The New York Bankruptcy Lawyer

Back in January of 2011, New York made changes to its laws that allowed people filing bankruptcy to keep many more assets when filing bankruptcy. It did this by increasing the New York limits on assets and authorizing the use of the federal bankruptcy exemptions. I, as many bankruptcy lawyers, thought that this was great and a real positive thing.

When the news broke, I ran into one of the bankruptcy trustees in the elevator. This trustee also represented people filing bankruptcy. I said something like "isn't it great news that debtors can keep more assets?" I was surprised at his reaction. He looked me straight in the eyes and said rather seriously, "no I think that is really bad news." After our brief exchange I thought about his prespective. I realized that if the people filing bankruptcy (also known as debtors) can keep more of their possessions (also known as assets), that he would earn less money. Much of the money that bankruptcy trustees earn are commissions that they earn when they take assets from debtors in order to pay their creditors. He was answering my question from the prospective as a bankruptcy trustee and not as an attorney representing debtors or as a debtor.

Since then, the bankruptcy trustees have been dealt a double blow to their income since then. As my bankruptcy trustee friend had feared, they have been able to take much less assets from debtors. In addition, the number of people filing bankruptcy has gone down. Making things worse, most bankruptcy trustees only practice bankruptcy, so they don't have other areas of law to fall back on to earn money.

The bankruptcy trustees are a smart and resourceful group of individuals. They have come up with other ways of making money from the cases in which they act as trustee. The one I'm discussing here is by looking at debtors apartments as a potential asset.

When you file bankruptcy the bankruptcy trustee, so to speak, stands in your shoes. The trustee has all of the financial rights that you have. For example, if you can go to your landlord and offer to move for a lump sum of money, so can the trustee. In other words, when you file bankruptcy, the trustee can ask your landlord to pay the trustee money in order for you to move. The situations where this is most likely is when you find yourself in one of the following situations: you live in a rent controlled apartment; you live in a rent stabilized apartment; you live in a rental apartment in a building that has converted to either cooperative apartments or condominiums.

Some people who have filed bankruptcy in the past year or so have found themselves caught in this situation because many lawyers did not know that their clients' apartments would be treated in this new way. In fact, it is likely that many bankruptcy attorneys still are not aware of this new approach by trustees.

If a bankruptcy trustee does decide to take a debtor's apartment as an asset the debtor can find himself or herself forced out of the apartment. The attorney representing the debtor may be able to use the appropriate exemption and get at least $10,000 for the debtor. The debtor's attorney may also be able to negotiate a larger amount of money and additional terms, such time to move and even for the landlord to provide another rental apartment (at market rent) to the debtor.

I think that New York legislators never thought that bankruptcy trustees would take debtors rental apartments as assets. However there are no protections in either the Federal or New York exemptions. I will explore the possibility of having the New York exemptions amended to protect apartment renters. When an owner of a home files bankruptcy New York offers generous exemptions. Why shouldn't renters be afforded the same protections?

Now more than ever, it is essential that if you are filing bankruptcy that you use an attorney that is up to date with the latest developments in bankruptcy and has many years of experience. I know that this sounds self-serving, but it really isn't. In addition to myself there are other such attorneys here in New York City and beyond. However, it is up to you to find the best bankruptcy attorney that you can, both in experience and one in which you feel comfortable with.

It is a good idea to take a close look at what your mortgage lender is charging in regard to your escrow fund. Some bankruptcy lawyers have found that some banks are overcharging escrow expenses. In fact federal investigators are now looking into this alleged practice.

Although it is not known how much money banks have allegedly stolen from borrowers by overcharging, it appears that the amount may be in the hundreds of millions of dollars. The New York Post has found that there could be over $150,000,000 in overcharges just from cases it reviewed from 2011. In New York, the Office of the United States Bankruptcy Trustee is reviewing Chapter 13 Bankruptcy cases for escrow overcharges by banks.

This is now the banks have been allegedly taking money out of the pockets of struggling homeowners. Many homeowners are required by their lenders to pay their property taxes and homeowners insurance premiums through their lenders. This is done by the homeowner making payments for taxes and insurance to their mortgage lenders, which are in addition to their payments for the mortgage. These expenses are added to the monthly mortgage payments and made in one lump sum payment each month. When the homeowner falls behind in payments the lender or its servicing company or its attorney then requires not only payment of the past due payments, which include payments for taxes and insurance, but also payments for the escrow items, which are taxes and insurance. Thus the lender collects twice for taxes and insurance and only pays those expenses once, pocketing the difference. It is believed that this little scheme, on average, has allegedly stolen about $2,000 from each home owner. In addition, many homeowners in distress falls behind in their mortgage on more than one occasiion. This provides an opportunity for the lender or its servicing agent or attorney to help themselves to additional money that they are they are not entitled to.

