About Me
“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”
Bankruptcy and Society
Written by Craig D. Robins, Esq.After reading a recent New York Times article about stock market jitters caused by worried consumers, I wondered if the stock market indexes could be used as a barometer to predict future personal bankruptcy filings.
After all, we have often heard that the fear on Wall Street is that nervous consumers can short-circuit the country’s economic recovery, which is just starting to pick up, despite the fact that consumer bankruptcy filings continue in very high numbers.
When consumer sentiment falls significantly short of expectations, which is what happened towards the end of the summer (before a slight rebound), it was a sign that consumers were cutting back on their spending as they worried about layoffs. With unemployment approaching ten percent, many consumers are growing increasingly concerned about losing their jobs, assuming they still have them.
Job loss is one of the major reasons why consumers file for bankruptcy help. I see this daily in my Long Island bankruptcy practice, meeting one person or another who has lost a job, lost the ability to work overtime, or has a family member who was laid off.
Although the stock market is indeed rebounding, I would conclude that the ebbs in the stock market have a rebound effect and lead to increased consumer bankruptcy filings several months (or even years) later, as consumers face job loss or the effects of reduced income.
Written by Craig D. Robins, Esq.Same-sex couples have many more issues to contend with than heterosexual married ones — especially when it comes to filing bankruptcy in New York. Everything about the federal bankruptcy law is geared towards the conventional family.
Alas, nowhere in the bankruptcy statutes is there sufficient guidance for dealing with non-conventional family units, let alone same-sex couples who were married in other states.
That does not mean that gay or lesbian consumers in committed relationships can’t file for bankruptcy; it just means that they have to approach the bankruptcy petition and means test more carefully.
Having represented a number of gay and lesbian individuals and couples, the following issues routinely come up in providing bankruptcy advice. Unfortunately, some of the answers are not necessarily so clear.
Can a same-sex unmarried couple file a joint bankruptcy?
There is no difference between gay or straight non-married couples. Only married couples can file a joint bankruptcy petitions.
Can a same-sex couple that is legally married in another state file a joint bankruptcy petition in a New York Bankruptcy Court?
Recently, a handful of states adopted legislation recognizing same-sex marriage. They include Massachusetts, Connecticut, Iowa, Vermont, Maine, and for a short time, California.
Consequently, many New York residents in same-sex committed relationships eagerly went to these state to tie the knot. What if one of these gay or lesbian married couples now wants to file a joint bankruptcy petition in a New York bankruptcy court: can they?
Here we have a conundrum. According to the Defense against Marriage Act, a federal law dating back to 1996, a state is not required to recognize a same-sex marriage in their state even if the couple was legitimately married in another state. However, Governor Paterson did not feel that this produced a fair result and issued a directive in May 2009 requiring all state agencies to recognize same-sex marriages performed out-of-state.
Bankruptcy is a federal procedure based on federal laws. When these laws fail to address certain issues, such as legitimacy of marriage, then state law can be used to amplify the federal law. Since New York does not currently have any law that explicitly recognizes such marriages (Governor Paterson’s directive only applies to state agencies), then it appears that the a New York bankruptcy court would not be able to recognize an out-of-state same-sex marriage.
I have not yet had the opportunity to file a joint case involving a same-sex married couple, but given that opportunity, I certainly would give it a try. The Office of the United States Trustee would then have the difficult decision on whether they should seek to dismiss the case.
Even if they raised such objections, a sympathetic judge could nevertheless rule in favor of the debtors and come up with some legal justification for permitting the joint bankruptcy filing. It is just a question of time before we see such a filing in a New York bankruptcy court. Earlier this year I even placed a post on my bankruptcy blog offering to do such a filing on a pro bono basis, just to set a precedent.
How do you calculate the size of the household for means test purposes when you have a same-sex couple with a domestic partnerships?
The real issue here is essentially no different for any two partners or roommates living together, whether they may be straight or gay. Simply calculate all of the people who occupy the household, whether they are related or unrelated.
The real issue here is essentially no different for any two partners or roommates living together, whether they may be straight or gay. Simply calculate all of the people who occupy the household, whether they are related or unrelated.
Do you include a same-sex partner’s income on the means test?
The means test only requires a debtor to include the income of the spouse. If you are representing an individual debtor who is in a same-sex unmarried relationship in which the parties share their finances, the best approach is to come up with a specific monthly contribution amount from the non-filing partner.
