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.

The first and most important step in stopping foreclosures across the Country is to deal with unemployment crisis.  Nothing else matters unless this changes (or Oprah says “You get a house for free and YOU get a house for free, and YOU…).  This sounds pretty simple, but for some reason, we can’t seem to grasp it.  My clients want to pay for their stuff.  They never come to me to file because they don’t want to pay for their stuff or they want to take advantage of the system.  To the contrary, they’ve likely paid idiotic debt collectors for years (at exorbitant interest rates) because they feel they have a responsibility to try and pay their debts.  The problem isn’t that their mortgage interest rate is too high.  That’s just absurd.  The problem is that many of them are now unemployed or underemployed.  We’re not at 9.1% in this Country.  Thats a mytth.  When you count the number of unemployed and “underemployed people” I would guess we’re likely closer to 17-20%.  You don’t fix housing until you fix that.  You can’t bring the interest rate of a mortgage down by 1% and expect it to change anything at all.  These people need decent paying jobs.  They need money.  Not disposable cash.  But a consistent paycheck, so that they can pay their mortgages.  If you ask someone if they want to pay $2400 for their home or $2516, they’ll obviously pick the former.  But if you ask them if they want to pay $2516 but also have a job that pays them, I’m pretty sure they could care less about the $100 difference.  You cannot put bandaids on someone’s arm when they’re internally bleeding.  You’re wasting time (and band-aids).

To effectively deal with the Housing Crisis, we also have to take definitive steps at addressing our emotions and move forward.  What we’re doing now is a little Waltz.  Dancing around the issue.  Sprinkle some mortgage relief here, maybe some there, and that’s it.  And everything still stays the same.  As I mentioned, we have two camps; they have to make peace or learn to move on.  Unless the guys in the room who think that the people who paid for homes they couldn’t afford deserve relief, we’ll get nowhere.  I understand the mentality.  I get it.  I think it’s much more complicated, but I get it.  But we need someone to reach across and say “Yes, a lot of people messed up and got caught up in the craze, but we need to move beyond this, otherwise nothing gets better.”  Half the Country bought into the notion that Real Estate prices will always go up.  But this Housing crisis has played a tremendous role in the surge of Bankruptcies, and the inability of a family to right their lives.  If you’re stuck paying for a home you can’t afford, you have two choices.  You keep paying and hope you’ll find more money (horrible idea) or you walk away and threaten the property values of your neighbors (horrible idea).  We just have to say “bad idea” and move on and forgive a ton of mortgage principle and fix this thing.  Otherwise we’re going to be pointing fingers at each other while we watch property values continue to drop or stay stagnant.

Unless this Administration, or Congress, or even the private sector, figures out a way to refinance these homes and reduce the principal owed on them, nothing changes.  These interest rate reductions will help close to no one.  It’s a joke.  If we want to effectively deal with the problem, then let’s deal with it.  But if you’re going to tell me that reducing already historically low interest rates for people who barely make enough to keep the lights on, will do anything long term, then I have something to sell you.

A new article discusses how banks are becoming even more aggressive in their foreclosure procedures.  They’re kicking people out on the street in shorter periods of time.  What does that mean to you?

The emotional attachment to a home is something that simply cannot be understated.  I’ve had plenty of people begin to cry while sitting in my office when the prospect of leaving their home came up.  I get it.  My parents owned their co-op for 30 years.  The memories I had there were some of the best memories I can remember.  But then there is the inevitable problem or trying to pay a mortgage that is more than the actual home is (and may ever be) worth.  In a situation like that, which happens all the time these days, the best thing you can do is file Bankruptcy and surrender the home.  I know you’re looking for an out other than that, but realistically there almost never is one.  Here are your options:

1.  Continue paying the mortgage; Hope you win Jeopardy soon:

You  take this approach about six months prior to calling me.  You  will do anything possible not to admit that you need to walk away from the home.  You’ll slave and scrimp and do anything to make sure the mortgage (sometimes two mortgages) is paid, even partially, each month.  If you fall a few months behind, you figure you’ll catch up and pay when you can.  You cut down on almost anything (and I’ve seen it all) just to make that payment.  Next month will be different.  Next month you think you’ll have enough.  But inevitable you don’t because of the economic situation we’re all in.  So you call me.  6 months later than you should have.  6 months worth of saving money that you likely could have kept.  You feel great after the Bankruptcy and the monkey comes off your shoulders, and you can finally sleep.

2.  Stop Paying the Mortgage but do not file Bankruptcy.

Let me guess; the Bank told you that you can apply for a loan modification.  Let me guess; they told you to stop paying the mortgage for a few months.  You listened.  Stop the insanity.  The Loan Modification process, in my opinion, is one the dumbest, most irrational, most arbitrary process’ that I’ve ever seen.  Literally, communists in government offices would look at it and go “This is just too inefficient.”  It’s crazy, makes no sense, and has very little chance of succeeding.  It’s almost always a waste.  And it puts you in the hole.  Your credit score drops, and you’re waiting for months and months and sometimes years and years for some solution and meanwhile your credit score goes down the tubes.  You don’t even know, if you do get approved, if you’re going to be able to afford the new payment.  And forget it if you have a second loan.  Twice the insanity.  Again, total waste of time.  You’re waiting years for something that may not happen and may not help you.  File Bankruptcy, have your credit generically repair itself (quickly) and move on.  You can, if you want, even chose to keep the home once you file Bankruptcy.  I do not recommend this if you’re home is worth less than what you owe.

3.  Think the Bank wont go after you after a Foreclosure because your friend/neighbor/Priest/bodega owner told you they wont.  

They will.  End of Story.  If they don’t, they’ll sell it to a credit collection agency that will.  They have up to six years to sue you.  Then another twenty or so to collect.  Want that phone call 10 years from now?  That frozen bank account?  Deal with the issue now, before it’s too late.

Emotion is HUGE in this, but understand that there are literally millions of people dealing with the exact same issues right now.  Ask the people who have filed Bankruptcy and gotten rid of these debts, and ask the people that haven’t.  I’m pretty sure I know which side feels better about their financial life going forward.  We’re here, as always, in our Manhattan or Brooklyn office, to answer any questions you may have.

In the opinion of this Manhattan Bankruptcy lawyer, things are getting worse, not better.  Unemployment hovers around 9% (those are the official numbers.  The unofficial numbers are likely much worse).  About 1 in 5 people is behind on his/her mortgage.  People are underpaid, and many of them don’t have enough to out food on the table and pay the rent at the same time.  Not everyone who was meant to file Chapter 7 Bankruptcy in Manhattan has filed Chapter 7 Bankruptcy in Manhattan.  To the contrary, many people are still waiting for that next big paycheck or job to come in.  They’re dealing with debt settlement companies when they should be filing.  They’re spending more and more on interest and late charges when they could realistically be completely out of debt in approximately 90 days.  They’re doing the same thing, but there is even less money to play with now.

In meeting with clients in our New York City office, we’re finding many potential clients have already run through their entire 401ks, accruing large fees to the IRS in the process.  They’ve stopped paying rent in hopes that they’ll be able to find a cheaper apartment while still paying their credit card minimums (they have no choice but to live on credit cards).  Things are getting worse, not better.

The advice has always been the same but I fear it still hasn’t sunk in.  You’re wasting your money in almost every other scenario.  The debt isn’t going away, nor is the stress.  The credit card companies and debt collection companies aren’t going anywhere either.  I can’t ever be clearer about this than I am now.  You’re wasting money as things seems to be getting worse, not better.  You’re paying debts that aren’t going away with money that could likely keep in a Bankruptcy filing. You may be wasting what money is left on this.

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.

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.