2 days 22 hours ago

The following is a warning from the Federal Trade Commission regarding scams you may receive about your student loans.  Read the warning and watch the very short video.
October 13, 2020, by Traci Armani, Consumer Education Specialist, Division of Consumer & Business Education, FTC

Having trouble paying your student loan debt?
You might get an offer that says you can reduce your monthly payment, or even reduce your overall debt. The offer might look like it comes from the government…and they might tell you that, first, you have to pay a fee. But it’s illegal for a company to ask you to pay a fee up front before they get you the promised relief. And it’s illegal for them to pretend to be from the government.
Because of the pandemic, people with federal student loans have some protections until December 31, 2020. People with student loans can also take steps to handle their student loan debt.
Start by learning to spot the scams – click here for a YouTube video created by the FTC.


  • Never pay a company upfront before they’ve gotten you results (see it in writing).
  • Scammers sometimes pretend they are with the government.
  • No company can promise you fast loan forgiveness
  • Protect you FSA ID.  Don’t give it out to anyone, for any reason.
  • Go directly to the source:
    • for free help with federal loans, visit
    • For private loans, contact your loan company directly.
  • Scammers can “spoof” the phone number for legitimate companies.  Don’t assume the caller id will have the caller’s true phone number.

Did you get an offer for student loan debt relief?

Then, read more about managing your debt.
Have you spotted a scam? Report it to the FTC at And be sure to keep up to date on what the FTC is doing by signing up to get Consumer Alerts.

.fusion-body .fusion-builder-column-1{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-1 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-1{width:100% !important;}.fusion-builder-column-1 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-1{width:100% !important;}.fusion-builder-column-1 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:980px) {.fusion-title.fusion-title-1{margin-top:15px!important;margin-bottom:0px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-1{margin-top:10px!important;margin-bottom:10px!important;}}MUSINGS BY DIANE:Never respond to ads on TV, mail, the Internet or door-to-door offering to “help” you.  Someone has to pay for those ads – that ends up being you.  Most of these are scams, but by the time you find that out they will have moved on to new victims.  Ninety percent of those who use their services will never report them and even if someone does, it will take years to stop them. 
If you have questions – do your own research.  Look for government resources (they usually have .gov extension on their website).  Ask people who are experienced in this area (electrician, medical, or lawyer).  Lastly, use your common sense and don’t be persuaded by fancy talk (this is a theme you will see throughout my Musings).

@media only screen and (max-width:980px) {.fusion-title.fusion-title-2{margin-top:0px!important;margin-bottom:6px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-2{margin-top:10px!important;margin-bottom:10px!important;}}– Diane L. Drain.fusion-body .fusion-builder-column-2{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-2 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 30px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 45px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-2{width:100% !important;order : 0;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-2{width:100% !important;order : 0;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}.fusion-body .fusion-flex-container.fusion-builder-row-2{ padding-top : 0px;margin-top : 0px;padding-right : 0px;padding-bottom : 0px;margin-bottom : 0px;padding-left : 0px;}.fusion-button.button-1 {border-radius:10px;}.fusion-button.button-1.button-3d{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}.button-1.button-3d:active{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}Click here for steps to your free bankruptcy consultation
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.fusion-body .fusion-builder-column-5{width:75% !important;margin-top : 0px;margin-bottom : 20px;}.fusion-builder-column-5 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 15px !important;margin-right : 10px;padding-bottom : 0px !important;padding-left : 15px !important;margin-left : 10px;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-5{width:100% !important;order : 0;}.fusion-builder-column-5 > .fusion-column-wrapper {margin-right : 10px;margin-left : 10px;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-5{width:100% !important;order : 0;}.fusion-builder-column-5 > .fusion-column-wrapper {margin-right : 10px;margin-left : 10px;}}.fusion-body .fusion-flex-container.fusion-builder-row-4{ padding-top : 0px;margin-top : 5;padding-right : 0px;padding-bottom : 0px;margin-bottom : 20px;padding-left : 0px;}
The post Don’t Fall Into a Student Loan Relief Scam. appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy Attorney.

3 days 22 hours ago

Once you have completed your bankruptcy and received your discharge order from the court, you will want to move forward financially. But what do you do? After your debt is eliminated, how do you repair your credit? Can you? Our experienced California attorney’s answer to that last question is a resounding “yes.” Below, the “how” […]
The post How do I Repair my Credit after Bankruptcy in California? appeared first on The Bankruptcy Group, P.C..

