About Me
“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”
Long Island Economy
Written by Craig D. Robins, Esq.
Many Long Islanders will become unemployed by the Chrysler Bankruptcy, leading to personal bankruptcy filings
Written by Craig D. Robins, Esq.
My staff and I have been working hard these past few months helping an increasing number of Long Island consumers file for bankruptcy relief
I’ve reported several times recently that bankruptcy filings have zoomed up over the past year.
(See my post from last month: Rate of National Bankruptcy Filings Now Over One Million a Year and my post: Bankruptcy Filings Surged in 2008 ).
Consequently, my Long Island bankruptcy attorney colleagues and I have been quite busy helping Long Island consumers who need to eliminate debts and stop foreclosure.
For me, that has meant finishing up client appointments as late as 11:00 p.m. on some nights, skipping many a dinner, and spending less time with family. However, during these difficult economic times, many clients need urgent help.
My two full-time associate attorneys, Jason Leibowitz, Esq. and Dean Weber, Esq., have also been burning the midnight oil with me on many an occasion and I am grateful for their contributions to my firm and their dedication to helping our clients file for bankruptcy on Long Island.
My Personal Observations about Bankruptcy Cases on Long Island So Far this Year
From the types of bankruptcy cases we have been getting this year, I have observed that although job loss has affected some Long Island consumers, I have not yet seen a big bump in bankruptcy filings that are strictly the result of massive layoffs.
Instead, we are filing bankruptcy petitions for a steady but greatly increasing influx of typical Long Island consumers who are suffering from overwhelming credit card bills that are the result of some financial calamity – a failed business, loss of work as the result of illness, massive medical bills, unemployment, inability to work overtime, or divorce and separation.
There is no doubt that many of these clients have debt problems that are the result of the current recession.
However, in the coming months I anticipate seeing the impact of layoffs in the greater New York metropolitan area which will likely have a trickle-down effect on Long Island in which event there will be even more Nassau County bankruptcy filings and Suffolk County bankruptcy filings. Last month I wrote about how the recession is affecting everyone on Long Island (Long Island Economist Provides More Grave Commentary About the Long Island Economy ).
In addition, there are a much greater number of Chapter 13 filings from Long Island homeowners who are seeking to save their homes from foreclosure. This is directly attributable to the great number of sub-prime mortgages that were issued between two and four years ago.
Typical Bankruptcy Debt Levels Have Increased Substantially
Another observation is that the average amount of family debt is now much greater than ever before. Where many families would have filed for Chapter 7 bankruptcy a few years ago with $20,000 to 40,000 in typical credit card debt, the figures now routinely approach $100,000 and sometimes more.
I find many consumers are consulting with us in order to learn what their options are if their financial situation does not improve, in which case they will likely need bankruptcy relief down the road.
Many Long Islanders are Suffering from the Emotional Burden of Overwhelming Debt
I also regularly witness first hand the emotional toll my bankruptcy clients have suffered from overwhelming financial obligation.
The emotional cost of reckoning for people drowning in debt is high. However, so many clients have commented to me at the end of the initial bankruptcy consultation that they feel so relieved that there is an available debt relief solution, that they will now be able to sleep at night. This is a shame because many of them have been holding off calling a bankruptcy attorney for months.
U.S. Consumers Can’t Pay Their Bills
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U.S. credit card defaults rise to 20 year-high
Credit card defaults rose last month to their highest level in at least 20 years according to a report just issued by Reuters. This is just one additional indicator of the deepening recession.
American Express, the largest U.S. charge card company by sales volume, reported that its net charge-off rate rose to 8.70 percent in February from 8.30 percent in January. A “charge-off” means the company has written the debt off as a loss for accounting purposes.
Meanwhile, Citigroup — one of the largest issuers of MasterCard cards — reported that its default rate soared to 9.33 percent in February, from 6.95 percent a month earlier.
Some experts believe that there will be a continued deterioration. Trends in credit cards will get worse before they start getting better. Some analysts estimate credit card charge-offs could climb to between 9 and 10 percent this year from 6 to 7 percent at the end of 2008.
With so many consumers unable to pay their credit card debt, it is no surprise that bankruptcy filings have increased dramatically on Long Island. Bankruptcy permits consumers to discharge and eliminate credit card bills.
Credit card lenders are trying to protect themselves by tightening credit limits, raising standards, and closing accounts. They have also been slashing rewards, raising interest rates and increasing fees to cushion further losses.
Recession Hitting Long Island Job Market HardBankruptcy on Long Island in 2009
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Almost half a billion dollars of Long Island mortgage loans were put into foreclosure from September through December 2008.
