About Me
“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”
Bankruptcy Tips Consumers Should Know
Filing bankruptcy without an attorney can be extremely difficult
Written by Craig D. Robins, Esq.
When Congress changed the bankruptcy laws in 2005, they made filing for bankruptcy extremely complex and complicated.
The fact is that is it is extremely difficult to file for bankruptcy without an attorney.
Recent figures indicate that about nine out of ten self-prepared bankruptcy petitions are dismissed because the “pro-se” debtors did not properly fulfill their obligations under the new bankruptcy laws. “Pro-se” is the Latin legal term for someone who is representing himself or herself without a lawyer.
Filing Bankruptcy on Long Island without an attorney is further complicated because in addition to attending to obligations under the federal bankruptcy laws, you must also adhere to the Local Bankruptcy Rules for the Eastern District of New York.
Representing Yourself in Bankruptcy is Often A Mistake
Filing for bankruptcy is much more involved than reading a “How to File Bankruptcy” book. It takes a keen understanding of federal and state law.
Many debtors who represent themselves are not aware of what assets they can protect, and what assets they cannot protect. I have seen many a case where the trustee has taken assets from a pro-se debtor because they were not exempt and protected.
The Means Test Can Be Very Complicated
Every person filing bankruptcy must complete the means test and must do so properly. If the means test is not prepared the right way, it can constitute grounds for the Bankruptcy Court to dismiss your case.
The means test is one of the most involved and controversial aspects of filing bankruptcy today. See: Deciphering the Plethora of Means Test Cases Across Many Bankruptcy Courts.
Click here to see a variety of articles about the bankruptcy means test.
Documents Must Be Filed with the Court and Provided to the Trustee
The new laws also require that a debtor provide a number of documents to the trustee in a timely fashion. I have observed that with a great number of pro-se Chapter 7 filings, the trustees have refused to examine the debtor because the debtor failed to provide the proper documents.
In addition, I have never, ever seen a Chapter 13 pro-se debtor who provided all of the necessary documents to the Chapter 13 trustee when they were required to do so.
Finally, if you do not file other mandatory documents with the court on a timely basis, the court will dismiss your case.
You Must Know What Information Must be Provided in the Bankruptcy Petition
The petition, itself, is rather complicated. With most of the cases we file, the petition is close to 50 pages long.
You must also understand what particulars about your financial situation to include. For example, What Income Has to be Disclosed in a Bankruptcy Petition?
Retaining an Experienced Bankruptcy Attorney is a Wise Investment
An experienced bankruptcy attorney will know how to quickly and efficiently put together your petition, file your case in the proper way, and then represent you in Court.
When it comes to seeking to eliminate a substantial amount of debt, it makes sense to do it the right way. Many experienced bankruptcy attorneys, such as my Long Island Bankruptcy Law Office, offer free consultations.
Please see the much more detailed article I wrote last year: Bankruptcy Attorney Representation — How Important Is It?
Getting Credit After Bankruptcy
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Written by Craig D. Robins, Esq.How easy is it to get credit after filing for bankruptcy? This is a question that clients ask me every day. It’s on almost every client’s mind who is considering filing for bankruptcy.
About three years ago I wrote an article that was published in the Suffolk Lawyer entitled, Life After Bankruptcy: Getting Credit Has Become Too Easy . At the time I discussed how my bankruptcy clients were inundated with credit card offers and solicitations to open new credit card accounts, and that they received a flood of these offers immediately after emerging from bankruptcy.
I haven’t addressed this topic in a while. Over the past few years, as a result of an economic change to recessionary times, such offers have not flowed as much — but times may be changing.
The Tightening of the Credit Market Has Affected Everyone’s Ability to Get Credit
Just over two years ago when the we saw a mortgage meltdown, and banking institutions started to run into trouble, the credit market tightened. This had an impact on almost everyone. Banks became very reluctant to extend credit except to those in the highest echelons of good credit.
As a result, many individuals were no longer able to obtain credit and actually had to file for Chapte 7 bankruptcy as a result.