6 days 7 hours ago

It is crucial to build your credit. Some people don’t realize how a good credit rating affects their lives significantly. A credit file is not only a matter of concern for a lender. Good credit makes life less costly, and financial situations much more manageable. With a good credit score, an auto loan or mortgage is approved with the best interest rates and terms. When they check your credit and see good ratings, you usually pay less for more in insurance, and utility companies start a service with little deposit after they check your credit report.
Though you cannot undo financial missteps and erase negative items in your credit report, your credit going forward can be improved by rebuilding a positive credit history today.
Credit Score Influencers
As you rebuild credit, know the factors influencing credit scores. Common credit scoring factors are:

  • Total debt, including loans, credit cards, loans, and collections
  • Payment history record, including on-time payments, late payments, or missed payments
  • Credit utilization ratio, which compares total credit available vis a vis how much of it is being used
  • Mix, which refers to the credit account types being used
  • Age, or how old the credit accounts in question are
  • Public records of civil judgments or bankruptcies
  • Hard inquiries or recent applications for credit

Credit Score Catalysts
rebuild creditChange credit behaviors to update credit scores positively. Take these steps to rebuild credit, slowly but surely:

  1. Pay your bills on-time and bring current your past-due accounts. You may set-up payment reminders to ensure on-time payments
  2. Check your available credit. Creditors spot maxed-out credit accounts, so be mindful of credit card limits. Try to reduce your credit utilization ratio by paying credit card debt and keeping card balances at zero.
  3. Try to open a secured account, like a secured credit card, to build a credit history. The amount deposited becomes collateral for the percentage of the cash that you will be borrowing. Credit bureaus can see your secured credit account and good payment history.
  4. Ask for help from friends and family who can make you an authorized user of their credit account, open a joint bank account, or be a cosigner for a loan.
  5. Be mindful of new credit. Applying for or opening credit card accounts affect credit scores and will translate to hard inquiries. Several credit card applications are also red flags for lenders. Generally, lenders need to be sure you’re not overextending your means financially before giving you additional credit.
  6. Pay your debt and get help from credit counseling organizations when needed. You may try credit counseling. A credit counselor helps create a financial plan to manage debts. A debt management plan can also help in eliminating debt. Following a payment schedule for unsecured debts could even make creditors waive fees or lower interest rates. You may also want to consider debt consolidation. A debt consolidation loan can help you pay back what you owe more conveniently.

How long will rebuilding your credit take?
It’s not easy to re-establish good payment history when negative information appears on your credit reports for quite some time, as below:

  • For late payments, seven years after the account went delinquent and eventually brought current (If the debt was moved to collections because payments were not brought current, the first missed payment will be the original delinquency date)
  • For Chapter 7, a bankruptcy that discharges the debt, ten years after the date of filing.
  • For Chapter 13 bankruptcy, where a bankrupt person repays debt through renegotiated terms, seven years from the date of filing
  • For civil court judgments, seven years from the date of filing
  • For paid tax liens, seven years from the date of filing (Ten years if unpaid)
  • For hard inquiries, after two years (Over time, their impact diminishes)

Mitigate these by making on-time payments moving forward along with other steps you can take to improve your credit score. Show that, as a borrower, you can responsibly repay a creditor on time.
Get the right people who can help with improving your credit standing. Know more about how to build credit and get more information on repairing your credit history by giving us a call right now at Northwest Debt Relief Law Firm
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The post How to Rebuild Credit and Tips in Improving Your Credit Score appeared first on Vancouver Bankruptcy Attorney | Northwest Debt Relief Law Firm.

1 week 1 day ago

There is so much mis-information about a forbearance of home mortgages during COVID-19.  Know your options before making a decision not to pay your mortgage.

Are you a ‘planner’ or a ‘gambler’?
forbearance mortgage
Do you assume everyone is looking out for you, or you need to look out for yourself?  Do you assume everyone will tell you the truth based on what you believe, or that everyone has some alternative motive to have you believe as they believe?  Since humans walked this earth there have been planners and gamblers.  Planners do their own homework, they research issues, ask questions and assume that answers change over time.  Gamblers throw the dice hoping that luck will shine on them today, they don’t see that the ‘house always wins’, instead they are looking for that one hit that will set them up for the rest of their life.
There are consequences for each action.
What does being a ‘planner’ or ‘gambler’ have to do with mortgages, car loans, student loans and credit cards during COVID-19?  Plenty!!  First, the year of 2020 will bring with it economic issues we have not seen in a century.  COVID-19 has led to mass under or unemployment, businesses closing or closed, shopping centers and large commercial businesses closing and filing for bankruptcy.  The quarantine has led to less driving.  Reduced driving led to using less gasoline, needing fewer repairs and buying fewer new cars (all at a cost to the underlying industry).  Our leaders are looking short term in how to solve the challenges we all face, but are their motives selfish (want to be reelected) or altruistic (want to help us weather this crisis)?
A forbearance is not a guaranty you can keep your home.
forbearance mortgageThe CARES Act introduced us to federally mandated programs that offered the homeowner a ‘breathing respite” – no mortgages during certain periods on certain loans.  First, the loans must be federally or GSE-backed mortgages.  That means 60% of all home loans do not qualify.  A forbearance means that payments are put on hold, not that payments automatically go away, or are added to the end of the loan. 
Hundreds of thousands homeowners are going to be very surprised when their forbearance periods are over and they must pay all the missing payments immediately, or the lender will foreclose on their home.

Never rely on anything someone tells you, even if they work for your lender.  ALWAYS get their promises in writing.  What someone says today will change tomorrow and it is your word against theirs what was said.  What someone writes will normally stand up in court.
There is no “one solution fits all circumstances”.