So far this allegedly problem has been found with loans from Wells Fargo and GMAC Mortgage, but it appears to be a wide spread problem. We will see how much this alleged bank activity is investigated, and what if anything comes of it. While we are waiting for investigators to do their job, do your own investigation and carefully review your mortgage and escrow statements for errors and outright theft.

I have practiced law for over 25 years and over the years I have seen many unfortunate people lose their homes to mortgage scams.  I am pleased that due to my intervention I have stopped con-artists from stealing homes from clients.  This has happened when the client had the good sense to come to my office, often with the thief in tow.  I have faced down these con-artists in my office.  I can see why people fall prey to these thieves.  Even when I confront them they lie to my face and become indignant!

The homeowner that falls victim to these con-artists, thieves and scammers are usually behind in their mortgage and or elderly.  The con-artist may be a man or woman, they may be White, Black, Hispanic or of any other ethnic background.  Usually the con-artist will select someone of their own ethic background as their victim.  Almost always, the con-artist is smooth and fast talker.  The con-artist will have you think that they are being your best friend as they steal your home from under you.  Also, beware, the scammer can be introduced by a friend or family member.  The sammer can even be a friend or family member!

There are two different types of mortgage scams:

1. The Equity Strip: In this scam the thief will have you deed over your home to him or her.  The thief will instruct you to pay your mortgage payments to him or her.  The con-artist will promise that once you have caught up on your mortgage payments that he or she will then transfer your home back to you.  In reality, the con-artist will sell your home to someone else and keep the profits.  In the end, you will be out of your money and your home.

2.  The Phantom Assistance Program: In this scam, although the con-artist is not after your home, only your money, you often end up also losing your home.  The con-artist will tell you not to speak to your lender because he or she will negotiate with the lender concerning your late mortgage payments.  The con-artist will charge you a "fee" for "services" and may tell you to direct your mortgage payments to him or her as well.  In the end, the con-artist will disappear with your money and provide no services.  By the time you have realized what has happened you may be so far behind your mortgage payments that you may lose your home to foreclosure.

There are many variations to the above mentioned mortgage scams.  The best way not to fall victim to any scam is to follow the following rules:

1.  Never sign any documents, including, but not limited to, contract or deed, without the advice of a trusted attorney of YOUR OWN INDEPENDENT selection. 

2.  Don't listen to any one that tells you not to talk to your mortgage lender.

3.  Look out for fake bank or government websites. 

4.  If you find that you are behind in your mortgage payments speak with your lender.

5.  Be extremely wary of anyone that ask you to pay them for dealing with your mortgage lender.

If you follow the 5 rules stated above it will greatly help you from becoming the victim of mortgage fraud.

Yesterday the law firm of Steven J. Baum P.C., which has offices in Amherst, NY and Westbury NY,  filed documents indicating that they would layoff much of their staff.  It is widely believed that the law firm will be closing down.  If so, a total of nearly 100 people will lose their jobs. 

If you have had a foreclosure action filed against you in the past few years, you are probably familiar with the law firm of Steven J. Baum P.C. due to the fact that it is very likely they represented your lender.  In recent times, the law firm of Steven J. Baum P.C. has been the largest foreclosure law firm in New York.

The fact that the law firm of Steven J. Baum P.C. is closing down should come to no surprise to anyone that follows foreclosure matters in New York.   There have been numerous news reports over the last couple of years concerning the practices of the law firm.  The law firm has been called a "foreclosure mill."

Home owners that have had foreclosure actions brought against them by lenders represented by the law firm of Steven J. Baum P.C. and fought back in court have had some success against the shoddy practices of the law firm.  Judges throughout the state have criticized the practices of the law firm of Steven J. Baum P.C.  In 2010 a Brooklyn judge stated that the foreclosure filing of the law firm of Steven J. Baum P.C. was "incredible, outrageous, ludicrous and disingenuous."  Also during 2010, in another foreclosure matter, a Nassau County judge ordered the law firm to pay fines and costs of nearly $20,000 due to papers that contained numerous "falsities."