Up until this tumultuous economic time, credit card companies and banks extended credit cards to everyone like they were going out of style (and in fact, they were, for a period of time). Lenders flooded the mailboxes of consumers who had filed for Chapter 7 bankruptcy and Chapter 13 bankruptcy, almost immediately after they received their bankruptcy discharges.
I used to regularly hear from my clients that they were amazed to receive offers for new credit cards just weeks after their bankruptcy cases were finished. However, the tighter credit market changed that for everyone — at least until recently.
Banks Increasing Credit Card Offers Again
According to a recent report by Synovate Inc., a company that provides market data research and monitors credit card solicitations, there was a 29% increase in credit card solicitations over last year’s levels.
Last year apparently produced a recession that was the worst we’ve seen in years, and as a result, credit card issuers pulled back dramatically on offers. As a result, annual mail volume of credit card offers dropped to its lowest levels since 1993.
Now, however, banking institutions believe the economy is strengthening, and they are renewing their efforts to again flood the mail boxes of consumers with offers of new credit card accounts.
One major bank, HSBC, actually considered leaving the credit card industry entirely last year. However, just tripled the number of credit card offers that they mail consumers.
Another bank, Capital One, had pulled out of the sub-prime market last year. However, they recently announced their intention to re-enter it. They, too, have started flooding mail boxes again.
Reasons Why Banks Are Upping Credit Card Solicitations
– Legislation which placed stricter rules on interest rates and fees took effect in February. Initially, banks were reluctant to extend additional credit after these new laws went effect. However, the banks have worked out the kinks. (You will note that as a result of the credit CARD Act, all Credit card statements now have additional disclosures).
– Banks lost a great deal of money last year. Now that they have written off substantial losses, their account balances have stabilized, and they are in a better position to extend new credit.
– It appears that the economy is rebounding and consumer spending is increasing again. With such signs of economic recovery, banks can look forward to better times again and go back to soliciting new customers.
What Else Should Debtors Know About Reestablishing Credit After Bankruptcy?
Most of the matters that I discussed in my older article still apply. Please see: Life After Bankruptcy: Getting Credit Has Become Too Easy .
Remember: Nothing is Forever
Although a bankruptcy filing is certainly a negative factor that creditors will consider in deciding whether to extend credit, this fact becomes less and less important over time.
Even though a bankruptcy can remain on one’s credit report for up to 10 years, its effect diminishes on a regular basis each month that goes by after the bankruptcy cases is closed.
Get a Secured Credit Card
It’s a generally accepted fact that a consumer needs two types of credit to quickly rebuild a credit score. One is installment credit, which includes auto loans or leases, student loans, and mortgages.
The other is revolving credit, which includes credit cards and home equity lines of credit.
Since someone emerging from a recent bankruptcy may have a tougher time qualifying for a regular credit card, the best solution may be to obtain a “secured” credit card, which is one in which you place a deposit with the bank, and then get a line of credit for that amount, typically about $500.
Get a Book on Rebuilding Credit
Any big box book store like Borders or Barnes and Noble will have a whole shelf of books on how to rebuild credit. Go there, take your time looking at the books, and then buy the one that looks best.
For about ten to fifteen bucks, it will be a great investment. You can also look at Amazon.com. In a future blog post, I will review some of the credit repair books.
Written by Craig D. Robins, Esq.In every consumer bankruptcy case, whether it is a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, there will be an initial hearing at the bankruptcy court about one month after the case is filed. If you filed for bankruptcy, you are required to attend.
What’s Happens at the Meeting of Creditors in Bankruptcy Court?
The purpose of the hearing is for the court-appointed trustee to ask you questions about your financial situation, the reason why you have debt problems, and whether you have any non-exempt assets.
This meeting is rather informal, as it is not in a courtroom, and it is not before a bankruptcy judge. Instead, it is in a hearing room, and it is before a trustee, who is a bankruptcy attorney, and not a judicial officer. See my post: Don’t Call the Bankruptcy Trustee, “Your Honor”.
As a matter of fact, the bankruptcy law even bars bankruptcy judges from attending the Meeting of Creditors. See: Bankruptcy Judges Are Barred by Law From Attending the Meeting of Creditors .
