When an underwater rental property is involved in a New York bankruptcy case, the trustee usually won’t try to sell it, particularly if the debtor is current on the payments. However, some trustees might actually try to sell an underwater rental to the lender under certain circumstances. This can be a disappointment to some debtors …
Why Trustees Might Sell Underwater Rental Properties to Creditors Read More »
In June 2013, the U.S. Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA) as unconstitutional in United States v. Windsor. Section 3 defined “marriage” in federal law as “a legal union between one man and one woman as husband and wife.” DOMA required the Bankruptcy Code to deny same-sex married …
Justice Department Recognizes Same-Sex Marriages in Bankruptcy Read More »
We recently discussed the elements a trustee must prove to avoid (that is, invalidate) a preferential payment to a creditor made before a New York bankruptcy filing (called a “preference”). One requirement is that the payment occur within 90 days of the petition or between 90 days and one year of the petition if the …
One of the more common things to happen in a New York bankruptcy case is the debtor will pay a favored creditor before filing the petition to give that creditor an advantage over the others in the bankruptcy proceeding. The bankruptcy code frowns on this behavior because it attempts to treat all creditors equally according …
5 Elements the Bankruptcy Trustee Must Prove to ‘Avoid’ a Preference Read More »
The topic of how to deal with an inherited underwater house came up recently, as did the unanswered question of whether a rent-stabilized apartment in New York City is an asset that can be included in the bankruptcy estate and liquidated by the trustee to repay chapter 7 creditors. Both issues are partly combined in …
Supreme Court to Decide Fate of Inherited IRAs in Bankruptcy Read More »
The last thing people who are considering filing bankruptcy in New York are probably interested in is filing two tax returns in one year, but it is not only possible but also worthwhile to do in certain circumstances. First, what are we talking about? Federal law allows individual debtors (i.e. non-businesses) in chapter 7 or …
The Benefits of a Short Tax Year Election to a Bankruptcy Filing Read More »
It’s a sad truth that many businesses in New York fail, prompting twin chapter 7 bankruptcies for both the business and the owner. The two most common causes of businesses shutting their doors is lack of sales (obviously) and liquidity problems, which usually involve solid sales, but the business nevertheless can’t pay its creditors because …
For New Yorkers involved with the bankruptcy process, whether debtors or creditors, the concepts of “preferences” and “fraudulent conveyances” often cause confusion. (Actually, it’s not just laypeople. They cause for confusion for many law students and even some lawyers as well.) They cause confusion because they both often relate to attempts by debtors to keep …
Preferences vs fraudulent conveyances in New York: What’s the difference? Read More »
There’s a new study out titled “Risky Business: Financial Firms Face Wave of Fraudulent Transfer Claims“ by Navigant Consulting and The Economist Intelligence Unit. The gist of it is that debtors, trustees and creditors committees are increasingly pursuing “fraudulent transfer” (aka “fraudulent conveyance“) claims (i.e., attempts to recover improper payments) in the wake of the …
My friend and fellow bankruptcy lawyer David Leibowitz who practices in Illinois and Wisconsin has a very helpful post titled “Who is the United States Trustee?” where he really does a nice job of explaining it all. The main point is that the trustee is not a judge, but he or she makes decisions that …
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