You may be surprised to learn that there are different types of bankruptcy. Each type is called a “chapter.” Most people who file for bankruptcy in Pennsylvania use either Chapter 7 or Chapter 13. It is crucial to understand how they are different, so that you are better able to select the best type of […] The post What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy in Pennsylvania? appeared first on .

By James BarronMohammed Uddin was having a bad day, and it was only lunchtime. He was fourth in line at a green-taxi stand in Astoria, Queens, and not happy about it.But he was not waiting for a green cab to pull up. He was in a line of green cabs waiting for passengers to pick up in the shadow of the Astoria Boulevard subway station.“I started at 9 o’clock,” said Mr. Uddin, a green-taxi driver since he left a hotel job on Long Island in 2014. “I made $47 so far. That’s very bad. If Uber hadn’t come in, it wouldn’t be like this.”Uber and Lyft, the ride-share services that have transformed the way many New Yorkers get around, have plunged the yellow cab industry into an existential crisis. But green-cab drivers are no less angry about app-connected rides, saying that Uber and Lyft have torpedoed their fledgling segment of the taxi industry before it even had a chance to establish itself.Mayor Bill de Blasio recently signed a bill into law that capped ride-share vehicles at their current level, around 100,000, making it the first major American city to impose a limit on the booming industry. But drivers like Mr. Uddin said the cap was unlikely to create a new window of opportunity for green cabs, in part because ride-hail cars outnumber green cabs 30 to 1. City officials estimate the number of green cabs on city streets to be around 3,500.The city wanted green taxis to be an antidote to a longstanding problem: Yellow cabs rarely pick up people outside Manhattan, except at the airports. But their arrival more or less coincided with the rise of Uber, which, after establishing itself in Manhattan, expanded across the city.“Uber and Lyft really decimated the green cab sector,” said Bhairavi Desai, the executive director of the New York Taxi Workers Alliance, which represents taxi and ride-hail drivers. “There was high expectation among drivers that this would be an opportunity to earn without the same level of pressure that you face in the yellow-cab industry.”Uber counters that it helps green cabs, because many green-taxi operators also drive for Uber. An Uber spokesman said the ride-hail service dispatches more than 50,000 trips to green taxis every month — of course, for passengers, it can be confusing to order an Uber car and have a green taxi pull up to the curb. The Uber spokesman, Jason Post, said Uber provided “an enormous earning opportunity by connecting drivers with more rides,” especially in far-flung neighborhoods where fewer green cabs circulate looking for passengers.Uber riders say it is often much easier and faster to get an Uber car with a couple of taps on a cellphone than to it is to look for a green cab to hail on the street.Figures from the city’s Taxi and Limousine Commission underscore how much business for green cabs has declined since ride-share cars arrived. In May, green taxis made 25,693 trips a day across the city, a 55 percent decrease from May 2015, the busiest month on record, which had 57,637 trips. By contrast, Uber says it handled more than 84,000 trips to or from a single neighborhood, East New York, Brooklyn, between July 18 and Aug. 15.For green cabs, revenue has declined proportionally as trips have dwindled, to $386,965 a day citywide in May 2018, from $862,099 in May 2015. Green-cab drivers are working less than they were, 5.7 hours in May 2018, compared with 6.5 hours in May 2015.Brooklyn accounted for a third of green-cab pickups from January through May of this year, according to the taxi commission. Almost another third, 31 percent, were in northern Manhattan, and 29.5 percent were in Queens. By contrast, only 5.3 percent were in the Bronx, and only one one-hundredth of one percent on Staten Island.And, while the number of ride-hail vehicles has soared, the number of green cabs has shrunk. A total of 8,345 permits have been issued since 2013, but the taxi commission considers only 3,514 active.As for whether Uber had hurt the green cabs, Mr. Post, the Uber spokesman, said, “I would say Uber has built a better mousetrap.”Green taxis were supposed to be that mousetrap — a new category for the entrenched taxi industry, created when Michael R. Bloomberg was mayor. “The right to hail a legal taxi in all five boroughs,” he said in 2013, was “something that New Yorkers have deserved and never had.” A survey by the taxi commission found that 95 percent of yellow taxis picked up passengers below 96th Street in Manhattan and at the airports.The solution — taxis that could only operate away from the areas dominated by yellow cabs — now seems so 2011, which is when the Bloomberg administration first proposed it. The new category of taxis that was created, the green cabs, could not pick up passengers in Manhattan south of East 96th Street or West 110th Street. They can stop if someone hails them anywhere in the other boroughs, except at the airports.By coincidence, 2011 is also when Uber began operating in New York.Now, some passengers say green cabs tried, but never fulfilled their promise.“They filled a crucial void in areas like Harlem where yellow cab service was spotty at best” when they first hit the streets, said Derek Q. Johnson, who lives in Harlem. “But I think it’s hard to dispute that the ride is better with Uber and Lyft and the reliability is more assured.”Different rules apply to green cabs at airports, where they can drop off passengers but cannot pick them up, except by prearrangement — for example, if they are sent there by a dispatcher. Many drivers complain that those rules force them to go to the airports empty if they are dispatched for a pickup or return empty if they take someone there. Unlike yellow cabs, they cannot wait in the taxi lines. Uber and the other ride-hailing apps are not bound by airport rules.The yellow-cab industry responded to the plan for green cabs by going to court. Yellow cab owners worried that the value of their million-dollar medallions would plummet.The city won the court challenge and the value plummeted, but not because of competition from the green cabs that went on the streets in 2013.“Unfortunately, they came along at the same time as Uber and Lyft,” said Mitchell L. Moss, a professor at New York University where he is the director of the Rudin Center for Transportation Policy and Management. “The benefit of Uber is it can come pick you up in highly dispersed locations, which the green taxi can’t really do because it’s got to stay near dense transit pickup locations.”Green cabs, he said, are “basically clustering at transit and retail hubs” — near where subway lines end, for example — because they are more likely to find passengers there than if they cruise the streets they are authorized to cruise where people are not used to seeing cabs. Indeed, Ms. Desai, of the Taxi Workers Alliance, said that “significant street-hail markets” had not developed outside Manhattan.But that was not the only problem for green cabs. “The city was kind of undercutting them by licensing all those other cars” — the ride-share vehicles, said Graham Hodges, a historian of the taxi industry and a professor at Colgate University, who predicted that a shakeout is coming.“There are far too many vehicles on the road, and that’s where I think the T.L.C. will tighten up regulation,” he said, referring to the taxi commission. “And when they do, the ones with those permits will be in the best legal situation. They’ll be the ones that survive.”Copyright 2018 The New York Times Company.  All rights reserved.