A bankruptcy trustee presides over the meeting by calling cases, one at a time. When your case is called, you sit at a table in the front of the room with your bankruptcy lawyer, and the trustee asks questions after you’ve been sworn in. To learn more about trustees, see What Is a Bankruptcy Trustee?
Most meetings are relatively short and uneventful. Although they will typically last just a matter of a few minutes, you may wait as much as 60 to 90 minutes for your hearing. The meetings are recorded by an electronic device, and there is a microphone on the table.
Since the meetings are somewhat informal, you do not have to get dressed up or wear a suit.
The Meeting of Creditors is also commonly referred to as the “341 Hearing” or “341 Meeting” because it is Bankruptcy Code section 341 that contains the law regarding such meetings.
Role of the Bankruptcy Trustee
The trustee is charged with several obligations which include making sure the bankruptcy petition is properly prepared, making sure any assets you intend to keep are protected by exemption statutes, ensuring that you properly completed the Means Test, and ascertaining whether you have any non-exempt assets that can be sold for the benefit of creditors.
It is usually rare, but not uncommon, that a trustee determines that there are non-exempt assets. The most common types of non-exempt assets include cars, tax refunds and personal injury law suits. In each case, if the asset is worth more than the exemption amount, the trustee can administer the asset. For more information about whether a trustee will pursue an asset, see: The Back-Door Politics Behind Trustees Pursuing Non-Exempt Assets.
If you live in New York, you can check some of the most common bankruptcy exemptions here: Bankruptcy Exemptions in New York.
If the trustee does try to sell an asset, he is entitled to be compensated for doing so. Information about this is in this post: How Does a Chapter 7 Bankruptcy Trustee Sell Assets .
Some clients primarily speak a second language like Spanish, and need the assistance of an interpreter. In the Central Islip Bankruptcy Court, the court now provides interpretation services at the Meeting of Creditors. See: Interpreters in Bankruptcy Court .
It is relatively rare that a creditor will show up. Generally speaking, credit card companies, which constitute the most common type of creditor, will never show up. I discussed this in my post: Will Creditors Show Up For My Hearing In Bankruptcy Court? However, If a Creditor Shows Up at the Meeting of Creditors in Bankruptcy Court, What Questions Can They Ask?
As far as questions at the Meeting of Creditors that the trustee asks you, it is very important to answer each question accurately and honestly, but you should not provide any additional information, other than simply answering the question. For more about how you should answer questions, see this post: How Much Should You Say at the Meeting of Creditors in Bankruptcy Court?
When Is the Meeting of Creditors?
This is the topic of an article I recently wrote: When Is My Meeting of Creditors in Bankruptcy Court?. Generally, the meeting is about one month after the date of filing. There is a lot of information on this post.
What Can Go Wrong at the Meeting of Creditors?
The vast majority of hearings at the Meeting of Creditors go very smoothly and last just a few minutes. If your bankruptcy attorney did a good job in drafting the bankruptcy petition and preparing you for the meeting, everything should go find.
Nevertheless, lots of things can happen at the Meeting of Creditors to complicate things. Several years go I wrote a lengthy series of articles for the Suffolk Lawyer about how to address unusual issues that may arise at the Meeting of Creditors in bankruptcy court.
If you have a Meeting of Creditors coming up, this series of articles should be extremely useful:
Preparation for the Meeting of Creditors is Key
I cannot stress how important it is to have your bankruptcy attorney prepare you for the meeting of creditors.
In my Long Island bankruptcy practice, we review with each client the various questions the trustee will most likely ask, as well as our client’s responses, to ensure that the meeting will go smoothly. We usually do this a few days prior to the meeting.
Are You Curious About Your Bankruptcy Trustee?
If your hearing is in the Central Islip Bankruptcy Court, which is in the Eastern District of New York, you can read profiles about each trustee and see their picture, most of which I took. Here is the link: Bankruptcy Trustee Profiles .
Can the Trustee Decline to Grant You Bankruptcy Relief at the Meeting of Creditors?
The answer is “absolutely not.” The purpose of the meeting is for the trustee to obtain information about your case. The trustee does not have the ability to take any action against you or decide whether or not you are entitled to a discharge.
