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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

How Do Creditors Find Out About a Bankruptcy Filing?

Posted on Monday (November 9, 2009) at 7:00 am to Bankruptcy Tips Consumers Should Know
Chapter 13 Bankruptcy
Chapter 7 Bankruptcy

Shortly after a bankruptcy petition if filed, the bankruptcy court sends out an official notice to all creditorsWritten by Craig D. Robins, Esq.
 
The instant a bankruptcy petition is filed, an “automatic bankruptcy stay” goes into effect, making it illegal under federal law for creditors to take any further steps to collect on a debt.  This is the first step to getting debt relief in any bankruptcy case.
 
So who notifies the bill collectors and creditors about the bankruptcy filing, and how do they find out that you filed for bankruptcy?  I previously wrote:  How Quick Will Creditors Stop Calling Me If I File Bankruptcy?
 
Once the bankruptcy petition is filed with the bankruptcy court, the Court sends out a “Notice of Commencement” form which, in a Chapter 7 case, is also known as a “Notice of Chapter 7 Case, Meeting of Creditors and Deadlines.” 
 
This notice is uniform throughout the country as it is on Official Form 9A.  The court typically mails the notice between two and four days after the petition is filed. 
 
The Court sends the notice to all creditors and interested parties listed in the petition.  Thus, it is important to make sure that you provide correct and accurate addresses for all creditors in the petition.
 
The notice contains your name and address; your Social Security number; the date of filing; the name and address of the bankruptcy court where the case is pending; the chapter of bankruptcy you filed for relief under (usually Chapter 7 or Chapter 13); the name of the judge; the name, address and phone number of the trustee; the date, time and location for the meeting of creditors; the deadline for filing objections to discharge; the deadline for filing objections to exemptions; a notation as to whether a “presumption of abuse” exists (in Chapter 7 cases); a notice to creditors that they may not engage in collection actions; and a schedule of explanations of common bankruptcy terms and concepts.
 
This notice is the only time the Court will send a creditor any documentation containing your Social Security number.
 
Violating the automatic bankruptcy stay is a very serious offense.  What Are Your Rights If a Creditor Violates the Automatic Bankruptcy Stay?
 
If creditors call you after filing because they have not yet received this notice, you can tell them that you filed for bankruptcy and give them the chapter (usually 7 or 13), the case number, and the name of the Court.  For most of my clients that would be “the Bankruptcy Court for the Eastern District of New York.”
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New Fannie Mae “Deed for Lease” Program May Be an Alternative to Foreclosure But It May Not Be the Best Choice for Many Homeowners

Posted on Saturday (November 7, 2009) at 12:15 am to Benefits of Bankruptcy
Chapter 13 Bankruptcy
Chapter 7 Bankruptcy
Foreclosure Defense
Mortgages & Sub-Prime Mortgage Meltdown

Fannie Mae Deed for Lease program is an alternative to foreclosure and bankruptcyWritten by Craig D. Robins, Esq.
 
If you have a Fannie Mae mortgage, are delinquent with your mortgage payments, and are headed towards losing your house in foreclosure, you may be able to get a temporary break.  A new program entitled, “Deed for Lease” permits homeowners to transfer the deed to their house to Fannie Mae and sign a one-year lease.  The program was just announced two days ago.
 
Why would Fannie Mae do this?    The foreclosure process is usually lengthy and time-consuming.  This program will permit families to stay in their homes (albeit for a limited period of time) and avoid the uncertainty of foreclosure.
 
However, the program is not for everyone.  There is a detailed application process and you must be approved.  Also, the program only applies to Fannie Mae mortgages.
 
Is the “Deed for Lease” program better than filing bankruptcy or engaging in foreclosure defense?      Only an experienced bankruptcy attorney can really help answer that question.  There are pros and cons with all options.  The “Deed for Lease” program means losing your home — for good.  On the other hand, filing a Chapter 13 bankruptcy enables the homeowner to cure the mortgage arrears over time and keep the home.
 
The program also guarantees a minimum one-year rental period, which also calls for a monthly rental payment.  However, defending a foreclosure proceeding (assuming that there is a reasonable foreclosure defense) can often provide the homeowner with an even longer period to stay in the home, during which time the homeowner does not make any rent, mortgage or real estate tax payments.  In the program, you would have to pay “market rate” for rent, which could be fairly pricey.  For a typical Long Island home, that could easily be $2,000 per month or more.
 