What is a Bankruptcy Trustee? A Bankruptcy Trustee is an individual who is appointed by the United States Trustee’s Office, (a Division of the United States Department of Justice), to administer bankruptcy cases within a particular State and District. In Pennsylvania, there are 3 Bankruptcy Districts: The Eastern, Middle and Western Districts. In Chapter 7 […] The post What Does a Bankruptcy Trustee Do? appeared first on .

How to Apply for Long Term Disability in Pennsylvania Long Term Disability Insurance provides insurers with income if they become ill or injured and cannot work for a certain period of time.  Most policies are an employer-provided policy governed by ERISA, the Employee Retirement Income Security Act.  To receive benefits, employees must file a timely […] The post Do You Need a Lawyer to File for Long Term Disability in Pennsylvania? appeared first on .

A Chapter 7 Bankruptcy, also known as liquidation, provides discharge of most unsecured debts, i.e. credit cards, medical bills, personal loans, under Bankruptcy protection. In approximately 95% of cases, Debtors do not have assets above the federal or state allowed limits and therefore there are no distributions to any Creditors. Therefore, in most Chapter 7 […] The post Why File a Chapter 13 Bankruptcy in Lieu of a Chapter 7 Bankruptcy appeared first on .

Here at Shenwick & Associates, we were one of the first law firms to foresee the taxi medallion valuation crisis.  And now, we see the potential for disruption to another integral aspect of life in New York City–the hospitality industry, including restaurants and bars.Starting on New Year’s Eve (January 1, 2019) NYC employers with 11 or more employees will be required to pay a minimum wage of $15/hour.  For employers with 10 or fewer employees, the minimum wage of $15/hour goes into effect on Dec. 31, 2019. In our opinion, the combination of the minimum wage increase with New York City’s already stratospheric commercial rent and operating expenses will have a severe impact on New York City’s restaurants and bars, especially smaller, independent and family–owned establishments resulting in the closure or bankruptcy of these businesses! We’ve already been contacted by several restaurateurs, who have expressed the following concerns: 1. Their restaurant or bar is breaking even or losing money, and with the coming increase in the minimum wage, should they close their business or file for bankruptcy? 2. Is the principal personally liable under either a guaranty (which makes the principal liable for rent and additional rent for the full term of the lease),  a “good guy” guaranty (which makes the principal liable until the business surrenders the premises to the landlord), for money owed to vendors, for sales tax or FICA/FUTA taxes as a “responsible person” or for unpaid wages to employees? 3. Should the entity that owns and operates the restaurant or bar close (“go dark”) or file for bankruptcy or negotiate with their landlord or vendors? Strategic considerations include: 1. Does the business file for bankruptcy?  If so, does it file under chapter 7 (liquidation) or chapter 11 (reorganization)? 2. Should the business simply wind up operations and close (“go dark”) or negotiate with their landlord and vendors? 3. As mentioned above, if there is a good guy guaranty, has the guarantor minimized his or her exposure under the good guy guaranty? 4. If there are three or more years left on the lease, has the principal thought about selling the business or subleasing the space? 5. Should the principal engage in asset protection planning, negotiate with creditors or consider filing for bankruptcy?At Shenwick & Associates we have a strong background in short sales, workouts, personal and business bankruptcy, asset protection planning and commercial leasing, providing a diverse set of possible strategies and solutions that we can help a restaurant or bar and their principal create or implement. Our analysis begins with an examination of the businesses’ books and records, including the balance sheet, income statement, lease and tax returns.  We also review the principal’s assets, liabilities and after-tax monthly budget. If you or your business need help, please call or email Jim Shenwick at (212) 541-6224 or jshenwick@gmail.com.