If the individual debtor is in a same-sex marriage, the debtor can conceivably argue that the spouse’s income and finances should be included in the means test, or, alternatively, argue that the spouse is merely a roommate, considering that New York has yet to make the arrangement legal, and that the income does not need to be included.
Does the United States Trustee look any differently at bankruptcy petitions filed by debtors who have same-sex partners?
My experience has been that the United States Trustee’s office does not treat debtors in same-sex relationships any differently than debtors in straight relationships. However, I do get the feeling that they may want to avoid any politically-charged controversy involving gay rights issues.
My experience has been that the United States Trustee’s office does not treat debtors in same-sex relationships any differently than debtors in straight relationships. However, I do get the feeling that they may want to avoid any politically-charged controversy involving gay rights issues.
What’s down the road?
Eventually, Congress may recognize the existence of same-sex marriages and domestic civil unions in bankruptcy proceedings and provide statutory authority for dealing with such issues. Until that happens, we can only look towards the time when New York legalizes same-sex marriage.
Eventually, Congress may recognize the existence of same-sex marriages and domestic civil unions in bankruptcy proceedings and provide statutory authority for dealing with such issues. Until that happens, we can only look towards the time when New York legalizes same-sex marriage.
In October, Governor Patterson called same-sex marriage a civil right and announced that he wanted the legislature to take quick action and adopt such legislation.
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About the Author. Long Island Bankruptcy Attorney Craig D. Robins, Esq., is a regular columnist for the Suffolk Lawyer, the official publication of the Suffolk County Bar Association in New York. This article appeared in the November 2009 issue of the Suffolk Lawyer. Mr. Robins is a bankruptcy lawyer who has represented thousands of consumer and business clients during the past twenty years. He has offices in Patchogue, Commack, Woodbury and Valley Stream. (516) 496-0800. For information about filing bankruptcy on Long Island, please visit his Bankruptcy web site: http://www.BankruptcyCanHelp.com.
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.
New Bankruptcy Chapter: Chapter 14 ???
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Written 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.”
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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.
Written by Craig D. Robins, Esq.Substantial Earners Are Coping with Recessionary Layoffs by Filing for Bankruptcy
There have been some massive job layoffs in this deep recession, even for professionals and upper level executives. Consequently, many recently-laid off workers are being forced to rethink their professional identities, their personal relationships and how they will manage their existing debt.
The current financially-plagued economy seems to be sparing no one. Even white-collar workers with advanced degrees, working at prestigious companies, are not immune. Anyone can lose a job. Wall Street firms have not been kind; advertising and retail are suffering greatly, and many question the viability of garment industry jobs remaining in New York.
According to studies by organizational psychologists, white-collar men tend to experience unemployment differently. For them it is sometimes difficult to adapt and find a job to provide income if that income is significantly less. Grappling with joblessness inevitably entails surrendering an idea of who they are. Negative emotions abound. I’ve previously written about the Eight Steps to Cope with Emotional Issues During Bankruptcy as well as The Emotional Side of Debt and Bankruptcy .
To those who qualify, bankruptcy can often provide a solution for eliminating substantial debt. This usually has a very positive effect on the psyche, eliminating a large source of anxiety and depression.
The bankruptcy option should be discussed and considered well before the raiding of 401-K and other retirement accounts. (See Are Pensions Protected in New York Bankruptcy Cases? ).
In my Long Island bankruptcy law practice, I frequently see clients who previously earned six-figure incomes. Bankruptcy can provide an opportunity for a fresh new financial start and remove some of the pressure of finding new employment.
Written by Craig D. Robins, Esq..
A bankruptcy filing can provide a fresh new financial start to those caught in a debt trap
Some of the major reasons consumers seek bankruptcy relief typically include medical expenses, death in the family, loss of a job or decreased salary, and matrimonial issues. However, America’s addiction to debt is certainly a significant reason — especially here on Long Island..
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New book discusses debt addiction
The fact is that high levels of household debt push consumers into seeking bankruptcy relief. The concept of debt addiction is the subject of a new book, just published last month, Collateral Damaged: The Marketing of Consumer Debt to America, written by Dr. Charles Geisst, Professor of finance at Manhattan College.
