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.

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.

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.

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.

Look, no one ever thinks they are going to be the ones sitting in a Bankruptcy meeting and having their debts discharged.  Its clearly not a life goal.  But that doesn’t mean that once you are in a situation like this, that you should do everything you can to avoid it, even at your emotional and financial peril.  had clients who weren’t sleeping for months prior to filing.  Clients who refused to use their own checking accounts for fear of having it frozen, or having their wages garnished.  What I’m saying is that Bankruptcy affords you a way out of this financial mess with a very straightforward procedure.  it allows you to restart your financial life, and in all honesty, your entire life, all over again.  So before you fork over your next minimum payment of several hundred dollar to a credit card that you know you’ll never be able to pay Ive off, at least speak to a Bankruptcy attorney as one of your options.

Lets be real.  No one necessarily wants to file for Chapter 7 Bankruptcy in Manhattan as a first step.  Its obviously a last resort.  You’ve gotten yourself into a ton of debt and there doesnt seem to be a way out.  But you have to take practical steps if you want to move forward during the process if you don’t want any issues.

What am I babbling about?  Well, under the Bankruptcy Code, you have certain exemptions, meaning you can keep a certain percentage of your stuff when you file for Bankruptcy and the creditor and Trustee cannot get their hands on it.  Some examples include $50,000 in home equity in your home, $2400 from a Bank Account, all of your IRA’s, 401k’s etc.  However, lets say you have some cash in the bank above that $2400 and you really need to get this Bankruptcy filed.  Dont hide it or move the money.  Don’t try and be crafty and put it into someone elses account.  Just let it go.  You heard me.  Let it go.

Lets say you had $100,000 in debt.  Not a crazy figure and I see it everyday in my Brooklyn office.  If I told you I could get rid of $100,000 in debt for $5,000, chances are, you’d kiss me (ethically inappropriate under most circumstances.)  However, the problem is many clients will try and save their very last dime from the Trustee, and thats just not a great way to go about doing things.  If you have $7000 in your bank account because you saved a couple of bucks, protect the $2400 and give the rest to the Trustee during the Bankruptcy filing.  The Trustee will be happy, which means less problems, if any, for the Bankruptcy, and for that amount of money you’ve known gotten rid of about $100,000 in debt.

It seems counterintuitive to us.  Why give up money when we can “protect” it.  I get that.  The problem is the amount your protecting as a percentage of the debt you’re being forgiven is minimal.  The trade off is absolutely amazing.  So my advice is not to mess up this amazing tradeoff but trying to keep every last dollar.  It will only cause problems for you and your attorney in the actual case.  Of course, like anything Bankruptcy related, there are many caveats to discuss, but in general I think you get the idea.

The first Bankruptcy test you’ll go through in New York, or any state for that matter, is the Median Income test.  It is that scary test you keep hearing about.  You know, the one your friend tells you about when he/she says “No they have this new test now.  If you make over a certain amount, you can’t file.”  Like most things your friends say, they are only partially correct.   The current Median Income limit in New York for a family size of one is $$46,523.  For a family size of two (much different than a joint filing or marriage), the amount is about $57,000.

So New York Bankruptcy Attorney man, how in the world can someone filing for Bankruptcy in New York who earns over $100,000 possibly file for Bankruptcy in New York?  The short answer is that Bankruptcy laws allow you to take certain deductions when deciphering if you are qualified to file.  You can take standard IRS deductions that your trusty New York City Bankruptcy Attorney knows about.  You can deduct certain childcare expenses.  Youc an deduct garnishments dealing with taxes.  You can deduct your actual mortgage payments.  You can deduct vehicle ownership expenses.  You can deduct health care expenses.  You can deduct food expenses.  In other words, if you’re earning more than that median income test, you still absolutely have a shot for filing for Chapter 7 Bankruptcy in New York City.

Rather than explaining each and every deduction (and inadvertently putting you into a coma in the process), I would recommend you speak with a New York City bankruptcy lawyer and he/she, if they are worth their weight, will TAKE THE TIME to sit down with you and explain all of this things to you.  This is a great field where attorneys are able to help people in financially stressful situations (and emotionally, physically, etc.)  Make sure you are completely confident about your options.

This is also brings me to my final reason surrounding hiring and the filing of a Bankruptcy in Brooklyn or New York:  EVERYONE IS DOING IT! Its literally become the cool thing to do.  The majority of people you encounter in the street are likely having financial issues.  Whether it be job loss, too much house, too many credit card debts, illness, etc., it’s likely that they are having serious credit issues as well.  Many many many people are filing for Bankruptcy, or at least have negative information on their credit report.  Therefore, your fear that your credit report would stand out is unfounded at best.  Our country has an unemployment rate hovering around ten percent.  Foreclosures and credit card defaults are soaring.  Do not think for one second that you are the only person in this position, and think more about sprucing up your resume and interview skills.  Believe me, if an employer sees you know how to do a good job, they will overlook any credit issues you may have had.

Oh, and my final reason for stating that an employer will not discriminate against you for your filing a Bankruptcy in New York:  Its illegal!