Bankruptcy

Real Estate

Wills, Probate, and Estate Planning

Introduction to Bankruptcy

There are two types of Bankruptcy proceedings available to individuals who are unable to pay their existing debts. A Chapter 7 Bankruptcy proceeding is a liquidation case. A Chapter 13 Bankruptcy proceeding is a payment plan. Under either chapter, a Petition is filed with the Court providing information concerning the debtor's assets, liabilities, income, household expenses, among other items. In both Chapter 7 and 13, you will be questioned by a Court appointed Trustee, who is an attorney assigned by the Court to your case. The Trustee's primary job in Chapter 7 is to determine whether or not you have assets which may be acquired by the Trustee and then sold with the sale proceeds then distributed to your creditors. The Trustee is entitled to all of your property which is not considered exempt. Exempt property includes:

1. Cash, bank accounts and tax refunds with a total value of up to $2,500.00 per person or a home with a total equity value of up to $10,000 per person provided that an individual cannot claim both a homestead exemption and a cash/bank account exemption;
   
   
2. One automobile per person with a total equity value of up to $2,400;
   
   
3. Household furniture with a value of up to $5,000;
   
   
4. Clothing;
   
   
5. Pension plans, 401k plans, 403b plans, deferred compensation plans, and most other employer related retirement accounts as well as IRA accounts;
   
   

Your Chapter 7 Petition can usually be filed in less than one month after our first meeting. You will be required to provide me with background information as well as documentation which will be required in order to complete your Petition. A copy of my client data information form can be downloaded using the free Adobe Acrobat software.

Debts that survive Chapter 7

Not every debt can be wiped out in a Chapter 7 case. Sometimes, a debtor does not wish to wipe a debt out, and, in fact, wishes to reaffirm or agree to continue paying the debt. Examples would include car loans which are secured by the vehicle and which the debtor wishes to reaffirm so that the vehicle can be retained. If not reaffirmed, the creditor would be able to repossess the vehicle after obtaining permission from the Court. Debts that cannot be wiped out in Bankruptcy include:

1. Most taxes, although under certain circumstances income taxes can be discharged; (for more information regarding discharge of tax liabilities in a Chapter 7 Bankruptcy case, please consult IRS Publication 908 (requires Adobe Acrobat which can be downloaded for free);
   
   
2. Child support and/or alimony;
   
   
3. Student loans unless the Court determines that repayment of the loans would create an undue hardship;
   
   
4. Court ordered fines;
   
   
5. Debts obtained through fraud or deception;
   
   
6. Personal injury debts caused as a result of driving while intoxicated or taking drugs.

After Your Case is Filed

Usually within approximately 30 days of the filing of your Bankruptcy Petition, you will be required to attend an initial meeting of creditors. All of your creditors are provided with notice of the date and time of that meeting so that they can ask any questions which they desire. Typically, creditors do not attend these meetings. The meeting is conducted by the Bankruptcy Trustee, who will ask many questions in order to confirm the accuracy of the information contained in your Petition. The Trustee also will ask questions to determine if there is any property that is not exempt which he will then need to administer. I will appear with you at this meeting of creditors, and if there are areas of concern, we will ordinarily discuss these before the actual Court appearance.

Once your Petition is filed with the Court, creditors are not permitted to undertake any further collection activity against you, and therefore, must cease calling you by phone, writing you, garnishing your pay or taking action to collect on judgments. If a foreclosure action is pending, the creditor will need to stop moving forward with the case until such time as the Court grants permission for the creditor to continue.

The fact that you filed Bankruptcy will appear on your credit report for as long as ten years. This filing may affect your ability to obtain credit in the future. You might need to pay higher interest rates and will likely have less credit extended to you.

Details regarding Chapter 13

A Chapter 13 Petition is submitted to the Court that includes all of the information in the Chapter 7 Petition as well as a Chapter 13 Plan detailing your intentions with regard to repayment of secured debt as well as portion of your unsecured debt. Chapter 13 can be used in order to catch up mortgage arrears as well as property taxes, income taxes and car loans. All accumulated arrears can be paid through your Chapter 13 Plan, although you will be required to make each and every future mortgage or tax payment on time for each month that you are in Chapter 13. So long as you keep making your current payments, the bank will not be able to foreclose on the mortgage as long as the Plan will pay all of the arrears in full. In addition, your Chapter 13 Plan will pay any car loans by paying the creditor in full up to the value of the car or the value of the loan, whichever is less. The Court will reset the interest rate at a rate likely to be lower than you are now paying. You will also be required to pay a portion of your unsecured debt. In the United States Bankruptcy Court in Rochester, Judge Ninfo typically prefers to see debtors pay at least 20% of their unsecured debt. This debt is ordinarily paid without interest.

Chapter 13 is designed for individuals who are able to repay a portion of their unsecured debt for a three to five year period. In addition, it allows a debtor to keep property that would otherwise not be considered exempt under Chapter 7. It is also possible to separately classify a student loan to payoff the entire balance during the course of a Chapter 13.

In a Chapter 13 proceeding, you will again be scheduled to appear before a Trustee at a meeting of creditors. Ordinarily, the same morning or afternoon, you will then appear before the Judge for confirmation of your Chapter 13 Plan. The Trustee first reviews the Plan to determine if all of the required debt is being appropriately dealt with and to also make a recommendation to the Court as to whether or not all of your available net income is being used to make Plan payments and whether you have any excess income available to increase your payments.

As a part of your Chapter 13 Petition, you will be required to submit a budget that will be scrutinized by the Trustee to determine whether or not you have any excess income available which could be used to increase your plan payment. Once your plan is established and confirmed, your payment will not be required to be raised if you receive an increase in pay at work. If in the future you are unable to make payments, it is possible to modify your Chapter 13 subject to the approval of the Court and Trustee.

REAL ESTATE - My real estate practice consists largely of the sale and purchase of both residential and commercial real estate. I additionally represent landlords and occasionally tenants in eviction proceedings. I don't delegate my real estate practice to inexperienced staff or associates; I accept only the number of real estate transactions that allow me to give each case real "hands on" attention. An added benefit of this philosophy is that it enables me to spend more time with my clients and better serve them. I enjoy meeting with my clients, and when you call me, I am the one who answers the phone.

WILLS, PROBATE, AND ESTATE PLANNING - I prepare Wills for individuals and also work to settle their estates. The process of preparing a Will is often difficult for clients and there are obviously stresses involved in the settlement of an estate. The purpose of a Will is to allow individuals the right to determine how their property will be distributed upon their death and to also nominate an executor to handle the administration of their estate and a trustee to administer any trust created under the Will.