A Moratorium on Evictions Ends, Leaving Thousands of Tenants FearfulEviction cases are expected to soar in New York City as housing courts reopen and landlords seek to recoup income lost during the pandemic.A moratorium on evictions that New York State imposed during the coronavirus pandemic expired over the weekend, raising fears that tens of thousands of residents struggling in the worst economic collapse since the Great Depression will be called into housing courts, which reopened on Monday.Housing rights groups estimate that in the coming days, 50,000 to 60,000 cases could be filed in New York City’s housing courts. In addition, thousands of cases that were already in progress but were paused in March can now resume.The number of eviction cases expected to be filed reflects the typical caseload in a three-month period, which was the length of the moratorium. But it does not take into account the fallout from the more than one million city residents who have lost their jobs or were furloughed in recent months and whose federal stimulus payments of an extra $600 per week will soon run out, housing advocates say.A second order issued by the state that shields tenants directly affected by the pandemic expires in late August and could produce an even bigger wave of eviction cases.“All levels of government have to realize that they cannot let tens of thousands of people end up in homeless shelters,” said Edward Josephson, the director of litigation and housing at Legal Services NYC. “It’s the most dire thing that we have ever seen.”But many landlords say they, too, are facing financial calamity, with the loss of rental income leaving them unable to pay their own bills, including mortgages, and invest in building upkeep.“It is clear that the economic impacts of the Covid-19 pandemic are nowhere near an end,” said Jay Martin, the executive director of the Community Housing Improvement Program, or CHIP, which represents about 4,000 property owners. “There are thousands of tenants and building owners who need help now.”As housing courts nationwide begin to reopen and federal stimulus checks are about to end, eviction cases are expected to soar. A recent report by Amherst, an analytics and data real estate firm, found that up to 28 million renters are at risk of eviction.In the days leading up to the first moratorium deadline, dozens of members of the New York State Legislature, as well as many housing groups, urged Gov. Andrew M. Cuomo to extend universal protection to all tenants, even in cases not directly caused by the pandemic.They also expressed concern that housing courts would reopen physically on Monday, placing tenants and others at risk of contracting and spreading the virus.But the state’s chief administrative judge, Lawrence K. Marks, decided against that, citing public health concerns. But case filings can be sent online or through the mail, and hearings will be held virtually.Susanna Blankley, the coalition coordinator for the Right to Counsel NYC Coalition, said it was “unconscionable” for housing courts to restart at all.“In what world is it good to evict people in the middle of a pandemic?” Ms. Blankley said. “Who are you opening for? It has to be for the landlords.”Even though the courthouses were closed on Monday, people protested the virtual reopening outside the Brooklyn location, holding signs that read, “EVICTION FREE NYC.”The past three months have been extremely difficult not only for tenants, but also for smaller landlords.About 25 percent of renters have not paid rent in May, April and June, according to a survey by CHIP. About 20 percent of the landlords represented by the group said they were concerned about losing their properties.Lincoln Eccles, who owns a 14-unit apartment building in Crown Heights, Brooklyn, said the closing of housing courts in March delayed two cases he had against separate tenants who have not paid rent in years. Together, the tenants owe tens of thousands of dollars in rent, he said.He said he collected full rent payments from only nine of his 14 units this month; some of the tenants have not paid because of the pandemic, he said.“If it’s a choice between me being solvent or the tenant staying in place, I have no choice but being solvent,” said Mr. Eccles, who said he was operating in the red this year.