Planners pay their bills, especially their mortgage, if they have the funds.  Gamblers jump on any offer (like COVID forbearance) even though they have the funds.  Why, because planners look at the future, gamblers look at the chips in front of them.

Look for resources that have no ulterior motives, such as:
Arizona Department of Housing
Mortgage Help For Homeowners Impacted By The Coronavirus
There are hardship programs in place to help homeowners who have been directly or indirectly affected by the coronavirus and are struggling to make their mortgage payments.  The Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac, encourages homeowners adversely impacted by the coronavirus who are having difficulty paying their mortgages to reach out to their mortgage servicers as soon as possible.  As the Consumer Financial Protection Bureau advises (link is external), “you can find the number for your mortgage servicer on your monthly mortgage statement or coupon book.”
Arizona Department of Economic Security
Services related to COVID-19
Mortgage Assistance
Maricopa County:
COVID Crisis Rental Assistance
Non-COVID Rent & Mortgage Assistance
US Department of Housing and Urban Development
Consumer Financial Protection Bureau
(CFPB is currently run by a Trump appointee, who has watered down the “consumer protection” component).
Learn about mortgage relief options and protections

.fusion-body .fusion-builder-column-2{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-2 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-2{width:100% !important;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-2{width:100% !important;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:980px) {.fusion-title.fusion-title-1{margin-top:15px!important;margin-bottom:0px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-1{margin-top:10px!important;margin-bottom:10px!important;}}MUSINGS BY DIANE:“FREE” does not mean free.  It means that you will pay dues later.  It may mean your free trip to the mountains comes with obligations to attend two days of intense sales pressure to buy a timeshare that no one wants.  It may mean you get a free puppy who hates your children (or it could mean life is perfect and everyone gets along).  My point is that ‘free’ is never free.  Take time to investigate why someone is offering something for free and what are you obligated to do in the long run.

@media only screen and (max-width:980px) {.fusion-title.fusion-title-2{margin-top:0px!important;margin-bottom:6px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-2{margin-top:10px!important;margin-bottom:10px!important;}}– Diane L. Drain.fusion-body .fusion-builder-column-3{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-3 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 30px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 45px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-3{width:100% !important;order : 0;}.fusion-builder-column-3 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-3{width:100% !important;order : 0;}.fusion-builder-column-3 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}.fusion-body .fusion-flex-container.fusion-builder-row-3{ padding-top : 0px;margin-top : 0px;padding-right : 0px;padding-bottom : 0px;margin-bottom : 0px;padding-left : 0px;}.fusion-button.button-1 {border-radius:10px;}.fusion-button.button-1.button-3d{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}.button-1.button-3d:active{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}Click here for steps to your free bankruptcy consultation.fusion-body .fusion-builder-column-5{width:25% !important;margin-top : 0px;margin-bottom : 20px;}.fusion-builder-column-5 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 10px;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 10px;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-5{width:100% !important;order : 0;}.fusion-builder-column-5 > .fusion-column-wrapper {margin-right : 10px;margin-left : 10px;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-5{width:100% !important;order : 0;}.fusion-builder-column-5 > .fusion-column-wrapper {margin-right : 10px;margin-left : 10px;}}

.fusion-body .fusion-builder-column-6{width:75% !important;margin-top : 0px;margin-bottom : 20px;}.fusion-builder-column-6 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 15px !important;margin-right : 10px;padding-bottom : 0px !important;padding-left : 15px !important;margin-left : 10px;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-6{width:100% !important;order : 0;}.fusion-builder-column-6 > .fusion-column-wrapper {margin-right : 10px;margin-left : 10px;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-6{width:100% !important;order : 0;}.fusion-builder-column-6 > .fusion-column-wrapper {margin-right : 10px;margin-left : 10px;}}.fusion-body .fusion-flex-container.fusion-builder-row-5{ padding-top : 0px;margin-top : 5;padding-right : 0px;padding-bottom : 0px;margin-bottom : 20px;padding-left : 0px;}
The post Don’t Gamble With Your Home During COVID appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy Attorney.

