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“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”
Archive for March, 2009
How to Get Your Credit Report for Free
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Writtten by Craig D. Robins, Esq.
It’s a great idea to review your credit report on a regular basis. As a result of federal legislation several years ago, consumers can get a copy of their credit report for free.
CREDIT REPORTS. A credit report contains information about your consumer finance creditors, how you pay your bills, where you live, and whether there may be judgments against you. All credit reports are prepared by three national credit reporting bureaus — Equifax, Experian, and TransUnion.
GETTING A REPORT FROM US. We regularly obtain copies of credit reports for our Long Island bankruptcy clients. However, the reports we obtain are different than the reports that you can get for free. When we order a report, we can usually get it in a matter of minutes. The report that we get is a “three bureau merged report” consisting of all information from each of the three credit reporting bureaus — Equifax, Experian, and TransUnion. When we order a report for you, it becomes automatically linked to our bankruptcy petition computer program and makes preparing your petition quicker, more efficient and error-free. However, we have to pass on the cost of getting this report.
GETTING A REPORT FOR FREE. You can also get free individual reports. The Federal Credit Reporting Act (FRCA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. To order your free annual report from one or all national consumer reporting companies, do one of the following:
1. Visit www.annualcreditreport.com
2. Call toll-free 877-322-8228; or
3. Complete an Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P. O. Box 105281, Atlanta, GA 30348-5281. The form can be obtained from ftc.gov/ credit.
Good News for Consumers on Long Island — Chapter 7 Bankruptcy Will Be Easier to Qualify For
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New Means Test Critera Goes Into Effect March 15, 2009When the bankruptcy laws were drastically overhauled in 2005, Congress imposed a “Means Test” requirement to determine eligibility to file for Chapter 7 relief.
The government just revised the criteria used to calculate the means test which means that more Long Island consumers will be able to discharge all of their debts in Chapter 7 bankruptcy cases.
The Means Test
This is a comprehensive, very complex series of calculations that the federal government designed to ascertain whether someone qualifies for Chapter 7 filing. Under the old bankruptcy law, almost anyone could seek to eliminate their debts by filing Chapter 7. The new laws changed that. Click here to take a look at the actual Means Test form.
The Means Test formula is designed to evaluate whether a debtor has the financial means to pay back a substantial portion of his or her debts. If the person does, then he or she may not be eligible to file Chapter 7 bankruptcy, and may instead have to file a payment plan bankruptcy under Chapter 13. If debtor’s income is below the New York State median income for a family of that particular size, then passing the Means Test is virtually automatic. If not, the debtor must have a sufficient amount of acceptable deductions permitted by the Means Test.
New Criteria - Great for Long Island Bankruptcy Cases
The new criteria, which is based on U.S. Census figures and I.R.S. tables, increases the median income for residents of the State of New York. It also increases the various Means Test deductions which will make it easier for Long Island residents to be eligible for Chapter 7 bankruptcy relief.
This will have the effect of enabling more Long Island consumers to qualify than before and get total debt relief.
Impact on Filing Bankruptcy on Long Island
In my Long Island bankruptcy law practice, I estimate that about 7 out of 8 clients now seeking to file for Chapter 7 bankruptcy relief do indeed qualify under the means test. I anticipate that this number will increase and that even more Long Island consumers will qualify for Chapter 7 bankruptcy when the new criteria is used.
Census Bureau Median Family Income By Family Size
(Effective for cases filed after 3/15/09)
|
. |
FAMILY SIZE |
|||
|
1 |
2 |
3 |
4 |
|
|
New York |
$46,523 |
$57,006 |
$67,991 |
$83,036 |
Add $6,900 for each individual in excess of 4.
Bankruptcy Filings Surged in 2008
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Bankruptcies Are on the Rise Again
U.S. bankruptcy filings surged 31 percent in 2008 as both businesses and consumers struggled to make ends meet in a worsening economy, according to court data released earlier this week.
It probably isn’t a shocker that the number of bankruptcy filings shot up in 2008 as the economy slipped into recession.
Total bankruptcy filings across the country rose to 1,117,771 last year, according to data from the Administrative Office of U.S. Courts, up from 850,912 in 2007.
The total is nearly twice the 617,660 filings recorded in 2006, when an overhaul in bankruptcy laws led to a drop in filings.
Businesses accounted for 43,546 filings last year, a small percentage of the total, but up 54 percent from 2007.
The number of filings rose steadily throughout 2008 as the economy worsened.
Bankruptcies have increased on Long Island and across the country because of escalating job losses, weakening consumer confidence and declining home values. The total is likely to continue to rise this year. I will provide data on Long Island bankruptcy filings shortly.
