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Because of the safety protocols imposed in response to the global COVID-19 pandemic, many federal bankruptcy courts throughout the United States have adopted modified operations to ensure that physical distancing is observed at all times and to prevent beginning a contagion in a United States bankruptcy court.
In Washington, many courthouses have closed, leaving those dealing with bankruptcy to wonder how they’re supposed to proceed. Debtors who have filed for bankruptcy in a now temporarily closed bankruptcy court would still be covered by the automatic stay. If you’re already in the middle of bankruptcy proceedings, you may continue to enjoy this bankruptcy protection preventing debt collectors such as creditors and collection agencies from pursuing repayment through wage garnishment, lien, or even a simple phone call.
Meanwhile, if you had just been about to file bankruptcy when the court where you’d typically file closed, or if the pandemic has made it necessary for you to file for bankruptcy protection in the midst of court closures, contact a local attorney to find out what you can do to file a bankruptcy petition at this very irregular time.
As for courts that have chosen to stay open, filing for bankruptcy in them means going through additional steps and modified protocols. If you’re considering bankruptcy now, make sure that you find out what the current rules are in the district and courthouse where you’re supposed to file for bankruptcy.
Waiving of Wet Signature Requirement
Bankruptcy lawyers usually have to get their client’s original signature on the petition for bankruptcy, even when filing documents online. Find out how your bankruptcy court stands on this as many have waived this requirement to eliminate the need for bankruptcy attorneys and their clients to review paperwork and get the wet physical signature in person.
Meeting of Creditors by Telephone
The Bankruptcy Code requires Chapter 7 and Chapter 13 filers to attend a meeting of creditors under Section 341. However, the US Trustee Program has issued an order for bankruptcy filings through July 10, 2020, to conduct these meetings either by telephone or another form of remote communication while the coronavirus remains a threat.
CARES Act and Modified Bankruptcy Rules
The CARES (Coronavirus Aid, Relief, and Economic Security) Act has also given rise to some changes, albeit temporary, to the standard bankruptcy rules. The modification, which is to expire on March 27, 2021, created distinct differences in bankruptcy procedures like giving a filer under Chapter 13 seven years to carry out the approved payment plan instead of the usual maximum of five years. Take note, though, that if you’re the debtor, you have to show cause for an extension, proving that the pandemic is causing you material financial hardship.
Keep in mind as well that coronavirus-related payments like stimulus checks are not regarded as current monthly income if you’re filing under the liquidation bankruptcy chapter (7). If you’re filing under the reorganization chapter (13), they won’t be considered disposable income. They have no effect on your eligibility to declare bankruptcy under either filing chapter. If you’re an entrepreneur filing under Chapter 11, you should know that a business bankruptcy filing under Subchapter V has a significantly increased debt limit.
Do You Need Help with Bankruptcy at This Time? Contact a Washington Bankruptcy Lawyer Now!
It’s easy to see how these difficult times may be pushing many to consider filing bankruptcy. If you yourself have overwhelming financial problems and think the bankruptcy procedure bears the best solution, consult an attorney specializing in bankruptcy law for legal advice and guidance. Call us at Northwest Debt Relief Law Firm to speak with a skilled and experienced Washington bankruptcy attorney about your case.
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COVID Has Exposed Many of Our Neighbors to an Ugly Financial Reality
The next 12 to 18 months is going to be financially difficult for many of our neighbors
Our new normal is homeschooling, face masks and self-isolation. What few are talking about is the financial consequence of COVID-19. Many of our neighbors are faced with difficult choices – pay the mortgage or buy food and pay utilities?
But, I thought Congress provides resources to help those who are not receiving a paycheck
You are correct – the law is called the Paycheck Protection Program (PPP), under the CARES Act. Employers (that includes those who are self-employed) can apply for loans to keep workers on the payroll, but the employees still have to work if the employer requires it.
The application process is difficult and not a guaranty to receive any funds. It took me (a lawyer) hours to help my self-employed daughter fill out the forms and to understand the strings attached to the funds. Good news – she finally received her money, but only after two months of waiting. Fortunately, her partner was paying the basic living expenses, but still she is way behind on her other bills.
