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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.

Life After Bankruptcy

Cell Phones and Bankruptcy

Posted on Monday (October 26, 2009) at 4:00 pm to Bankruptcy Tips Consumers Should Know
Benefits of Bankruptcy
Chapter 7 Bankruptcy
Life After Bankruptcy

A cell phone contract can be terminated in a bankruptcy filing and the early termination penalty can be dischargedWritten by Craig D. Robins, Esq.
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Filing bankruptcy can release you from a burdonsome cell phone contract and let you discharge the early termination penalty
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These days, almost everyone has a cell phone.  Should a typical consumer debtor filing bankruptcy on Long Island list their cell phone provider as a creditor for bankruptcy purposes?
 
Consumers Who Have Old Accounts with Deficiencies.   If you have an old bill on a closed account with a balance due, then there is no question.  This is a debt that you must include.   The entire obligation will be eliminated by the bankruptcy filing.
 
Consumers Who Have Active Accounts with Balances Due.   Consumers filing for personal bankruptcy are required to list all outstanding debts in the bankruptcy petition.  Thus, if you owe your cell phone provider a balance, even if you plan to keep the account, you must list them.  Doing so will enable you to discharge the balance owed.  Some cell phone companies may ask you to post a security deposit after the bankruptcy filing, but I observe that most providers are not asking for this.
 
What Happens to the Service Contract in Bankruptcy?   Chances are you are still in a service contract which requires that you pay a penalty if you cancel it before the end of the contractual period, which is typically two years.  Most consumers can benefit by canceling their cell phone contracts.  This would enable the consumer to not only eliminate their balance but remove their obligation to pay any early cancellation penalty. 
 
Here’s why:  Filing a Chapter 7 bankruptcy has the effect of terminating any “executory contract” which is one in which the parties are still performing it.  Cell phone contracts are executory contracts during the typical two-year contract period.  By including the cell phone provider as a creditor in the bankruptcy petition, the contract is automatically terminated, and any early cancellation penalty becomes a dischargeable debt just like the credit card debts.
 
Consumers Who Have Accounts that Are Totally Up-to-Date.   Consumers should list the cell phone provider as a potential creditor in the bankruptcy petition, even if no balance is owed.  Although the bankruptcy law has the effect of automatically terminating the cell phone contract, virtually all cell phone companies will continue service if the account is current, and will not pay any attention to the bankruptcy filing.
 
The advantage to you, the consumer, by including the cell phone company in the petition, even if you are current, is that you can later terminate the contract before the end of the typical two-year period, and not be responsible for the early termination penalty.
 
Special Note About Cell Phones for Later:   Since I’m talking about cell phones, please note that when you do eventually file for bankruptcy relief and later go to court for the meeting of creditors, you must leave your cell phone in the car.  The Central Islip Bankruptcy Court has a policy of not permitting any cell phones into the building.  If you arrive at court by public transportation, the U.S. Marshall will permit you to check your phone with them in the lobby.
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Filing Second Bankruptcy is Simple as 2 – 4 – 6 – 8

Posted on Wednesday (August 12, 2009) at 5:15 pm to Bankruptcy Procedure
Bankruptcy Tips Consumers Should Know
Chapter 13 Bankruptcy
Chapter 7 Bankruptcy
Issues Involving New Bankruptcy Laws
Life After Bankruptcy

Can I File Bankruptcy Again? Yes; Filing a Second Bankruptcy Petition is as Simple as 2 - 4 - 6 - 8Written by Craig D. Robins, Esq.
 
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For lack of a better term, I often have “repeat customers” coming back to see me at my Long Island bankruptcy law offices.  It is unfortunate, but consumers who have totally eliminated all of their debts in a bankruptcy filing years ago can sometimes find themselves in debt again — especially in these difficult economic times.
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The other possibility is that they liked bankruptcy so much the first time around, they want to do it again.
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“Can I File Bankruptcy Again?” 
 
This is the question I get from every one of these clients.  Fortunately, the answer is YES!  However, when the bankruptcy laws were changed in 2005, various waiting periods were imposed.  In every case, you can file bankruptcy again; it’s just a question of how long you have to wait.
 
Four Important Notes About Filing a Second Bankruptcy Case
 
The first important note you need to know is that the waiting period starts from the date you filed your prior bankruptcy petition and ends on the date you filed your second bankruptcy petition.
 
The second important note is that you only have to wait if you received a discharge in your prior case.  If you did not receive a discharge, you can file immediately.  For example, if you filed a Chapter 13 bankruptcy case, and it was dismissed because you were unable to make payments, you do not have to wait at all to re-file a second case (provided, of course, that you meet other necessary criteria — speak to an attorney about this).
 
