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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 November, 2009

Long Island Bankruptcy Attorney Craig Robins Quoted In Newsday Article About Canceled Mortgage

Posted on Monday (November 30, 2009) at 12:45 pm to Foreclosure Defense
In The News
Mortgages & Sub-Prime Mortgage Meltdown

IndyMac is clearly not popular these days.  Suffolk County Supreme Court Judge Jeffrey A. Spinner canceled an IndyMac mortgage in a Long Island foreclosure case.Written by Craig D. Robins, Esq.
One of the biggest stories in years about foreclosure defense litigation on Long Island was the subject of my post on Tuesday:  Judge Cancels Mortgage Due to Mortgagee’s Shocking Behavior in Long Island Foreclosure Action .
The next day, Newsday reporter Alfonso A. Castillo interviewed me about the story and wrote a great article that appeared in Sunday’s Newsday, containing several quotes from me.
Here is the Newsday article, taken from the Sunday November 29, 2009 edition: 
Foreclosure Ruling Sends Message to Lenders
A Suffolk judge’s decision to wipe out the mortgage debt of a foreclosed-upon East Patchogue couple may send a message to predatory subprime lenders that unless they work to save their customers’ homes, they stand to lose everything, some real estate attorneys said.
“This case shows the change in the tide as to the sentiment about mortgage foreclosures in general,” said Woodbury bankruptcy attorney Craig Robins, who called Suffolk County Court Judge Jeffrey Spinner’s decision “a good demonstration that courts are not going to tolerate this type of conduct by the mortgage companies anymore.”
The judge’s ruling against the lender – IndyMac Mortgage Services, based in Pasadena, Calif . – was without doubt highly unusual. In addition, it was perhaps without precedent. A search of published reports nationally turned up no similar action, and several attorneys said the decision was the first of its kind, at least on Long Island.
But some wondered whether the precedent set is a positive one and others questioned the legal soundness of the ruling.
“It’s encouraging as a citizen, but as a practitioner, I can only think that if the judges have the authority to throw out mortgages, who’s going to be lending money?” Commack real estate attorney Lita Smith-Mines said.
In a statement, OneWest Bank E.S.B., IndyMac’s parent company, has said the bank will appeal. A spokeswoman for OneWest Bank did not return a call last week for comment.
Behind the Ruling
In his Nov. 19 decision, Spinner wrote that IndyMac Mortgage Services exhibited conduct that was “harsh, repugnant, shocking and repulsive” in its proceedings against Diana Yano-Horoski, owner of the Oakland Street home at issue.
Spinner wrote that IndyMac “soundly rebuffed” even the most reasonable of settlement offers, inflated the amount of debt of Yano-Horoski and her husband, Gregory Horoski, and seemed determined to kick them out of their home. In order to deter IndyMac from such “unconscionable” behavior in the future, Spinner erased the Horoskis’ nearly $300,000 debt – in effect turning over the home to the family free and clear.
In the nine-page decision, the judge found IndyMac’s credibility wanting and invoked the court’s “equity jurisdiction,” citing an 1890 Court of Appeals decision and numerous other cases in concluding that the mortgage company’s actions were so egregious that it had no claim, morally or ethically, to “equitable relief” in the matter.
“Thus, where a party acts in a manner that is offensive to good conscience and justice, he will be completely without recourse in a court of equity, regardless of what his legal rights may be,” Spinner wrote.
IndyMac, at its height, was known as a subprime lender that doled out high-cost loans to borrowers with less-than-perfect credit. According to Federal Reserve data, IndyMac approved the fourth-highest number of home mortgage loans out of 440 lenders, with 3,893 in 2007. They were fourth-highest in 2006 as well, with 5,058 mortgages.
Out of more than 500 lenders, IndyMac Bank brought the seventh-highest number of foreclosure actions on Long Island, with 970 between January 2008 and June 2009.
Special Circumstances
Robins said such improper and irresponsible practices were not isolated to IndyMac. But, while Spinner’s decision could create important case law that will likely be cited by homeowners’ attorneys in future foreclosure proceedings, Robins said he did not think it should “open the floodgates” for similar decisions.
“I do see a lot of the irresponsible practices that mortgage lenders commit frequently, but I think what sets this case apart was that there were several irresponsible practices in this one case,” said Robins, adding that Spinner “used this case to send a loud warning to all mortgage companies . . . that they better shape up and get their act together.”
Anthony Sabino, a law professor at St. John’s University who practices bankruptcy law in Mineola , said Spinner’s decision to wipe out a homeowner’s debt to a bank may seem like a victory for the underdog, but it could send a dangerous message.
“If all of a sudden banks couldn’t rely on being paid back their mortgages – you think it’s tough to get a mortgage now?” said Sabino, adding that a multitude of similar decisions could slow down construction and put people out of work and out of their homes.
Spinner’s ruling resembled – but went further than – so-called “cram-down” legislation that passed the House of Representatives in March but was defeated in the Senate. The legislation would have allowed homeowners in foreclosure to ask a bankruptcy judge to reduce their mortgage payment if their lender had not offered better terms.
Sabino said he doubted decisions similar to Spinner’s would follow, because while lenders may routinely engage in “nasty” practices, they would not usually rise to the level of that admonished in the Horoskis’ case.
“The laws of banking and real estate have been around since men and women lived in caves. A bank lends you money, you buy a house, and you have to pay the bank back the money, or it takes the house away. That’s not going to change,” said Sabino, who added that the ruling may not set a precedent at all if OneWest Bank is successful in its planned appeal.
Attorneys said judges usually deal with unscrupulous lenders by dismissing their cases or, in extreme instances, issuing monetary sanctions paid to the court.
However, Hauppauge attorney Arshad Majid, who has represented several homeowners in foreclosure proceedings, said, while they rarely use it, judges have the power in some instances to void mortgages. He was not surprised to hear that Spinner would take the drastic step.
“It’s not only a court of law that he presides over, but it is also a court of equity,” Majid said of Spinner. “The court, in making this decision, wanted to stop a pattern of abuse.”
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Judge Cancels Mortgage Due to Mortgagee’s Shocking Behavior in Long Island Foreclosure Action