Finally, even if the program sounds good for you, there is no guarantee that you will be accepted into it, and the approval process can take some time — and all the while the mortgagee can continue a foreclosure proceeding.
 
Of course, if the bank takes back a deed in exchange for a lease, the homeowner is off the hook for any mortgage deficiency.  However, keep in mind that a Chapter 7 bankruptcy filing in New York would discharge such a deficiency.
 
If you’ve already filed for bankruptcy, you are not eligible for the program.
 
How do I know if I have a Fannie Mae mortgage?      Fannie Mae has a website that enables you to look up your property to see:  http://loanlookup.fanniemae.com/loanlookup/.
 
What are the details of the “Deed for Lease” program?
 
  • The mortgage servicer has to decide that the homeowner qualifies for a “deed in lieu of foreclosure.” Basically, borrowers who are in default on their loan voluntarily give the deed back to the lender, negating the need for a drawn-out foreclosure process. Traditionally this has been considered less damaging to the borrower than foreclosure, although both actions have severe effects on a borrower’s credit standing–and both result in loss of their home.
  • Borrowers-turned-tenants must be able to afford market rent on the home. That rent can’t exceed 31 percent of their monthly gross income, which must be documented.
  • Borrowers cannot have 12 or more past-due payments on their mortgage. And they must have made at least three payments since the loan was first taken out–or since the last time it was modified. Borrowers can’t be in the process of declaring bankruptcy.
  • Rentals are for 12 months, with the possibility of an extension.
  • The home remains available for sale, subject to the terms of their lease. Renters remain responsible for maintaining the property.
  • Only primary residences qualify. Landlords may qualify if their tenant has been using the home as a primary residence.
  • Mortgages backed by the FHA, VA or other government agencies don’t qualify.
  • Borrowers who think they might qualify for the new rent-back program should talk with their mortgage servicers, who, in conjunction with Fannie Mae, will figure out if they qualify for a rent-back offer.
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    Credit Card Debt Collectors Ripped in Federal Report

    Posted on Friday (November 6, 2009) at 8:00 am to Creditors Engaging in Abusive Bankruptcy Practices
    Current Events

    Many debt collectors are downright evil!

    Many debt collectors are downright evil!

    Written by Craig D. Robins, Esq.

     
    Two weeks ago the Government Accounting Office (GAO) issued a scathing report about the illicit practices of bill collectors.  Of course, this is a regular complaint that I hear from my Long Island bankruptcy clients.
     
    The GAO has been asked by Congress to examine federal and state consumer protections statutes to see if they were working.  They concluded that they were not and reported back to Congress that the Fair Debt Collection Practices Act (FDCPA) should be amended to provide consumers with better protection.  Like, tell us something we don’t know!
     
     
    The Federal Trade Commission (FTC) receives more complaints about bill collectors and the debt collection industry than any other industry.  Last year they received  79,000 complaints on third-party debt collectors.  This is almost 19 percent of all of the complaints it received.
     
    Ongoing abusive practices include trying to collect debt that isn’t owed or is beyond the statute of limitations, making harassing phone calls, threatening to make arrests that the debt collector has no authority to make, and collecting debt discharged in bankruptcy.
     
    I previously wrote about efforts here in New York to deal with the problem of rogue bill collectors:  Debt Collectors Shut Down by Attorney General .
     
    Hopefully, Congress will indeed make the debt collection laws stricter to prevent the abuse that we hear so often.
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    How Does a Chapter 7 Bankruptcy Trustee Sell Assets

    Posted on Thursday (November 5, 2009) at 11:55 pm to Bankruptcy Exemptions
    Chapter 7 Bankruptcy

    Chapter 7 bankruptcy trustees must provide notice before selling assets of a bankruptcy estateWritten by Craig D. Robins, Esq.
     
    If a trustee in a Chapter 7 case comes across a significant asset that is not exempt, the trustee will first solicit an offer from the debtor.  If the debtor is interested in keeping the asset, then the debtor will negotiate to purchase the debtor’s interest.
     
    What happens if the debtor is not interested or can’t afford to purchase the asset?  Then the trustee will try to sell it.
     