1 week 1 day ago

Leading Lawyers Weigh In on Portrayal In The Media – (includes quote from Diane Drain)Can you remember the very first time you came across the word ‘lawyer’?
EXCERPT (from KTVN 12 NewsWFXG Fox News 54, and WFMJ 21) For most of us it was on a television series such as ‘Law & Order’ or ‘Suits’. Perhaps you watched your parents enjoying shows such as ‘LA Law’ or ‘Cops’? This raises the question; what is the attraction of films and shows depicting law? As a society do we enjoy watching justice get served? Do we feel secure on the deepest levels knowing that we are protected by the integrity of the legal system?
Whatever the reason for our obsession with shows depicting lawyers, one thing is for sure – Hollywood has delivered what we wanted. This raises the next question – Has the big and silver screen’s deeply jaded the public perception of Lawyers? Has the profession been portrayed in an unrealistic light?
For this segment, DirectRank Media has reached out to some of the nation’s most awarded and respected law firms and leading attorneys for their thoughts and opinions of how Hollywood portrays the legal profession.
2. Diane L. Drain, from the Law Office of D.L. Drain, P.A, is one of Arizona’s leading bankruptcy and foreclosure firms. When we posed the question of whether or not Drain thought that the Hollywood portrayal of lawyers influences how people think of the legal profession she stated “Hollywood’s goal is to sell a product.  No one is going to watch a show that depicts the true life of a lawyer (it is usually very boring).  Instead, Hollywood distorts the practice of law in order to garner attention and sell products.  The sexier, more controversial, or shocking they can make a legal situation – the more likely someone is to watch the program and buy the product.”
.fusion-button.button-2 .fusion-button-text, .fusion-button.button-2 i {color:#00260a;}.fusion-button.button-2 .fusion-button-icon-divider{border-color:#00260a;}.fusion-button.button-2:hover .fusion-button-text, .fusion-button.button-2:hover i,.fusion-button.button-2:focus .fusion-button-text, .fusion-button.button-2:focus i,.fusion-button.button-2:active .fusion-button-text, .fusion-button.button-2:active{color:#004713;}.fusion-button.button-2:hover .fusion-button-icon-divider, .fusion-button.button-2:hover .fusion-button-icon-divider, .fusion-button.button-2:active .fusion-button-icon-divider{border-color:#004713;}.fusion-button.button-2:hover, .fusion-button.button-2:focus, .fusion-button.button-2:active{border-color:#004713;border-width:2px;}.fusion-button.button-2 {border-color:#00260a;border-width:2px;border-radius:0px;}.fusion-button.button-2{background: rgba(255,255,255,0);}.fusion-button.button-2:hover,.button-2:focus,.fusion-button.button-2:active{background: rgba(255,255,255,0);}.fusion-button.button-2 .fusion-button-text {text-transform:uppercase;}READ MOREThis is an alert! Trying to take care of your own legal issues without good guidance can lead to horrific and unnecessary results.  Many attorneys offer free or very inexpensive consultations.MUSINGS BY DIANEdangerI have seen innocent people make terrible legal decisions because they took advice from neighbors, friends, family, even the Internet.  As a result they lost their home, their savings and their peace of mind.  Would anyone do their own surgery or diagnose their complicated health problems?  There is a reason why not, because it just does not make common sense.  We all want to save money, but at what point do we realize that we need professional help.  I don’t know about you, but I would never rewire my home because I cherish the people who live in that home.  Read this post: There is nothing more expensive than hiring a cheap lawyer.

– Diane L. Drain
The post Leading Attorneys Share Thoughts on Misrepresentations in the Media appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy Attorney.

1 week 5 days ago

Originally appeared on Baltimore Business Journal Filing for bankruptcy protection may seem taboo to small business owners, but a relatively new and little-known program could prove to be the difference between surviving the Covid-19 pandemic or closing for good. The flood of bankruptcies that many economists, lawyers and accountants expected has not transpired. While several large companies in the retail industry have filed for Chapter 11 bankruptcy — J.C. Penney, Neiman Marcus and Brooks Brothers to name a few — most small businesses have held off as they try to tread water. Small businesses have typically not filed Chapter 11 bankruptcy because the reorganization process associated with doing so tends to be costly and take a lot of time. If businesses don't have enough cash for reorganization, creditors will push them to liquidate. However, for many small businesses the clock is getting closer to striking midnight as the federal stimulus money dries up and the coronavirus pandemic continues to persist. Despite what President Donald Trump says, medical experts don't expect a vaccine to be widely available until 2021. A law passed by Congress last year that went into effect in February provides small businesses with a lifeline: a new section of Chapter 11 known as Subchapter V, which involves a more timely and less costly reorganization process. Subchapter V was created to provide an option for businesses with $2.7 million or less in debt. It prevents creditors from proceeding with collections, guarantees a reorganization plan is filed within 90 days and waives quarterly bankruptcy trustee fees. Congress raised the debt limit to $7.5 million when it passed its coronavirus relief package, known as the CARES Act, in March. "It was pure luck that we have such a useful tool that came out right when this [pandemic] happened," said Vadim Ronzhes, a tax consultant at Rosen, Sapperstein & Friedlander in Towson. Accountants and attorneys have traditionally recommend against filing for Chapter 11 in the past because of how difficult it can be to get a reorganization plan approved, Ronzhes said. With Subchapter V it's a much easier and quicker process, he said. During the proceedings, a business may continue to pay expenses such as employees wages and benefits while it develops a plan for paying off creditors, Ronzhes said. "The whole goal is to make sure that the business is operational and that you're able to continue supporting the community that you're operating in and make sure your employees are getting paid," Ronzhes said. "That is definitely one of the biggest benefits." Another benefit is that the company can bring on new investors or owners. In the current operating environment with all-time low interest rates, Ronzhes said outside investors are looking to provide debt or investment capital. Perhaps most important, Ronzhes said, is that the Subchapter V process brings all creditors to the table to come up with a plan for paying off debt. Everyone does not have to approve of the plan, but at least all parties will have been a part of the conversation, he said. During the pandemic many small business owners have complained about the challenges of working with landlords who are unwilling to rework leases. The Subchapter V process can force those landlords to come to the table while allowing the business to remain operational instead of being forced to close. There are downsides to filing for bankruptcy though. For one, it will negatively impact credit ratings. Filing for bankruptcy also carries a negative stigma. But in the current economic situation brought on by the pandemic, Ronzhes said the good more than likely outweighs the bad. "If you have multiple debtors and one person decides to file suit and take money out of your bank account through levies, that could end an organization," Ronzhes said. "As soon as you start paying employees, they're not showing up. This is a way to reorganize and I think it's going to be used a lot by businesses to give themselves breathing room." One industry that won't be helped is real estate, Ronzhes said. Real estate firms are usually structured by having separate limited liability companies for individual properties. Those LLCs won't be able to file for Subchapter V protection because the overall organization may still be profitable.