Posted on Tuesday (November 24, 2009) at 8:45 pm to Current Events
Foreclosure Defense
Mortgages & Sub-Prime Mortgage Meltdown

In a Suffolk County Foreclosure Proceeding, the homeowner scored a victory over the lender, IndyMac BankWritten by Craig D. Robins, Esq.
Suffolk County foreclosure proceeding resulting in total cancellation of mortgage spells a major victory for homeowner
A Suffolk County homeowner who fell behind on her mortgage was sued by the mortgagee, IndyMac Bank, in a foreclosure proceeding that just produced one of the most startling results I have ever seen in foreclosure litigation.
The judge determined that the lender engaged in “unconscionable, vexatious and opprobrious” conduct in attempting to foreclose the property.  The judge concluded that the appropriate penalty was to cancel the mortgage in its entirety, essentially punishing the mortgagee and bestowing a windfall on the homeowner.
Thus, the mortgagee, even though they brought the foreclosure action against the homeowner, ended up losing the entire value of the mortgage.
The case, IndyMac Bank v. Yano-Horoski, was decided Novermber 19, 2009 by Suffolk County Supreme Court Justice Jeffrey A. Spinner.
Foreclosure Judge determines that lender’s attitude was absolutely unconscionable
In a stinging and especially eloquent decision, Judge Spinner highlighted the relatively new law in New York which mandates pre-foreclosure settlement conferences between lenders and borrowers of sub-prime loans, and the problems caused by IndyMac’s wantonly-indifferent attitude towards participating in those conferences.
Judge Spinner determined that IndyMac refused to negotiate, and instead, treated the homeowner in a “harsh, repugnant, shocking and repulsive” manner by spurning what he thought could have been a “win-win” situation.
The homeowner, Ms. Yano-Horoski lives in East Patchogue.  She took out a $292,500 mortgage in 2004.
IndyMac Bank refused to cooperate with settlement
The lender apparently refused to participate in any kind of settlement on the ground that the homeowner defaulted on a forbearance agreement.  However, it later came out that the lender did not even mail the forbearance agreement to the homeowner until after payments were due.
The judge stated:  “Defendant, through Plaintiff’s duplicity, found herself to be in unique and uncomfortable position of being placed in default of the ‘agreement’ even before she had received it.”
In addition, the judge blasted Karen Dickinson, the regional loss mitigation manager for IndyMac, stating that she had an “opprobrious demeanor” and a “condescending attitude.”
To make matters worse for IndyMac, they claimed that $527,437 was due when almost all other documents indicated that the amount actually due, was less than $300,000.
The judge concluded that the banks’ conduct was “wholly unsupportable at law or in equity, greatly egregious and so completely devoid of good faith that equity cannot be permitted to intervene on its behalf.”
In addition, Judge Spinner determined that merely sanctioning the lender was not enough and would not benefit the homeowner.
The law firm of Steven J. Baum, who we regularly interact with in our bankruptcy and foreclosure defense practice, represented IndyMac.
Judges have had it with irresponsible lenders’ practices
What is important about this case is that it illustrates the changing tide against mortgagees, lenders and banks.  Whereas years ago mortgagees got away with murder, now judges won’t tolerate any improprieties. 
Thus, there is all the more reason to defend foreclosure proceedings if the lender engaged in any bad faith conduct.  An experienced foreclosure defense attorney can review a foreclosure situation and advise the homeowner of their legal rights.
In a case earlier this year, I personally was successful in having the Nassau County Supreme Court dismiss a foreclosure proceeding on technical grounds.  See Long Island Foreclosure Case Dismissed!
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It’s No Wonder Bankruptcy Filings Are Skyrocketing