Only a bankruptcy court judge can do such things. Also, every debtor is entitled to a discharge unless a proceeding is brought challenging discharge — and these are very rare.
Directions to the Central Islip Bankruptcy Court on Long Island
If your meeting of creditors is in Central Islip, here’s how to get to the court: Directions to Central Islip Bankruptcy Court - Long Island .
Written by Craig D. Robins, Esq.Many of our clients are justifiably anxious about meeting with a bankruptcy for the first time.
However, a good, experienced bankruptcy attorney should be able to put the client at ease, review their financial situation, explain whether bankruptcy is a good option, and if so, discuss how a bankruptcy filling will work.
What Documents Should You Bring to the Bankruptcy Attorney?
Getting the most from your first bankruptcy consultation requires that you bring certain financial papers. I’ve learned that in order to best advise clients about bankruptcy and consider all of the various options, I need to know all of the details of their finances.
Here is a list of documents that I typically ask my Long Island bankruptcy clients to bring to their first meeting with me:
• One recent bill from each creditor
• Collection letters and any law suit papers
• As many pay stubs as you can locate for the past six or seven months
• Tax returns for the past two years
• Drivers license and Social Security card
• Collection letters and any law suit papers
• As many pay stubs as you can locate for the past six or seven months
• Tax returns for the past two years
• Drivers license and Social Security card
There are other papers we will need if we go forward with a bankruptcy filing, but the above items usually enables us to meet with the client and review their situation.
Written by Craig D. Robins, Esq.I was prompted to write this blog post because I just filed a Long Island Chapter 7 bankruptcy case and the court scheduled the meeting of creditors for a date that is only 25 days away. With every other case I’ve filed during the past few years, the hearing was always over a month later.
So what’s the story with when the meeting of creditors is held?
What is a Section 341 Hearing?
First, In every single bankruptcy case, be it Chapter 7, 11 or 13, there is an initial meeting at the bankruptcy court called the Meeting of Creditors. In consumer cases under Chapter 7 or Chapter 13, the purpose of the meeting is for the court-appointed trustee to review the case with the debtor by examining the debtor under oath.
Section 341 of the Bankruptcy Code provides for this hearing, which is why it is often referred to as the “341 Hearing.”
The Bankruptcy Rules Provide the Time Frame For Holding the Meeting of Creditors
Although the 341 hearing is usually held about a month after the petition is filed, it can sometimes be held much earlier than that, and other times, much later.
Bankruptcy Rule 2003(a) sets forth the time parameters for the 341 Hearing:
In a Chapter 7 or Chapter 11 case, the meeting must be held no fewer than 20 days, and no more than 40 days after the date the petition is filed.
However, in a Chapter 13 case, the meeting shall be held no fewer than 20 days, and no more than 50 days after the date of filing.
When the bankruptcy court is operating very efficiently, meetings tend to be sooner. When the court is overburdened, or trustees are taking vacations, the time frame is longer.
When the there was a massive rush of bankruptcy filings in September and October 2005 because consumers were anxious to file their bankruptcy petitions before the bankruptcy laws were about to change, the bankruptcy court could not accommodate the great number of cases, and most debtors in New York had to wait 60 to 100 days for their 341 hearings.
There’s Lots of Information About Preparing for the Meeting of Creditors on this Blog
One of the biggest concerns my clients have is how to prepare for the meeting of creditors and what to do about going to the bankruptcy court for the very first time. As such, I have written extensively about this.
If you have a meeting of creditors coming up, the following posts will be helpful:
If You Have a Meeting of Creditors Coming Up Soon on Long Island and You Want to Find Out Info About Your Trustee
I have a series of posts containing biographies of all of the Long Island Chapter 7 and Chapter 13 trustees: biographies and profiles of Long Island bankruptcy trustees and judges.
You Must Provide Identification at the Meeting of Creditors
Here is a post about what identification you need to provide when you go to bankruptcy court: You Need Certain Identification to File for Bankruptcy.
Will Creditors Show Up At the Meeting of Creditors?
