pizza and laugh at potential applicants, enjoys the same exemptions as houses and condo’s do under Bankruptcy law. Namely, we’re able to exempt up to $150,000.00 in equity in the property(the value of the shares). More importantly, if you’re married and both you and your spouses name are on the co-op shares and both of you file, you can exempt up to $300,000.00. What does that mean for you? Well, I’ve yet to see a co-op with more than $300,000 in equity in it. That’s not to say there arent any. Im sure there are many. But I can tell you that with the new laws, you now have the ability to keep your co-op and get rid of all of your credit card debt.

Theres another thing to note as well. So lets say that you own a co-op as a single person, and the Co-Op has over $150,000 in it. Lets say it’s got $180,000.00 You’re doomed, right?! No. Not at all. The thing is, you have to look at this from the angle of the Chapter 7 Trustee. The Trustee wants to sell the thing and disburse some money to creditors. But, like any other real estate deal, they’ve got to pay everyone thats in line for the money first. What that means is that if there are taxes to pay, like the ever present FLIP TAX and the Real Estate Broker, theres probably not going to be any money left at the end of the day, which means the Trustee may very well abandon the the Unit and give it back to you. Huge caveats here left and right in terms of the details and how to go about this, but the point is just because its over the equity exemption, doesn’t mean you lose your home.

But thats got to be done properly. Documents have to be sent to the Chapter 7 Trustee evidencing all of these figures. They may want to do an appraisal of their own. This is why I always say that if you have any type of assets, trying to do a Chapter 7 Bankruptcy by yourself is a mistake. Speak to someone, you know, who does this like every day maybe.

We had one closing where we needed to close way before our mortgage expired. There were just some pretty serious circumstances surrounding the purchasers personal lives, and they needed to get in there. Initially, I just didn’t think it would happen. Contract stated that there was plenty of time to close. But, to the credit of my clients, they didn’t give up and they kept pushing and pushing and pushing. Sellers initially said “No”, but they finally got into the unit in the time period they needed. Squeaky wheel. Sponsors and sellers dont want to deal with that. Most of the time, if you complain loud enough and long enough, the sellers will in fact give in, or at least meet you half way.

Same thing happened on a similar deal last week for a new construction in Williamsburg. Sellers didn’t want to throw in the paying of transfer taxes (literally tens of thousands of dollars). The Purchasers basically threatened to walk. They meant it. This wasn’t so much of an emotional deal for them as it was a financial one. Purchasers complained and said everyone in the neighborhood had the sponsors pay transfer taxes. You know what? They got it. Sponsors ended up paying.

So the lesson here is (and it was also a lesson for me): Don’t stop being aggressive just because you think the seller is in a position of power, because typically they are not. Sellers still need to move units. They still need cash. The market is still WAYYY in the favor of the purchaser. Be aggressive. Have your lawyer be aggressive. It helps if your lawyer also wears pocketsquares, because that screams “aggressiveness” (even silk ones). The things you think you have no shot of getting are those very same things the seller will likely throw in if you make enough of a fuss.

Springtime is coming. People will start buying real estate in New York again. Make sure you get what you need from the purchase.

Heres a small story and maybe you can relate. I had a client in my office a few days back. Around 60 years old or so. Lost a fortune when the market crashed in 2008. Regular person like me and you. And you could tell that this was an incredibly emotional decision even walking into my office to discuss the filing. Lets face it, no one wants to say, at least initially, that they’re filing for Bankruptcy. I get it. So should the lawyer you choose. This isn’t coming in to claim some prize you won. It’s a heartfealt decision. Many people have sleepless night prior to going to see a Bankruptcy lawyer. Others are worried beyond belief and try to do everything they can do to solve the financial problem without filing (even when they may know in the back of their minds that Bankruptcy is likely the cheaper and better option.) Your lawyer should be cognizant of all of this and LISTEN. It’s so crucial and sometimes so overlooked. You’re not just another client. You have a story to tell. A particular set of circumstances which make the predicament you’re in….yours and yours alone. Look, there are a ton of Bankruptcy attorneys that do a great job out there. But I think it’s vital, and I’ve said this many times before, that you choose someone you feel absolutely comfortable with. As this is likely to be one of the biggest financial decisions of your life. Choose someone who understands what you’re going through and can empathize with your situation, but can also show you that there is a way out of this mess.

We don’t take any client that walks in the door. I know that certain clients may or may not want to do this and may or may not cooperate throughout the process. And just like me, you shouldn’t just pick the first attorney you find. Make sure that when you choose someone you’ve thoroughly thought it through. Again, there are so many people in Queens that want financial relief from their sleepless nights, stress, and the constant calls of creditors (which are insane). The lawyer needs to understand that. It will make the relationship, in my opinion, ten times better.

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.