Posted on Sunday (November 22, 2009) at 5:30 am to Bankruptcy and Society

Long Island Bankruptcy filings are reaching record levels in large part because of the large number of out-of-work consumers
Written by Craig D. Robins, Esq.
I recently wrote a post about how Bankruptcy Filings Are Reaching New Highs .  Looking at the above chart, we get an indication as to one of the major reasons why this is so.
The above graph, courtesy of the Calculated Risk Blog, shows the incredible number of consumers who are out of work and filing unemployment job claims.
Even if the recession has ended (see the blue column on the far right), the level of unemployment continues to remain at the highest levels we’ve seen since 1983, over twenty-five years ago.
The financial stress of losing a job is one of the major reasons why consumers seek bankruptcy relief.  As a Long Island bankruptcy attorney, I have helped great numbers of people eliminate their debts with Chapter 7 bankruptcy filings during the recessionary period.
For those on Long Island who have lost a job and gotten into serious debt, it is prudent to confer with an experienced bankruptcy attorney to learn if bankruptcy is an option to consider.
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Bankruptcy Filings Are Reaching New Highs

Posted on Thursday (November 19, 2009) at 4:30 am to Bankruptcy Statistics

 Written by Craig D. Robins, Esq.
Individual Bankruptcy filings have continued to increase this year, bringing the filings for those overwhelmed by consumer debt to new highs since the bankruptcy laws were overhauled in 2005.
Nationally, the 135,913 consumer bankruptcy filings in October represented a 27.9 percent increase over last October’s monthly total of 106,266.
The above graph, courtesy of the Calculated Risk Blog, shows consumer filings on a quarterly basis going back to 1996.  We are now approaching the levels seen just prior to when the bankruptcy laws were changed in October 2005.
The filings have increased virtually every single quarter since 2006.  I previously wrote about Bankruptcy Filings Returning to Pre-Amendment Levels .
Through October, there have been 1.18 million personal bankruptcy filings in the U.S. 
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Can Credit Card Companies Trust the Collection Firms They Hire?