It’s very unlikely that creditors will show up: Will Creditors Show Up For My Hearing In Bankruptcy Court? However, here’s a post I wrote about what kind of questions they can ask if they do show up: If a Creditor Shows Up at the Meeting of Creditors in Bankruptcy Court, What Questions Can They Ask? .
Directions to the Central Islip Bankruptcy Court on Long Island
If your meeting of creditors is in Central Islip, here’s how to get to the court: Directions to Central Islip Bankruptcy Court - Long Island .
Written by Craig D. Robins, Esq.
This post is the fourth in a series of articles that I’ve writtten this week addressing every aspect you will need to know about filing bankruptcy, protecting tax refunds, and related issues. Links to all posts in this series are at the bottom of the page.
What Should You Do If You Expect a Large Tax Refund, But Haven’t Filed the Bankruptcy Petition Yet?
TIP: Here’s where pre-bankruptcy planning becomes very important. If you expect a large refund, you may want to delay the filing of your bankruptcy petition until you receive the refund and spend it down in an appropriate manner.
Using a large tax refund to pay your rent or mortgage, buy food, make a car payment, or even pay your bankruptcy attorney, are all types of payments that are consistent with filing for bankruptcy in good faith. Sometimes the refund can also be used to buy necessary clothing or furniture, fix your house, repair your car, or get necessary dental work done.
However, you cannot pay existing debts to friends or relatives, give the money away, gamble it away, or buy luxury goods. In general, using it to pay any reasonable and necessary expenses is O.K.
Since pre-bankruptcy planning can be tricky in order to do it in a way that complies with the bankruptcy law, it is always best to seek the advice of a competent bankruptcy attorney before doing so.
Exempting the Tax Refund in the Bankruptcy Petition
If you need to file your bankruptcy petition before you recieve the refund, you must list it in the petition.
To protect your tax refund, you must exempt it by including it as an asset in the Schedule B, which is the Schedule of Personal Property, by stating the anticipated amounts of both the Federal and State refunds, and by listing the exemption and the correct exemption statute (New York C.P.L.R. section 5206) in Schedule C to the petition, which is the Schedule of Exemptions.
If you have to file your bankruptcy petition before preparing your tax return, then you will not know the amount of your refund (which is fairly common because most people don’t do prepare their tax returns until April). In such situations, you should nevertheless list it as “possible income tax refund for the 2009 tax year. . . . Amount $ - unknown -”
You May Be Able to Keep a Non-Exempt Tax Refund If It Is Small
Generally, trustees will only administer non-exempt assets if it is reasonable to do so. If the tax return is relatively small, it will probably be administratively inconvenient for the trustee to be burdened with all of the work necessary to distribute a very small amount.
I previously wrote a post about the issues a Chapter 7 trustee considers in deciding whether to take a debtor’s money or assets to distribute to creditors: Sometimes Debtors Can Keep Non-Exempt Assets in Chapter 7 Bankruptcy Cases .
Quick Links to All Tax Week Blog Posts About Tax Refunds and Bankruptcy:
Informative Article About Eliminating Taxes in Bankruptcy:
Article About Tax Consequences and Bankruptcy:
Written by Craig D. Robins, Esq.
This post is part of a series of articles this week addressing every aspect you will need to know about bankruptcy and tax refunds.
The Issues to Consider in Determining If a Tax Refund is Protected in Bankruptcy Are:
1. Are you filing for Chapter 7 or Chapter 13?
2. Are you filing on your own or with your spouse?
3. Did you file your bankruptcy before December 31, or will you be filing in the new year?
4. Did you already get your tax refund?
5. Do you own a home that you are also trying to protect in the bankruptcy?
6. Do you have other liquid assets such as cash and money in the bank?
Tax Refunds in Chapter 7 Cases
Most of this blog post addresses tax refunds that you may receive if you are filing for Chapter 7 Bankruptcy. I will address tax refunds in Chapter 13 cases later in the week.
Do You Have a House?
New York has an unusual exemption scheme as it applies to protecting homes and protecting liquid assets. The way the law works, you can’t protect both. You have to choose: either protect the house with the New York homestead exemption or protect your liquid assets with the various liquid assets exemptions.