1 week 6 days ago

Bankruptcy laws provide specific information on the different types of bankruptcy. Among others, there is personal bankruptcy, consumer bankruptcy, and business bankruptcy. If you find yourself having trouble with debt-settlement or if you know you won’t be able to repay a creditor with what you owe, you may want to file for bankruptcy.
People considering bankruptcy should at least have an idea of the bankruptcy process. Credit counseling or a chat with a bankruptcy attorney can help with general bankruptcy information and details. This article will help you know if filing for bankruptcy is the best option for you.

  1. Should I declare bankruptcy or just do nothing?

For people who can’t pay-back and wipe-out their debt, only doing nothing is worse than choosing to declare bankruptcy. It’s going out during a storm without an umbrella. If you have not filed for bankruptcy yet, you can be harassed by creditors or debt collection agencies. You may find yourself sued or dealing with a lawsuit with your assets or equity unprotected.

  1. Is debt consolidation better than bankruptcy filing?

bankruptcy workBankruptcy filings are not done overnight. People ask if it’s better to file bankruptcy or opt for debt consolidation.
Compare monthly payments vis-a-vis Chapter 13 bankruptcy cases. If borrowers have lower monthly payments in five years, then debt consolidation might be the right choice. Consider the time you need to pay off what you owed because this also applies if you will not qualify for Chapter 13 bankruptcy, likely because of the debt limit for unsecured and secured debt.
Most opt for Chapter 7 type of bankruptcy because it allows for a fresh start in a much shorter time. However, if filing bankruptcy will have unwelcome consequences, you may want to look into debt consolidation. Experienced bankruptcy attorneys can help explain this further.

  1. I decided to file for bankruptcy. Should I file Chapter 13?

There are two types of bankruptcy. Following the bankruptcy code, Chapter 13 runs for usually five years, roughly similar or longer compared to debt consolidation. With this, you are protected from creditors while you settle the outstanding debt following a repayment plan. Some call it as home-saver bankruptcy because, aside from debt-relief, it can prevent home foreclosure. The need for bankruptcy protection concerning debtors is also something you need to know.
The bankruptcy court can reduce the total amount to be repaid to certain creditors, depending on the debts incurred. Note, however, that once payment agreed upon is received, the debt will be considered fully-paid. However, you will have a low credit rating throughout Chapter 13, following the bankruptcy law.

  1. What if I file a Chapter 7?

Chapter 7 bankruptcies are often less complicated and expensive. Think about unpaid debt from your lenders. With experienced bankruptcy attorneys, your unsecured debt may be wiped clean in around three months.
If you filed for bankruptcy under Chapter 13, repayment of your full disposable monthly income is required. In contrast, a Chapter 7 case in the form of bankruptcy known as “fresh start” or even “clean slate” bankruptcy is a better choice for some because it can allow you to get out of your debts without repaying the unsecured debt to creditors. Furthermore, although it will require you to turn over all your non-exempt assets, there is a way to keep your property. A knowledgeable bankruptcy lawyer can help make sure that most, if not all, your assets are considered exempt.
Lastly, in this bankruptcy type, it is the court who decides if assets must be sold to pay back your creditors. A bankruptcy law firm experienced in handling different cases can help you prepare documents that must be filed. Bankruptcy forms and paperwork must be accomplished very carefully or you risk dismissal of your case.
If you are considering bankruptcy and you more information on how to get started, call us now at Northwest Debt Relief Law Firm for a free initial consultation.
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1 week 6 days ago