    In order to do so, the Chapter 7 trustee must give notice to all creditors and interested parties listed in the petition.
     
    The trustee can then determine how the asset will be sold.  It can be through a broker or an auctioneer.  The trustee can also publish a notice indicating that the sale will be in his office, or that the item will be sold to the highest bid received by a certain date.
     
    In order for the trustee to accept a bid, even if the only party making the offer is the debtor, the trustee must seek bankruptcy court approval.  In some instances, the trustee will structure the sale so that it is subject to a higher or better offer.
     
    Once the trustee sells the asset, then he has good amount of paperwork to do.
     
    You may be interested in a related post I wrote:  How Much Do Chapter 7 Bankruptcy Trustees Get Paid?
     
    What are typical assets that a Chapter 7 trustee may sell?  These can be cars, jewelry, collectibles, homes, and even baseball tickets.
     
    However, a good experienced Chapter 7 bankruptcy attorney will properly guide the client to make sure that there are no unprotected assets.  Also, Sometimes Debtors Can Keep Non-Exempt Assets in Chapter 7 Bankruptcy Cases .
    .
    .
    For those considering filing bankruptcy in New York, here is a list of the most common Bankruptcy Exemptions in New York .
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    Woman Gets Bankruptcy Discharge Without Having to Show Any Photo Identification

    Posted on Monday (November 2, 2009) at 9:00 pm to Bankruptcy Practice
    Recent Bankruptcy Court Decisions

    One debtor was excused from showing photo identification at her meeting of creditors in bankruptcy courtWritten by Craig D. Robins, Esq.
     
    Last week I wrote a post in which I said that You Need Certain Identification to File for Bankruptcy .   I did have one unusual case in which my client could not obtain the necessary photo ID.
     
    Several years ago I represented a disabled woman through the Volunteer Lawyers Project.  She had no photo identification when she came to my office and had never driven a car in her life.   In addition, she had never worked.  As you can imagine, she never received a driver’s license or any other kind of photo identification. 
     
    I sent her to the NYS Department of Motor Vehicles to get an official New York State identification card, but they refused to give her one because she had no other sources of identification to prove who she was. 
     
    When I filed her bankruptcy case in the Central Islip Bankruptcy Court, the Chapter 7 trustee, Allan B. Mendelsohn, eventually agreed to examine her at the meeting of creditors, but did not officially close the meeting.  I then brought a motion to waive the identification requirements after reviewing the matter with the Office of the United States Trustee.  The motion was granted, the trustee closed the meeting of creditors, and the debtor received her discharge.
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    What Income Has to be Disclosed in a Bankruptcy Petition?

    Posted on Sunday (November 1, 2009) at 8:00 am to Bankruptcy Means Test
    Bankruptcy Tips Consumers Should Know

    All income of any kind must be disclosed in a bankruptcy petition.  Income must also be disclosed on the bankruptcy means test.Written by Craig D. Robins, Esq.
     
    The simple answer is that all income of any kind must be disclosed in a bankruptcy filing.  Some clients think that because they “work off the books” they don’t have to disclose that income.  That’s certainly not the case.  All income must be disclosed — no matter how it is received.
     
    In addition to salary and earnings from employment, all other types of income must be disclosed as well.  These include:
    .
    • Rental Income
    • Business Income
    • Investment Income 
    • Child Support, Alimony, and Maintenance
    • Gambling Winnings
    • Pensions and Retirement Income 
    • Individual Retirement Account (IRA) Withdrawals
    • Life Insurance Policy Withdrawals
    • Money received through Inheritance  
    • Social Security / SSDI Benefits
    • Disability Payments
    • Unemployment Insurance Proceeds
    • Workman’s Compensation
    • Food Stamps or Welfare
    • Annuity payments
    • Regular Contributions from others in the household
    • Payment on Notes and Mortgages you own
    Even though all income must be disclosed, that doesn’t necessarily mean that all of it must be included in the means test.  For example, Social Security payments do not fit into the means test calculation. 
     
    There can be strict penalties for failing to accurately disclose all of your income.  They include having your bankruptcy petition dismissed or being denied a discharge.  Consumers have a great opportunity to discharge their debts with bankruptcy.  It’s not worth messing around and jeopardizing your ability to eliminate your debts by neglecting to reveal everything.
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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