House Approves Cram-Down Bankruptcy Bill
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Many Long Island Homeowners Will Be Able to Save Homes Through Chapter 13 Bankruptcy
Written by Craig D. Robins, Esq.
This afternoon, the House of Representatives approved legislation that should enable over a million Americans to reduce their mortgage payments through bankruptcy.
This is part of the Democratic efforts to stem a U.S. housing crisis that has erased more than $2.4 trillion in home values.
How Bankruptcy Judges Will Be Able to Modify Mortgages
The so-called cram-down bill, approved 234-191, lets federal bankruptcy judges modify mortgages in the following ways:
➔ reduce the balance on mortgages
➔ lengthen terms
➔ cut interest rates
Senate Must Still Vote on the Bill
In order for the bill to become law, it must still be approved by the U.S. Senate, who can vote on a companion bill as early as next week. President Obama would then sign the bill into law shortly thereafter.
The bankruptcy provision is opposed by the banking industry and most Republicans, who said it would further destabilize home prices. President Barack Obama and a majority of Democrats backed using bankruptcy as a last resort for homeowners facing default or foreclosure in the worst housing crisis since the Great Depression.
Long Island Bankruptcy Filers to Benefit
This legislation will certainly encourage many more Chapter 13 bankruptcy filings on Long Island.
As a Chapter 13 Long Island bankruptcy attorney, I have many homeowners who will certainly benefit from the measure. The new law should have the effect of enabling many Long Islanders to stop foreclosure by seeking a mortgage modification through bankruptcy.
The Approved Bill Contains a Compromise
In my blog post a week ago today (Today’s a Big Day For Homeowners Seeking Debt Relief in Bankruptcy), I wrote that this measure was up for vote. However, Democratic leaders pulled the measure from consideration last week amid opposition from industry organizations including the American Bankers Association.
Stricter provisions were added at the urging of a group of self-described moderate lawmakers called the New Democrat Coalition, including a requirement that borrowers seek loan modifications from their mortgage companies before they could qualify to amend repayment terms through bankruptcy.
The bill that was approved today reflects a compromise from earlier proposed legislation. Under the approved bill, bankruptcy judges would have the discretion to decide whether banks had offered a “qualified” loan modification that would bar borrowers from cramming down their mortgage in bankruptcy.
A qualified modification must meet standards set out by Obama yesterday as part of his housing rescue plan. It calls for lenders to cut a borrower’s monthly payment to as little as 31 percent of gross income by first reducing the interest rate on the mortgage, then lengthening repayment terms and reducing the outstanding loan balance if necessary.
Additional Chapter 13 Provisions
Borrowers taking advantage of provisions in the legislation would have to reimburse mortgage companies for a portion of losses if the property is sold before the debtor completes a five-year Chapter 13 bankruptcy repayment plan. Chapter 13 of the bankruptcy code allows individuals with regular income to pay all or part of their debts without losing their homes to foreclosure.
Our Office is Ready and Prepared to Help Long Island Homeowners File Chapter 13 Bankruptcy to Save their Homes
For years, the Law Offices of Craig D. Robins, Esq. has provided Long Island Chapter 13 legal representation. Long Island homeowners seeking assistance to stop foreclosure are invited to contact us for an appointment
Written by Craig D. Robins, Esq.If every person could transfer their valuable assets out of their name before filing for bankruptcy, then few people would pay their debts, everyone would file for bankruptcy, and our economic system would collapse.
Obviously, we have laws to prevent this very type of conduct. If a debtor makes a transfer with the intent to hinder, delay, or defraud creditors, the bankruptcy trustee has the power to set the transfer aside.
Even if the debtor does not have this intent, If the debtor transfers a valuable asset prior to filing bankruptcy and does not receive reasonable value in return, then the transfer is called a “fraudulent transfer,” and the trustee can sue the person who received the asset to bring it back into the bankruptcy estate, so that all creditors can share in its value. In order for the trustee to be able to do this, the debtor must also be insolvent at the time of transfer.
One part of the bankruptcy petition requires the debtor to indicate whether he or she made any recent transfers of valuable assets. In addition, Long Island bankruptcy trustees routinely ask about such transfers and always ask about real estate that the debtor may have sold or transferred in the prior six to ten years.
If the bankruptcy court determines that a debtor made a fraudulent transfer with the intent to avoid paying creditors, then it might also determine that the debtor should not be entitled to receive a discharge, which means that there is no protection from creditors.
Thus, transferring valuable assets prior to filing should not be done without first speaking to a qualified Long Island bankruptcy attorney.
Debtors who have valuable assets do have options. One is to consider pre-bankruptcy planning, which involves turning non-exempt assets into exempt assets. Another option is to consider filing for Chapter 13 bankruptcy.