As many readers of our blog and emails know,  at Shenwick & Associates we are helping many commercial tenants vacate their leases prior to the  expiration of their lease, due to the virus and other economic factors. See and "Commercial leases in New York City, COVID-19, Recent Protests and a Strategy to End or Terminate Commercial Leases", dated SUNDAY, JULY 12, 2020 can be found at law was recently passed in NYC which limits the liability of individuals who have guaranteed leases with certain restrictions (that law Int. 1932-A, which is discussed below and which many people including attorneys and lawyers are not aware) can limit a guarantors exposure if a lease is terminated.The Wall Street Journal reports that only 10% of workers have returned to their office in NYC and with so many workers working remotely, many businesses would like to terminate or  exit their leases and or vacate their space prior to the expiration date of the lease to save on the cost of rent. In fact, office rent and the cost of commuting are significant business expenses that many businesses would like to reduce or eliminate.Additionally, many experts predict that many workers may never return to New York or other cities due to technological advances like Zoom, Google Meet, crime, the diminishing quality of life in New York, the cost, aggravation and time spent commuting and the other benefits of not having to commute, such as more family and leisure time.At Shenwick & Associates,  we have helped many tenants vacate their lease and space  using a multi pronged strategy consisting of:   1. review of the commercial lease to determine if the Landlord has breached any terms of the Lease, 2.   review of the guarantee or good guy guarantee signed by the   principle of the business, 3.  aggressive negotiations with the landlord and 4.  threatening or filing a bankruptcy petition, including new sub chapter 5 of chapter 11 of the bankruptcy code, to reject the lease in bankruptcy or to close the business.Many clients are interested in retaining our  services, but they are concerned about the impact of the  guarantee or the good guy guarantee, if the commercial tenant vacates the space early or terminates the lease prior to its expiration.Guarantees:There are two types of guarantees in leases: a regular guarantee and a good guy guarantee. Good guy guarantees are more common in leases  than regular guarantees in leases. Having reviewed many office guarantees, we note that many guarantees have a limited life, meaning that the guarantee expires on its own terms during the term of the lease or converts to a good guy guaranty, after a period of time.A good guy guarantee generally provides that the guarantors liability for rent or additional rent terminate when 1. the tenant gives proper notice (pursuant to the terms of the Lease or the good guy guaranty) that the tenant will vacate the space (generally 90 days), 2. The tenant does in fact vacate the space and is current on the payment of rent or additional rent when it vacates and 3. The premises are left “broome clean”. Provided that these and other conditions are met, the guarantors liability ceases, however the tenant remains liable for rent and additional rent until the lease expires. Oftentimes if we can show a landlord that the tenant is out of business, closing its business,  losing money or has few assets, the landlord may be amenable to allowing the tenant to vacate the space early, pursuant to a negotiated lease surrender agreement.If the landlord resists, we will draft a bankruptcy petition and send it to the landlord indicating that if the parties cannot reach an agreement then the tenant will file for bankruptcy and the landlord will lose rent, and incur significant legal fees for landlord tenant and bankruptcy attorneys.Additionally, there is a New York City law that can aid a tenant who wants to vacate a space with respect to money that may be owed by the guarantor., which law prohibits the enforcement of personal liability provisions in certain commercial leasesInt. 1932-A prohibits landlords under certain commercial leases from enforcing guarantees in their leases if the guarantors  are “natural persons,”  (it may not apply if the guarantor is an  LLC or corporations), provided that the default occurred between March 7, 2020 and September 30, 2020, and that the tenant was impacted by the stay at home orders implemented by the Governor’s office in one of the following ways: 1. the tenant was required to cease serving food or beverages for on-premises consumption or to cease operation under Executive Order 202.3 issued by the Governor on March 16, 2020; 2. the tenant was a non-essential retail establishment subject to in-person limitations under guidance issued by the New York State Department of Economic Development pursuant to Executive Order 202.6 issued by the Governor on March 18, 2020; or 3. the tenant was required to close to members of the public under Executive Order 202.7 issued by the Governor on March 19, 2020 (i.e. barbershops, hair salons, tattoo or piercing parlors, nail technicians, cosmetologists, estheticians and the provision of electrolysis, laser hair removal services and related personal care services).The law also provides that if a landlord  attempts to enforce a guaranty that the landlord knows or reasonably knows  is not enforceable, that would be  commercial tenant harassment that is prohibited under Subdivision a of section 22-902 of the Administrative Code of the City of New York
The facts of each case need to be reviewed to determine if Int. 1932-A applies, however at Shenwick & Associates we have found that many tenants meet the requirements of the law based on the fact that the tenant was a non-essential retail establishment and therefore their guarantor liability was voided.Clients that are interested in terminating their lease or existing their lease early should contact Jim Shenwick 212 541 6224.  