Dr. Geisst believes that sometime in the 1970s and 1980s, the use of credit cards, which had begun as a convenience, began to grow into an addiction. Banks then took advantage of this addiction milking consumers with exorbitant interest fees and service charges.
Then Wall Street took advantage of the situation by creating “toxic securities” that are now threatening to bring about a collapse of the global economy, continuing where the toxic securitization of the mortgage market left off.
In his book, Dr. Geisst delivers a scathing critique of the routine practices of the credit card industry that led to the current consumer debt crisis.
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It seems that banks became greedy after realizing that simply making loans to consumers to buy a home or car was not enough. The banks became increasingly interested in the high profit margins of these loans and other types of consumer debt, and then sought increasingly sophisticated ways to market them, eventually leading to the bursting of the credit bubble last year.
In my Long Island bankruptcy law practice, I see first hand the debt addiction that many families encounter, and their inability to escape from the ever-deepening abyss of credit card bills. Fortunately, bankruptcy acts as an escape valve, enabling these clients to eliminate their debts and get a fresh new start.
Several years ago the credit card industry pushed hard for bankruptcy reform to make it harder for consumers to seek bankruptcy relief. Ironically, they have also created a situation which is now driving consumers to file for bankruptcy in droves . It is expected that 1.4 million Americans will file for bankruptcy this year.
You can listen to an American Bankruptcy Institute podcast of Dr. Geisst being interviewed by the Sam Gerdano, Executive Director.
Written by Craig D. Robins, Esq.The precipitous drop in real estate values during the past two years is forcing many wealthy homeowners to consider bankruptcy as an option and Long Island is no exception.
Here’s why: many well-to-do individuals invested heavily in one parcel of real estate — their home — during the go-go real estate boom, thinking that it was a fantastic investment. After all, who could complain about an investment that increased 10% to 20% in value for a number of years?
However, as we all know, real estate values have plummeted. To make matters worse, many of these high-income homeowners leveraged their real estate purchase. They bought a million dollar home and financed it with a million dollar mortgage. Unlike an investment in stock, which, in a worse-case scenario, can become worthless, a leveraged investment in real estate can result in an extreme amount of additional liability.
Thus, if the value of the home is under water and worth less much less than the amount due on the mortgage, the homeowner can now be liable to the mortgage company for hundreds of thousands of dollars. In addition, the homeowner must also pay for property taxes, insurance and maintenance.
With many highly-paid executives being laid off, there are a lot of million dollar homeowners who can’t afford to make their mortgage payments. According to data from the National Bankruptcy Research Center, personal Chapter 11 filings, which is the type of bankruptcy a wealthy individual would file, have jumped 73 percent over last year.
In general, if secured debt is more than $1,010,650, then a homeowner is not eligible for Chapter 13 bankruptcy, and instead, must file for Chapter 11 bankruptcy, which is also the type that businesses ordinarily file. Individuals who have earned substantial income in the six-month period before seeking bankruptcy relief are also precluded from filing for Chapter 7 bankruptcy because of the means test.
It is also interesting to note that listings of homes nationwide for sale worth $1 million or more increased 27.3 percent in July from October, according to Zillow.com, a Web site that tracks real estate transactions. Yet, the number of nationwide homes sold with a value between $1 million to $2 million fell 23 percent in July from a year earlier, according to the Chicago-based National Association of Realtors. Furthermore, there was a 21-month supply, up from 16 months last year.
In my Long Island bankruptcy practice, I frequently consult with individuals who previously earned substantial incomes, and homeowners who own expensive homes.
Bankruptcy Can Save Your Marriage
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Written by Craig D. Robins, Esq.Disagreement about finances can lead to divorce as debt is a marriage killer
I all see it all too frequently – couples fighting over financial problems. One of the leading causes of matrimonial difficulty is the strain caused by money issues.
I all see it all too frequently – couples fighting over financial problems. One of the leading causes of matrimonial difficulty is the strain caused by money issues.
In these recessionary times, more and more families are facing overwhelming debt. Whether caused by loss of a job, poor money management, reduced income, or increased expenses, financial pressures seem to be at an all-time high.
The ensuing stress of fighting over bills and money can take its toll on the marriage, often straining marital relationships to be brink of failure. Most marital arguments are over financial issues. Many divorces are the result of stress and constant fighting over lack of money.
Although there are many elements to a healthy marriage, statistics show that divorce occurs more often due to financial troubles than other issue, including marital infidelity, health problems, and growing apart.