Posted on Wednesday (November 18, 2009) at 9:00 am to Current Events
Debt Negotiation

Another credit card debt collection law firm gets in troubleWritten by Craig D. Robins, Esq.
Law Firm of Bill Collectors Dissolves Amid Law Suits Alleging that the Collection Firm Engaged in Fraud
I previously wrote about debt collector law firms in New York that had gotten in trouble with the law.  Debt Collectors Shut Down by Attorney General .
Now it is coming to light that a large regional collection firm in Georgia crashed and burned amid allegations that the firm failed to file collection law suits on behalf of their clients and also used funds for those suits to pay the firm’s own expenses.
The firm, Trauner, Cohen & Thomas, located in Sandy Springs, Georgia, dissolved after operating for more than 30 years. 
What led to the firm’s demise?  Several of the firm’s clients, who are banks and credit card companies, sued the firm, alleging various gross improprieties.
NCO Financial Systems, (a company I regularly deal with on behalf of my Long Island bankruptcy clients as they purchase massive amounts of delinquent debt), brought suit against the Trauner collection firm alleging that it gave the firm more than $1.3 million to reimburse the firm for filing fees and other expenses of collection suit litigation relating to more than 15,000 lawsuits the firm was to handle on NCO’s behalf.  Instead, the collection firm used the funds for its own operating expenses and inflated it reimbursement requests according to the pleadings.
Midland Credit Management brought another suit on similar grounds, alleging that they were defrauded $1.7 million.  A third suit alleges that the Trauner collection law firm is affiliated with a collection company, National Asset Recovery Inc., and that this company and the law firm defaulted on $1.7 million in loans.  There are even more similar law suits filed by Zenith Acquisition Corp. and Northstar Capital Acquisition.
One wonders if the financial pressures that many of these debt collection firms are suffering from encourages them to take shortcuts and violate consumer rights.  Congress recently issued a scathing report about the illicit practices of bill collectors:  Credit Card Debt Collectors Ripped in Federal Report .
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New Bankruptcy Chapter: Chapter 14 ???

Posted on Tuesday (November 17, 2009) at 7:45 pm to Bankruptcy and Society
Bankruptcy Legislation
Current Events

too-big-to-failWritten by Craig D. Robins, Esq.
Possible New Bankruptcy Chapter for Companies “Too Big To Fail”
We are all familiar with bankruptcy Chapters 7, 11 and 13.  Then there’s Chapter 9 for municipalities, Chapter 12 for farmers, and rather recently, Chapter 15 Bankruptcy  for international insolvency matters.
In an American Bankruptcy Institute Legislative Symposium held today, the panelists discussed whether Congress should add a new chapter to the Bankruptcy Code to handle filings by this country’s largest troubled companies that have recently been in the news as being “too big to fail.”
After the failure of Lehman Brothers and the possible failure of AIG and the big three automakers earlier this year, there has been significant concern about how to handle such large companies.
Daniel Flores, chief Republican counsel for the House Judiciary Committee, suggested that these companies need to be treated specially and that the United States needs to modify its bankruptcy laws so that the largest companies can fail without causing turmoil in this country’s financial system.
Flores advocated for congressional passage of H.R. 3310, which would create a “Chapter 14” to institute a new legal process designed to help restructure troubled non-bank financial holding companies whose collapse would pose a systemic risk to U.S. economic stability. The new chapter would create an oversight board that would bring together the failing company, its creditors and regulators to address complicated financial issues before a bankruptcy filing.
It appears that not all conference presenters were convinced that this new Chapter 14 filing category is  really necessary.
“I don’t know if it’s necessary to have a separate chapter,” said Harvey Miller of Weil Gotshal & Manges, who is the lead bankruptcy attorney for Lehman Brothers. “The Bankruptcy Code now is not perfect, but with some amendments, it could clearly deal with issues of non-bank financial holding companies.”
About the image:  the political cartoon is courtesy of  David Donar, a Clemson University professor who maintains the blog, Political Graffiti .  Although he teaches digital film projection, David has a sharp wit for political satire and uses his political cartoon site to showcase his opinions on all sorts of topics…middle east, US politics, environment, sport, anything news or opinion worthy.  Check it out.
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Bankruptcy Attorney Representation — How Important Is It?

