The Federal Reserve Bank of New York published a fascinating blog post about the 14 percent of U.S. households whose debts exceed their assets. Because a substantial proportion of New York bankruptcy cases involve net debtors, the post illuminates the segment of the country that most likely faces serious financial hardship. One of the chief …
Study: Net Debtors’ Financial Situations Differ Substantially Read More »
I’ve discussed “noncontingent claims” a couple times recently in the context of bankruptcy dollar amount adjustments and involuntary bankruptcy without explaining what they are (and what they’re not), or what they’re worth. A claim is “contingent” if a triggering event must occur before it must be repaid. Before the event is triggered, the claim isn’t …
What Is a Contingent Claim and What Are They Worth? Read More »
Negotiating a mortgage modification is an alternative to New York bankruptcy that frequently pops up, even though the Home Affordable Mortgage Program was not so successful. Nevertheless, modifications are perfectly reasonable. Debtor-homeowners can reduce their interest rates and monthly payments to align their mortgage costs with their incomes, particularly when they’ve lost substantial equity in …
A Mortgage Modification Can Stymie a Chapter 13 Bankruptcy Read More »
The Consumer Financial Protection Bureau (CFPB) turned five on July 21, 2016. The bureau’s purposes are to protect consumers from unscrupulous lenders and inform consumers to help them make financial decisions. Now that it’s five years old, the question is: Has the CFPB prevented needless bankruptcy filings? Unfortunately, there aren’t any studies out there measuring …
Five Years On, Has the CFPB Prevented Bankruptcies? Read More »
The federal government offers Parent PLUS loans to parents of college students to help pay for the students’ educations, but they are notoriously difficult for struggling parent-debtors to deal with because they have high interest rates and aren’t protected by as many of the student-loan innovations that keep regular direct-loan borrowers afloat, e.g. Income-Based Repayment …
Many people, usually in the banking industry, regularly assert that better financial literacy will keep people out of New York bankruptcy. The empirical evidence for this isn’t remarkably great. Researchers have found that the Bankruptcy Code’s pre-filing financial education requirement doesn’t deter unnecessary bankruptcies, and many debtors have said the pre-discharge financial management course was …
New York Fares Well in National ‘Financial Capability’ Survey Read More »
I recently wrote about executory contracts in New York bankruptcy in the context of private licenses, but one issue that debtors (and creditors) might have is recognizing when a contract is not executory but some other unusual category. Sometimes the confusion comes down to misunderstanding an at-will contract for an executory agreement, but there can …
At-Will Contracts and Other Non-Executory Contracts in Bankruptcy Read More »
Real estate in bankruptcy generally concerns debtors, creditors, the trustee, and maybe some tenants. But when that real estate is environmentally contaminated for some reason, then the number of participants swells to include nearby parties who might be affected and environmental regulators. Bankruptcies involving environmental laws are almost always long, complex, and business related. So …
Environmentally Contaminated Property in New York Bankruptcy Read More »
In early June the Consumer Financial Protection Bureau (CFPB) announced its proposed rule for regulating the payday lending industry—and what it calls “debt traps” in particular. According to the bureau, one in five consumers default on payday loans due to the fees and penalties that accrue when the loans are rolled over. Often, payday loans …
CFPB Payday Lending Rule Takes Shape, May Reduce Bankruptcies Read More »
Discharging tax debts can be difficult but not impossible in New York bankruptcy, but what about more mundane debts to the government, like traffic tickets? Are these subject to the same rules as tax debts or are they nondischargeable because they’re unsecured debts? It’s a common concern by debtors. The answer is, it mostly depends …
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