Financial stress can quickly build to the breaking point. But if you could save your marriage, wouldn’t you?
Bankruptcy can come to the rescue and save the marriage. For those who qualify for a Chapter 7 bankruptcy filing, the bankruptcy will likely eliminate all credit card debt and personal loans, effectively eliminating a major source of marital strife.
Many of my clients have confided in me after I filed their bankruptcy petition and eliminated their debts, that I rescued their marriage.
For those couples with excessive debt, it is important to understand that filing for bankruptcy relief is often an overlooked option that may work to save the marriage.
Financial stress can be overwhelming but divorce can be infinitely worse. Filing bankruptcy can be a way to regain control over both your marriage and your finances.
Written by Craig D. Robins, Esq.Senior citizens can be prone to debt problems
With fixed incomes and unexpected expenses, senior citizens are at high risk for getting into debt – and they have less time to pick up the pieces.
In my Long Island bankruptcy practice, we are seeing more and more seniors utilizing bankruptcy to deal with their debts.
A recent Newsday cover story focused on the problems affecting many of Long Island’s senior citizens which are driving them into debt. A common situation occurs when one spouse dies, eliminating one-half of the golden couple’s income. Often receiving limited funds from Social Security or modest pensions, a surviving spouse is driven to using credit cards just to pay for day-to-day living expenses.
Bankruptcy can be a lifesaver for the elderly
The Newsday article told the story of an unfortunate 77-year-old woman who needed to place her sick husband in a nursing home. But fortunately for her, she was able to eliminate all of her debts by filing bankruptcy.
According to Harvard professor Elizabeth Warren, who I’ve quoted frequently in the past, older Americans are under increasing financial pressure and are carrying more debt into retirement than ever before in history, which leaves them financially weakened.
Today’s economy is bad enough for younger folks, but it can be particularly troubling for those in their 50’s or older who have less time to recuperate and more at stake.
Accordingly to Long Island economist Irwin Kellner, some seniors started getting into debt when they used their homes as a piggy bank and an ATM. This encouraged people to spend far more than they earned, and they didn’t save enough in the process.
I previously wrote several posts about how more and more seniors are seeking bankruptcy relief – Senior Citizens Are Filing Bankruptcy In Record Numbers .
Many seniors have no choice but to rely on their credit cards to pay for the increasing costs of health care. A serious illness can drive one into debt in the many tens of thousands of dollars.
Unfortunately, one of the difficulties many seniors face is embarrassment from debt. Consequently, senior citizens are sometimes reluctant to get advice for dealing with their debt situation.
Many seniors are able to discharge all of their credit card debt and medical bills with a bankruptcy filing, and most seniors with significant debt qualify for Chapter 7 bankruptcy.
My office offers free consultations to senior citizens with overwhelming debt problems.
Here are some other resources for seniors on Long Island who are struggling with debt problems:
Legal Aid Society of Suffolk County, Senior Citizen Division
(631) 854-0401
(631) 854-0401
Legal Aid Society of Nassau County
(516) 560-6400
(516) 560-6400
Nassau Suffolk Law Services – Suffolk
Pro Bono Project
(631) 232-2400
Pro Bono Project
(631) 232-2400
Nassau Suffolk Law Services – Nassau
Volunteers Lawyers Project
(516) 292-8299
Volunteers Lawyers Project
(516) 292-8299
Suffolk County Department of Aging
(631) 853-8200
(631) 853-8200
Celebrities File Bankruptcy, Too
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Written by Craig D. Robins, Esq.
Bankruptcy debt relief helps many typical consumers, but sometimes celebrities have debt problems also. Last month movie actor Stephen Baldwin, a Massapequa native, filed for bankruptcy after his mortgage company began foreclosure proceedings against him.
A famous sports star also filed bankruptcy last month. Former Major League Baseball All-Star Lenny Dykstra, a fixture of the New York Mets, filed a bankruptcy petition which indicated his debts were between $10 million and $50 million. Dykstra had built a financial empire of various businesses which unfortunately did not work out.
Last week, the venerable magazine and publishing phenomenon, Readers Digest, also sought Chapter 11 bankruptcy relief to restructure $2.2 billion in debt.Celebrity photographer Annie Leibovitz has been rumored to be considering bankruptcy now that a lender is suing her over a $24 million loan.