Case in point.  My client is selling a co-op apartment in  Brooklyn.  Again, she is SELLING the apartment in Brooklyn, not buying it.  Weve found purchasers who are paying cash.  We have a closing date.  But we cannot close because the bank is unable to send us the stock and lease (analogous in some respects to a deed for a home).  Weve called in approximately 10 times (not a typo) and have been on hold each time for approximately 30 minutes.  Th bank cannot tell us why they cant send us the stock and lease and state that someone will get back to us within 24 hours or 2 weeks.  Can you imagine if you called a friend and they said they would either get back to you later today, or Mid February.  Unless this was your mother in law where youd be happy to wait the 2 weeks, you would not be pleased.  We were not pleased.  Also the bank cant communicate with the proper department because that department doesnt have phones.  The dept has live people, and computers, but no phones.  Again Id like to emphasize all we are currently looking to do is pay the bank lots of money but the bank is saying “We know, and wed love to take the money, but we cant take the money, we dont know why we cant take it, and we dont know when we could tell you why we cant take it, but someone may or may not be able to tell you why we cant take it within 2 weeks.”

On another closing, the bank appraised a home for a certain sum and said “Youre ok to close.”  They then came back the following week and re-apraised the house for $50,000 less.  Lets again use a real life example.  I come to you and tell you Id like to buy your Mercedes, and that Id be willing to pay you $20,000 for the car and tell you I’d like to meet you the following week to pay you.  You agree.  The following week I show up announced and say “Let me look at the car again” and after looking at the identical car I tell you I will pay you $14.32 right now on the spot.  Absurd no?  Well folks welcome to 2010, the year when the recovery will hit.

In business, companies are always obsessed with bottom lines, and thats normal.  However, when you’re looking to buy a home in New York City and the lender is telling you that they’re telling you that they dont have phones, there is something wrong.  No business can recover financially if they are acting completely irrationally.  You may be reading this and thinking that there is something more to the story.  Something is missing because it doesnt make sense.  I wish there was.  Our firms Manhattan Real Estate practice has shifted in that we now do so much more on a daily basis for our clients than we ever have just to get them into the homes they wanted.  There really should be no discussion of a bottoming of the market in New York City without discussing why we’re stuck here now in the first place.

So Mr. Sheepshead Bay Real Estate Lawyer, what is the best advice you can when purchasing a co-op in Sheepshead Bay?  Well, what I can tell you is that when you buy a co-op in Sheepshead Bay, or anywhere for that matter, the first thing you should do is do some internet research on the address.  You can try looking on Trulia.com.  But my search would be more general.  There are tons of forums online discussing issues with co-ops.  From aggrieved co-op owners complaining about poor management to lawsuits against corporations, you can find everything.  But thats just the start.  You should also ask your real estate broker about whether they have had past clients in the building and if they could put you in touch with any so you can ask them about their experiences.  Is this out of the box?  Absolutely.  But it works better than many other things out there.  Do your research before you purchase a co-op in Sheepshead Bay.

Great tip, Sheepshead Bay Lawyer Daniel Gershburg, but lets say I am purchasing a co-op in Sheepshead Bay.  Ive done my research, spoken to people in the building, and now I have my interview.  What can I expect?

Anything.  That’s right, anything.  A co-op is a corporation.  The board of directors are therefore making a business judgment as to whether or not you “fit in” financially and otherwise with the building.  Now unless you have a habit of fighting pit bulls in your apartment, you’ll likely be fine so long as your financials are ok.  Having said that, IF you are rejected for one reason or another, the co-op technically does not have to disclose the reason you were rejected, other than saying, “Sorry you can’t live in this co-op in Sheepshead Bay, try Brighton Beach.”  Yes yes you can try and sue and all those good things, but it will cost you money and will usually not leave you in any better position.  The best way to avoid this embarrassment is to literally be as prepared as possible.  Each co-op has a “package” which has to be prepared including your financials,references, etc.  Make sure you go over this diligently before the meeting and everything is complete.  Make sure you look prepared for the meeting.

When you buy a co-op in Sheepshead Bay, when will the closing take place?

This is one of those “Why is the sky blue?” questions.  There are so many variables involved here.  Typically a closing for a co-op in Sheepshead Bay will take place immediately after the co-op approves the individual and the bank clears financing.  There are, however, many hurdles and obstacles that your attorney will have to navigate for you.  Sometimes the bank is late, or they haven’t apprised you of issues they have, which delays financing.  Sometimes the board won’t meet for several months, thereby delaying the closing and causing you to make sure your rate for your loan is locked with the bank.  Sometimes the management companies attorney will request a delay in closing to make it occur at a convenient time for them.  There are literally multiple variations that could delay your closing, so make sure you choose an experienced Real Estate Lawyer in Brooklyn to help you through this.  It’s not a sales pitch, its reality.  Just ask anyone who has gone through the process.