2 weeks 4 hours ago Originally appeared on Bloomberg
Almost 6,000 city businesses have closed. Recovery hinges on office workers’ returnThe pandemic has battered New York City businesses, with almost 6,000 closures, a jump of about 40% in bankruptcy filings across the region and shuttered storefronts in the business districts of all five boroughs.It’s going to get worse.This fall, the nation’s largest city will see even more padlocked doors as companies burn through federal and private loans they tapped in March, landlords boot businesses that can’t make rent, and plummeting temperatures chill outdoor dining and shopping. “By late fall, there will be an avalanche of bankruptcies,” said Al Togut, a lawyer who has handled insolvencies for small businesses and huge corporations like Enron. “When the cold weather comes, that’s when we’ll start to see a surge in bankruptcies in New York City.”New York City and its businesses have reached a pivotal point. After over six months with the specter of Covid-19 hovering in every subway car and corner bodega, the virus is showing signs of resurgence.The state of New York on Saturday reported more than 1,000 new cases for the first time since early June. Spikes emerged in south Brooklyn and Queens neighborhoods with large Orthodox Jewish communities, just as they observed Yom Kippur. Meanwhile, principals called on the state to take over schools days before they restart in-person classes, saying Mayor Bill de Blasio failed to ensure enough staff to open safely.relates to New York Region Sees 40% Bankruptcy Surge, Braces for More
 Pedestrians pass by a closed storefront on Madison Avenue.The coming wave of business closings will touch every New Yorker as jobs get scarcer, neighborhoods lose beloved shops and families run out of cash.Already, dwindling tax revenue has led to cutbacks in municipal services. Trash on sidewalks, unkempt parks and an increase in shootings have made it more difficult to persuade workers to return to offices, more than 150 executives told the mayor in a letter this month. A dearth of office workers is a death knell for many merchants.“It’s a crisis, and we need to act—our economy can’t recover without saving small businesses,” said city Comptroller Scott Stringer, a candidate in next year’s mayoral election. “When they close, we don’t just lose our beloved Main Street businesses. We lose jobs, tax revenue and the economic backbone of our city.”The pandemic could permanently close as many as a third of New York’s 230,000 businesses, according to the Partnership for New York City, a business group.Bankruptcy filings in the region have skyrocketed since the middle of March, when the state of New York reported its first deaths from Covid-19 and Governor Andrew Cuomo closed all nonessential businesses. There were 610 filings in the Southern and Eastern Districts of New York from March 16 to Sept. 27, according to court records. That’s a 40 percent jump from the same period in 2019 and the most by far for any year since the financial crisis. The districts include some nearby counties.Almost 6,000 New York City businesses closed from March 1 to Sept. 11, according to Yelp, the website of user reviews. Over 4,000 of those closed permanently.The carnage has been demoralizing after decades in which the city fought back from the brink of bankruptcy, the scourges of crack cocaine and violent crime, terrorist attacks and recession. The pandemic hit as the city had achieved record high employment and low crime.relates to New York Region Sees 40% Bankruptcy Surge, Braces for More
 Diners eat outside a French restaurant in front of a storefront for lease.
Prosperity expressed itself in bustling department stores from Bergdorf’s to Macy’s. Neighborhoods flourished with artisanal food and clothing boutiques, mom and pop stores, and coffee shops that gave New Yorkers a place to feel at home outside their tiny apartments.The nation’s business capital has always rebounded from past crises, but the advent of work-from-home in an economy increasingly dependent on white-collar jobs may be an insurmountable challenge.Distress is on display on Madison Avenue, once a global destination bustling with glamorous shoppers. From 60th Street to 70th Street today, about 60 of the 130 storefronts are closed and locked. Padlocked doors and windows covered with butcher paper or plywood line a quiet boulevard. Even inside the luxury retailers that remain open, like Dolce & Gabbana and Prada, a handful of well-coiffed sales people and broad-shouldered security guards stand expectantly on sales floors empty of customers.The owner of Jimmy’s Steak and Grill, a food cart on the corner of Madison and 60th, said that with nearby office buildings empty, sales of hot dogs and lamb-on-rice platters are down 60%.“Right now, I’m supposed to have a line,” Jimmy Gonzalez said through a black mask, motioning mournfully to the empty sidewalk. Over half the food-cart owners he knows gave up. “They sell the cart, they sell the permit, they sell everything.”Small businesses like Gonzalez’s show what’s at stake when big employers keep workers away from office towers. Manhattan businesses that use the digital payment system Square are earning only 62% of the revenue they earned pre-pandemic, according to the company.relates to New York Region Sees 40% Bankruptcy Surge, Braces for More
 A padlock on the door of Carroll Gardens Classic Diner, a neighborhood restaurant now permanently closed after struggling during the pandemic.
“This is likely a result of a significant drop in the number of commuters coming into the borough,” according to Square economist Felipe Chacon.By late September, just 15% of the city’s 1.2 million office workers had returned, according to the Partnership for New York City.“Retail and real estate will continue to decline in New York until you can reignite the office traffic,” said Joseph Malfitano, who advised Brooks Brothers and the parent company of Ann Taylor in their bankruptcies this year.Many New York City business owners who give up don’t even bother filing for bankruptcy, which can cost as much as $25,000, according to Leslie Berkoff, a longtime bankruptcy attorney. Owners just lock the doors and walk away.“What’s the point of bankruptcy? Nobody’s going to chase you right now,” said Berkoff. “A lot of your vendors probably aren’t going to survive either.”That’s what cheesemonger Patrick Watson, the owner of Stinky Bklyn in the Cobble Hill neighborhood, did when his landlord refused to renegotiate his rent. Watson quickly sold off his inventory of imported Brie and Humboldt Fog and donated the remaining staples —cans of tuna, crackers and condiments—to a homeless shelter.“We tried. We really, really tried,” Watson wrote on Facebook in April. “For the safety of our crew and with no immediate end in sight, Sunday will be our last day.”About 10 neighboring businesses also closed, including a diner, a bar and a hair salon, said Randy Peers, president of the Brooklyn Chamber of Commerce.Sales remain brisk at Watson’s other business, a wineshop called Smith & Vine, possibly indicating heightened stress levels in the city.In an effort to help restaurants, the city closed dozens of streets on weekends so they can take that space, and it’s going to continue the program into the winter, allowing propane heat lamps and tent-like enclosures.“Once you hit below 60 degrees, it starts to get dicey,” said Vin McCann, a restaurant consultant. “I would bet you that between 25 and 50 percent of restaurants in New York City will not come back.”Rent relief could be possible if the state allowed localities to forgive landlords’ property-tax payments in return for discounting rent owed to them, said City Councilman Mark Gjonaj, who heads the council’s small-business committee.“This would help save struggling mom-and-pop shops while preventing landlords’ properties from going into distress,” he said.The city’s Department of Small Business Services received about 35,000 calls for help since June and gave out about 4,000 grants and loans from an $80 million program approved early in the pandemic.“A third of our small businesses could be closed if we don’t have a strong recovery,” said Jonnel Doris, the department’s commissioner. “The fate of small businesses will determine the fate of the city.”relates to New York Region Sees 40% Bankruptcy Surge, Braces for More
 A “For Lease” sign hangs in the window of Stinky Bklyn.

