AN ENCYCLOPEDIA OF BANKRUPTCY

The main purpose of this Blog is to give you all of the information you want to know about bankruptcy. This article is intended to serve as an Index to others in the Blog, and will always be on top. What I am trying to do here is explain on one page everything about bankruptcy - what it is, how it works, and what it might do for you. While I doubt that I can actually get all of this on one page, I will at least be able to set forth the most basic concepts for you.

To keep this short, I have made links to other pages in this Blog. Each key concept, or "keyword" (they are bolded) will take you to another article containing a more complete explanation of each subject. Each of these articles may also have links to others. Any text shared with other posts will be in brackets [ in brackets] in case you want to skip it. To go back to where you jumped from, click on the back button above. You can comment on any article, including this one. After reading, and maybe answering them, I may leave any that expand the scope of the article up. Many of these articles, including this one, are not yet complete. This is a work in progress.

The idea of debt relief goes back beyond Biblical times. Principles of our bankruptcy law were imported here from England in the colonial era, and have matured as laws of the United States. There have been many changes in the law over the years, the most recent being found in the Bankruptcy Abuse Prevention and Consumer Protection Act, called "BAPCPA" for short.

There are only two kinds of bankruptcy. One is "liquidation" - in which debts are extinguished. More than 99% of them are Chapter Seven cases. The second is "arrangement" or "adjustment" of debt - cases where the debtor pays some debt over 2 to 5 years, and usually cancels some debt also. Most of these are filed under Chapter Thirteen, and a few under Chapter Eleven.

In exchange for freedom from debt in Chapter 7, creditors were (and still are) allowed to take the property of the debtor. The severity of this bargain has been tempered over the years by an ever-growing list of property exemptions, created by law to protect some property from seizure. At first these were the most basic of necessities: a workingman's tools, the family bible, a cemetery plot. The list has grown to include equity in a home and a car, retirement funds and life insurance, to name a few. Since it is up to the courts to decide what is included, no single article - not even this entire Blog - can name them all.

The basic idea of bankruptcy is to get rid of debt, or to manage debt. Either can be done, and you can also choose to keep some debts, and have some discharged. You do this by reaffirming the debts you want to keep. These might include car loans and home mortgages, so that you can keep the car and the house.

Your home mortgage is likely to be your largest debt. If you are in foreclosure bankruptcy offers many options to manage the problem, but you should never, ever fail to defend the lawsuit before, during or after filing bankruptcy. If you defend, chances are better than ever that the bank will lose !

Rockland Bankruptcy Law: An Introduction and an Invitation

For more than forty years, Peter J. Steckler has been helping people find solutions to their debt problems. As a “debt relief agent,” he’s made sure that people have access to good advice and have been able to use the law in their favor—allowing them to cancel debt often or at least reduce it. Mr. Steckler doesn’t provide credit advice or negotiate with creditors; instead he shows you how to avoid having to pay them anything, and helps you do it. With our monthly newsletter we’d like to introduce you to Rockland Bankruptcy Law and invite you to consider our services for individuals and their businesses.

Rockland Bankruptcy Law represents individuals or “consumer debtors” and does not represent lenders, creditors, or big business. Declaring bankruptcy will (1) help you salvage your credit rating and (2) give you the chance to catch up on payments, manage your debt, and save yourself from creditors. (Important fact: bankruptcy may raise your credit score by as much as one hundred points if you follow the declaration of bankruptcy with payment).

Steckler’s business record related to bankruptcy is also strong even considering how the recent recession has affected businesses from Wall Street to Main Street. Although individual circumstances matter greatly, many of the smaller businesses he’s dealt with over four decades are still in business even if their owners declared bankruptcy.

Beyond this, foreclosure rates have skyrocketed in recent years and bankruptcy has become the new legal armor for many individuals about to lose their home. As Mr. Steckler states, “If you are in foreclosure, bankruptcy will stop that—maybe for good. If your wages are being garnished or your bank account restrained, bankruptcy can stop those, too.”

Whether your interests are individualized, business-related, or due to the threat of foreclosure, Peter Steckler and Rockland Bankruptcy Law can help you immediately. They represent clients in Rockland, Orange Westchester, Dutchess, Ulster, Putnam and Sullivan Counties, as well as the five boroughs of New York City. With experience in New Jersey, New York, and Connecticut, no one is better equipped to protect you and your family from credit siege.

To better understand the philosophy and successes of Rockland Bankruptcy Law, please enjoy these quotes from Peter Steckler:

“I have seen my clients get car loans and home mortgages in less than a year after filing.”

“Most people who file a bankruptcy petition get to keep their property, including their houses, cars, personal possessions, pensions, and even their businesses.”

“Whatever financial crisis you are in, chances are that I have resolved it many times before.”