Commercial leases in New York City, COVID-19 and Recent ProtestsAs a result of COVID-19, recent protests and the advent of technologies such as Zoom and Google Meet, many tenants have excess office space/s that they cannot or do not want to continue to rent and would like to terminate their lease or stop paying rent.At Shenwick & Associates, we have received many calls from clients with these issues and we have developed a strategy to address them.First, we review the company's financial information including a recent balance sheet, income statement, the commercial lease and guaranty, if any. Second, we determine if the company is a candidate for a bankruptcy filing, either chapter 7 (a liquidation where the company closes as a result of the filing), a small business Subchapter 5 bankruptcy filing, or a full-blown chapter 11 business bankruptcy filing.In the case of a Chapter 7 filing, the lease will terminate; however, the Chapter 7 bankruptcy trustee appointed to the case will also liquidate or close the business. For businesses that are losing money or do not see a bright future, this may be a good strategy.A company that wants to remain in business, but terminate or reject their lease, should consider a bankruptcy filing under new Subchapter 5, which is a fast-paced, less costly chapter 11 business bankruptcy filing. As part of a Subchapter 5 bankruptcy filing, the lease can be rejected, and the landlord would be paid their lease rejection damages and other monies owed over 5 years or less from disposable income of the business.If Subchapter V does not work due to the debt limit of $7,500,000 or for other reasons, a company can consider a full-blown chapter 11 bankruptcy filing. However, they would want to consider the cost from a chapter 11 filing, versus the expected savings from rejecting the lease. Chapter 11 is a complicated, risky and expensive process for many companies.Another strategy that we have been using with much success is preparing a bankruptcy petition, without filing the petition (a so called Pro-Forma Bankruptcy Petition). This bankruptcy petition would accurately disclose the assets, liabilities and earnings of the company. Then we would forward that bankruptcy petition to the landlord or their counsel indicating that if the tenant and landlord cannot reach an agreement where the tenant is allowed to terminate their lease (pursuant to a Lease Surrender Agreement), then the tenant or company will file for bankruptcy. The benefit of this strategy is that it is quick, relatively inexpensive, the landlord gets financial disclosure regarding the company or tenants finances upfront without litigation or discovery and we convince the landlord that releasing the tenant from their lease is a “win-win” for both the tenant and the landlord. How is this strategy a win for the landlord? The landlord keeps the tenant’s security deposit, the Landlord will also save substantial money on bankruptcy and landlord tenant legal fees, they remove an unprofitable tenant from their building, and they obtain possession of the premises quickly allowing them to re-let the space.One of the reasons that we have had much success with this strategy in these trying times is that we have been filing bankruptcy petitions for over 20 years and the landlord or their counsel can Pacer our law firm’s bankruptcy filings, or visit our website and blog. Based upon our work and experience in this area of the law, landlords realize that bankruptcy is a real option for the tenant not an idle threat. Clients or their advisors who would like to discuss these strategies with Jim Shenwick or schedule a consultation can reach him at 212-541-6224 or email him at jshenwick@gmail.com
A Tidal Wave of Bankruptcies Is ComingExperts foresee so many filings in the coming months that the courts could struggle to salvage the businesses that are worth saving.Already, companies large and small are succumbing to the effects of the coronavirus. They include household names like Hertz and J. Crew and comparatively anonymous energy companies like Diamond Offshore Drilling and Whiting Petroleum.And the wave of bankruptcies is going to get bigger.Edward I. Altman, the creator of the Z score, a widely used method of predicting business failures, estimated that this year will easily set a record for so-called mega bankruptcies — filings by companies with $1 billion or more in debt. And he expects the number of merely large bankruptcies — at least $100 million — to challenge the record set the year after the 2008 economic crisis.Even a meaningful rebound in economic activity over the coming months won’t stop it, said Mr. Altman, the Max L. Heine professor of finance, emeritus, at New York University’s Stern School of Business. “The really hurting companies are too far gone to be saved,” he said.Many are teetering on the edge. Chesapeake Energy, once the second-largest natural gas company in the country, is wrestling with about $9 billion in debt. Tailored Brands — the parent of Men’s Wearhouse, Jos. A. Bank and K&G — recently disclosed that it, too, might have to file for bankruptcy protection. So did Weatherford International, an oil field services company that emerged from bankruptcy only in December.More than 6,800 companies filed for Chapter 11 bankruptcy protection last year, and this year will almost certainly have more. The flood of petitions from the worst economic downturn since the Great Depression could swamp the system, making it harder to save the companies that can be rescued, bankruptcy experts said.Most good-size companies that go into bankruptcy try to restructure themselves, working out payment agreements for their debts so they can stay open. But if a plan can’t be worked out — or isn’t successful — they can be liquidated instead. Equipment and property are sold off to pay debts, and the company disappears.Without reform in the system, “we anticipate that a significant fraction of viable small businesses will be forced to liquidate, causing high and irreversible economic losses,” a group of academics said in a letter to Congress in May. “Workers will lose jobs even in otherwise viable businesses.”Among their suggestions: increasing budgets to recall retired judges and hire more clerks, and giving companies more time to come up with workable plans to prevent them from being sold off for parts.