Furthermore, if the Debtor is the one that commenced the personal injury lawsuit, he or she may still be able to keep the proceeds from the lawsuit. Since December, 2010, New York bankruptcy law allows Debtors to choose either the state exemption or Federal exemption on personal injury lawsuits. Depending on the specific circumstances of each case the Debtor may be able to retain as little as $7,500.00 (NY exemption) or much more if the Debtor chooses the Federal exemptions.

Contact us for a free consultation to determine if you qualify for bankruptcy.

If you are facing foreclosure and you are not able to work out a deal with your lender, you are not without options. Bankruptcy can be used as a way to either save your home or to buy time before the lender will take back the property.  Here are some examples of how bankruptcy could be used to deal with foreclosure.

The Automatic Stay

The automatic stay gives you a way to delay foreclosure because when you file for Chapter 7 or 13 bankruptcy, all creditors, including your mortgage lender, are required to stop all collection actions and postpone all pending foreclosure sales. However, the postponement will not be permanent and the lender will still be able to file a motion to lift the stay. Also, if the lender has already filed a foreclosure notice then filing for bankruptcy will not help you.

Chapter 13 Bankruptcy

If you are behind on your mortgage payments and at risk of losing your home that you want to keep, you can file for Chapter 13 bankruptcy. In Chapter 13 bankruptcy you will have the opportunity to pay back your arrears under the Chapter 13 plan while keeping up your mortgage payments to the lender. In order to qualify for this type of bankruptcy, you should have adequate income to cover both your regular mortgage payments and the plan payments as required by law.

Lien Stripping

If the value of your property is fully secured by your first mortgage, Chapter 13 bankruptcy can help you strip off the second and third mortgage by turning these mortgages into unsecured debt. Unsecured debt does not always have to be paid back in Chapter 13 bankruptcy. This can help you if you have multiple mortgages and you are not able to keep up with all of your mortgage payments.

Call us for a free evaluation to see if bankruptcy can help you prevent or avoid foreclosure.

Who is a Small Business Debtor?

A small business debtor is defined by the Bankruptcy Code as a “person” engaged in commercial or business activities, not including a person that primarily owns or operates real property, that has aggregate non contingent liquidated secured and unsecured debts that do not exceed $2,343,300 for a case in which the United States Trustee has not appointed a creditor’s committee. Since the passage of BAPCPA, it is mandatory that the debtor proceeds as a Small Business Debtor if it qualifies.

Treatment

Small Business Debtors generally have greater duties as compared to non Small Business Debtors and the United States Trustee has more oversight over these cases. However, these debtor are subject to shorter deadlines allowing faster and more efficient reorganization process. Additionally, this designation allows the hearing on Confirmation of the Chapter 11 Plan to be held at the same time as a hearing on disclosure statement allowing further expedition of the case.

1) Pay stubs for 60 days prior to filing. If the Debtor is unemployed, then an affidavit will be used as a substitute.

2) If the Debtor owns a house or any type of asset, then an appraisal for the asset and some type of title report will be necessary.

3) Tax returns for two years prior to the filing date will be required to be submitted to the Trustee to verify income.

4) A recent credit report and recent billing statements will need to be submitted to the attorney so the attorney can verify debt.

We will be happy to give you a free evaluation if you contact our firm at (347) 732-5232 or drevzin@revzinlaw.com.

To prove undue hardship, some, but not all courts will use the Brunner test and evaluate the following factors:

1) the repayments of the student loan debt, will not allow the debtor, or the debtor’s dependents, to maintain a “minimal” standard of living based on the current income and expenses;

2) additional circumstances show that this state of affairs will last for a large portion of the repayment time of the student loan; and

3) the debtor has attempted in good faith to repay the loan.

In order to get a student loan discharged through undue hardship, you must start a separate case called “adversary proceeding”.(Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987).

As an additional option, if you can’t afford to make payments on your student loans and other household debts, it may be a good idea to explore  Chapter 13 bankruptcy to give yourself a break for a 3-5 year period. In Chapter 13 bankruptcy, you make debt repayments based on your disposable income (after considering numerous other factors). Therefore, you may be able to propose a Chapter 13 bankruptcy plan where you pay a fraction of your student loan payments during the duration of the plan. Regular student loan payments would resume after the end of the Chapter 13 plan payments.