The third important note is if your prior case was a Chapter 13 bankruptcy case in which you paid back your unsecured creditors at least 70%, then you do not have to wait at all.
 
The final important note is that the waiting period does not prevent you from filing again; it just prevents you from getting a discharge.  You can still file without waiting — you just do not get the benefit of the discharge.  Why would you do this?   If the sole purpose of re-filing is to stop foreclosure, you probably do not need to wait several years, as you still get the benefit of the bankruptcy stay in a Chapter 13 case as well as the ability to cure arrears with a payment plan.
 
The Waiting Periods Are 2, 4, 6 and 8 Years
 
Two Years
 
If your prior case was a Chapter 13 bankruptcy case and your new case will be Chapter 13, then the waiting period is only two years.
 
Four Years
 
If your prior case was a Chapter 7 bankruptcy case and your new case will be Chapter 13, then the waiting period is four years.
 
Six Years
 
If your prior case was a Chapter 13 bankruptcy case and your new case will be Chapter 7, then the waiting period is six years.
 
Eight Years
 
If your prior case was a Chapter 7 bankruptcy case and your new case will be Chapter 7, then the waiting period is eight years.
 
Important Note for homeowners in foreclosure:  Even if you do not qualify to file again based on the above criteria, you can still file for Chapter 13 if the primary concern is curing mortgage arrears.  In this instance, you will not receive a Chapter 13 discharge, but you will be able to cure all of your mortgage arrears and stop foreclosure.
 
The Above Waiting Periods Can be Tricky, So Get Good Bankruptcy Advice
 
Since the new bankruptcy laws made repeat filings somewhat complicated, it makes sense to meet with an experienced bankruptcy attorney who can give you the appropriate advice about filing a second bankruptcy.
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These Waiting Periods to Re-File Bankruptcy Apply In Every State
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A number of my blog readers located outside of New York have asked if these guidelines apply in their home state.  They do.  The waiting periods are the same no matter what state you file in.
 
For more info about repeat filings, see my full-length post that was published in the Suffolk Lawyer —  Consumer Bankruptcy Debtors Face New Limitations for Repeat Filings .  That post also contains info about specific issues concerning multiple filings in Chapter 13 cases.
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Eight Steps to Cope with Emotional Issues During Bankruptcy

Posted on Thursday (July 16, 2009) at 12:55 pm to Consumer Advice
Life After Bankruptcy

There are several ways to cope with emotional issues during bankruptcyWritten by Craig D. Robins, Esq.    
 
I represent hundreds of typical Long Island consumers each year with bankruptcy.  Some find the process extremely smooth and look forward to the procedure that will enable them to feel that a major a burden has been lifted from their shoulders.  Others, however, experience a certain amount of emotional anxiety about filing for bankruptcy.
 
For those who may suffer from anxiety surrounding overwhelming debt and feel a sense of conflict in seeking bankruptcy relief, here is a eight-step process to make dealing with the emotions of bankruptcy easier.  Also see the post I wrote last month — The Emotional Side of Debt and Bankruptcy .
 
Step 1: If you are having feelings of financial failure, you may be experiencing a sense of embarrassment.  You must understand that bankruptcy is not the end of the world. In fact, most bankruptcy proceedings go incredibly smoothly.  My clients often say to me after their hearing, “Craig – Is that all there is to it?”
 
Step 2:  You may feel that consulting with an bankruptcy attorney for the first time can be difficult and agonizing.  However, investigating your bankruptcy options is an important first step to learn the truth about how bankruptcy works and how it may help you.  A good bankruptcy attorney is patient and understanding and will ensure that you understand how the process works.
 
Step 3:  You are not alone and you must keep the bankruptcy filing in perspective. You certainly aren’t the first person to go down this path and you definitely won’t be the last.  For most of the past six years, over a million American consumers sought bankruptcy relief each year.  Many tens of thousands file here in New York each year.
 
Step 4: You should stay focused on the reason you are filing for bankruptcy.  This requires that you shake feelings of sadness to better control your emotions if you want to recover financially and get back on track. 
 
Step 5: Learn from your mistakes.  Getting into debt can happen to the best of people.  Sometimes a bad debt situation is caused by factors beyond your control; sometimes because of financial mismanagement.  If so, learn from it and apply these lessons to your life in moving forward.  No matter what caused your debt, consider it only a setback and not a failure.
 