“Tight deadlines may lead to overly optimistic restructuring plans and subsequent refilings that will congest courts and delay future recoveries,” they wrote.The pandemic — with its lockdowns, which have just started to ease — was enough on its own to put some businesses under. The gym chain 24 Hour Fitness, for example, declared bankruptcy this week, saying it would close 100 locations because of financial problems that its chief executive attributed entirely to the coronavirus.But in many cases, the coronavirus crisis exposed deeper problems, like staggering debts run up by companies whose business models were already struggling to deal with changes in consumer behavior.Hertz has been weighed down by debt created in a leveraged buyout more than a decade ago, and added to it with the acquisition of Dollar Thrifty in 2012. As it was battling direct competitors, the ascent of Uber and Lyft further upended the rental-car industry.J. Crew and Neiman Marcus were carrying heavy debt loads from leveraged buyouts by private equity firms while struggling to deal with the changing preferences of shoppers who increasingly buy online.Oil and gas companies like Diamond and Whiting borrowed heavily to expand when commodities prices were much higher. Those prices started to fall as production increased, and plunged further still when Russia and Saudi Arabia got into a price war shortly before the economic shutdowns began.(And then there are cases that have nothing to do with the pandemic but nonetheless take up time and energy in the courts. Borden Dairy, a Dallas company with a history that goes back to 1857, declared bankruptcy in January, a victim of declining prices, rising costs and changing tastes.)A run of defaults looks almost inevitable. At the end of the first quarter of this year, U.S. companies had amassed nearly $10.5 trillion in debt — by far the most since the Federal Reserve Bank of St. Louis began tracking the figure at the end of World War II.“An explosion in corporate debt,” Mr. Altman said.Having a lot more debt to deal with is likely to make the coming bankruptcies a bruising experience for unsecured creditors, who may include retirees with pensions or health benefits, vendors waiting to be paid, tort plaintiffs whose lawsuits are cut short and sometimes even current workers. If a company goes into bankruptcy with more secured debts than the value of its assets, the secured creditors — including vulture investors who bought up the debt for a song — can walk away with virtually everything.The sums at play in some of these cases will be enormous. Mr. Altman expects at least 66 cases with more than $1 billion in debt this year, eclipsing 2009’s mark of 49. He also predicted 192 bankruptcies involving at least $100 million in debt, which would trail only 2009’s record of 242.Robert J. Keach, a director of the American College of Bankruptcy, said many companies had so far managed to put off bankruptcy by amassing cash and conserving it as best they can: drawing down existing credit lines, furloughing workers, delaying projects and taking advantage of federal and state pandemic-relief programs.But when those programs expire, the companies will start burning through their cash. That’s when bankruptcy filings are likely to soar and stay elevated, Mr. Keach said.Expect “a Covid-19 cliff” in the next 30 to 60 days, he said.Companies that received loans under the federal Paycheck Protection Program may be waiting to file, said Mr. Keach, who practices bankruptcy law with the firm of Bernstein Shur in Portland, Maine. The loans can be converted to grants if the companies meet certain requirements, and if the borrowers can put off bankruptcy until they’re sure they won’t have to pay the money back, they will have more cash when they file.That’s an important consideration, because Chapter 11 is expensive. A bankrupt company must pay the fees of the lawyers and other professionals that help it reorganize, as well as the fees of those who advise the official creditors’ committees.The experts’ recommendations to Congress walk a fine line. They suggest allowing companies more time to come up with reorganization plans, even though Chapter 11 cases are supposed to move quickly so bankrupt companies don’t burn through their cash before they reorganize.Generally, the longer a company stays in bankruptcy, the greater the chances of a liquidation. And that increases the likelihood that the company’s troubles will spread: Suppliers of raw materials could fold if a manufacturer languishes in bankruptcy, and smaller stores in entirely differently lines of business can suffer if a shopping-mall anchor can’t stay open.These risks are real, said Robert E. Gerber, who retired in 2016 as a bankruptcy judge in the Southern District of New York. One of his cases was the 2009 bankruptcy of General Motors, which moved at lightning speed to keep the automaker from going under for good.“If G.M. had failed, God knows how many companies in the supply chain would have failed, and this would have snowballed terribly,” said Mr. Gerber, who is now of counsel with the Joseph Hage Aaronson firm. The cascade would have wiped out paychecks to workers throughout the supply chain, threatening other businesses and even the finances of the local governments that count on them for tax revenue.That, Mr. Gerber said, makes it imperative that the bankruptcy system have the resources to deal with the coming rush of cases.“Bankruptcy can’t print money for those companies,” he said, “but it can give a good number of them a chance of survival.”