Childcare:
Returning to work is fine, so long as you do not have children who need adult supervision. Childcare is difficult to find right now. The parent has the additional concern about the steps the childcare provider is taking to protect the children from being exposed to the virus.
Unemployment:
The CARES Act provided federal funds for those on unemployment ($600 per week), plus whatever the state pays. In many cases that meant the worker received far more by staying on unemployment then going back to work. As of May 1, 2020, more than 30 million Americans have filed for unemployment insurance since the COVID-19 crisis hit the U.S. (author’s opinion – Congress really did not think that one through.) Important note – unemployment income must be claimed on the worker’s tax returns.
Rent:
Many low-income renters are unemployed, waiting for unemployment to come in, but faced with a monthly rent bill. Federal and statewide eviction moratoriums were put in place (generally three to six months).
This moratorium is on the tenant being evicted, it does not excuse the tenant’s obligation to pay rent. At the end of the moratorium the tenant is supposed to come up with the missing rent, or be evicted. The problem will be exacerbated because the moratorium is based on COVID-19 timetables that are “too short” and don’t consider predictions from medical experts that the pandemic could persist into the fall and beyond.
Landlords:
Many landlords depend on the rents to pay their own bills. The moratorium puts them facing their own default of the mortgage and possible foreclosure, resulting in their own eviction.
Homelessness:
Evictions lead directly to homelessness, which increases the burden on the taxpayer and the various agencies that help those without a place to live. Crime will increase because people become desperate to just survive.
What about other bills?
In addition to worrying about where to live, the worker is also faced with demands from credit card companies, vehicle payments and other debts. By this time they are so desperate that many have shut down emotionally. They are not seeking help from those who can look at the big picture, rather are looking only at how to survive today. That is completely understandable, if you cannot get through today, why should you care about tomorrow? The answer – because tomorrow will always come.
Education is the key:
Our job is to help the worker step back from their current focus and talk about the future. Life will change. There will be a cure for virus. People will go back to work. Landlords will need tenants. Car dealers will need buyers. Mortgage companies will need borrowers.
I want to help the worker plan for their future. But, I am not the only one offering their help, there is a new breed of selfish attorneys who don’t care about their clients. They are only on this earth to take as much money from their clients as possible, while offering little to no education. They even have false reviews created by employees, and Internet companies. Use your common sense when talking to anyone who may have ulterior motives (take your money).
MUSINGS FROM DIANE:
When you hear “we are all in this together” stop and think – are we really? One person buys something or pays a bill, that money is used to buy more products or pay more bills. Round and round goes that dollar. So, yes, we are all in this together. I am ignoring the wealthy who don’t worry about how to pay their mortgage or buy food for their family. Instead, I am talking about the other 90 percent of our community. Congress did its best to come up with an idea about putting money into the hands of those who really need it, but much of that money was detoured into the hands of the wealthy. We must be responsible for ourselves and look for our own way out of this situation. Be smart about your choices and stay away from the “quick fixes” – they are scams.
How Can I Help You?
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New Law Governing the Paycheck Protection Program – June 5, 2020
SBA issues rules and guidance regarding the amended Paycheck Protection Program.
Legislation signed June 5 lowered to 60% from 75% the minimum percentage of PPP funds borrowers have to spend on payroll costs to have the loans forgiven. Plus, extended the covered period from eight weeks to 24 weeks, after loan disbursement.
New rules, guidance, applications coming
(reprint from Journal of Accountancy) The SBA, in consultation with Treasury, will “promptly” issue rules and guidance, a modified borrower application form, and a modified loan forgiveness application implementing the amendments to the PPP made in the new law, the statement said. In addition to confirming that June 30, 2020, remains the last date on which a PPP loan application can be approved, the new rules will implement the following changes:
- Extend the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness. Borrowers that have already received PPP loans retain the option to use an eight-week covered period.
- Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time-equivalent (FTE) employees for borrowers that are unable to return to the same level of business activity the business was operating at before Feb. 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020, and Dec. 31, 2020, by the secretary of Health and Human Services, the director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration related to worker or customer safety requirements related to COVID-19.