If you have a lot of equity in your home, then you will certainly want to use the New York homestead exemption. If you do, then you cannot use the liquid assets exemption, which means that you can’t protect the tax refund.
The New York Liquid Assets Exemption
In New York, each individual consumer who files for bankruptcy relief can protect certain assets: Bankruptcy Exemptions in New York . Each debtor can protect up to $2,500 of liquid assets. This includes:
– Cash
– Money in the Bank
– Entitlement to Tax Refunds
– U.S. Savings Bonds
Thus, if you have a total of $500 in the bank and in cash at the time you file your bankruptcy petition, you can protect the first $2,000 of a tax refund. That means that in close cases you have to look at the value of your liquid assets on the very day you file your petition.
Sometimes a trustee will require that you provide copies of bank account statements that indicate what your balance was on the date your petition was filed.
The $2,500 liquid assets exemption is per person and can be doubled if you are filing with a spouse, for a total of $5,000.
There is no distinction between Federal refunds and state refunds.
What Happens to a Joint Tax Refund If You File Bankruptcy Without Your Spouse?
In the State of New York, each spouse is entitled to one-half of the tax refund for bankruptcy purposes. Last year I wrote a detailed review of the law about this. See Who Owns the Tax Refund in a Bankruptcy Case: Trustee or Spouse? Apportioning the Refund of a Non-filing Spouse .
Here’s how a refund is allocated between debtor and non-filing spouse: Let’s suppose you file for bankruptcy and your spouse does not, and let’s assume that you can protect $2,000 of a tax refund because you have $500 in the bank (remember $2,500 is the total for liquid assets). What happens if the joint tax refund is $7,000?
Since each spouse is entitled to one-half of the refund for bankruptcy purposes, then your share is one-half of 7,000, which is $3,500. You can protect $2,000 of that, which means that you would have to turn over the unprotected part to the trustee, which is $1,500.
TIP: This means that if you expect a large refund, you will want to have as little in your bank account as possible on the date of filing.
Quick Links to All Tax Week Blog Posts About Tax Refunds and Bankruptcy:
Informative Article About Eliminating Taxes in Bankruptcy:
Article About Tax Consequences and Bankruptcy:
Written by Craig D. Robins, Esq.
What Happens to Your Tax Refund If You File for Bankruptcy in New York? Here’s the Complete Guide
Tax refunds can be several thousand dollars; so it’s worth learning how to protect and keep your refund if you file for bankruptcy.
Tax season starts the last month in January — which is when employers and financial institutions send out W-2 forms, 1099 forms, etc. It’s also when consumer tax payers start thinking about and preparing for filing their tax returns.
This week — all week long – I will post a number of helpful and informative articles on everything the consumer needs to know about filing bankruptcy and protecting tax refunds.
If you file for personal bankruptcy in New York, a tax refund that you have not yet received may be totally exempt and protected, or, based on your particular situation, it may only be partially protected, or not protected at all.
To learn whether your refund is protected, carefully read my blog posts this week. If you have questions or comments, please send them in. Keep in mind that the best way to ascertain whether a tax refund is protected in bankruptcy or not, is to seek the advice of an experienced New York bankruptcy attorney.
Quick Links to All Tax Week Blog Posts About Tax Refunds and Bankruptcy:
Informative Article About Eliminating Taxes in Bankruptcy:
Article About Tax Consequences and Bankruptcy:
Retainer Agreements in Bankruptcy Cases
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Written by Craig D. Robins, Esq.Having a written retainer agreement in a consumer bankruptcy case is not only important, it’s the law.
For the 20+ years that I have been representing clients in bankruptcy cases, I have always used written retainer agreements. Four years ago, when the bankruptcy laws were changed, written retainer agreements became mandatory. Even so, there are some sloppy bankruptcy attorneys who neglect to use them.
A written bankruptcy retainer agreement clearly sets forth the understanding between the bankruptcy attorney and the bankruptcy client. It also sets forth what services are included and what services may not be included. Several years ago I wrote an article for the Suffolk Lawyer about Best Practices for Representing Your Clients and discussed the importance of using a plain-English written retainer agreement.