Reorganizing Your Debt under Chapter 13 Bankruptcy Huge debts can become overwhelming. You may try to pay them off, but your credit card interest rates just keep resetting higher and higher as your credit score suffers, making it harder for you to pay down the balances. You may want to pay what you owe to your mortgage, but your lender won’t work with you. You may want to pay off your medical debts, but the sums are just outrageous, and it feels like you will never be able to pay them. You can get the debt relief you need by filing for bankruptcy. Chapter 7 bankruptcy tends to offer the most relief since it liquidates your unsecured debts, relieving your need to pay them. However, you must pass a means test in order to file for Chapter 7 bankruptcy, and some people make too much money or have too many assets to file. In that case, you can still get debt relief by filing for Chapter 13 bankruptcy in Mesa. Debt Repayment Plan What Mesa Chapter 13 bankruptcy does is put you on an affordable debt repayment plan. This type of bankruptcy is often known as “debt reorganization.” Your Mesa bankruptcy attorney and the bankruptcy trustee create a repayment plan that prioritizes your secured debts, such as your home or car loans, and creates a monthly payment for all your debts that you can actually afford. The repayment plan takes into consideration your income as well as your debts. The plan is designed to last only three to five years. Under a Chapter 13 bankruptcy repayment plan, certain debts must be paid in full, including: Your mortgage Your auto loan Back taxes Student loans You will also be responsible for continuing to pay your alimony and child support. In some cases, your Phoenix bankruptcy attorney may be able to negotiate a lower interest rate for some of these payments so that it is easier for you to pay off your debts. Under this plan, you may be able to pay what you owe on your mortgage to keep your house out of foreclosure or to save your car from repossession. The plan allows you to catch up on what you owe while also making your debt more manageable. Unsecured Debts Your unsecured debt will also be included in your Chapter 13 bankruptcy repayment plan, including credit cards, medical bills, and some personal loans. Often, you’ll save money on these debts because you’ll be paying under a lower interest rate and you’ll be avoiding late charges and other penalties. At the end of the repayment period, you may not have paid back all your unsecured debt. If that is the case, that debt will likely be discharged. Therefore, you will only pay back a portion of your unsecured debt, based on your ability to pay, as determined by the bankruptcy courts. While Chapter 13 bankruptcy does not completely eliminate debts, it is often preferable to Chapter 7 bankruptcy because it allows you to keep all of your assets, such as your home and your car. Chapter 13 bankruptcy can also help you save your house from foreclosure or your car from repossession, which you cannot do with Chapter 7 bankruptcy. With Chapter 13, you can get a greater handle on your debt, while also freeing yourself of the burden of some of your unsecured debt. Talk to an experienced bankruptcy attorney serving Gilbert to review your finances and determine whether Chapter 13 bankruptcy would be right for you, or whether you would benefit more from other debt relief options. The bankruptcy attorneys at My AZ Lawyers can help you learn about your bankruptcy options and how each of them might provide you with debt relief so that you can regain control of your finances. We will thoroughly review your finances to better understand your debts and your financial means so we can suggest the best path forward. Our goal is to help you get the maximum debt relief possible. We help individuals and businesses with multiple bankruptcy filings, including both Chapter 7 bankruptcy and Chapter 13 bankruptcy for individuals. We serve clients throughout the Phoenix, Mesa, Tucson, and Glendale areas. Contact us today to talk to a bankruptcy attorney about your options. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: info@myazlawyers.com Website: https://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post Reorganizing Your Debt under Chapter 13 Bankruptcy appeared first on My AZ Lawyers.