Step 6: Be positive with how you utilize your emotional energy about finances in the future.  Rather than feel degraded and destroyed, ask yourself what you can do differently in the future.
 
Step 7: Think about how a major burden will be lifted from your shoulders once you file your bankruptcy case.  My clients often tell me that they can finally sleep at night just knowing that they’ve retained us to start the process.  Once you file for bankruptcy, bill collectors stop calling and creditors cannot take any further legal action against you.
 
Step 8: Think of bankruptcy as a tool.  In many ways, bankruptcy is nothing more than a financial planning tool that the government makes available.  Remind yourself of this and think of bankruptcy as taking a course of action to solve a particular problem.
 
 
At our office, we make the bankruptcy process as easy and stress-free as possible.  If you are suffering from overwhelming debt, make an appointment with us today.
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The Inadvertently-Omitted Creditor in a Closed Chapter 7 Bankruptcy Case

Posted on Sunday (June 21, 2009) at 12:30 pm to Bankruptcy Procedure
Chapter 7 Bankruptcy
Life After Bankruptcy
Suffolk Lawyer

The Inadvertently-Omitted Creditor in a Closed Chapter 7 Bankruptcy CaseWhat happens if a Chapter 7 debtor realizes that he or she forgot to include a creditor after the case has closed?
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Wrritten by Craig D. Robins, Esq.
 
If you’re a regular bankruptcy practitioner, this will sound all too familiar.  You file a routine Chapter 7 bankruptcy petition, the case goes unremarkably, the debtor gets a discharge, and the case is closed.
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Then, sometime thereafter – it could be days, months or years – the debtor calls to say that he or she inadvertently omitted a creditor.  The anxious client explains that this failure was an innocent mistake.
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Counsel might then instinctively think, “no problem.”  The case can be reopened by motion, and an application can be brought to amend the schedule of creditors to include the omitted one.  Right?
 
Confusing Case Law Has Made Resolving this Issue Difficult
 
But, not so fast.  There have been a great number of cases on this issue, with widely differing theories and conclusions.  Some have held that you can re-open, and some have held that you can’t.
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Some bankruptcy courts routinely grant debtors’ motions to amend schedules to list previously omitted creditors.  One line of cases focuses on whether there is prejudice to creditors or whether there was fraud.
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Some courts will refuse to permit the case to be reopened, because they believe omitted debts are non-dischargeable.  Yet other courts will refuse to permit the case to be reopened because they believe that omitted debts are automatically discharged even if they are not listed, and therefore reopening the case serves no purpose.
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Even in our own jurisdiction, I have seen different judges over the years have different policies with this issue.  Understandably, there has been a good deal of confusion as to the appropriate remedy dealing with the problem of the omitted creditor.
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 So what is the Long Island bankruptcy lawyer to do?
 
Recent Case Provides Some Guidance
 
In April, Brooklyn Bankruptcy Court Judge Dennis E. Milton addressed this issue in the case of In re: Coppola (96-21661).  Although the decision contained a nice discussion of the two main approaches, it still left undetermined what the appropriate protocol is in this district.
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In that case, the debtor filed a motion to reopen his Chapter 7 bankruptcy case for the purpose of amending the schedule of creditors.  He did this over 11 years after he filed his petition.  The debtor hoped to include a debt owed to his former business partner.
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The Court, however, after conducting a trial, determined that the debtor was not a credible witness and that the debtor’s failure to disclose the debt was either the result of recklessness or intentional design.  Because of that, and the significant delay, Judge Milton denied the application.
 
Equitable Approach vs. Mechanical Approach
 
Judge Milton stated that in deciding motions to reopen bankruptcy cases where the debtor has failed to disclose a creditor on his schedules, courts have developed two approaches.
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Under the “mechanical approach” courts have denied motions to reopen no-asset cases, finding that the debt owed to an omitted creditor is discharged “as a matter of law.”  Under this approach, there is no reason to reopen a bankruptcy case, provided that it is a no-asset case and the debt is not otherwise excepted from discharge.
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Based on my own familiarity with cases here, I would say that prior to this decision, most judges in the Central Islip Bankruptcy Court utilized this approach.
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Judge Milton then explained that under the “equitable approach,” courts consider whether the debtor’s omission was the result of fraud, recklessness or intentional design, or if it would prejudice the creditor’s rights.  Good faith is an important element.  Courts adopting this approach have held that motions to reopen no-asset cases to list omitted creditors should be liberally granted.
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Judge Milton did not use the mechanical approach, and instead relied upon the equitable approach.  He did so because the facts of the case (the debtor’s bad faith) would have produced an unfair result by permitting the debt to be discharged under the mechanical approach.
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The judge found the debtor lacked good faith as it appeared the debtor had known about the debt for years, but neglected to amend earlier.  It also appeared that the debtor lied about this knowledge at trial.  The court also found that the length of time that elapsed between the filing of the petition and the request to reopen the case also suggested bad faith and prejudiced the debtor.
 