Bankruptcy court rules require the bankruptcy attorney to file some forms with the petition indicating the amount of the legal fee. Sometimes counsel files a copy of the retainer agreement to support this disclosure.
A properly-prepared retainer agreement also indicates what the bankruptcy legal fee is, the amount of the filing fee, and whether there are any disbursements, such as those for obtaining a credit report or for advancing the costs of credit counseling.
My retainer agreements also indicate what obligations my clients have. These include simple things such as reading mail that I send them, agreeing to provide correct and accurate information, and letting me know if there are any significant changes in their circumstances.
If you are filing for personal bankruptcy, make sure your attorney prepares a written retainer agreement, and of course, make sure you read it before signing it; ask any questions if you do not understand it; and make sure you get a copy of it.
Written by Craig D. Robins, Esq.The Importance of Experienced Counsel in Bankruptcy Cases
Let’s start with the likelihood of success of a debtor filing a pro se Chapter 13 bankruptcy case. It’s virtually zero. There is almost no chance of success. This is based on regular reports from Chapter 13 trustees around the country.
But suppose you retain a Chapter 13 lawyer. Does that mean you will definitely succeed with your case? Not necessarily. A debtor’s success with a Chapter 13 bankruptcy is still not assured merely because you are being represented by counsel.
What’s most important in having a successful Chapter 13 case is the competence and ability of the debtor’s attorney, the attorney’s understanding of the law, and his or her appreciation of the responsibilities and obligations of the attorney-client relationship in bankruptcy cases.
These were the comments of my colleague, bankruptcy attorney William J. McLeod, who spoke at a consumer bankruptcy seminar in Boston this afternoon which was attended by several hundred bankruptcy attorneys from across the Northeast. Bill is the author of a great little resource book for bankruptcy attorneys, Chapter 13 in 13 Chapters.
The Bankruptcy Battleground is Constantly Changing Whether It’s Chapter 7 or Chapter 13
Here’s why having experienced counsel is so important. Practicing bankruptcy law is in essence like shooting a moving target. The rules are constantly changing, the law is constantly changing, and the bankruptcy court’s interpretation of the law is also constantly changing.
What a debtor might be able to get away with one month can be shot done the next month, and visa-versa.
For example, last month I wrote about a bombshell decision from Long Island Bankruptcy Court Judge Dorothy T. Eisenberg who had just come down with a decision permitting Chapter 7 debtors to cram-down second mortgages. (Chapter 7 Cram-Down of Second Mortgages ). Obtaining this relief was previously impossible in the Bankruptcy Court for the Eastern District of New York.
My office quickly seized on this new avenue of legal relief, and we are now helping a number of clients to eliminate their second mortgages in Chapter 7 cases.
However, most attorneys still do not even know about this new decision as the Judge delivered it with no fanfare or other formal announcement. To my surprise, the Judge didn’t even mention it at a recent bankruptcy seminar.
I learned about it because I regularly read every new bankruptcy court decision that comes out of the Long Island Bankruptcy Court. I asked the judge why she didn’t mention the decision at the seminar and she said that she assumed all bankruptcy counsel regularly read the new case decisions.
Having experienced bankruptcy counsel is necessary to properly evaluate a potential bankruptcy filing, develop an appropriate bankruptcy strategy, and then communicate with the clients so that they understand how the bankruptcy case will work.
Debtor’s Counsel Plays an Integral Role in the Bankruptcy Process
When you have questions about your bankruptcy, you call your bankruptcy attorney.
When creditors have a question or concern, they call debtor’s bankruptcy attorney.
When trustees file a motion to dismiss, it is debtor’s bankruptcy counsel who must respond, appear and when appropriate, defend the matter in bankruptcy court.
Without any doubt, debtor’s counsel plays an integral role in the bankruptcy process.
Bottom Line: If you want to make sure your bankruptcy case is successful and that you get the maximum amount of debt relief the the bankruptcy laws afford you, use a competent and experienced bankruptcy attorney.
When a client comes in to meet with one of my Long Island bankruptcy attorneys or me, they can be assured of getting personal attention and up-to-date bankruptcy advice, based on our experience and knowledge.