Can I Clear My Medical Debt by Filing for Bankruptcy in Arizona? There is no shortage of information about how health care expenses have spiraled out of control. Life-saving drugs cost thousands of dollars a month in some cases, and a single surgery can cost more than the price of a house. Insurance may cover some of that, but most insurance will not cover all of it. You may still owe tens of thousands of dollars for medical care, even if you have health insurance. If you don’t have health insurance, you could lose everything trying to pay off your medical bills. Fortunately, you do have options other than struggling in debt for years or selling off everything you own to pay for your medical expenses. Filing for bankruptcy in Glendale may be able to help you get rid of your medical expenses or to make them more manageable to pay. You should talk with a Glendale bankruptcy attorney to find out exactly how bankruptcy can help your particular circumstances. Chapter 7 Bankruptcy Filing for Chapter 7 bankruptcy in Phoenix can get rid of your medical expenses entirely. Chapter 7 bankruptcy discharges, or erases, all unsecured debt – which is debt that is not backed by some property as a promise in case of default. Doctors, hospitals, and other medical providers do not have the right to seize your home or personal property if you do not pay them. They are unsecured creditors, which means they have only your word that you are going to pay. Before you can file for Phoenix Chapter 7 bankruptcy, you have to qualify. You must pass a means test, which looks at your income in comparison to the average, as well as other factors. If you do not pass the means test, you cannot file for Chapter 7, and you cannot completely liquidate your medical debts. If you do qualify for Chapter 7, there is no limit on how much medical debt you can discharge. You could have hundreds of thousands of dollars in medical debt, and it can all be cleared when the bankruptcy is closed, which typically takes only a few months. Chapter 13 Bankruptcy If you cannot file for Chapter 7 bankruptcy, you can still get some relief from medical debt by filing for Chapter 13 bankruptcy in Mesa. Under Chapter 13, a debt repayment plan is created for you based on your ability to pay. You can put all your medical debt into a three- to five-year repayment plan. You will pay a lower monthly payment, avoid late fees and other penalties, and then likely have your debt dismissed when the repayment plan is over. Filing for Mesa Chapter 13 bankruptcy will put an end to the calls and letters you receive from your debtors, and it will give you an end point for paying off your debt. You also have the option to pay less of your debt than you would if you were just paying the bills as they came in. Filing for Chapter 7 or Chapter 13 bankruptcy in Phoenix can provide you with great relief from overwhelming medical debt. You might get immediate relief from all debt with Chapter 7, or you might reduce the burden by putting your debt into a manageable repayment plan under Chapter 13. You should talk to a bankruptcy attorney serving Phoenix to determine which chapter of bankruptcy would be best for your financial circumstances and your goals. Your Arizona bankruptcy attorney can help you understand the best course of action to take to reach your goals as quickly as possible. The bankruptcy attorneys at My AZ Lawyers are ready to help you get the maximum debt relief possible through bankruptcy, whether you are struggling with medical debt or some other kind of debt. We may be able to help you get total liquidation through Chapter 7, or we may help you get on an affordable debt repayment plan through Chapter 13. If you own a business, we can also help you explore the business bankruptcy options. We serve both individual and business clients through the Mesa, Glendale, Tucson, and Phoenix areas. Call our bankruptcy law office today to schedule a consultation with a reputable and committed bankruptcy attorney to learn about your options for debt relief. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: info@myazlawyers.com Website: https://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post Can I Clear My Medical Debt by Filing for Bankruptcy in Arizona? appeared first on My AZ Lawyers.