Practical Tips
 
For most garden variety situations where the debtor omits a typical credit card debt and advises the attorney within a few years, the courts here will probably be unwilling to permit counsel to reopen the case to add the creditor, asserting that, under the mechanical approach, the debt is dischargeable.  In such cases, consider sending a certified letter to the creditor stating that the debt has been discharged, together with copies of the notice of commencement and order of discharge.
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However, in situations where the creditor raises objections to this approach, be prepared to file a motion to reopen, in which case the court will probably consider the various factors in the equitable approach.
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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 June 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.
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The Emotional Side of Debt and Bankruptcy

Posted on Sunday (June 14, 2009) at 10:15 am to Consumer Advice
Life After Bankruptcy

The Emotional Side of Debt and Bankruptcy. A good bankruptcy attorney must wear two hats – legal counselor and psychological counselor.Written by Craig D. Robins, Esq. and Dean Weber, Esq.
 
A good bankruptcy attorney must wear two hats – legal counselor and psychological counselor
 
When a person considers filing for bankruptcy, he or she often feels a lot of emotions — especially feelings regarding their financial situation.
 
Sometimes, one feels a certain sense of dread, or a feeling that he or she is a “failure”, or “worthless.”  These are very common thoughts and feelings to have for someone who is overwhelmed with debt.
 
In meeting with our various Long Island bankruptcy clients, we often observe that a person’s self-worth is intertwined with his or her finances.   As such, we’ve learned that a bankruptcy attorney has several roles, one being  to help clients accept that bankruptcy will provide a fresh new start – not just financially, but emotionally as well.
 
Losing a job, having difficulties in a relationship, suffering from illness, and just trying to deal with overwhelming debt, are all factors that can take a sizable psychological toll.  There’s no doubt that many bankruptcy clients are stressed out at the time they seek bankruptcy help.
 
That’s why bankruptcy attorneys should also help clients learn from the bankruptcy experience so that they can let go any negative emotions of blame and bitterness, and instead focus on the positive aspects of getting their finances under control and getting a fresh new start.
 
A good bankruptcy lawyer, such as those in our firm, will help the client come to terms with these emotional issues and smoothly guide them through the bankruptcy process. 
 
Those with debt problems should select a bankruptcy attorney that he or she feels comfortable with – from both a legal and an emotional standpoint.  Someone under serious mental strain from major financial problems requires experienced legal counsel – not just with legal issues, but with life experiences as well.
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Note:  Dean Weber, Esq. is a bankruptcy lawyer with our firm
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Real Estate Financing Options for Your Bankruptcy Clients

Posted on Friday (December 10, 2004) at 1:33 am to Attorney of Nassau
Bankruptcy Practice
Bankruptcy Tips Consumers Should Know
Chapter 7 Bankruptcy
Consumer Advice
Life After Bankruptcy

refinancing homes on Long Island after bankruptcyWritten by Craig D. Robins, Esq.

We have now seen several straight years of rapid real estate appreciation on Long Island. With the current real estate boom, most home prices have doubled in the past six years. Buoyed by low interest rates and a hot real estate market, the mortgage industry has become incredibly competitive and has relaxed many previous requirements that have acted as impediments to former bankruptcy debtors seeking to obtain a new mortgage or refinance an existing one. You can help your prior bankruptcy client purchase their first home, or take advantage of increased equity in their existing home by helping them with refinancing.

Homeowners with Bankruptcy Histories Are Often Able to Get Mortgages, Sometimes at Respectable Rates. With over a million and a half consumers filing bankruptcies each year, many mortgage companies have tapped into the lucrative market of offering mortgages to those who recently sought Chapter 7 bankruptcy protection, and even those still making payments in open Chapter 13 cases. Just a few years ago, debtors seeking to obtain mortgages under such circumstances found it difficult, if not impossible. Today, however, mortgage lenders actively solicit the profitable sub-prime market of recent home-owner debtors. A “sub-prime” mortgage is one where the borrower has a blemished credit history. Lenders, in their drive to maximize profits, have actually become quite lenient with the sub-prime market and have relaxed some previous requirements. Some lenders even specialize in providing financing to recent debtors. A former Chapter 7 filer can qualify for a mortgage one year after the bankruptcy is over.

