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Craig D. Robins, Esq. New York Bankruptcy Attorney, Longisland bankruptcy attorney

“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”

Craig D. Robins, Esq.

Credit

Getting Credit After Bankruptcy in 2011

Posted on Monday (January 24, 2011) at 6:00 pm to Consumer Advice
Credit

credit after bankruptcyWritten by Craig D. Robins, Esq.
 
Re-establishing credit after filing bankruptcy is one of the most common questions my clients ask me.
 
That led to me write a rather detailed article about three years ago:  Life After Bankruptcy: Getting Credit Has Become Too Easy .  When I wrote that post, most of my bankruptcy clients were solicited for new credit cards just weeks after their cases were concluded.
 
Bouncing Back From Bankruptcy
 
Most of the concepts that I discussed in that article remain true today and I urge anyone concerned about this to read it:  Life After Bankruptcy: Getting Credit Has Become Too Easy
 
About a year after I posted it, our current recession started and the credit market tightened up.  This made it somewhat more difficult for those emerging from bankruptcy to obtain new credit card accounts.  However, credit cards are back in vogue for both issuers and consumers.
 
Banks are now eager to seek out new customers and open new accounts as they have retooled their business models to meet relatively new federal regulations that control the entire credit card industry.
 
Last year credit card solicitations doubled to about 2.75 billion.  Financial experts predict that there will be a double-digit increase again this year.  This is good news for those considering filing for bankruptcy who are eager to obtain new credit later on.  Consumers emerging from bankruptcy are once again seeing their mailboxes flooded with credit card offers according to recent news reports.
 
Generally, consumers who emerge from bankruptcy are considered sub-prime borrowers, which is the category that includes those with blemished credit.  These consumers can often get credit, but will end up paying a higher rate of interest and will likely have a lower credit limit.
 
The most important aspect of bankruptcy and credit is that the negative weight caused by bankruptcy diminishes over time.  The sooner a debtor re-establishes credit with one account, and demonstrates responsibility with that account, the sooner the next account can be opened up, and so on.
 
getting credit cards after filing bankruptcyThe Path to Good Credit After Bankruptcy
 
The first step is to apply for a gas card or small store card — both of which typically come with a small debt limit.  It is extremely important to make regular and timely payments.  It is also important to use the card, even if it means just charging relatively small amounts.  This shows that you can again handle credit responsibly.
 
Then, after a few months, apply for a sub-prime card.  These are regular Visa or Mastercard accounts offered by banks that cater to those with bad credit.  The interest rate will be high, there may be a annual account fee, and the credit limit will be low.  However, having a card with less than favorable conditions is temporary.  Use the card, but try to pay off all balances in a relatively short period or right away.
 
Perhaps six to twelve months later, after having used and timely paid for purchases on these cards, apply for a more conventional card with better terms.
 
For More Info About Getting Credit After Bankruptcy
 
 
I urge my bankruptcy clients to go to any big-box bookstore and look at the dozen or so books they will have on re-establishing credit.  For an investment of ten to fifteen dollars, you can’t go wrong.
 
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Getting Credit After Bankruptcy

Posted on Wednesday (May 19, 2010) at 10:00 pm to Bankruptcy Tips Consumers Should Know
Consumer Advice
Credit
Current Events

credit-after-bankruptcyWritten 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.
 
 
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Six Reasons Why It’s a Tough Time for Debt Collection Attorneys

Posted on Wednesday (January 6, 2010) at 7:00 pm to Bankruptcy and Society
Chapter 7 Bankruptcy
Consumer Advice
Credit
Lawyer to Lawyer

Bankruptcy will stop Debt Collectors and Collection Law FirmsWritten by Craig D. Robins, Esq.
 
Although debt collection law firms are the fierce and hated adversaries of my Long Island bankruptcy clients, I have gotten to know several collection attorneys fairly well over the years.
 
Some of them are the same age as I am, and we started practicing at the same time, and were members of the same young attorney groups 25 years ago.  My practice happened to take me in the direction of helping consumers, whereas some of my colleagues ended up representing credit card companies.
 
Although my practice only helps consumers and business owners who have financial problems, I like to hear what it’s like on the other side — from those attorneys who actually pursue my clients before they have the opportunity to file for bankruptcy relief or achieve a negotiated settlement.
 
A Collection Attorney Colleague Recenty Confided In Me
 
My clients are always complaining about the unabated and aggressive pressure that bill collectors put on them, so it was interesting to have an informal chat with a collection attorney colleague who I’ve known for years and years.  He complained that those law firms who specialize in debt collection in New York are not exactly doing so well these days. 
 