Child Support and Filing Bankruptcy As a parent in Arizona, it’s the responsibility of yours to provide for your children. Therefore, this includes paying the child support of yours on time. Arizona doesn’t take this responsibility lightly and also have numerous punishments at the disposal of theirs, which includes incarcerating parents that fail paying their support orders. Additionally, if parents have child support arrearages, declaring chapter seven or even chapter thirteen bankruptcy won’t discharge the debt of child support. Nevertheless, filing for chapter 13 bankruptcy in Glendale might put you in a position to enable you to get caught up on the payment of yours that you owe for child support. Let’s take a further look at child support and the various chapters of bankruptcy and your options. Child Support when filing Chapter 7 Bankruptcy When you file for Chapter 7 bankruptcy, there’s an automatic stay which stops anyone from pursuing claims against you. The Automatic Stay doesn’t stop collection actions for unpaid child support. Nonetheless, along with a party looking for back child support from you is permitted to proceed regardless of the simple fact you filed a Chapter seven bankruptcy. Any revenue you get once you file for bankruptcy isn’t considered a part of your bankruptcy estate in a Chapter seven bankruptcy, and may be looked at in determining child support responsibilities and utilized to pay support arrearages. In a Chapter thirteen bankruptcy, nonetheless, any income earned is a part of the bankruptcy estate along with a party seeking to enforce a support obligation should request help from the stay to do it. If an individual that filed for Chapter thirteen bankruptcy is currently governed by a support order and additionally fails to produce support payments, the Bankruptcy Trustee will often raise the stay so the assistance could be recovered. QUESTION: My ex spouse has declared bankruptcy, and now she claims she does not need to pay child support. Is that accurate? ANSWER: Child support payments generally can’t be discharged in bankruptcy. Thus,your wife is completely incorrect. Which means that a parent that owes child support can’t escape this particular responsibility by filing for bankruptcy. Whereas, bankruptcies don’t serve as a stay, or maintain, on measures in order to establish paternity or to change child support obligations. If your co parent has stopped paying kid support, the court and state department that administers support could use various techniques to try to enforce those aforementioned support obligations. The relationship between bankruptcy and child support is complicated. Therefore, you might require the assistance of an Arizona lawyer acquainted with bankruptcy law. Will Filing a Chapter 13 Get Rid of my Child Support? In a chapter thirteen bankruptcy in Arizona, child support obligations are as essential in the Federal Bankruptcy Court as they’re in the Arizona Family Court. In a chapter 13, child support is considered a priority debt. Child support arrearages must be paid through your chapter thirteen payment plan. A chapter 13 repayment plan lasts 3-5 years and is based on what the filer is able to repay. However, if there is child support, that must be figured into the plan. The substantial difference between a chapter seven and a thirteen is usually that a chapter thirteen stops collection activity for support obligations. A chapter 7 bankruptcy does not stop collection efforts on back child support. Support collections might be kept because the Bankruptcy Code considers the debtors earnings as home of the estate. Arrearage Child Support Put Into the Chapter 13 Repayment Plan Thankfully, after these payments are stopped, a Chapter thirteen repayment program permits a debtor to manage the debts of theirs, and also by paying child support debt a debtor will lessen the amount he or maybe she would usually spend to satisfy their general creditors. Sometimes debtors are able to minimize just how much they pay to various other creditors by the total amount of support debt they owe through a Chapter 13 filing. Paying back child support should be considered a positive. Whereas, many debtors usually prefer pay for the needs of their children by paying the owed child support versus paying their arbitrary creditors. Nevertheless, one important part would be that the debtor should stay current by continuing paying their support obligations. Failure to do so means they won’t get their chapter thirteen discharge. At the end of the Chapter 13 repayment plan, not only will the filer receive a discharge from their chapter 13 bankruptcy but the filer will also be current on their Arizona child support payments. One can not happen without the other. Child Support is a Priority Debt As the benefits of providing for minor kids is recognized throughout federal court systems and state, in both Chapter seven and Chapter thirteen bankruptcies, Child support debt is deemed a priority debt which isn’t dischargeable in bankruptcy. As a result, any ordered child support debt won’t be forgiven in case you file for bankruptcy and you’ll be forced to make up the overdue payments. Additionally, child support debt is paid first over other priority debts including tax obligations and also before unsecured obligations. In case you filed a Chapter 13, any support debt must to be paid off entirely through part of your respective repayment program for you to get a discharge from the debts of yours. Making all of your Chapter 13 repayment plans in conjunction will satisfy your child support and arrearages. An experienced Arizona BK Lawyer will make sure this happens through a Chapter 13 bankruptcy. If you are considering filing for bankruptcy and are currently paying child support or have child support arrearages, you should seek the assistance of experienced Arizona attorneys. The professionals at My AZ Lawyers represent clients in Arizona in both bankruptcy law and Arizona family law. You may get in touch with us by calling (480) 833-8000 or Contact us on-line. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: info@myazlawyers.com Website: https://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post Child Support and Filing Bankruptcy appeared first on My AZ Lawyers.