- Provide a safe harbor from reductions in loan forgiveness based on reductions in FTE employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on Feb. 15, 2020, and unable to hire similarly qualified employees for unfilled positions by Dec. 31, 2020.
- Increase to five years the maturity of PPP loans that are approved by the SBA (based on the date the SBA assigns a loan number) on or after June 5, 2020.
- Extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that the SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period).
MUSINGS FROM DIANE:
What no one discusses is that if the loan is forgiven, these funds cannot be deducted on your tax returns. Otherwise, this would be ‘double dipping’. The company gets PPP money to pay its’ employees, then the company’s obligation to repay the loan is forgiven, in total or partially. Therefore, the company receives a windfall if the company deducts the same employee costs on their taxes as overhead. Talk to your CPA and make sure to disclose any “free money” from any stimulus funds.
How Can I Help You?
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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; [email protected].
Bracing for the next phase of the coronavirus recession: BankruptciesJune 9, 2020
Art Van Furniture, Bar Louie and True Religion all sell different products, but they all have one thing in common: Each has gone bankrupt this year, as the coronavirus-induced recession that started in February flattens businesses large and small.
Recent data show 722 companies sought bankruptcy protection around the U.S. last month, a 48% increase from the year-ago period. Chapter 11 filings also jumped in April and March, as states started imposing business restrictions amid the coronavirus outbreak.
"This is a sign that already weak companies are succumbing to the lockdown recession," Chris Kuehl, an economist with the National Association of Credit Management, which tracks bankruptcies, said in a research note. Businesses that were struggling before the pandemic "are starting to get in some real trouble," he added
Among those long-distressed companies finally tipped into bankruptcy by the economic fallout from COVID-19: Gold's Gym, Hertz, J. Crew, J.C. Penney and Neiman Marcus.
Altough Congress has passed relief programs designed to help businesses survive shelter-in-place orders, including the Paycheck Protection Program and Economic Injury Disaster loans, the aid won't help floundering companies for long, one expert said.
"As this relief runs its course, however, mounting financial challenges may result in more households and companies seeking the shelter of bankruptcy," said Amy Quackenboss, executive director of the American Bankruptcy Institute.
Some analysts expect a wave of bankruptcy filings, particularly in hard-hit industries like retail and the energy sector, which has been slammed by falling oil prices and plunging demand during the virus. Boeing CEO Dave Calhoun also has predicted that a major U.S. airline will go bankrupt this year.
Of course, bankruptcy doesn't necessarily spell doom. Court supervision is designed to help companies shed or restructure their debt, restructure their business, and emerge from Chapter 11 as a streamlined, more competitive company. For other companies that have recently gone under, such as Pier 1 and Modell's Sporting Goods, bankruptcy is the end of the road.
Meanwhile, companies with healthy revenue streams, options for cutting costs and access to credit will rebound, predicted investment strategists Indranil Ghosh and Gina Sanchez. Although car sales have slumped, for instance, automakers are expected to bounce back as pent-up demand recovers and as many people shun public transportation due to virus concerns.
"Car manufacturers have been discounted in recent years due to falling ownership rates among the young, but they may regain lost ground due to COVID," Ghosh and Sanchez said. "Car traffic in China is back to 90% of normal levels whereas public transport is still only at 50% because consumers feel safer in their car."
The Small Business Reorganization Act of 2019 (the "SBRA"), which went into effect on February 18, 2019, provides for simplified small business reorganization for individuals and business entities under the new subchapter V of chapter 11. Subchapter V resembles the provisions of chapter 12 for family farmers, but incorporates also some of the provisions that apply in a regular chapter 11. The legislative purpose of the SBRA was to provide for a fast track for small businesses to confirm a plan of reorganization with the assistance of a subchapter V trustee.
EligibilityFor the new subchapter V provisions to apply, the debtor needs to elect so on its petition. To be eligible for subchapter V, the debtor must be engaged in "commercial or business activities" and 50 percent or more of its debt must arise from its commercial or business activities.
