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Offices in downtown Brooklyn & Melville, LI

26 Court St, Suite 2211
Brooklyn, NY 11242-1125
Phone: (718) 855-6840
Toll Free: (800) 297-6840
Fax: (718) 625-1966
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68 South Service Road, Suite 100
Melville, NY 11747
Phone: (631) 454-5248
By Appointment Only

The Notice of Federal Tax Lien: The IRS’s Gateway to Bankruptcy

In 2014, I wrote about the role that a proof of claim plays in New York bankruptcy, but not all creditors use those. Notably, when the IRS enforces a debt in bankruptcy it will instead file a Notice of Federal Tax Lien (NFTL). What are these?

As with all statutory liens, an NFTL creates a . . . → Read More: The Notice of Federal Tax Lien: The IRS’s Gateway to Bankruptcy

Can a Bad Economy Be Grounds for a Chapter 13 Hardship Discharge?

By the time most people file chapter 7 New York bankruptcy, they’ve concluded that there’s really nothing more they can do to repay their debts. They can’t work more jobs or magically earn more money. Thus, their hardship entitles them to a discharge.

Chapter 13, by contrast, is aimed at debtors with some hope of . . . → Read More: Can a Bad Economy Be Grounds for a Chapter 13 Hardship Discharge?

Supreme Court Holds ‘Actual Fraud’ Does Not Require Misrepresentation

On May 16, 2016, the U.S. Supreme Court resolved a split among the circuit courts of appeal regarding the definition of “actual fraud” in the Bankruptcy Code. Section 523(a)(2)(A) states:

A discharge … does not discharge an individual debtor from any debt for money, property, services, or an extension, renewal, or refinancing of credit to . . . → Read More: Supreme Court Holds ‘Actual Fraud’ Does Not Require Misrepresentation

Co-ops in Foreclosure and New York Bankruptcy

I recently wrote about what happens to condo or homeowners fees in New York bankruptcy, but I left out the prominent alternative, non-renting urban residence: co-ops. That wasn’t an accident; the reason is co-op maintenance fees are paid before mortgage payments, so a debtor would default on a mortgage before co-op fees. The result is . . . → Read More: Co-ops in Foreclosure and New York Bankruptcy

How Can a Debtor (or Creditor) Get a New Trustee?

The trustee in a New York bankruptcy case is usually not the debtor’s ally. His or her purpose is mainly to administer the bankruptcy estate or ensure the debtor’s repayment plan goes according to plan. Trustees pursue preference payments, fraudulent conveyances, and other malfeasance committed by debtors. They frequently initiate adversary proceedings against debtors. In . . . → Read More: How Can a Debtor (or Creditor) Get a New Trustee?

Where Do Debtor Education Fees End Up? A Multi-Million-Dollar Industry

I wrote a few posts about the 2005 bankruptcy reform, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), but I left out one topic that doesn’t really address whether the law benefited debtors in New York bankruptcy. Specifically, what were some of the unintended consequences of the BAPCPA? One answer is the industry spawned . . . → Read More: Where Do Debtor Education Fees End Up? A Multi-Million-Dollar Industry

Government Reaching Out to Disabled Student-Loan Debtors

A few years ago, I discussed how the federal government changed its process for allowing qualifying debtors to apply for a non-bankruptcy discharge their student loans due to disability. Until 2013, the process required disabled debtors to slog through a bureaucratic process, even if the Social Security Administration had independently judged them as “totally and . . . → Read More: Government Reaching Out to Disabled Student-Loan Debtors

Bankruptcy With or Against Reverse Mortgages

Last year I wrote about reverse mortgages and New York bankruptcy, but a recent article in the American Bankruptcy Law Journal adds more depth to the “intersection” between reverse mortgages and bankruptcy. It has a handful of lessons that New York homeowners (and their heirs) might want to know.

First, though, is a reminder as . . . → Read More: Bankruptcy With or Against Reverse Mortgages

Does the Means Test Apply to Cases That Are Converted From Chapter 13?

The short answer is probably yes.

The long answer is that the specific issue hasn’t been decided in a New York bankruptcy case or in a Second Circuit appellate case that I could find. Courts in other parts of the country have split on the issue. Their reasoning is interesting.

Against Taking the Means Test . . . → Read More: Does the Means Test Apply to Cases That Are Converted From Chapter 13?

At Last, a Principal Reduction Opportunity for Underwater Homeowners

In addition to mortgage modifications, deed-in-lieu of foreclosure offers, New York bankruptcy, and other options, the federal government has finally created the effective solution that until now has been off the table for underwater homeowners: mortgage principal reductions. On April 14, the Federal Housing Finance Agency (FHFA) announced the Principal Reduction Modification program, which would . . . → Read More: At Last, a Principal Reduction Opportunity for Underwater Homeowners