“Bankruptcy is not the only thing that I do, but I have done many of them over the years, and I am sure that I can help you. By asking you a few questions, I can tell you in a minute or two, in my office or over the phone, what filing bankruptcy in your particular situation could do for you. Why don’t you call me now? If I am here, I will personally answer your call.”

Are you considering bankruptcy and need qualified legal assistance? Do you need solutions to debt and legal help correcting your credit status? Be sure to contact attorney Peter J. Steckler of Rockland Bankruptcy Law, with offices conveniently located at 32 Concord Dr, New City, New York 10956. For further information please see our website: http://www.rocklandbankruptcylaw.com.

More on foreclosure and the Federal Judiciary Bankruptcy Court System:

US Bankruptcy Courts: http://www.uscourts.gov/bankruptcycourts.html

Wikipedia on foreclosure: http://en.wikipedia.org/wiki/Foreclosure

QUESTIONS ASKED BY THE TRUSTEE AT THE CREDITORS MEETING

Standard questions asked of the debtor by the Trustee (with suggested answers if true) include:

Showing the Petition to the debtor: "I this your signature ?" - Yes.

"Did you read the petition before you signed it ?" - Yes.

"Did you read the bankruptcy information sheet ?" - Yes (Your lawyer gave it to you).

"Are all of the statements in the petition true and correct ?" - Yes / No - I want to make these changes......

"Have you listed all of your assets/property ?" - Yes

"Have you listed all of your debts/creditors ?" - Yes / No, I will add these.........

"Do you own any real property, or have you owned any in the last six years ?"

"Do you have a right to sue anybody ?"

"Do you expect to receive any money or property by inheritance ?"

"Have you destroyed all of your credit cards ?" - Yes / No, but I haven't used them since......

"Do you have a family support obligation (alimony/maintenance/child support) ?"

"How did you get into your financial difficulty ?"

The Trustee will ask further questions as may be suited to the particular facts of your case.

"DO I HAVE TO FILE BANKRUPTCY FOR MY BUSINESS ?"

It all depends on how you do business. There are three ways to be in business: by yourself, in a partnership with others, or as a corporation or some other entity, like an LLC. This incomplete article discusses individuals and corporations.

If you are personally in business, you are responsible for all of the business debts. The business has no existence beyond you, and creditors will claim against you "doing business as (d.b.a.)" Johnny's Pub, or whatever. Your name is on the lease and the bills are made out to you. If you file bankruptcy those debts can be discharged. In this kind of business it is usually your personal services that are sold, or you may have a small retail business with some loyal customers (a large retail business is rarely owned by one person). Since the "good will", or custom and trade of your service business is usually non-existent without YOU, you can usually retain that asset in bankruptcy..........

THE CREDITORS MEETING

In most chapter 7 bankruptcies, the debtor will make only one trip to Court, for the so-called creditor's meeting, also called a "341 Meeting". There, at the courthouse though not in a courtroom - the Judge and the formalities of court are absent from these meetings - the debtor and his attorney will meet with the Trustee, who is required to ask certain questions.

First the debtor must show the Trustee his driver's license and social security card. Any government photo ID can substitute for the license, and if you have lost your social security card you can use a medicare card, an original tax document, such as a W-2or 1099, or you can get a paper from your local Social Security Office as proof of your SSN.

The Trustee will then quiz the debtor, who will provide the answers. The debtor's attorney must remain silent, but can prompt his client by pointing to things in the petition, and offering documents or the occasional verbal cue. He will make notes of information to be furnished or things to be done afterwards. If the debtor does not speak English, a translator is available by telephone. Meetings are scheduled throughout the day. A typical one may take about five minutes. Ten or fifteen of them are scheduled for each half-hour time slot. Get there early and you will probably see and hear ten or twenty before your turn comes. This is good preparation.

Despite its name, creditors almost never show up at these meetings - they don't have to, because the Trustee will do most of the work they would otherwise have to do - making sure that the petition, schedules and other documents are all properly filed, by investigating their truthfulness before, during and after the meeting, by accessing credit reporting agencies and other databases, and by otherwise making sure that the integrity of the bankruptcy process is protected.

If a creditor wants more information, it can schedule a separate meeting with the debtor and his attorney. Likewise, the Trustee can schedule a "private" session with them. This happens maybe once in a hundred or more cases, and is avoided by good preparation and follow-up.

Credit card banks, retailers and other lenders rarely, if ever, attend these meetings. Those who do will usually be seeking reaffirmation agreements - you keep their stuff, and pay that debt; it's up to you. Creditors who do appear will often have a close or personal relationship to the debtor, such as a business partner, a major business creditor, or the neighbor who loaned money. They and/or their lawyer may attend and ask questions. Others may show up if they have a reason to be very angry with the debtor. Once there was a man who had a limousine service. He booked limos for many weddings and took the money, but didn't hire any cars or drivers. About seven jilted brides came to his creditors meeting. It wasn't pretty.