The law firm of Steven J. Baum P.C. has been accused of "robo-sigining" of documents.  That is- documents were merely signed by individuals without being read or verification of the truth of the documents that were being sworn to.  The United States attorney's office in Manhattan had been investigating the practices of the law firm of Steven J. Baum P.C.  Last month the law firm entered into an agreement in which the law firm agreed to pay a two million dollar penalty and promised to make changes to the way they handle foreclosure matters.

In addition, it has been reported that the New York Attorney General's Office has been also investigating the foreclosure practices of the Steven J. Baum P.C. law firm.

Earlier this month, The New York Times reported on a Steven J. Baum P.C. Halloween party in which photos of employees were taken showing employees wearing costumes mocking people who had lost their homes.

With the exit of the law firm of Steven J. Baum P.C. from the foreclosure business, this will no doubt cause further delays to the thousands foreclosures currently being handled by the law firm. 

It is likely that another law firm will appear to become the new major player in representing lenders in foreclosures.  Hopefully that law firm and all other law firms handling foreclosures will learn a lesson from Steven J. Baum, P.C. and not repeat their mistakes.

We are in a very weak recovery after the worst recession since the 1930's.  Unemployment is hovering around 9%.  You would think that bankruptcy filings would be increasing.  Surprise!!! Bankruptcy filings are actually falling. 

Comparing the period October 1, 2009 to September 30, 2009 to October 1, 2010 to September 30, 2011, bankruptcy filings across the United States have fallen 8%.  Here in the Eastern District of New York, which covers Staten Island, Brooklyn, Queens, Nassau and Suffolk Counties, comparing the periods of September 1, 2009 to August 31, 2010 with September 1, 2010 to August 31, 2011 Chapter 7 Bankruptcies have fallen by 4% and Chapter 13 has fallen by 36%.

Doesn't seem logical, but when you stop to think about it, it does makes sense.  Bankruptcy filings are droping because here in New York and the rest of the U.s. because the economy is in such dire straits.

Many people just don't have the money or energy for bankruptcy.  They are more concerned with putting food on the table a roof over their heads.

When the markets crashed in 2008 and 2009 banks issuing credit cards cut credit lines and closed many accounts.   They have not extended large amounts of credit since them.  Many people that had credit card debt have already filed bankruptcy.   With credit now scarce fewer people are needing to file bankruptcy due to credit cards.

Many homeowners in New York, as in the rest of nation, are underwater and are behind in their mortgage payments.   Some of these unfortunate homeowners have been attempting to modify their mortgages.  The modification process takes many months and most often doesn't lead to a modification of the mortgage.  These homeowners are holding off on filing bankruptcy because they want to see the results of their modification efforts.

Many homeowners are also late in their payments and are in the foreclosure process.  With the large number of loans in foreclosure the banks and courts are backed up.  This has resulting in homeowners living in their homes, without paying mortgages, for many months and even years.  Many of these homeowners are putting off filing a Chapter 7 Bankruptcy because they are not ready to walk away from their homes and move on. 

In better economic times many people who fall behind in mortgage payments would look to Chapter 13 for relief.  With this poor economy many of these people can't afford a Chapter 13 repayment plan in order to catch up on their mortgage payments.  This has resulted in a truly stunning drop of 36% in the Eastern District of New York.

When bankruptcy numbers start to rise that will probably reflect an improving economy.  Eventually people will have the money to file bankruptcy so that they can get their finances in order and start the process to rebuild their credit.

Eric T. Schneiderman, who is the New York Attorney General, as well as the federal prosecutors in Manhattan are investigating the practices of the largest mortgage foreclosure law firm in New York, Steven Baum.  Mr. Baum's law firm represents lenders such as JP Morgan and Wells Fargo. In addition to the Steven Baum law firm, the comany created by Mr. Baum, Pillar Processing is also being investigated.

These investigations have been brought after courts across New York have rejected many cases filed by the firm due to faulty documentation of their forecclsoures.  Fore example, last year a Nassau County judge sanctioned the Steven Baum law firm with a $5,000 penalty for bringing a foreclosure action with no legal bases.  Steven Baum was also ordered to pay $14,000 in fees to the home owners attorney.  The District Judge in that case, Scott Fairgrieve stated "Bringing  legal proceedings when there is no legal right to do so, due to lack of standing, stalls the efficient administration of justice in the system."

Steven Baum, although a major player in the world of New York mortgage foreclosures in not alone in being accussed of bringing faulty foreclosure proceedings against home owners.  Attorney Generals across the nation are investigating lenders for bringing faulty home foreclosures across the country.  Unfortunately many homeowners have already lost their homes to faulty mortgage foreclosures.  If a foreclosure action has been brought against you or someone you know, it is essential to get the legal assistance of an experienced attorney in the area of mortgage foreclosures.