2 weeks 4 days ago Originally appeared on New York Post
Nearly 90 percent of New York City bar and restaurant owners couldn't pay their rent in August, heightening the continued crush the coronavirus shutdown has inflicted on Gotham’s economy.Patrons eat outdoors in NYC's Chinatown area.
Eighty-seven percent of bars, restaurants, nightclubs and event spaces in the five boroughs could not pay their full August rent, according to data from 457 businesses surveyed between Aug. 25 and Sept. 11, in a new study released Monday by the nonprofit NYC Hospitality Alliance.It’s a 7 percentage-point increase from June and a four-point jump from July, darkening the dire picture for eateries desperately seeking relief following six months of partial — and in some cases total — closure due to COVID-19 shutdowns.Some 34 percent of this group said they could not pay rent at all last month, and only 12.9 percent were able to meet full payments.“Restaurants, bars and nightlife venues have been financially devastated by the COVID-19 pandemic,” said alliance executive director Andrew Rigie.“Even before the pandemic when operating at 100 percent occupancy, these small businesses were struggling to stay open. Now we’re seeing widespread closures, approximately 150,000 industry workers are still out of their jobs, and the overwhelming majority of these remaining small businesses cannot afford to pay rent.“The hospitality industry is essential to New York’s economic and social fabric, and to ensure the survival of these vital small businesses and jobs, we urgently need rent relief, an indefinite extension of outdoor dining, a roadmap for expanded indoor dining, covered business interruption insurance and immediate passage of the Restaurants Act by Congress,” he added.When asked if landlords were waiving rent in relation to COVID-19 hardships, just 40 percent of businesses responded in the affirmative — 28.5 percent said less than 50 percent of their rental obligations were waived in August, 43 percent said 50 percent and 28.5 percent said they were given a break on more than 50 percent of their rental fees.Meanwhile, 90 percent reported they have been trying to negotiate their leases, but their landlords wouldn’t budge.The study also comes ahead of the long-awaited partial reopening of New York City’s indoor dining slated for Sept. 30 at 25 percent capacity.New York City will be the last region in the state — and also a month behind neighboring New Jersey — to get the green light for the practice, despite a majority of the Empire State’s 57 counties outside the five boroughs being approved for the practice since June.“I’m not really surprised because the industry is devastated by this pandemic,” said David Rosen, owner of several eateries including Williamsburg’s the Breakers. He is also co-founder of the Brooklyn Allied Bars and Restaurants and a member of the New York City Nightlife Advisory Board.“The analysis around why folks are not able to get firm relief from their landlord, or renegotiate around long-term lease agreements or changes, is interesting because the narrative for the past few months has generally trended in a positive direction,” said Rosen.“I can understand why landlords have been reticent to renegotiate because people have been under the impression that we would reopen or get back to normal,” he added, saying he, too, is in different stages of ongoing discussions with his landlords and doesn’t expect to fully reopen his venues until at least next spring.“What’s concerning about this report is I would assume given the past two months and with outdoor dining unfortunately will be peak revenue season during this pandemic for restaurants. As we head into the winter, even with indoor dining on the horizon, I don’t think that 25 percent indoor will exceed what exists already outside. This ‘inability to pay rent’ trend will continue, if not worsen,” he said.“We understand the difficulties facing restaurants, which is why we’re protecting commercial establishments from eviction, allowing bars to sell cocktails via take-out and delivery, and cutting red tape so restaurants can easily expand outdoor dining,” said Jack Sterne, a spokesman for Gov. Cuomo.
Guidelines will be reassessed by Nov. 1 and restaurants may be allowed to increase to 50 percent capacity depending on positive compliance and infection data, according to state officials.–– ADVERTISEMENT ––