A few months ago, we began to sit down and figure out what the direction of the Firm would be, moving forward, as we’ve grown since 2010.  And we began to realize a few things:

1. The area of Bankruptcy law is getting more crowded in New York City as more and more attorneys are coming into the practice and each website slowly begins to look almost identical to one another.

2. Many people were (are) coming to us and complaining about problems with receiving a loan modification even when their lender told them to stop making payments (thus ruining their credit). Now these same people face foreclosure in New York.

3. We like doing work for the most underprivileged in our New York City area but realized we could do more.

4. I like donating money to charity.

So, over the next year, here’s our plan:

While I’ve no doubt that you like reading the blog (except the emails I receive that say  ”I don’t like reading your blog.”) I overwhelmingly hear about how much you prefer our videos. So, we’re going to give you more of that.  In early 2012, we’ll roll out a video page that, I think, is unlike anything you’ve seen before on a law firm’s website.  As always, we’ll ensure that the videos are clear and understandable.  But we also realize there is not a “one size fits all” approach to either Bankruptcy or Real Estate, and so our videos will be more tailored to you.  Personalized.  They’ll answer questions directly.  Why?  Because there is so much out there on the internet, and the last thing you want is to research for hours and fail to find anything that address your particular situation.  In other words, I think we can do it in a different way that will be more easier, more direct, and more appealing for you.

Another issue we’ve identified is how many people across New York City have been victimized by their own lenders when it comes to loan modifications. I say victimized sincerely.  Client after client complains about listening to their own lenders advice on not making future payments, to their detriment.  We hope to change that.  In 2012, we’re going to substantially expand our presence in Foreclosure Defense in New York City.  It’s one thing if “Loan Mod USA “(fictional name) tricks someone into believing they can reduce their principal and payments.  It becomes quite another when the very bank that financed your home is telling you to take steps that hurt your credit score, and then foreclose on that home.  We hope to change that, and we believe we will. Look for a Gershburg Foreclosure Defense site in January 2012.

I’m perhaps most excited to address #3 and #4 above.  Ever since I established this practice five years ago, I believed it was imperative that I give back to the community in the form of Pro Bono work.  The reason?  I basically learned the practice of Bankruptcy through doing volunteer work at the Brooklyn Bar Association.  Each time I did a pro bono case I felt as if I was doing something good for the Brooklyn community.  Is it cliche and cheesy?  Maybe, but it was and continues to be, quite important for me.  Having said that, at the time of this blog, the Brooklyn Bar Association has 30 open Pro Bono Bankruptcy cases waiting to be filed.  I’ve called them and said that my firm would personally take on each one of them in 2012.  We hope to bring the open case load down to 0 by December of 2012.  Why?  Because it’s important for us and it’s the right thing to do.

This year, we’ve been able to donate money to the Wounded Warrior Project, an amazing organization that helps develop programs for  severely wounded  Vets come back home.  Also, in conjunction with the Street Academy for Financial Literacy and an absolutely amazing organization, Pencil.org, we’ve been able to bring Financial Literacy programs to a middle school in Brooklyn, and we are eager to expand this, with Pencil’s help, to several schools across Brooklyn in the coming year.  We’re teaching kids the value of a dollar and how to save it.  We’re teaching them about credit and debt and the relationship they have.  And we’re teaching kids good money habits that can transform their lives as they grow older.

In addition, the communities where our offices are located (one in TriBeCa and one in Sheepshead Bay) are incredibly important to me.  I’ve lived and worked in both areas and they are close to my heart.   In 2012, we ‘ve pledge to donate up to 10% of the profits of Daniel Gershburg, Esq., P.C. to various charities working in both areas (email us if you know of worthwhile charities in either community). Beyond that, we’re putting even more of an emphasis on doing volunteer work .  In fact, starting in 2012, our staff they will receive paid days off for doing volunteer work at the charity of their choice.