I enjoy bankruptcy because it gives me so much satisfaction.  Being a bankruptcy lawyer allows me the opportunity to give real relief to people that have a problem.  Many people come into my office and are at the end of their rope.  Their financial problems are disrupting their lives.  They may not be able to sleep at night; it may be effecting their marriages and other relationships, and usually creditors are hounding them, calling day and night at home and at work.  They may even be seriously depressed. 

In many cases I can eliminate their financial problems by filing bankruptcy for them.  I wish other problems, such as medical problems could be solved as easily as I can solve their financial problems.

It really makes my day when a client shakes my hand or hugs me after the conclusions of their bankruptcy hearing.  Those are the moments that make me proud to be a bankruptcy lawyer.  Even better, when a former clients runs into me in the street or stops by my office and tells me how filing bankruptcy helped turn around their lives and how they are now doing well.

It's good knowing that I'm making a difference.

Same Sex Bankruptcy

A married couple may file a joint bankruptcy petition.  What about a married couple of the same sex?  Under the Defense of Marriage Act (DOMA), which became law in 1996 a gay or lesbian couple does not have the right to file a joint bankruptcy petition since DOMA defines marriage to between a man and woman. 

Now, that seems to be quickly changing.  On June 13, 2011 a bankruptcy court in Los Angeles, California decided that DOMA was unconstitutional and that a same sex couple may in fact file a joint bankruptcy petition.  the case, in re Gene Douglas Balas and Carols A. Moraleswas resulted in a 24 page strongly worded decision that was signed by 20 judges. 

In addition, last year a Boston court ruled that DOMA was unconstitutional due to a violation of equal protection guarantees.  also, two other bankruptcy judges have rejected attempts to dismiss same sex bankruptcy filings without adressing the constitutionality of DOMA. 

There have been other recent courts deciding that same sex couples don't have the legal right to file joint bankruptcy petitions due to DOMA. 

With same sex marriage currently legal in five states and Canada, and gaining ground throughout the United States there will be more and more gay and lesbian couples filing joint bankruptcy petitions in the coming months and years.  this topic will certainly be addressed by future courts.  Keep tune for further developments.

Governor Paterson today signed a bill that would allow people filing Chapter 7 Bankruptcy in New York to keep considerably more assets.  Amount the changes are the following:

The tools of the trade exemption has been increased from $600 to $3,000

Motor Vehicle exemption has been increased from $2,400 to $4,000

If the motor vehicle has been equipped for a disabled person, then $10,000

The exemption for a home, known as the homestead exemption has been increased from $50,000 to as much as $150,000, depending on the county you reside in.

If you are not using the homestead exemption, you get an exemption of $10,000 towards cash and or personal property.  The amount of this exemption used to be $5,000

You have a choice to use the federal exemptions instead of the New York exemptions.  Depending upon your circumstances, using the federal exemptions may be beneficial.

These new rules go into effect on January 22, 2011.

To view the actual new law:

  http://assembly.state.ny.us/leg/?default_fld=&bn=A08735%09%09&Summary=Y&Text=Y

Hi there! ,

Our law firm handles Chapter 7 Bankruptcy and Chapter 13 Bankruptcy matters throughout all of New Jersey.

Bankruptcy can provide you with a fresh financial start in life. If you are deeply in debt, by filing bankruptcy, you can either eliminate all or most of your debt or create an interest free repayment plan. By getting a financial reset through bankruptcy, you will be able to rebuild your credit and sleep better at night. Instead of throwing more money into the bottomless pit of debt, you will be able to start saving for a home, your children's education, and your retirement.

The moment you retain our office, we help take the burden of overwhelming debt off of your shoulders. We will take the calls from your creditors. We will tell you what information you need to provide us to us prepare your bankruptcy petition. Once your petition is filed with the Bankruptcy Court, the court will impose an automatic stay that prohibits your creditors from garnishing your salary, taking money from your bank account or foreclosing on your home. We let you know in advance what questions you will be asked at the bankruptcy hearing. In addition, unlike some law firms who have independent contractors appear at the hearing, we will be sitting at your side for your hearing.

Once you receive your discharge in bankruptcy, you will be able to plan and work towards your future without the burden of worrying about your creditors harassing you. Since 1986 we have successfully helped over 20,000 clients with legal problems, including getting a fresh financial start by filing bankruptcy.

We also speak Spanish, French, Haitian Creole, Hindi, Bengali and Urdu.