by Herb WeisbaumCredit card delinquencies on the rise. Despite a strong economy and low unemployment, Americans are falling behind in paying off their credit card debt.The delinquency rate on all U.S. credit card loans is 2.47 percent — up from 2.42 percent at the beginning of 2017 and 2.12 percent in the second quarter of 2015, according to the Federal Reserve Bank of St. Louis.That means more than $23 billion in credit card debt is currently delinquent — 30 or more days overdue — according to a new report from the personal finance website NerdWallet.While lack of money is the most common reason for missing a payment, forgetting to pay the bill is often the case. For its 2018 Consumer Credit Card Report, NerdWallet surveyed 2,019 U.S. adults and found that:35 percent simply forgot to make the payment.33 percent needed the money to pay for essentials.32 percent needed the money for an unexpected expense.Kim Palmer, NerdWallet’s credit card expert, finds it “troubling” that so many people — 65 percent of those surveyed — did not pay their bill on time because they didn’t have the money. According to NerdWallet’s most-recent Household Credit Card Debt Study, income growth isn’t keeping up with some of people’s biggest expenses. Reasons for credit card delinquencies“People's budgets are really stretched because the cost of certain essentials, like healthcare, food and housing, continue to go up and really put pressure on people's budgets,” Palmer said. “And so, people are turning to credit cards as a way to bridge the gap when they can't afford their monthly bills and then they’re unable to make the payments at the end of the month.”Nerdwallet’s report found that 25 percent of those who’ve been delinquent on a credit card payment said it was because they prioritized paying off other debt.People's budgets are really stretched because the cost of certain essentials, like healthcare, food and housing, continue to go up and really put pressure on people's budgets.Research by the Federal Reserve in 2017 found that when there’s not enough money to cover all monthly bills, credit card bills are more likely than other debt payments — rent or mortgage, car payment, or student loan — to go unpaid or partially unpaid.The high cost of paying lateMore than one in five cardholders in the survey (21 percent) said they made a delinquent credit card payment sometime in their life. NerdWallet did the math: Using a late payment fee of $27, that’s more than $1.4 billion in penalty payments on a nationwide basis. And that’s on top of the interest charged for carrying a balance.Adding insult to injury, falling more than 60 days behind can trigger what’s called the “penalty APR” which can be as high as 29.99 percent with some cards. That penalty APR, which makes it more expensive to carry that balance, can last for up to six months before the credit card company reviews your account to see if the rate should be lowered.Let’s say you carry a balance of $3,000 on a card with a 15 percent interest rate and it takes you 18 months to pay off that balance. The Credit Card Payoff Calculator at Bankrate.com shows total interest will be $368. With a default rate of 29.99 percent, that jumps to $761, more than double the carrying cost.Missing a payment can also decimate your credit score, because card issuers report delinquent accounts to the credit bureaus.“The longer your account goes unpaid, the more damage you can do to your credit score and the more effort it will take to bring the account current,” said Bruce McClary, vice president for communications at the National Foundation for Credit Counseling (NFCC). “Once reported, a late payment could cause your credit score to drop more than 100 points in some situations.”A poor credit score will make the cost of borrowing money more expensive and could result in being rejected for a mortgage or car loan. In some case, it could make it difficult or impossible to rent an apartment.What you can doAll of these financial repercussions can be avoided with a more proactive approach, including:Use automatic bill paySet up email and text reminders of upcoming due datesAt least make the minimum payment to keep the account from going delinquentIf your statement comes at the wrong time of month for you, contact the credit card company to see if the statement date can be changed.When a late payment is unavoidable due to financial hardship, contact the credit card company before the due date to see if they can help you manage the situation. This would also be the time to get some expert guidance from a nonprofit credit counselor. You can find one near you on the NFCC website.“Silence will only lead to setbacks,” McClary told NBC News BETTER. “Keeping your credit card balances under control and spending within your budget will go a long way toward protecting your credit health and your bottom line.”Copyright 2018 NBC Universal.  All rights reserved.