So, why am I telling you all of this?  First, because I think it’s time we did this.  I’m incredibly happy with our website, but it’s time we do something different…again.  I think that law firms and social media and tech are a great combination. In fact they’re so great that everyone is doing it. In fact so many people are doing it that you can’t tell the difference anymore.  Everyone is on Facebook and Twitter and LinkedIN and that’s fine. But this blog has never been here to scream “Look at us, we’re great!”; That’s unethical.  This blog and site were designed to serve a purpose, which was to make finding the information you need easier for you while you search at work.  We hope to do that with our new video page.  We hope to do that with our new Foreclosure Defense Page.  And, most importantly, we hope to do that by doing things you can’t possibly do online.  We hope to do our part in changing our communities.

I wish you the very best in this holiday season and the New Year.

-Daniel

If she had a large amount of debt, I could help her.  If she had any debt, I could help her.  I could file a Chapter 7 Bankruptcy in New York for her and I could make sure she wouldn’t have to pay any types of credit card bills anymore.  If she had past due medical bills I could easily get rid of those also.  But that’s it.  That’s the most infuriating part.  I could help her get rid of nasty credit collectors calling her, or idiotic law firms that dont follow protocol, freezing her bank accounts without notice.  But I can’t really get her paid, or on her feet.  I can’t really help her afford luxuries like toothpaste.

And before you accuse me of being a bleeding heart, understand that I am 100% for personal responsibility.  But more and more I’m seeing clients who are working and working and they can’t possibly make ends meet.  I have a client who works a night shift….and a day shift, and he can’t afford his rent and he has no family to move in with.  Another, who bought a house, was told not to make payments to get a loan mod, and now faces foreclosure.  There must be a way to help these people.

Which brings me to my next point, which is that you can’t just throw money at the problem.  I donate a specific percentage of my profits to various organizations in an attempt to give back.  In 2012, we will donate 12% of all profits to various local organizations.  Everything from education for children in Kenya, to the Wounded Warriors Project (which is an amazing charity, by the way.)  But it’s not enough to actually transform someones life.  Thus far, my firm has partnered with The Street Academy of Financial Literacy and Pencil.org to bring Financial Literacy lessons to kids across Brooklyn.  But again, I can and should do more.  Which is why I’d like your ideas this holiday season.  As we embark and yet another few weeks/months where we say thanks for all we have (even if our families are insane…yes, yours too), we should also reflect on meaningful ways of giving back.  If you’ve any ideas/thoughts/etc., on how my law firm can really make an impact in Brooklyn or Manhattan, feel free to email us.  It’s not just donations, though.  I’m looking for real, concrete ideas to help people like the woman who lost her job when St. Vincents closed down. Or anyone you know who is trying to make ends meet.  If we can implement them, we will…and immediately.

I look forward to hearing from you.

Around the same date that MF Global filed for Bankruptcy protection, I took a cab from my Sheepshead Bay office to my Manhattan office.  I usually take the train, but that day, for one reason or another, I did not.  The driver picked me up in a beat up old Toyota 4Runner with horns on the grill.  That’s horns on the grill.  The conversation would change my perspective on things for some time to come.

The cab driver told me about working for a prominent law firm a few years back, only to be let go when the firm went belly up after some accusations of wrongdoing (happening more often these days).  He couldn’t find work in the legal sector because of his affiliation with his former employer, so he did anything he could to feed his family.  I mean anything.  He did construction work until the gas it cost him to get to his job in Connecticut ended up costing him almost as much as he was making for the day.  He worked in a pizzeria.  He sold trinkets on the street.  During that time his wife left him.  He told me that he never thought that would happen.  17 years of marriage down the drain once the money stopped coming in.  But then a funny thing happened.  I noticed he never once frowned or complained.  He took what life gave him, what this crisis gave him, and with it he shaped a new life.  He’s happy because his “scenery changes every day” while driving a cab.  He met someone new, with whom he fell in love; with whom he sells vitamins (yes, I’m serious) for extra money.  She treats him incredibly well, he told me.  And he misses none of the things he thought he would.

When the cab driver pulled up to my street, I asked him how much the cab fare was and typically when a driver doesn’t know he’ll call the dispatcher and ask.  But instead, said “I dont know. Whatever you think it typically is.”  I paid the man and thanked him.  I did so sincerely.

