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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.

Archive for July, 2009

Can Federal Exemptions be Used in New York Bankruptcy Filings?

Posted on Saturday (July 25, 2009) at 12:00 pm to Bankruptcy Exemptions

Can Federal Bankruptcy Exemptions be Used in New York Bankruptcy Filings?Written by Craig D. Robins, Esq.
 
When a consumer files for bankruptcy relief, the bankruptcy laws permit him or her to keep and protect certain assets.  These laws are called exemption statutes.
 
There is a set of exemption provisions set forth in the Bankruptcy Code and they are called the Federal Exemptions.  However, in  1978, Congress gave the legislature of each state, such as the state of New York, the ability to “opt out” of the federal exemptions.
 
This is because for almost 200 years, there has been an issue over whether state rights should include the authority to regulate exemptions.  Accordingly, each state can determine whether to use the Federal exemptions or their own state exemptions.
 
New York has opted out of the Federal Exemptions
 
I often meet with clients who have read up on bankruptcy law before coming to meet with us and many of them have expressed confusion over whether the federal exemptions apply in New York.
 
Here in the state of New York, federal exemptions are not used or recognized.  There are a number of different New York state statutes which contain exemption provisions.  Some of these statutes include the New York Debtor and Creditor Law, the New York Insurance Law, and the New York Civil Practice Law and Rules (CPLR).
 
Only 16 of the 50 states permit debtors to use the federal exemptions.  The remaining states each have their own exemption statutes.
 
For those readers who live outside of New York, here is a list of states that permit the federal exemptions:
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  1. Arkansas
  2. Connecticut
  3. Hawaii
  4. Kentucky 
  5. Massachusetts
  6. Michigan
  7. Minnesota
  8. New Hampshire
  9. New Jersey
  10. New Mexico
  11. Pennsylvania
  12. Rhode Island
  13. Texas
  14. Vermont
  15. Washington
  16. Wisconsin
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How Quick Can Bankruptcy Relief Be Obtained?

Posted on Friday (July 24, 2009) at 9:00 am to Bankruptcy Tips Consumers Should Know
Chapter 13 Bankruptcy

In a real emergency situation, bankruptcy relief can be obtained within hours with an emergency bankruptcy filing in New YorkWritten by Craig D. Robins, Esq.
 
In a real emergency situation, bankruptcy relief can be obtained within hours.  Although it is certainly not wise waiting until the last minute, there have been numerous times that a client has contacted one of our Long Island bankruptcy law offices the day before a scheduled foreclosure sale.
 
Usually this happens when the client believes that the mortgage company will agree to postpone the foreclosure sale but the company does not do so.
 
Under emergency filing conditions, we can file what is known as a “bare-bones” or “skeletal” petition — one with just the minimal number of pages necessary to obtain bankruptcy relief.  The remaining schedules can then be filed the following week. 
 
However, the new bankruptcy laws that went into effect in 2005 have made emergency filings more difficult because of the additional obligations placed on both debtor and bankruptcy attorney.
 
Nevertheless, an emergency bankruptcy filing can usually be accomplished.
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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, 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, 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, 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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How Do I Get Away With Cheating On My Bankruptcy Petition?

Posted on Thursday (July 23, 2009) at 10:15 am to Bankruptcy Tips Consumers Should Know

How Do I Get Away With Cheating On My Bankruptcy Petition?Written by Craig D. Robins, Esq.
 
I am sad to say that a few times each year a potential client asks me this question.  However, the answer is quite simple.  You cannot cheat on your bankruptcy petition.  No winks; no baloney; no funny business.  You simply cannot lie or cheat in a bankruptcy case.
 
Americans are very fortunate that they have access to federal bankruptcy laws that enable them to eliminate debts and get a fresh new financial start.  In doing so, they have to approach the bankruptcy filing in good faith; they have to be honest and accurate in listing their assets and liabilities; and they have to comply with their reasonable obligations as a bankruptcy debtor.
 
Although it is rare, some potential clients have disclosed to me that they owned certain assets, but they were adamant that they did not want to list them in their bankruptcy petition.  One potential client said he owned property located out of the country and that nobody would find out.  I told these potential clients that they had to be totally honest in their petition.  For those who did not agree, I refused to represent them and sent them on their way.
 
An honest mistake is one thing, but cheating on a bankruptcy petition is something else.  It is simply not acceptable. 
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Are Americans Being Driven Into Bankruptcy by the Health Crisis?

Posted on Wednesday (July 22, 2009) at 11:30 pm to Bankruptcy and Society
Benefits of Bankruptcy
Chapter 7 Bankruptcy

Too many consumers are insured but insufficiently protected resulting in an exodus to Chapter 7 bankruptcy to eliminate burdensome medical debtWritten by Craig D. Robins, Esq. and Dean Weber, Esq.**
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Too many consumers are insured but insufficiently protected resulting in an exodus to Chapter 7 bankruptcy to eliminate burdensome medical debt
 

It is well known that many consumers who have no health insurance are often forced to seek the protection that bankruptcy affords, as the result of huge medical bills.  Hospital bills, not to mention doctor fees, can be catastrophic.