Posted on Tuesday (November 17, 2009) at 1:30 am to Chapter 7 Bankruptcy
Consumer Advice
Issues Involving New Bankruptcy Laws

When it comes to filing bankruptcy in New York, using an experienced bankruptcy attorney is quite importantWritten by Craig D. Robins, Esq.
The two major reasons why people who know they need to file for bankruptcy, but put off doing so, is anxiety about filing, and concern about paying the legal fees.
Some consumers consider filing themselves.  However, this can be a major mistake and create additional problems.  Here’s why:
In every bankruptcy case, the debtor must appear before a court-appointed trustee.  The trustee is not your friend.  To the contrary, the essential purpose of the trustee is to investigate the debtor and determine if there are any assets that can be taken for the benefit of creditors.  Meeting with an experienced bankruptcy attorney will enable the debtor to have his or her assets reviewed.
What many debtors do not realize is that certain conduct that may have occurred years before filing can have a major impact.  For example, giving away assets or transferring an interest in real estate can result in significant litigation in the bankruptcy case.  Such matters are regularly reviewed by bankruptcy counsel before a bankruptcy petition is filed.  There are many reasons Why Consumer Debtors Can’t Transfer Assets Like a House or Car Before Filing Bankruptcy on Long Island .
The bankruptcy petition is written in plain English, so one would think that it is quite readable.  However, a fully-completed petition in a Chapter 7 bankruptcy in New York, when including all of the various forms and schedules, can easily exceed 40 pages.  The petition requires preparing numerous schedules and budgets.  Proper information about debts and assets must be listed.  Not necessarily an easy task. 
Then, there are several dozen questions in a Statement of Financial Affairs that must also be answered.  The creditors and their addresses must be listed not only ih a schedule of debts (that is broken into three separate categories) but also in a special format called a Matrix.
When Congress drastically overhauled the Bankruptcy Code in 2005, many new requirements were imposed.  Now there is a complex and complicated means test, as well as the requirement for mandatory credit counseling.  The Chapter 7 trustee as well as the Office of the U.S. Trustee reviews each and every petition to make sure all of the requirements under the new law are properly met.   I reviewed issues under the new bankruptcy laws in several posts.  Here’s one:  Bankruptcy Judges Convene to Discuss New Bankruptcy Laws on their One Year Anniversary .
In addition, the means test is very tricky.  Failure to properly prepare the bankruptcy means test can spell disaster as the United States Trustee can seek to have the bankruptcy case dismissed.  The Means Test is Often the Key to a Successful Chapter 7 Bankruptcy Case .
Another important aspect is Determining Household Size for the Means Test .  If the bankruptcy court determines that the debtor did not include the proper number of family or household members for the means test calculation, the means test eligibility can change, resulting in an abusive filing situation.
Consumers must also choose which Chapter 0f bankruptcy to file.  If a consumer is seeking to stop foreclosure and cure mortgage arrears, A Chapter 7 filing won’t do the trick. 
Of course, there are many books that explain how to do the process.  They are all several hundred pages long.  Yes, any American consumer can file their own bankruptcy petition.  However, there are so many traps for the unwary that even attorneys who do not regularly practice bankruptcy often get their clients into hot water.
A good bankruptcy attorney will also prepare the client for the meeting of creditors.  For example, How Much Should You Say at the Meeting of Creditors in Bankruptcy Court?
Every trustee I know on Long Island has expressed concern about those consumers who file bankruptcy without an attorney because these consumers often make serious mistakes with the procedure.   Many consumers who file on their own get bad advice from a friend or relative.  When it Comes to Bankruptcy, Don’t Listen to Uncle Joey .
Self-representation by pro-se debtors in bankruptcy matters can end up being penny-wise, but pound-foolish.  This is one of Three Reasons Why a Chapter 7 Bankruptcy Case Can Go Bad .
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Super Ninja Bankruptcy Attorneys

Posted on Monday (November 16, 2009) at 9:00 am to Bankruptcy Humour
Photographs of Max