The Social Security Administration (SSA) operates two programs that provide financial benefits for people with disabilities: Social Security Disability Insurance (SSDI), and Supplemental Security Income (SSI). This article will focus exclusively on SSDI, which is intended for applicants who have earned enough “work credits” through their employment histories. Read on to find out whether you […] The post Do I Have to Be Permanently Disabled to Get Disability Benefits in Pennsylvania? appeared first on .

By Ben MillerMillions of students will arrive on college campuses soon, and they will share a similar burden: college debt. The typical student borrower will take out $6,600 in a single year, averaging $22,000 in debt by graduation, according to the National Center for Education Statistics. There are two ways to measure whether borrowers can repay those loans: There’s what the federal government looks at to judge colleges, and then there’s the real story. The latter is coming to light, and it’s not pretty. Consider the official statistics: Of borrowers who started repaying in 2012, just over 10 percent had defaulted three years later. That’s not too bad — but it’s not the whole story. Federal data never before released shows that the default rate continued climbing to 16 percent over the next two years, after official tracking ended, meaning more than 841,000 borrowers were in default. Nearly as many were severely delinquent or not repaying their loans (for reasons besides going back to school or being in the military). The share of students facing serious struggles rose to 30 percent over all.  Collectively, these borrowers owed over $23 billion, including more than $9 billion in default.Nationally, those are crisis-level results, and they reveal how colleges are benefiting from billions in financial aid while students are left with debt they cannot repay. The Department of Education recently provided this new data on over 5,000 schools across the country in response to my Freedom of Information Act request. The new data makes clear that the federal government overlooks early warning signs by focusing solely on default rates over the first three years of repayment. That’s the time period Congress requires the Department of Education to use when calculating default rates. At that time, about one-quarter of the cohort — or nearly 1.3 million borrowers — were not in default, but were either severely delinquent or not paying their loans. Two years later, many of these borrowers were either still not paying or had defaulted. Nearly 280,000 borrowers defaulted between years three and five. Federal laws attempting to keep schools accountable are not doing enough to stop loan problems. The law requires that all colleges participating in the student loan program keep their share of borrowers who default below 30 percent for three consecutive years or 40 percent in any single year. We can consider anything above 30 percent to be a “high” default rate. That’s a low bar. Among the group who started repaying in 2012, just 93 of their colleges had high default rates after three years and 15 were at immediate risk of losing access to aid. Two years later, after the Department of Education stopped tracking results, 636 schools had high default rates. For-profit institutions have particularly awful results. Five years into repayment, 44 percent of borrowers at these schools faced some type of loan distress, including 25 percent who defaulted. Most students who defaulted between three and five years in repayment attended a for-profit college. The secret to avoiding accountability? Colleges are aggressively pushing borrowers to use repayment options known as deferments or forbearances that allow borrowers to stop their payments without going into delinquency or defaulting. Nearly 20 percent of borrowers at schools that had high default rates at year five but not at year three used one of these payment-pausing options.  The federal government cannot keep turning a blind eye while almost one-third of student loan borrowers struggle. Fortunately, efforts to rewrite federal higher-education laws present an opportunity to address these shortcomings. This should include losing federal aid if borrowers are not repaying their loans — even if they do not default. Loan performance should also be tracked for at least five years instead of three. The federal government, states and institutions also need to make significant investments in college affordability to reduce the number of students who need a loan in the first place. Too many borrowers and defaulters are low-income students, the very people who would receive only grant aid under a rational system for college financing. Forcing these students to borrow has turned one of America’s best investments in socioeconomic mobility — college — into a debt trap for far too many.Copyright 2018 The New York Times Company.  All rights reserved.