Bankruptcy can often mean downsizing your life. That may mean giving up a house or moving to a less expensive apartment. Rental rates are going up in Philadelphia, and apartments can be competitive. It’s smart to look ahead and wonder whether you’ll be able to secure the housing you need in the future before choosing […] The post Will I Be Able to Rent a Philadelphia Apartment After Bankruptcy? appeared first on .
Bankruptcy can often mean downsizing your life. That may mean giving up a house or moving to a less expensive apartment. Rental rates are going up in Philadelphia, and apartments can be competitive. It’s smart to look ahead and wonder whether you’ll be able to secure the housing you need in the future before choosing […] The post Will I Be Able to Rent a Philadelphia Apartment After Bankruptcy? appeared first on .
On 8 June, 2020 the 5th Circuit ruled against the chapter 13 Trustee on a matter a number of trustee's are asserting in plans proposing 100% to unsecured creditors. Brown v. Viegelahn, 2020 U.S. App. LEXIS 17915, Case No. 19-50177 (5th Cir., 8 June 2020). The trustee in that case requested, and the bankruptcy court ordered that the debtor must either increase the monthly payment to pay all disposable income so that unsecured claims are paid over 7 months, or agree that no future modification can reduce the dividend to unsecured creditors to below a 100% dividend. This language was incorporated in the case Molina v. Langehennig.1 Given only these choices, the debtor chose the Molina language, and appealed to the district court, which certified the matter to the 5th Circuit Court of Appeals. 11 U.S.C. 1325(a) requires that a court confirm a chapter 13 plan if it complies with the requirements listed in the code. §1325(b)(1) provides an exception, that if the trustee objects to the plan, the court may not confirm the plan unless as of the effective date of the plan - A) the value of property to be distributed under the plan on account of such claim is not less than the amount of such claim; or B) the plan provides that all of the debtor's projected disposable income to be received in the applicable commitment period beginning on the date that the first payment is due under the plan will be applied to make payments to unsecured creditors under the plan. Under §1329 a plan may be modified after confirmation before completion of payments to increase or reduce the amount of payments. The trustee argued that the plan did not comply with §1325(a). There were three parts to the trustee's argument. First, that the debtor failed to comply with §704(a)(2) as imposed by §1302(b)(1) to be accountable to the trustee for all property received. Per the trustee's argument, this puts a duty on chapter 13 debtors to preserve the estate. The court rejected this, finding that the trustee is accountable for all property received, but that the debtor's excess income is not property that the trustee received, so the trustee cannot have a statutory duty to preserve it. Further, §1325(b)(1) is disjunctive, and does not require a debtor to pay all disposable income into the plan. Similarly §1322 only requires a debtor to submit all or such portion of the future income to the trustee as is necessary for the execution of the plan. As Mr. Brown, the debtor, proposed to pay creditors in full but also allowed him to maintain some disposable income, there was no requirement under the Code for him to turn over his excess disposable income not necessary to execute the 100% plan. Next the trustee argued Brown acted in bad faith, failing to satisfy §1325(a)(3), (7) by making creditors bear the risk of default should there be a future change in his circumstances. The Fifth Circuit indicated that while it normally reviews a bankruptcy court's finding of good faith for clear error, it would apply de novo review where the good faith findings are based on incorrect law. As there were no findings on the §1325(a) requirements, or any mention of good or bad faith in the Court's decision. To the extent the court made a finding of bad faith, such finding was based on incorrect law. Debtors are not in bad faith merely for doing what the Code permits them to do. The trustee also objected that the plan was not feasible, but the bankruptcy court made no finding on feasibility. The 5th Circuit then turned to the requirements under §1325(b)(1) that requires a debtor to A) pay the full value of the claim under the plan, or B) provide that all the debtor's disposable income will go toward payments. The trustee argues that this does not provide alternative methods of complying with §1325, but rather that B) sets the minimum payment for above-median