Somewhat dumbfounded, I stepped out of the cab and looked across the Financial District of Manhattan.  The area where bankers make money for themselves, and for New York City.  Where Occupy Wall Street, whether you agree with them or not, protests peacefully not two blocks from the epicenter of the financial world against companies and government allegedly run amok. And I thought of MF Global, and the millions of dollars missing from its books.  The countless lives likely harmed as a result.  And of a Governor who was painfully close to becoming the next Treasury Secretary.  I came to the realization that the storm is far from over.  The Country continues to balance precariously between a rebound and falling back into this deep recession that we can’t seem to lift ourselves out of.  But amongst all of this lost money and the realization that the security blankets that kept us safe at night were nothing more than a mirage (a hope or a dream), we still continue to persevere and move on and build new lives.  The very companies that were supposed to keep books and manage risk and ensure they were safe from implosion are the ones that are showing us that no one and nothing in this climate is immune.  That people who have gone broke have nothing to be ashamed of.   Understand that if you find yourself in the same position as this cab driver, or of any of your neighbors, that you’re not alone. In fact, you’re likely not the minority anymore.  The pillars that will support us as we rise again wont be companies like MF Global, but rather the hard workers that we are surrounded by every day.  The undefeated ones who refuse to accept the cards that have been dealt and instead make their own deck to play with.  This cab driver reminded me how difficult times are, and how much better they will ultimately be.  All of my clients, past, present, and future should take solace in that.

The rest of us, to the best of my knowledge, are not immortal, and therefore we have to do some prudent financial planning going forward. Our life expectancies are going up. Our money has to stretch farther than ever. Which means we have to save more for retirement. Which means we have to put more money away now towards retirement. Which means we need to free up more money to put away but not paying for unnecessary expenses. Which means I have absolutely no idea whatsoever why you are paying credit card minimums when you are so neck deep in debt that you will never, ever, ever, be able to get out of it by doing the things you’re doing now. Like that buildup? It was OK. No big deal.

Heres my point: You have to assess your financial situation immediately and take steps to rectify it and put you back on the path you need to get on. If you’ve got a ton of credit card debt that you know you wont be able to pay off, and your sacrificing putting money aside because of it, then maybe you should stop. Or at least talk to a Bankruptcy Lawyer. Almost every single one of my clients, before they came to my office, thought that their debt was manageable. But how can you manage interest accruing at 30%. The Mafia doesnt charge that (there, um, is no mafia).

I’m not telling you to simply stop paying your bills and put money aside. Specifically if you’re not in over your head. But I am telling you that if you realize you’re only making minimum payments, then you have to have a conversation about what to do going forward. You can’t simply say “I was doing OK because I was paying minimums”. It would be weird if I owned a car and could only afford to put one gallon in at a time. Maybe thats telling me something. Maybe I shouldn’t own a car. Maybe I should figure out why I keep driving my car when I can only put in one gallon at a time.

Realistically speaking, you know when you’re in over your head. There is no magic formula. You just know. You might want to trick yourself into thinking if you just wait another year you’ll get that promotion or someone will give you money or your grandma will die and leave you the money in her will, but that likely wont happen. More importantly, thats another year of bad credit. Another year where you haven’t contributed to your IRA, 401k, your kids college fund. For what? For the sake of saying you’re paying minimums on cards you wont be able to pay off? Or making interest only mortgage payments on a house you know you can’t afford.

Its time to have a conversation with yourself. My grandmother may be immortal, but we are not. We’re going to need money to live on.

1. ” Filing Bankruptcy will ruin my credit for 10 years.  My neighbor told me.”  Your neighbor is a liar and is jealous of the view from your apartment and shes much too loud on the phone.  Bankruptcy will IMPROVE your credit almost overnight.  You heard me.  Improve.  As in get better.  If you’re tens of thousands in debt and missing payments, trust me, your check to settle Debt #1 out of 15 is not going to do much for your credit.  Bankruptcy, on the other hand, can greatly improve something called your Debt/Income ratio, which effectively comprises about 35-40% of your score.

2.  ”They’ll take my couch if I file Bankruptcy.  They’ll come in and go through my stuff”  Stop this.  Who will?  The US Marshalls?  They want your Levitz couch from 2002?  Big market out there for your coffee tables?  In all seriousness there are enough Bankruptcy exemptions as of January 2011, that we can confidently state that you likely wont have any issue with used furniture, etc.  It just doesn’t really happen.

