Daniel Gershburg » Mortgages

Updated New York Bankruptcy Limits Means Thousands more will be able to keep their homes and cars and still file

admin — Thu, 15 Jul 2010 17:26:30 +0000

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.

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

admin — Fri, 14 May 2010 15:12:32 +0000

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?

New York City Real Estate Attorney Daniel Gershburg discusses Mortgage Pre-Approvals

admin — Thu, 25 Feb 2010 20:22:01 +0000

I constantly here this in my law office: “Im good to get the house because I got a Pre-Approval”. Congratulations. That means two things. 1. The bank has verified you are a human being who is currently alive and 2. You have absolutely no clue as to whether or not you’ll get a loan.

Think Im crazy? I am. But ask any people you know who purchased a condo/co-op or a home in New York City in the past year what the process was like. They will tell you it was pure unadulterated hell. Banks have no clue what they’re doing anymore. Absolutely none. And because of that, what you thought would be a smooth loan process has turned into a loan nightmare. Therefore, here are some friendly tips from your Manhattan Real Estate Attorney:

1. Everything on time, all the time, with confirmations of receipt. If youre dealing directly with a bank, you may be speaking to Jim in Omaha on Monday, and Tyle in Akron on Tuesday. You want to get a point person whenever possible, because you can verify all the documents the bank asked to be sent, were in fact sent in received. Absent that, I would ask to always deal with supervisors, as they seem more helpful on most occassions.

2. Do not believe anything they tell you. Im serious. The loan process is fairly simple, but they keep saying nonsense that confuses both client and attorney. They’ll say “We need your lawyer to close by March 9th” but they wont assign a bank attorney who is required to be present at the closing and to actually clear the file to close. Once you get any response from them, call your lawyer and tell he/she what the bank said. I don’t care if they get annoyed, they shouldn’t. It can delay your closing and your rate can expire. If your lawyer has to call (we do it all the time), so be it. Its a crazy market out there and you need someone who knows that and doesnt care.

3. Bankrate.com . I dont care if your neighbor told you their mortgage broker got them a free house. Before you do anything, go to that site. Completely unbiased and independent and offers you a comparison of tons of banks, their rates, closing costs, and even contact information, plus informative articles.

4. Aspirin. Take it a lot during the process because you’ll need it. I know I’m making this sound so dreary but the reality is that the process has become quite painstaking and can take some time and patience to navigate. Have a good attorney by your side, always always always follow up with the bank (also have a back up bank in case the first isnt moving quick enough) and youll be fine at the end of the day.