He commented that his firm is facing the horrifying prospect of taking in millions of dollars in collection proceeds, but not making any profit whatsoever.
 
Here’s Why Bill Collectors and Collection Law Firms Will Have a Tough Time in 2010:
 
1.  Debt Collectors and Collections  are Under Greater Scrutiny.  It’s no secret that the entire debt collection business has come under great scrutiny during the past year as the result of some unscrupulous debt collection practices.  I’ve written extensively about this previously.  See:
 
 
2.  It’s Harder to Collect.  My colleague complained that he and his firm were working incredibly hard, yet not making much money.  Apparently, the economic pressures that are pushing more and more Long Island families to seek bankruptcy relief also mean that collection firms are having a much more difficult time collecting the amounts that they’ve collected in the past.
 
3.  Lenders and Their Collectors Are Paying the Price for Easy Credit.  One of the key reasons for the relatively low rate of collectability is that several years ago, banks and lenders were so loose with their credit policies and underwriting standards that they extended credit to too many consumers who weren’t credit-worthy.  That translates into greater difficulty collecting on delinquent accounts.
 
4.  Unemployed Debtors Mean No Funds for Creditors.  Many consumers do not have the funds to make any payment simply because they are unemployed.  Projections for continued unemployment mean continued difficulty into the new year with trying to collect.
 
5.  Changing Sentiment Against Banks, Bill Collectors and Collection Law Firms.  We now have a more consumer-friendly atmosphere in which courts tend to side with the consumer as opposed to the creditor.  In addition, there are always new debt collection laws and regulations, and the trend is to make it harder for the debt collector and easier for the consumer.
 
6.  BANKRUPTCY.  I saved the best for last.  Over a million and a half American consumers will probably file for bankruptcy in 2010, and most of them will be able to totally eliminate all credit card debts.  This is how my Long Island bankruptcy law firm and I will be helping many consumers in 2010.
 
 
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The Overdraft Trap: Banks Force Consumers Into Bankruptcy with Obscene Fees

Posted on Thursday (July 23, 2009) at 5:15 pm to Credit

Banks and credit card companies continue to beat up the public with unconscionable overdraft fees.
Written by Craig D. Robins, decease Esq.
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Squeez’em ‘till they’re dry – that’s what the banks are doing to consumers with soaring overdraft fees
 
Even though Congress and the Obama administration have been cracking down on banks that have fleeced the American public with abusive mortgage and credit card practices, drugs the banks still continue to trap consumers with some outlandish fees.
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Banks and credit card companies continue to beat up the public with unconscionable overdraft fees      .

Over-limit fees” weren’t enough.  The banks have been charging even greater fees for what they euphemistically call the “courtesy overdraft fee” –  a fee the bank charges customers for being able to charge when they don’t immediately have the money available to pay.
 
Overdraft Fees Are Becoming Rampant
 
Overdraft fees are the single largest source of fees for banks.  This year, malady banks expect to earn an incredible $38 billion from overdraft fees, which is almost twice as much as the $20 billion they will earn from penalties such as late fees and over-limit fees.
 
ABC’s Nightline recently highlighted the problems with overdraft fees which are pushing consumers deeper into debt in our difficult economy.  USA Today also recently ran a cover story detailing the over-aggressive drive of banks to develop overdraft policies to milk the public.
 
How Overdraft Fees Work
 
A customer who already owes a balance fills up the gas tank, which purchase costs $30.  However, the typical bank then charges an overdraft fee of $35.  If the customer then makes a handful of other small charges the same day – say for a quick meal, some groceries and other incidentals, the fees for that one day will add up to $175 !!!  This relates to an annual interest rate that can exceed 5,000 percent.
 
Consequently, a typical consumer can be hit with fees in the many hundreds of dollars in a matter of days – fees which many consumers cannot afford to pay.
 
Some banks even engage in sneaky practices such as charging consumers before they overdraw by deducting a purchase when it is made, rather than when it clears.   This has the effect of pushing the account into the red even sooner.
 
With such excessive fees, it is no wonder that many consumers cannot pay them and are driven to file for bankruptcy relief.  In our Long Island bankruptcy practice, we see evidence of these outlandish fees on a daily basis. 
 
Legislators Are Being Forced to Introduce New Legislation to Curb Overdraft Fee Abuse
 
Our own Congresswoman from New York, Rep. Carolyn Maloney (D-NY), is currently proposing legislation which will require banks to get consumers’ permission to cover overdrafts, disclose APRs and pay transactions in a way that does not increase fees.
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Does a Credit Card Charge-Off Mean You’re Off the Hook?