Mortgage Companies Offer Various Mortgage Programs Depending on Financial History. Although the borrower may not qualify for the best rates (known as “A” paper) if there was a recent bankruptcy filing, they may nevertheless qualify for sub-prime rates, (known as “B, “C” or “D” paper). Lenders with programs for recent debtors will typically offer something like a two-year hybrid adjustable rate mortgage in which the mortgagor has the option of converting to a more conventional mortgage with better interest rates after a two year period of time, provided that the borrower makes timely payments and keeps his new credit history clean. Even former debtors who developed additional negative credit information after their bankruptcy was concluded can qualify for financing if they have a healthy loan-to-value ratio of 70% or less.

Debtors May Become Eligible for “A” Paper Mortgages Sooner Than They Think. According to some published guidelines, a former Chapter 7 debtor may be eligible for the best rate FHA mortgage just two years after the discharge if the borrower has re-established good credit or has not re-established any new credit. If more than two years have elapsed since the Chapter 7 bankruptcy was discharged and the borrower is applying for a VA mortgage, then the bankruptcy will not even be considered. If the borrower is applying for a conventional mortgage, then they will be considered for the best rate after four years, although some lenders will consider them after three years, if there is a good reason. For Chapter 13 debtors, the provisions are even better for FHA and VA mortgages. In such instances, debtors need only wait 12 months from the date of filing and may even be in an open case.

Debtors Should Consider Consulting a Mortgage Broker. Ordinarily, I steer my real estate clients directly to banks. However, when it comes to borrowers who have blemished credit histories or previous bankruptcies, I sometimes suggest that they consult with a mortgage broker, who will have access to many potential lenders, and who should be keenly familiar with the various sub-prime financing issues. As a variety of lenders offer different programs to borrowers with prior bankruptcies, a mortgage broker catering to this customer base should have a good familiarity with what program might be best for a particular borrower. Savvy brokers should also be able to give tips to clients in advance about improving chances for qualifying.

Chapter 13 Debtors in Open Cases Who Seek to Refinance Must Either Obtain a Court Order or Withdraw Their Case. If the borrower is still a debtor in a pending Chapter 13 case, refinancing a home will require seeking court approval of the refinance by bringing a motion. Consider discussing this issue with the Chapter 13 trustee if refinancing becomes a possibility. Alternatively, you may consider withdrawing the debtor’s petition, although you would only want to do this if the conditional mortgage commitment permits it, and the debtor can handle the unsecured debt after the case is dismissed. Also remember that the debtor loses the protection of the bankruptcy stay once the case is dismissed. Therefore, you should only withdraw a case if it appears absolute that all closing conditions have been met, and the closing will definitely occur.

Consumers Should be Cautious with Adjustable Rate Mortgages. Previous bankruptcy filers may have no choice other than obtaining an adjustable rate mortgage hybrid. At some point, the monthly payments for all adjustable rate mortgages increase. As your client previously got into a financial bind resulting in the prior bankruptcy filing, it is important that you advise them about preparing realistic future budget projections so that they do not end up in a future financial bind when the rate increases.

Many Abstract Companies Do Not Understand How Prior Bankruptcies Discharge Debts. Several times a year I deal with a lender or abstract company who insists, incorrectly, that certain discharged debts actually remain for various reasons. This usually happens when the client refinances without the aid of legal representation or uses an attorney who is unfamiliar with bankruptcy law, and I get a frantic call from the client while they are sitting at a closing table. In-house title examiners at abstract companies are notorious for their lack of knowledge about the implications of a bankruptcy filing. You should persuade former bankruptcy clients that it is advisable to utilize counsel for all real estate financing transactions. Then, if the lender’s abstract company raises a bankruptcy-related problem, insist on speaking directly with underwriting title company’s clearance department or legal department to clear up any bankruptcy-related title exceptions.

Practice Pointer for Helping Debtors with Mortgages and Re-financing: Be aware that financing is often available, advise your client of the options, and suggest that your client retains legal counsel for real estate transactions.

About the Author.  Long Island Bankruptcy Attorney Craig D. Robins, Esq., is a frequent columnist for the Attorney of Nassau, published in Nassau County New York for members of the bar. This article appeared in the December 2004 issue of the Attorney of Nassau. Mr. Robins is a bankruptcy lawyer who has represented thousands of consumer and business clients during the past twenty years. He has offices in Medford, 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.

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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

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