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

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.

Since this past Friday, throngs of people have marched into my office and said “Daniel, now that we can legally get married, what in the world happens if we both file Bankruptcy?” That didnt happen. No one came by. I was in Newport, Rhode Island (great lobster roll). But they will. And the answer is, the field of Bankruptcy will likely get a bit more complicated now. They’ll be some questions in the coming months about the process, but heres what I imagine will happen. Before, if you were a gay couple that wanted to file Bankruptcy, you would simply list yourselves as roommates for purposes of the Means Test and whatever the partners contribution was to the household would be listed. Now, both gross incomes count. Shaking your head and asking yourself why you’re reading a Bankruptcy Blog on a Monday? Heres what I mean in simpler terms:

#1- Before Friday: Gay couple lives together. One partner wants to file Bankruptcy. Filers income counts towards the Means Test. We also then add in the monthly contribution and NOT the gross income of the other partner.
#2- Now (or after July 30th): Gay couples lives together and are married. One partner wants to file Bankruptcy. BOTH partners income now count towards the Means Test as opposed to simply (My partner contributes $700 for the rent and thats all the money Im putting down for the Means Test)

What implications does that have? Realistically it may mean that while you may have passed the means test before, you may not now if you do get married. KEEP THAT IN MIND if you’re deep in credit card debt. Same goes for assets, tax returns, etc. Its all going to be treated that same as if you were a heterosexual married couple for the purposes of Bankruptcy law. There will be tons of questions surrounding homes (if both partners purchased them prior) and cars. What I can tell you is that you should 100% speak to a Bankruptcy attorney prior to filing, given how much this will change things.

Again, congratulations to the thousands of New Yorkers that can now get married, and have wonderfully expensive weddings and homes with amazing decor (unless you’re planning to file for Bankruptcy, in which case lets keep the wedding simple.) We’re here to answer any questions you may have.

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.

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.

In the past few days I’ve been floored by the stories of financial issues my clients have expressed to me. I wont go into details but I will just say whoever thinks that people who file for Bankruptcy are quitters is completely incorrect. They are fighters. They had no desire to do this, yet they feel great because a debt burden has been lifted off of them. People working 3 or 4 jobs just to put some food on the table. People who have degrees (many of them advanced) and have been caught in one of the most tumultuous economic periods of our time. Each one of these individuals has clawed, has scraped by, has done everything they could do to financially survive. Some of the stories make you realize how lucky many of us are in comparison.

The most common statement I get in my office is: “I never thought I would end up filing Bankruptcy”. The most common question I get is “Do other people like ‘me’ file?” The answer is yes. Someone you know likely has filed. Theres no getting around it. And while it may not be your first resort (even though I argue that in the majority of cases it should be), it nevertheless feels good to know you don’t have to worry about all that debt anymore. It’s a hard, hard thing sometimes being an attorney. These clients that I have day in and day out remind me that its absolutely worth it.

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.

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.

I had a client in my Brooklyn office the other day. Debt well in excess of $100,000.00. The client also owned a vehicle outright. It was a pretty new vehicle as well, so it still had some equity in it. If the client filed for Chapter 7 Bankruptcy in Brooklyn, the client would most likely lose the car. I advised the client that because of the amount of debt that client had, it would still be highly beneficial to file for Bankruptcy. Without making minimum payments, he would be able to save several thousand dollars in the coming months, and purchase a vehicle (not a great one, not a sexy one, but one that ran). He didn’t want to do it yet, which is unfortunate.

I’m always very compassionate and understanding with clients, but there are also times when you have to realize that problems simply arent going away. If you’re in over your heard in credit card debt to the tune of $100,000.00, thats not going away. Those creditors aren’t going to stop. They’ll call all day, freeze accounts, garnish wages, for up to twenty years. As I keep saying, this practice has made me understand that Chapter 7 bankruptcy is in fact an emotional decision. You have to be ready to say “This is it. I start fresh now.” Along with that comes the realization that you can’t go bankrupt, and have your debts forgiven, and still have assets that are worth more than you’re allowed to exempt. That car that you’re holding onto is not going to stop your creditors from coming after you for money you owe them. That big bank account that you have, if its less than what you owe, wont pay off your debt. Financially speaking, you need to let go of these things to be able to start anew.

Look, I understand that we have connections to things. Its normal, and natural. But you must understand that this process is allowing you to get rid of thousands upon thousands upon thousands of dollars in debt for close to nothing in many case. If I gave you the opportunity to get rid of 90%-100% of your debt for pennies on the dollar( in the worst case scenario), you’d obviously take it. Anyone would. But if I said to get rid of that debt, you have to get rid of the motorcycle or RV that you love, or the Time share, then that question moves people into two categories. The first realize that there is no way they can pay all that debt back, and they want to be free from credit collectors, from annoying calls, from frozen bank accounts. They want to start fresh. The others….still think that somehow, someway, this will go away. I can’t, no matter what I do, help that latter category. At the end of the day, you need to make this decision for yourself. If you have to give up a car that you have an emotional attachment to, so that you can stop worrying about the thousands of dollars of unpaid bills chasing you, I think the decision is a clear one.