income debtors. The 5th Circuit found this interpretation runs counter to the plain text of the statute, and completely ignores the 'or' in the statute. The section is not ambiguous, and the 5th Circuit ruled that a debtor is not required to comply with both §1325(b)(1)(A) and (B). The Court then found that the plan's language, to pay 'approximately 100% of allowed claim' satisfied the requirements of §1325(b)(1)(A), noting the 'approximately' language came from a mandatory standing order of the particular bankruptcy court. A plan paying 100% is as close to 'in full' as the standing order would permit, and thus complies with the requirement in §1325(b)(1)(A). The 5th Circuit then considered whether the Molina conditions imposed by the bankruptcy court violated §1325. Such language restricts future modification of the plan. The 5th Circuit ruled that it would not impose a blanket ban on a court imposing conditions on a compliant chapter 13 plan, but noted that the provision contravened §105(a) by failure to further some other provision of the Code. The 5th Circuit did find a violation of §1329 which permits a plan to be modified anytime after confirmation before completion to adjust payments, schedules, or the distribution to creditors. The purpose of §1329 is to allow modification of a plan if the circumstances of a debtor change during the life of the plan. The court went on to note that if a §1329 modification request was not made in good faith, such modification request would be denied as all modifications must still meet the requirements for plan confirmation.1 No. SA-14-CA-926, 2015 US Dist. LEXIS 167933, 2015 WL 8494012 , at *1 (W.D. Tex., Dec 10, 2015.↩Michael BarnettLaw Offices of Larry Heinkel, PA506 N Armenia Ave.|Tampa, FL 33609-1703813 870-3100https://myfloridabankruptcylawyer.com
Subchapter V (New Bankruptcy law subchapter) and Who May be a Debtor?In re Charles Christopher Wright, Case No. 20-01035-HB (Bankr. D.S.C. April 27, 2020), the Bankruptcy Court in South Carolina addressed the issue of who may be a “debtor” under new bankruptcy law Subchapter V (the new fast track bankruptcy chapter for small businesses).The issue before the Court was whether business debt without an ongoing business was sufficient to meet the requirement of engaging in commercial or business activities under Subchapter V of the Bankruptcy Code.The Debtor, Mr Wright, was an individual involved in two previous Chapter 11 business bankruptcy filings and as a result he retained personal liability for significant business debts. At the time of Mr. Wright’s personal bankruptcy filing, both of his business entities had stopped doing business . Mr. Wright’s bankruptcy petition listed business debt of more than $395,816.29 and consumer debt of $220,882.42. The United States Trustee assigned to the case argued that since the businesses were not active, Mr. Wright did not qualify to be a debtor under Subchapter V.The Bank Code, Section 11 U.S. Code § 1182(1), defines a “debtor”(for purposes of Subchapter V) as a person engaged in commercial or business activities that has aggregate noncontingent liquidated secured and unsecured debts as of the date of the filing of the petition or the date of the order for relief in an amount not more than $7,500,000 of which not less than 50 percent arose from the commercial or business activities of the debtor.Mr. Wright clearly met the requirement under Subchapter V because more than 50% of his total debt was business or commercial debt.The issue before the Court was whether the Debtor met the requirement of being “engaged in commercial or business activities” despite the fact that both businesses had closed prior to his personal bankruptcy filing.The Bankruptcy Court held that the business activity requirement had been met and allowed the case to proceed under Subchapter V. The Judge held that Subchapter V is not restricted to a person who, at the time of filing of the petition, is presently engaged in commercial or business activities and who expects to continue in those same activities under a plan of reorganization.Bankruptcy Courts are courts of equity and the goal of bankruptcy is to help individuals and businesses reduce, reorganize or eliminate their debt.The view expressed by the Wright Court will encourage more individuals and businesses to file under new Subchapter V.This ruling could also assist businesses that have closed as a result of the corona virus and have not reopened, but want to reorganize.Individuals or businesses who are considering a small business bankruptcy filing under Subchapter 5 and have questions should contact James Shenwick (212) 541-6224; jshenwick@gmail.com.