Posted on Monday (July 13, 2009) at 4:21 pm to Chapter 7 Bankruptcy
Credit

viagra it is obligated to write the debt off its books as being uncollectible. This is called charging-off the account. ” src=”http://longislandbankruptcyblog.com/wp-content/uploads/2009/07/credit-card-pile-41.png” alt=”When a credit card issuer is unable to collect on an account after a certain period of time, it is obligated to write the debt off its books as being uncollectible. This is called charging-off the account. ” width=”270″ />Written by Craig D. Robins, Esq.
  
Credit card companies wrote off a record amount of debt last month according to a recently-released report from Moody’s Credit Card Index.
 
The amount of Americans’ credit card balances that banks wrote off in May 2009 as being uncollectible increased to a whopping 10.6% of the total $900 billion in outstanding balances.  This is the highest charge-off rate in the twenty-year history of the index.
 
What is a Charge-Off?
 
 When a credit card issuer is unable to collect on an account after a certain period of time, it is obligated to write the debt off its books as being uncollectible.  This is called charging-off the account.  Sometimes this is reported on one’s credit report.
 
If Your Account is Charged Off, Does that Mean that the Bank Will Not Bother to Collect?
 
Absolutely not!  Charging-off is merely an accounting notation that the credit card company makes for the purposes of balancing its books and records. 
 
What typically happens is that the bank will sell the account to a collection company for about five or ten cents on the dollar.  That collection company will aggressively try to collect by calling you, harassing you, and eventually suing you.
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A charged-off account also remains on your credit report for the same period of time as any other delinquent account — seven years.
 
No Matter what company ends up owning your charged-off account, it is still a legal liability.  However, you can eliminate charged-off credit card debts with Chapter 7 bankruptcy, assuming that you are eligible.  You can also negotiate rather reasonable settlements with the holder of the account.  See Now May be the Time to Settle Debts with Your Credit Card Company.
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One thing is certain. — if you have many charged-off accounts, then you have a serious enough debt situation to warrant immediately meeting with a qualified Long Island attorney who can advise you as to your bankruptcy and debt negotiation options.
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Credit Card Reform Being Thrown Monkey Wrench by Some House Republicans

Posted on Wednesday (May 20, 2009) at 11:50 pm to Credit

Credit card reform is around the corner.  Long Island consumers will benefit.Written by Craig D. Robins, capsule Esq.
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Yesterday I reported that the Senate overwhelming supported a new bill to overhaul anti-consumer credit card billing practices. (Credit Card Reform Is Around the Corner ). 
 
This afternoon, shop the House gave final approval to its bill which provides a new set of rules for credit card companies as Congress is racing to send President Obama the new legislation before the Memorial Day recess.
 
The support in the House (361-to-64) was almost as overwhelming as the Senate (90-to-5) which reflected the public anger over the abusive practices of credit card companies and banks which include sudden and unexplained interest rate increases and indecipherable terms.

Some House Republicans threw in a totally extraneous provision that would allow visitors to national parks and wildlife refuges to have loaded guns in those facilities if they were otherwise allowed to have the weapons.

Throwing in this measure, which has absolutely nothing to do with credit cards or consumer protection, is nothing less than a dirty trick to take advantage of popular legislation that the President is likely to sign.

“This is a dumb amendment, and Congress should be embarrassed that we have to vote on it,” said Representative Sam Farr, Democrat of California, about the gun provision.

In any event, it is likely the president will sign the credit reform law within the next few days.

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Credit Card Reform Is Around the Corner

Posted on Tuesday (May 19, 2009) at 11:37 pm to Credit

Consumers trapped by unjust credit card rules will greatly benefit under the proposed new lawby Craig D. Robins, look Esq.
 
Many consumers have been virtually forced into bankruptcy by the unfair policies of credit card companies.  Because of new legislation, many of these unfair policies will become history.
 
 
The United States Senate voted today to put new restrictions on the entire credit card industry by passing a bill that will treat consumers more fairly.  The proposed law places new restrictions on credit card fees and interest rate policies.
 
The vote, which was 90 to 5, was overwhelmingly in favor of consumers.  It is much stronger than a version recently passed by the House.
 
As a Long Island bankruptcy lawyer, I see many clients who are caught up in a bad-debt situation because of the unfair and unjust ways the credit card companies have treated them.  Soon it will be good-bye to credit card provisions that double interest rates and penalize the average consumer who falls a little behind.
 
It is expected that the House and Senate bills will be reconciled very quickly as President Obama previously announced that he wanted to sign it before Memorial Day.
 