 
But, what about those who actually have health insurance?  One might think that consumers who are covered would be pretty safe from large medical bills.  Unfortunately, it turns out that this is often not the case according to a study recently highlighted by the New York Times that pointed out that too many people are underinsured:  Insured, but Bankrupted by Health Crises.  
 
Said the Times article:  “Health insurance is supposed to offer protection — both medically and financially. But as it turns out, an estimated three-quarters of people who are pushed into personal bankruptcy by medical problems actually had insurance when they got sick or were injured.”
 
One reason is that many health insurance policies do not cover all aspects of medical treatment.  Often, coverage is so meager, that financial calamity is but one negative diagnosis away.
 
These “limited-coverage” policies are very common, and very often, the insured does not even realize that he or she is lacking decent coverage.  Congress may soon pass legislation to make insurers issue much clearer-language policies – so that the insured is more aware of the policy’s serious limitations.
 
One health economist, from the New America Foundation, said that, “conceptually, insurance means normal people should not go bankrupt from serious medical conditions.”  However, there is no doubt that this is exactly what is happening, and people are well advised to check their health insurance policies so that they might better understand their coverage and perhaps better protect their financial well being.
 
At our office, we have helped many debtors who were compelled to file Chapter 7 bankruptcy on Long Island because of their insurmountable medical debts.  Just one serious operation can result in tens of thousands of dollars in bills. 
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Even to one with perfect credit, a large, unexpected medical debt can be impossible to handle.  Fortunately, medical debt is fully dischargeable in a Chapter 7 case, and a bankruptcy filing can provide the ideal solution to an overwhelming medical debt problem. 
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**Dean Weber, Esq. is a full-time associate with our firm
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How Much Can You Protect In an Individual Retirement Account (IRA) While Filing Bankruptcy in New York?

Posted on Wednesday (July 22, 2009) at 5:48 pm to Bankruptcy Exemptions

How Much Can You Protect In an Individual Retirement Account (IRA) While Filing Bankruptcy in New York?Written by Craig D. Robins, Esq.
 
An individual retirement account is certainly exempt in a New York bankruptcy case.  However, there is no clear-cut answer as to how much is exempt.
 
The exemption statute that protects IRA accounts in New York is set forth in the New York Debtor and Creditor Law section 282(2)(e), which totally exempts IRA accounts “to the extent reasonably necessary to support the debtor and the debtor’s dependants.”
 
Most consumers who file for bankruptcy in New York need not worry about this distinction.  I have never seen a situation where a trustee has tried to go after an IRA with a value of a few hundred thousand dollars or less.  Most consumers have IRAs that are worth much less than that.
 
However, what issues would be involved with trying to ascertain if an IRA worth several hundred thousand dollars or more is exempt?
 
Here the trustee, and ultimately the bankruptcy court, would look at the reasonableness of the debtor needing the full amount of the account.  This would result in an analysis of the debtor’s factual situation.  In interpreting the facts, the court would also look at Congressional intent and prior case law.
 
Congress has decided that consumers should be able to protect over a million dollars in an Individual Retirement Account
 
Let’s first look at what Congress recently determined to be reasonable.  The 2005 Bankruptcy Amendment Act changed the federal exemption amount for IRA accounts (Code section 522(n)) by increasing it to $1,000,000 per individual.  The Judicial Conference increased this amount again in February 2007 to $1,095,000.
 
Although New York has opted out of the federal exemption scheme, which means that this provision does not apply to bankruptcy cases filed in New York, we cannot ignore Congress’s evaluation as to what a reasonable IRA exemption is. 
 
Congress determined that a reasonable amount is $1,095,000.  As a matter of fact, the federal exemption is not even limited to $1,095,000.  The federal statute provides that this amount can be increased “if the interests of justice so require.”
 
We also need to be mindful of, and accommodate, the significantly strong legislative intent behind the policies and goals underlying the new laws to protect retirement accounts and encourage regular deposits into retirement accounts.  This is demonstrated in the various provisions permitting deductions for retirement accounts in the means test.  In other words, Congress made it clear that it wants consumers to have retirement accounts.
 
Accordingly, the legislative intent is certainly to protect a large amount of funds in retirement accounts and encourage deposits into them.
 
There has not been much New York case law on this issue since the bankruptcy laws changed in 2005.  However, most trustee should be persuaded by the above argument.  I have already convinced one aggressive trustee to leave a debtor alone whose family retirement accounts were half a million dollars.


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Directions to Central Islip Bankruptcy Court – Long Island

Posted on Wednesday (July 22, 2009) at 10:47 am to Central Islip Bankruptcy Court & Judges

Directions to the Long Island Bankruptcy Court in Central Islip, New YorkWritten by Craig D. Robins, Esq.
 
The new Federal Courthouse in Central Islip opened in September 2000. 
 