Consumers who were previously not able to file due to ownership of large amount of assets may now qualify for bankruptcy due to expanded exemption limits.

The following is a listing increased bankruptcy exemptions:

· Homestead Exemption: increased from $50,000 to up to $150,000 depending on where you reside.

· Motor Vehicle: increased from $2,400 to $4,000

· Motor Vehicle: if equipped for use by disabled person (new) $10,000

· Cash: increased from $2,500 to $5,000

· Tools of trade: increased from $600 to $3,000

· Aggregate personal property exemption: increased from $5,000 to $10,000

· Wildcard (personal property, bank account or cash): $1,000

The criteria for dischargeable tax debt is as follows:

1)      Only income taxes are dischargeable. Other types of taxes such as trust fund or payroll taxes are not dischargeable.
2)      No fraud or willful evasion must have been committed.
3)      The tax return must have been originally due at least three years before you filed for bankruptcy.
4)      The tax return for the debt you wish to discharge must have been filed at least two years before filing for bankruptcy.
5)      The tax debt must have been assessed by the IRS at least 240 days before filing for   bankruptcy, or must not have been assessed yet.  The time limit can be extended if the IRS suspended collection activity because of an offer in compromise or a previous bankruptcy filing.

If you are facing foreclosure and you are not able to work out a deal with your lender, you are not without options. Bankruptcy can be used as a way to either save your home or to buy time before the lender will take back the property.  Here are some examples of how bankruptcy could be used to deal with foreclosure.

The Automatic Stay

The automatic stay gives you a way to delay foreclosure because when you file for Chapter 7 or 13 bankruptcy, all creditors, including your mortgage lender, are required to stop all collection actions and postpone all pending foreclosure sales. However, the postponement will not be permanent and the lender will still be able to file a motion to lift the stay. Also, if the lender has already filed a foreclosure notice then filing for bankruptcy will not help you.

Chapter 13 Bankruptcy

If you are behind on your mortgage payments and at risk of losing your home that you want to keep, you can file for Chapter 13 bankruptcy. In Chapter 13 bankruptcy you will have the opportunity to pay back your arrears under the Chapter 13 plan while keeping up your mortgage payments to the lender. In order to qualify for this type of bankruptcy, you should have adequate income to cover both your regular mortgage payments and the plan payments as required by law.

Lien Stripping

If the value of your property is fully secured by your first mortgage, Chapter 13 bankruptcy can help you strip off the second and third mortgage by turning these mortgages into unsecured debt. Unsecured debt does not always have to be paid back in Chapter 13 bankruptcy. This can help you if you have multiple mortgages and you are not able to keep up with all of your mortgage payments.

Call us for a free evaluation to see if bankruptcy can help you prevent or avoid foreclosure.

When you file for bankruptcy, all the property that you own becomes property of the estate, and unless it is exempt, the trustee has the right to liquidate it and give the proceeds to creditors.  The homestead exemption applies to real property that is considered to be your primary residence. After the 2005 bankruptcy law amendments, the New York bankruptcy law homestead exemption rose to $50,000.00 for individuals and $100,000.00 for those filing jointly.

If you want to file for bankruptcy in New York State and you own a home which is your primary residence, you should determine the amount of equity that exists in the property. If the equity is $50,000.00 or $100,000.00 (depending on if you are filing alone or jointly), then you can file for chapter 7 bankruptcy without losing your home. If on the other hand, the equity in your real property is over the exemption limit, you still have the option of filing for chapter 13 bankruptcy if you qualify.

What are some of  the benefits of Chapter 13 bankruptcy if you own real property?

Under chapter 13 bankruptcy you can keep real property even if the equity is greater than the exemption limit by making regular payments to mortgage lenders. Also, chapter 13 bankruptcy allows you to cure any arrears that you may have to your mortgage lender. These arrears can be paid as a part of the chapter 13 plan.

To get more information on the impact of bankruptcy on your real property, contact us at drevzin@revzinlaw.com.