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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

If you own a house in New York City and you’re filing for Bankruptcy without a lawyer, you’re insane.

Friday, May 14th, 2010

I just came back from a Bankruptcy trustee meeting in Brooklyn, New York.  One of the individuals filing for Chapter 7 Bankruptcy in New York was a middle aged man that owned two properties, one of which was his primary residence.  Fine.  Both residences had some equity in them.  Fine (kind of).   The individual filing this case was doing this without the assistance of a Bankruptcy lawyer and decided to go at it alone.  A screaming match ensued between the Chapter 7 Trustee and the individual within about 2 minutes of the meeting beginning because many of the documents filed were erroneous.  Not Fine.  Listen, if you own a Mercedes, and the light goes in in the dashboard displaying an engine problem, and you start repairing the car with your own hands (and you’re not a mechanic), the majority of the population would not think you’re the smartest person in the world.  Thats because when we spend a large sum of money on an item, be it a house, a car, a boat (dumb idea, I can’t get rid of this boat!) we want to protect that asset.  The same goes with filing for Bankruptcy in Brooklyn, or Queens, or anywhere else in New York and not hiring a competent Chapter 7 Bankruptcy lawyer.  I get the lawyer jokes you’ll make, I do.  I know you’ll think this is self serving and another way for lawyers just to say that no one can do certain things so that lawyers make more money.  Thats fine.  And to a certain extent, you’re right.  For instance if you have no assets and no income, you may find a pro bono association near you that would file your case for free.  But don’t confuse that with an individual who does not want to spend a small sum of money to ensure he can keep his house.  Because right now, we’re unsure whether or not this individual could in fact keep his house.  Lawyers know exemptions limits in Bankruptcy.  We know the documents that we need to bring to the Trustee meeting to ensure your meeting doesnt turn into a rematch of Ali-Holyfield.  There is a value to this.  You’re getting rid of hundreds of thousands of dollars of debt and keeping property you’re legally allowed to keep for a very very reasonable price.

So I say again that if you’re planning on filing for Bankruptcy, do not go at it alone.  Its dumb.  It doesn’t work in a large percentage of cases I see.  And don’t go to one of those $399 preparation services.  It’s like bringing your taxes to your uncle who taught Math and saying (Do my taxes!).  He doesn’t know how to do your taxes.  They don’t know how to file for Bankruptcy in New York properly.  Finally, Does anyone want to buy a boat?

Posted in Bankruptcy, Gersh Blog, Homes in Bankruptcy, Mortgages | View Comments

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