Upon entering the Courthouse, you will need to go through a metal detector.  VERY IMPORTANT: You are not permitted to take cellular phones into the building.  The U.S. Marshal’s Service, which provides building security, will make you go back to your car to leave your cell phone there if you bring it into the building.  They will only let you check it if you have no car.
 
There is a coffee shop on the first floor of the Courthouse which serves breakfast and lunch, and pay phones on every floor.
 
If you are going to court for your first bankruptcy hearing, it is called the Meeting of Creditors.  They are always held in either room 561 or 563.
 
You cannot miss the Federal Courthouse.  It is the tallest building in Suffolk County and it is located in the same complex that contains the Suffolk County Supreme Court.  It is a very large white building with an unusual-looking rotunda that looks like a missile silo.
 
The building is located off Exit 43A on the Southern State Parkway and it is at the Northeast corner of Carleton Avenue and the Southern State Parkway.
 
If coming from the West, take Southern State Parkway to Exit 43A.  You will loop over Southern State Parkway.  Please follow signs to the Court and into the parking lot. 
 
If coming from the North, take Route 111 which merges with Carleton Avenue.  The Courthouse is on the left, approximately 2 ½ miles south of the Long Island Rail Road tracks in Central Islip.  It is just before Southern State Parkway.
 
If using the Long Island Rail Road, the station is the Central Islip station, but you will need taxi accommodations to go the 2 ½ miles south to the Courthouse.
 
We tell our clients to time their travel so that they are at the Courthouse and in the hearing room at least 30 minutes before the scheduled hearing.
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Your Employer Will Not Find Out If You File for Bankruptcy

Posted on Tuesday (July 21, 2009) at 11:40 pm to Bankruptcy Tips Consumers Should Know

Your employer will not find out if you file for bankruptcyWritten by Craig D. Robins, Esq.

Some of my clients want to file for bankruptcy relief but are concerned that their employer will find out.  The truth is that generally an employer will not find out that you filed for bankruptcy unless you choose to tell them.

Here’s why:  the bankruptcy court does not get in touch with your employer and neither does the trustee.  Bankruptcy notices are not sent to employers.

The only reason an employer would be included in your bankruptcy petition is if you owe money to your employer, thereby making the employer a creditor.  However, this is exceptionally rare.

You should also know that it is against federal law for an employer to fire or discriminate against someone who seeks bankruptcy relief.

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Over 99% of Our Long Island Chapter 7 Bankruptcy Clients Eliminate All of Their Credit Card Debt

Posted on Tuesday (July 21, 2009) at 11:45 am to Benefits of Bankruptcy
Chapter 7 Bankruptcy

Over 99% of Our Long Island Chapter 7 Bankruptcy Clients Eliminate All of Their Credit Card DebtWritten by Craig D. Robins, Esq.

It true. When I recently looked at some of  my bankruptcy law firm’s filing statistics I observed that over 99% of our Long Island consumer bankruptcy clients who we filed Chapter 7 bankruptcy petitons for have been successful in eliminating and discharging all of their credit card debt.

I must say that I was pretty pleased with those figures.

When we meet with a new client and recommend that they file a Chapter 7 bankruptcy petition, it means that we’ve thoroughly reviewed their case and firmly believe that it will go through smoothly.

An important part of any bankruptcy proceeding is having an experienced bankruptcy lawyer review the facts of the case to make sure that the bankruptcy filing is appropriate, that the debtor qualifies for Chapter 7 relief, that the information in the petition is truthful and accurate, and that there are no unusual factors that will become problematic.

For those consumers who are overwhelmed by credit card debt and are considering bankruptcy, they should only meet with a qualified bankruptcy attorney who has the experience and expertise to ensure that the case will produce the desired results.

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Long Island Economy: Jobs Down; Unemployment Up; Bankruptcy Up

Posted on Monday (July 20, 2009) at 5:30 pm to Long Island Economy

With unemployment up, Long Island is going from bad to worse, causing many middle Americans on Long Island to seek bankruptcy reliefWritten by Craig D. Robins, Esq.
 
Long Island is going from bad to worse, causing many middle Americans on Long Island to seek bankruptcy relief
 
Long Island is suffering big time, according to data just released by the New York State Labor Department.  Long Island lost private-sector jobs at an annual rate of over 40,000 in the one-year period ending in June, 2008.
 
What this means is that Long Island is experiencing job losses at a magnitude that it hasn’t seen since the recession in 1991.
 
In addition, unemployment is at its highest rate since 1992 — 7.5 percent.  This is a great increase from the levels we saw a year ago.  Unemployment for June 2008 was only 4.7%.
 
In the early 1990’s, Long Island suffered some of its highest unemployment losses as a result of the recession at the time and the closing and downsizing of many Long Island defense industry businesses.  Now Long Island is suffering because of another recession and a severe economic downturn.
 
Many consumers have no choice but to turn to bankruptcy as they are being battered by high debt combined with job insecurity.  My Long Island bankruptcy practice is helping more white collar workers than ever before.
 
According to the data, the largest job losses are in the retail and construction sectors.
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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