   Discussing an issue that arises with some frequency in cases converted from chapter 13 to chapter 7, the court in In re: JEFFREY J. ROCKWELL d/b/a Rockwell Prods. f/d/b/a Rockwell Prods., Inc., Debtor., No. 15-20583, 2018 WL 4042859 (Bankr. D. Me. Aug. 23, 2018) found that if the property was properly exempted when the chapter 13 was filed, and the case was converted in good faith, the property remained exempt in chapter 7 even if the funds were not timely reinvested in a new homestead.     In this case, the Debtor, Rockwell, owned his residence and scheduled a $47,500 exemption of equity in the property as exempt under Maine law in his August 2015 chapter 13 bankruptcy filing.  The plan was confirmed in November 2015 providing for direct payments on the mortgage.  In January 2017 the bankruptcy court entered an order authorizing debtor to sell the property, paying the nonexempt portion to the trustee, as well as paying closing expenses and the balance of the mortgage.  Closing occurred in March 2017 with $47,500 distributed to Mr. Rockwell.  The chapter 13 trustee never objected to the exemption claim.  In August 2017 Rockwell converted to chapter 7.  As of that date Rockwell has spent $18,806.23 of the cash proceeds leaving a $28,693.77 balance.  The chapter 7 trustee objected to the exemption.  Mr. Rockwell moved out of the property in September 2017.    The court initially found that the trustee bears the burden of proof in establishing that the debtor is not entitled to the $47,500 proceeds exemption.  In examining the exemption, the court notes that when a bankruptcy is filed, an estate is created under §541 encompassing all of the debtor's property, including that which may be exempted.  Debtor may then exempt certain property from the estate pursuant to §522.  This section allows states to 'opt out' of the list of federal exemptions, and specify under state law which property may be exempt.  Maine opted out, and set a $47,500 exemption for homesteads.  The state exemption statute allows proceeds from the sale of exempt property to retain its exempt status for six months to allow reinvesting in a residence.  Section 348(a) of the bankruptcy code discusses the effect of conversion from chapter 13 to 7.  The statute provides the conversion does not change the date of filing, the case commencement, or the order for relief for purposes of the converted case.  So, despite the conversion, the court still must use the 2015 filing date to determine the debtor's rights to exempt property.  §348(f)(1)(A) provides that unless a case is converted in bad faith 'property of estate in the converted case shall consist of property of the estate, as of the date of filing of the petition, that remains in the possession of or is under the control of the debtor on the date of conversion.'   The court noted no allegation of bad faith was made in the Rockwell case.  When the case was converted only $28,693.77 of the  proceeds of the sale remained in his control, and, before exemptions, on that amount was property of the estate.  The court defined statutory schemes where state law sets a limited time to reinvest homestead exemption proceeds as 'vanishing exemptions.'  Court's have taken different approaches in dealing with such exemptions in converted cases.  One approach, defined as the 'partial snap-shot rule' requires that exemptions be determined by examining the exact scope of the exemption as of the time of filing, and if the proceeds are not timely reinvested, the exemption expires.1  Other courts reject this approach, finding that the snap-shot must be complete, and if the time frame requiring reinvestment has not expired prior to the filing of the chapter 7, the exemption is forever preserved, notwithstanding the post-petition passage of time and failure to reinvest. 2  The Rockwell court determined that the latter view more faithfully adheres to the Code and the practicalities of administering a chapter 7 case.   Determining that the exemption is frozen in time as of the filing date, notwithstanding the failure to reinvest the proceeds, is in accord with §522(c) and (k).  Under §522(c) property exempted is not liable during or after the case for any debt of the debtor that arose before commencement of the case.  The protection under §522(c) extends beyond termination of the case.  §522(k) provides that with the exception of certain avoidance costs set forth therein, property exempted is not liable for payment of any administrative expense.  Thus, under these sections, once property is exempted and is no longer part of the bankruptcy estate, the Code specifically insulates it from the reach of pre-petition creditors or administrative claimants.  The partial snap-shot rule violates these principles.   The partial snap-shot rule also runs counter to §541(a) and the framework of chapter 7.  The chapter 7 estate is captured at the commencement of the case, and exemptions are immutable despite post-petition events, other than specific exceptions defined in the statute.      The court allowed the exemption in the proceeds despite the debtor's failure to reinvest the proceeds.1 In re Zibman, 268 F.3d 298 (5th Cir. 2001)↩2 In re Thomas, BKY MER 17-43367, 2018 WL 3655654 (Bankr. D. Minn. July 31, 2018)↩Michael Barnett www.tampabankruptcy.com