Here are the latest statistics showing the number of lis pendens filed on Long Island.
| Long Island Lis Pendens Filings |  |
|||
| Fourth Quarter – 2008 | ||||
| Location | # | Amount | Median | Average |
| Long Island | 1,292 | 489,244,801 | 325,350 | 378,672 |
| Suffolk County | 769 | 281,844,636 | 304,000 | 366,508 |
| Nassau County | 523 | 207,400,165 | 368,000 | 396,559 |
| Babylon Township | 128 | 43,628,248 | 303,525 | 340,846 |
| Brookhaven Township | 289 | 85,646,995 | 275,600 | 296,356 |
| East Hampton Township | 19 | 9,678,000 | 517,500 | 509,368 |
| Huntington Township | 61 | 26,830,676 | 382,500 | 439,847 |
| Islip Township | 180 | 68,084,964 | 300,000 | 378,250 |
| Riverhead Township | 18 | 9,273,746 | 243,125 | 515,208 |
| Shelter Island Township | 0 | 0 | 0 | 0 |
| Smithtown Township | 33 | 12,194,797 | 370,000 | 369,539 |
| Southampton Township | 34 | 22,976,210 | 505,000 | 675,771 |
| Southold Township | 7 | 3,531,000 | 400,000 | 504,429 |
| Hempstead Township | 364 | 127,350,408 | 356,675 | 349,864 |
| North Hempstead Township | 60 | 30,812,990 | 463,500 | 513,550 |
| Oyster Bay Township | 99 | 49,236,767 | 391,623 | 497,341 |
A foreclosure proceeding is started when the mortgagee files a document called a lis pendens with the county clerk.
The median mortgage being foreclosed is in the $300,000 to $400,000 range, which is a hefty amount for many Long Islanders to afford.
Many of these homeowners may be able to save their homes by filing for Chapter 13 bankruptcy.
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Attorneys As Waiters in Restaurants???
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Some Long Island lawyers are suffering from a lack of business, ending up in a black hole of debt, and filing for bankruptcy
The souring economy is affecting the legal profession and a number of attorneys are filing bankruptcy on Long Island
Written by Craig D. Robins, Esq.
Many attorneys are being laid off according to an article in the New York Law Journal last week.
For months, headlines have been filled with stories about large, national companies laying off workers by the thousands. Now, many New York and Long Island law firms are making tough decisions on how to survive the economic crisis by laying off attorneys, too.
Many solo practitioners are hurting as well. Those attorneys who were previously overwhelmed with real estate business just a few years ago are now suffering big time as the glum economy has led to a dearth of business. Real estate attorneys have reported to me that they have virtually no business.
Attorneys who did well handling volume sub-prime mortgage closings are now victims of the sub-prime mortgage meltdown themselves.
Wall Street layoffs, mortgage foreclosures on a massive scale and a freeze in the financial transaction sector have affected Long Island attorneys across all practice areas, some more than others. Often, the smaller the law firm, the bigger the impact. There have been stories in the news about attorneys having to wait tables in order to make ends meet.
“Buyers are backing out of deals, walking away from down payments, banks are requiring 50 percent equity when it used to be 30 or 20 percent,” said Eric C. Rubenstein, a partner in Long Island, New York’s Ruskin Moscou Faltischek lawfirm, who co-chairs the firm’s real estate practice. Corporate and retail Long Island bankruptcy filings have also led to reduced legal work for many lawyers.
“I believe every project is affected by the recession,” said Steven R. Schlesinger, an Long Island attorney partner in Garden City, N.Y.’s Jaspan Schlesinger.
Many Lawyers Filing Bankruptcy on Long Island
I have regularly represented Long Island lawyers who, themselves, have needed bankruptcy relief. See my blog post about Long Island lawyers filing for bankruptcy.
However, I have never experienced so many attorneys seeking my bankruptcy advice as I have in the past year. The most common type of bankruptcy that my lawyer clients file is a Chapter 7 bankruptcy, which enables them to eliminate debts and get a fresh financial start.
If you are a lawyer and overwhelmed by debt, you should consider obtaining debt relief by filing for bankruptcy.
In a Business Beat blog post on Newsday.com’s website, columnist Carrie Mason-Draffen interviewed Pearl Kamer, chief economist for the Long Island Association, to shed some light on how long the recession affecting Long Island will be. Here are Ms. Kamer’s predictions for Long Island’s economy.
Consumer spending will be slow. Ms. Kamer suggests that consumers are very concerned about the economy and are heavily indebted. Whatever extra spending power they get from the Stimulus Package will be used to pay down existing debt, and that relatively little under the Stimulus Package will be spent. Thus, she does not expect an immediate consumer rebound.