Super Ninja Bankruptcy Attorneys -- Max Robins and Sam GelbergWritten by Craig D. Robins, Esq.
What happens when you take two spirited six-year-old boys who love to use their imagination and pretend to be Power Rangers, and it also happens that both of their fathers are bankruptcy attorneys?
Why, you get Super Ninja Bankruptcy Attorneys!  
My son went through a faze where he couldn’t get enough of the “Power Rangers” television program.  He would often pretend to be a Power Ranger, which is a seemingly ordinary individual who morphs into a powerful, costumed superhero.
Add to the mix visiting Daddy’s bankruptcy law office, seeing Daddy come home “costumed” in his suit and toting his briefcase, and hearing Daddy talk a lot about this thing called, “bankruptcy.”
So about three years ago, my son, Max, while playing with his best friend, Sam, came up with the idea that they were Super Ninja Bankruptcy Attorneys.  Sam is the son of former Brooklyn Chapter 13 trustee Stuart Gelberg, who now is a Long Island bankruptcy attorney, like me.
I was never able to get Max or Sam to reveal exactly what the Super Ninja Bankruptcy Attorney does, as they explained to me that this was “top secret.”  However, I see them constantly trying to save the world. Or at least that’s what it looks like from where I sit.
The boys, now nine, are still hard at work, playing Super Ninja Bankruptcy Attorney.
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It’s Time for Bankruptcy Songs

Posted on Sunday (November 15, 2009) at 11:45 pm to Bankruptcy Humour

Bankruptcy Song Contest
 Written by Craig D. Robins, Esq.
My friend, Steven Horowitz, the originator of the Bankruptcy Bill and BAPCPA Man bankruptcy comic strips, recently announced a bankruptcy song contest.
Although practicing bankruptcy is usually serious business, it’s still fun to make light of its humorous aspects.
I’m considering entering the song contest.  In the meantime, I will post some already-written bankruptcy songs. 
Here is one by Michael Silverstein, who was previously a senior editor with Bloomberg Financial News.  He wrote this to make light of how consumers were hurrying to file their bankruptcy petitions before the law changed in 2005.

The Bankruptcy Song
(To be sung to the tune of
“My Bonnie Lies Over The Ocean”)

To bankruptcy court I am fleeing,
This cop out is calling to me,
I’ve spoken to Irv my accountant,
He says it’s my best strategy.
  Bankrupt, bankrupt,
There’s creditors at my front door,
My door;
Need a,
Court date,
Before Congress changes the law.
The stock market took down my savings,
It’s years since I got my last raise,
My bills keep on growing like fungus,
There’s just one way out of this maze.
Bankrupt, bankrupt,
There’s creditors at my front door,
My door;
Need a,
Court date,
Before Congress changes the law.
I’m woefully overextended,
When the phone rings I shake and I twitch,
The gap twixt my debts and my assets,
Makes the Grand Canyon look like a ditch.
Bankrupt, bankrupt,
There’s creditors at my front door,
My door;
Need a,
Court date,
Before Congress changes the law.
To see more of Michael’s funny songs and poetry, which emphasize satirical verse about financial themes, check out his website:  http://www.wallstreetpoet.com.
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Bankruptcy Can Provide Way Out of Bad, Highly-Leveraged Real Estate

Posted on Tuesday (November 10, 2009) at 5:30 am to Chapter 7 Bankruptcy
Foreclosure Defense
Mortgages & Sub-Prime Mortgage Meltdown

Filing bankruptcy can eliminate debt from highly-leveraged homes and real estate investmentsWritten by Craig D. Robins, Esq.
For many, purchasing a home in the past few years with no money down was the way to go.  Now, however, with real estate values plummeting, many homeowners are finding themselves owing substantially more than their homes are worth.  This is a concept I’ve focused on repeatedly in many blog posts over the past several months.
The concept of taking a loss with such real estate purchases has to do with leveraging — putting very little down, but purchasing a lot. 
When property values are increasing, the homeowner is considered a winner.  However, with the collapse of real estate values, often combined with an increase in the costs of monthly mortgage payments because of adjustable-rate mortgages, the costs of home ownership become especially difficult.
Homeowners faced with this pressure have to make a decision as to whether it is worth it to keep their home if they can barely afford to pay the mortgage and they have absolutely no equity at all.
Our Long Island bankruptcy attorneys help counsel homeowners with exploring the various options.   To those who qualify, a bankruptcy can provide an opportunity to walk away from over-leveraged bad real estate without any future liability.
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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