The following are the key protections that the bill will afford consumers.
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¶There are new restrictions on when credit card companies can increase the interest rate on balances you have already run up. The bill says that banks generally must wait until you are 60 days late in making the minimum payment before applying a penalty interest rate to your existing debt.

¶Card companies will have to give 45 days’ notice before raising their interest rates.

¶Banks must send out your bill no later than 21 days before the due date. 

¶If the card company gets your payment by 5 p.m. on the due date, it’s on time.  Also, no more late fees if the due date is a Sunday or holiday and your payment doesn’t arrive until a day later.

¶If you are paying different interest rates on the debt on a single card — one for a cash advance, another for a balance transfer and a third for new purchases. Now, when you make a payment over the minimum balance, banks will have to apply it to the highest-interest debt first.

¶Banks will need your permission before allowing you the “privilege” of spending more than your credit limit and paying a fat $39 fee for that privilege.

¶Students will find it more difficult to get a credit card. No one under 21 will be able to have a credit card unless a parent, legal guardian or spouse is the primary cardholder. However, students with their own income can submit proof and ask for an exception to the co-signer requirement.

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U.S. Consumers Can’t Pay Their Bills

Posted on Wednesday (March 18, 2009) at 12:30 am to Credit
Long Island Economy

Creditcard defaults reaching all-time highs 

U.S. credit card defaults rise to 20 year-high

Credit card defaults rose last month to their highest level in at least 20 years according to a report just issued by Reuters. This is just one additional indicator of the deepening recession.

American Express, buy cialis the largest U.S. charge card company by sales volume, reported that its net charge-off rate rose to 8.70 percent in February from 8.30 percent in January. A “charge-off” means the company has written the debt off as a loss for accounting purposes.

Meanwhile, Citigroup — one of the largest issuers of MasterCard cards — reported that its default rate soared to 9.33 percent in February, from 6.95 percent a month earlier.

Some experts believe that there will be a continued deterioration. Trends in credit cards will get worse before they start getting better. Some analysts estimate credit card charge-offs could climb to between 9 and 10 percent this year from 6 to 7 percent at the end of 2008.

With so many consumers unable to pay their credit card debt, it is no surprise that bankruptcy filings have increased dramatically on Long Island. Bankruptcy permits consumers to discharge and eliminate credit card bills.

Credit card lenders are trying to protect themselves by tightening credit limits, raising standards, and closing accounts. They have also been slashing rewards, raising interest rates and increasing fees to cushion further losses.

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How to Get Your Credit Report for Free

Posted on Monday (March 9, 2009) at 11:45 pm to Consumer Advice
Credit

How to get a free copy of your credit reportWrittten by Craig D. Robins, viagra 100mg Esq.

It’s a great idea to review your credit report on a regular basis. As a result of federal legislation several years ago, look 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.

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Universal Credit Card Default Affects Many Long Island Consumers

Posted on Thursday (January 22, 2009) at 9:07 pm to Credit

The universal default feature on many credit cards causes consumers to seek bankruptcy protectionWritten by Craig D. Robins, medicine Esq.

“Universal Default” is when you are late with one credit card and because of this, another credit card that you are current with considers you to be in default on their card, and then doubles your interest rate.

The dreaded universal default language is buried deep in the complicated and small-print boiler-plate language in your credit card agreement. Very few consumers know that their card may have this provision affecting them – that is, until it is too late.

Thus, even if you are current on thousands of dollars owed on many cards, if you are late with just one – for just a few dollars – your interest rates can double on all of your cards, to as high as 30%.

Credit card companies have been doing this for several years because of greed and because they have been able to get away with it. Many analysts believe that universal default has been one of the biggest profit centers for most credit card companies during recent years.

The great increase in interest rates triggered by a universal default has resulted in many Long Island consumers seeking bankruptcy protection to eliminate their debts as the only possible debt solution.

Fortunately, sweeping new legislation was adopted in December 2008 to prohibit this unfair and deceptive practice. However, the new laws do not become effective until July 2010. They will prevent credit card companies from raising interest rates on existing balances.

The excessive charges caused by universal default leads effects many consumers on Long Island.  However, consumers can often eliminate their credit cards debts by filing for bankruptcy relief.

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About Us

Craig D. Robins, Esq. is a Long Island bankruptcy lawyer, who is focused primarily on helping individuals and families, find solutions to their debt problems. Read more »

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Craig D. Robins, Esq.
35 Pinelawn Road, Suite 218E, Melville, NY 11747.

Tel : 516 - 496 - 0800

CraigR@Craigrobinslaw.com