3.  ”I own a home and Im scared”  If we file under the New York Exemptions, you’ve got $150,000 in equity you can protect in your home.  $300,000 if both you and your spouse are on the deed of the home and you’re both filing.  Next.

4. “It feels weird to file Bankruptcy.”  I know, it feels weird to get a Mud and Cucumber facial too, but you feel like a million bucks at the end (not that I know….seriously not that I know).  I know it feels weird, and you don’t want to do it, but you do it because you want to open up a bank account again and not be scared that someone is going to freeze it or garnish your wages.  You do it because you want to sleep at night and not worry about $30k in debt growing at 30% interest.  You did it because you want a fresh start.  You feel great when the process is over.  Don’t believe me?  Ask anyone who has filed (and had a good lawyer)

The lesson here is to stop throwing money you don’t have at creditors who aren’t going to go away.  If your house is on fire, are you going to get cups and fill them with water and throw them at the carpet?  Same thing here.  If you’re thousands in debt, settling with one creditor and hoping you’ll have enough to settle with the others is a losing proposition.  There are other, less expensive, faster, more efficient, painless ways to get through this mess.  Before you send in another check, make sure you speak with a Chapter 7 Bankruptcy lawyer.

I’m not allowed to offer advice here really. Its supposed to be an informative blog that lets you know about recent issues in the Bankruptcy and Real Estate field, but lets be real for a second. If you’re settling some debt for 50% of what its worth, but you have $20,000 in other debt that you cant pay off, whats the point of settling that debt. If you could file a Chapter 7 Bankruptcy and be done with them all, for a fraction of what it would cost to settle each one, why wouldn’t you? Think your credit will be worse off? Not true. I can show you articles and studies. Think they’re going to take your stuff? Unlikely. New York has some of the most liberal exemptions in the Country now (thanks Governor Patterson-he never heard that phrase much, did he?). There is zero reason to unfreeze your bank account by settling on debts IF you have plenty of other debts you can’t pay. Why? Because those other creditors will likely try and freeze your accounts. Now we’re back to square one.

Look, to be honest, lawyers get paid either way. If they’re settling court cases or filing Bankruptcy. But I can’t express how much better Chapter 7 usually is for peoples livelihoods, pockets, and credit. Once you get around the whole “stigma” surrounding Bankruptcy, you realize how much more it can do for you. I know I sound like Im selling Bankruptcy Time Shares, but its really the case.

Like a warm and loving family member, we are here for you. Unlike a warm and loving family member, we will not ask to borrow your car.

Let me just say that this was an important lesson to learn. Sometimes, as attorneys, we know what you clients go through, but we dont necessarily experience it. I can tell you that now Ive experienced it. So, the lesson here is that when you’re dealing with an abusive representative, don’t get caught up in a screaming match (as hard as it is…and…it is hard not to). Call back and deal with someone else. If that doesn’t work, turn to an attorney to contact them. Theres always a way around this in New York.

Exemptions on all kinds of things have increased as well. The exemption for a vehicle has increased from $2400 to $4000 as well. Again, if your car is worth up to $4,000 more than what you owe on it, and you need to file for Bankruptcy in New York, you’ll be able to keep the vehicle now. There are now Federal exemptions to work with as well, which can mean a very large increase in the amount of cash you can exempt.

Contact our office to learn more about this bill and its implications to you. Merry Christmas to everyone out there.

Here’s an example to illustrate:

You’re being sued for 10,000.  You decide to settle.  You, after weeks of negotiating, settle for $6,000.  You now have to make $600 monthly payments, further distressing the amount of money you have to use. Plus you now likely can’t afford to pay your other credit card bills.  And to top it off, if you miss even ONE payment, the Creditor can say “No Deal, whole thing is now due”.    And, by the way, you’re still in a ton of debt.

OR

For about 1/3 of the price (approximation and depends on each individual case) you can file Chapter 7 Bankruptcy and get rid of all of your debt in 4-5 months and keep the $600 a month from going to your creditors in the above situation.

Again, YES, I am a Bankruptcy Lawyer in New York so obviously I prefer that you file for Bankruptcy.  But its not self interest.  It literally is because you save THOUSANDS, and don’t have to deal with the above nonsense.  It literally is the smart choice in almost ever single situation.  Contact us to find out more.