Prior to the meeting the trustee will have reviewed the petition, the debtor's pay stubs for two months prior to filing, and his two most recent tax returns. The Trustee may also ask the debtor's attorney to furnish other documents, such as house closing statements and vehicle titles. At the meeting he or she will question the debtor about the petition and the case. The debtor's attorney will usually know what to expect. If satisfied with the answers, the Trustee will usually announce that he is closing the meeting, and report this to the Court. If other information is needed, the meeting will be adjourned to another date. Usually the attorney can supply this information before the adjourned date, and another trip to Court will be avoided.

THE BANKRUPTCY TRUSTEE

Bankruptcy Trustees are usually very experienced bankruptcy attorneys who have huge appetites for paperwork, and a staff to help them with it. There is a surprisingly small number of them, only three for Rockland and Westchester, and one of them is given all of the chapter 13 cases, along with sevens. They are appointed by the Office of the United States Trustee.

The Trustee's most visible role is to conduct "creditors meetings". For Rockland and Westchester they are held in White Plains. For the northern counties they are in Poughkeepsie. This meeting is usually held about five weeks after the petition is filed. The meeting is held in an office room in the courthouse - the Judge does not attend, and the formalities of a courtroom are absent. At the meeting the debtor will see his attorney, the Trustee, and 20 to 30 other debtors and their attorneys for their own creditors meetings. The Court schedules 10 to 15 of them for each half-hour time slot throughout the day.

Despite its name, creditors almost never show up at these meetings - they don't have to, because the Trustee will do most of the work they would otherwise have to do - making sure that the petition, schedules and other documents are all properly filed, by investigating their truthfulness before, during and after the meeting, by accessing credit reporting agencies and other databases, and by otherwise making sure that the integrity of the bankruptcy process is protected.

If a creditor wants more information, it can schedule a separate meeting with the debtor and his attorney. Likewise, the Trustee can schedule a "private" session with them. This happens maybe once in a hundred or more cases, and is avoided by good preparation and follow-up.

Credit card banks, retailers and other lenders rarely, if ever, attend these meetings. Those who do will usually be seeking reaffirmation agreements - you keep their stuff, and pay that debt; it's up to you. Creditors who do appear at the meeting will often have a close or personal relationship to the debtor, such as a business partner, a major business creditor, or the neighbor who loaned money. They and/or their lawyer may attend and ask questions. Others may show up if they have a reason to be very angry with the debtor. Once there was a man who had a limousine service. He booked limos for many weddings and took the money, but didn't hire any cars or drivers. About seven jilted brides came to his creditors meeting. It wasn't pretty.

Prior to the meeting the trustee will have reviewed the petition, the debtor's pay stubs for two months prior to filing, and his two most recent tax returns. The Trustee may also ask the debtor's attorney to furnish other documents, such as house closing statements and vehicle titles. At the meeting he or she will question the debtor about the petition and the case. The debtor's attorney can usually tell him what to expect. If satisfied with the answers, the Trustee will usually announce that he is closing the meeting, and report this to the Court. If other information is needed, the meeting will be adjourned to another date. Usually the attorney can supply this information before the adjourned date, and another trip to Court will be avoided.

The Trustee's administration of the case often draws on the resources of the regional Office of the U. S. Trustee, in Manhattan or Albany. A part of the U. S. Department of Justice, this office is available to the Trustee when a case demands a lot of review time. Someone from this office may attend the meeting, may ask questions, and may request information and records from the debtor's attorney.

MORTGAGE MODIFICATION

The "Great Recession" of 2008 put the housing and mortgage industries into crisis, causing borrowers to lose their homes, and lenders to lose their bets that homeowners would be able to repay their loans. As a result, borrowers, lenders and the government are eager to stop further losses, and are willing to negotiate.

There are many programs available from HUD (U. S. Housing and Urban Development Agency), from non-governmental housing advocacy groups, like Rockland Housing Action Coalition, from banks and mortgage brokers aimed at modifying existing mortgages or refinancing the debts. HUD and other government agencies are co-operating with some of these programs, regulating them, and in many cases financing them.

There also many scams being run by individuals and firms, which seek to prey upon the vulnerability of people in danger of foreclosure and homelessness. They often try to get money from them "up front", by credit card or check, and then do little or nothing to help their clients. In some states these scams are "fronted" by attorneys, who are allowed to collect up front retainers for their services. A New York Times expose' of one of the bigger mortgage rescue scammers in California is frightening and instructive. You can read it here.

Banks usually charge nothing to negotiate a loan modification with you. They will not always give you what you want or need, but they don't make you pay up front. Banks charge fees of a few hundred dollars to process a new loan application, but they make their real money by charging you interest on the loan. They also have you as a customer for life, or the next thirty years, which is good for them, too.

Any person or company who asks you to pay several thousand dollars up front may be trying to scam you.