Debtor in PossessionSubchapter V provides for the debtor to remain in possession of its assets and to operate his or its business with the rights and powers of a trustee unless the Court orders otherwise.
Upon the election under subchapter V, the debtor generally must file the following financial documents: 1. most recent balance sheet 2. statement of operations 3. cash-flow statemen 4. federal income tax return
During the case, the debtor must file periodic reports which contain information regarding: 1. the debtor’s profitability 2. reasonable approximations of the debtor’s projected case receipts and cash disbursements 3. comparisons of actual case receipts and disbursements with projections in earlier reports 4. whether the debtor is in compliance with Bankruptcy Code postpetition requirements 5. whether the debtor is timely filing tax returns and paying taxes and administrative expenses when due Subchapter V TrusteeA subchapter V trustee is to be appointed in all subchapter V cases. The role of the subchapter V trustee is to monitor the case and to assist the parties in achieving a consensual subchapter V plan. The subchapter V trustee is to make the plan payments to the creditors under confirmed nonconsensual plans.
Subchapter V permits, but does not require, the debtor to make adequate protection payments through the trustee.
Subchapter V Plan
Only the debtor may file a plan in a subchapter V case. The plan must be filed within 90 days after the filing of the case unless the court extends the time period. Normally, the information that would typically appear in a separate disclosure statement is to be part of the subchapter V plan.
The Bankruptcy Court may confirm the plan even if all classes of creditors reject it. Subchapter V also does away with the "absolute priority rule." But to be approved, the plan must comply with the new projected disposable income requirements. Jordan E. Bublick - Miami Bankruptcy Lawyer - North Miami & Kendall Offices - (305) 891-4055 - www.bublicklaw.com
The Small Business Reorganization Act of 2019 (the "SBRA"), which went into effect on February 18, 2019, provides for simplified small business reorganization for individuals and business entities under the new subchapter V of chapter 11. Subchapter V resembles the provisions of chapter 12 for family farmers, but incorporates also some of the provisions that apply in a regular chapter 11. The legislative purpose of the SBRA was to provide for a fast track for small businesses to confirm a plan of reorganization with the assistance of a subchapter V trustee.
EligibilityFor the new subchapter V provisions to apply, the debtor needs to elect so on its petition. To be eligible for subchapter V, the debtor must be engaged in "commercial or business activities" and 50 percent or more of its debt must arise from its commercial or business activities.
Debtor in PossessionSubchapter V provides for the debtor to remain in possession of its assets and to operate his or its business with the rights and powers of a trustee unless the Court orders otherwise.
Upon the election under subchapter V, the debtor generally must file the following financial documents: 1. most recent balance sheet 2. statement of operations 3. cash-flow statemen 4. federal income tax return
During the case, the debtor must file periodic reports which contain information regarding: 1. the debtor’s profitability 2. reasonable approximations of the debtor’s projected case receipts and cash disbursements 3. comparisons of actual case receipts and disbursements with projections in earlier reports 4. whether the debtor is in compliance with Bankruptcy Code postpetition requirements 5. whether the debtor is timely filing tax returns and paying taxes and administrative expenses when due Subchapter V TrusteeA subchapter V trustee is to be appointed in all subchapter V cases. The role of the subchapter V trustee is to monitor the case and to assist the parties in achieving a consensual subchapter V plan. The subchapter V trustee is to make the plan payments to the creditors under confirmed nonconsensual plans.
Subchapter V permits, but does not require, the debtor to make adequate protection payments through the trustee.
Subchapter V Plan
Only the debtor may file a plan in a subchapter V case. The plan must be filed within 90 days after the filing of the case unless the court extends the time period. Normally, the information that would typically appear in a separate disclosure statement is to be part of the subchapter V plan.
The Bankruptcy Court may confirm the plan even if all classes of creditors reject it. Subchapter V also does away with the "absolute priority rule." But to be approved, the plan must comply with the new projected disposable income requirements. Jordan E. Bublick - Miami Bankruptcy Lawyer - North Miami & Kendall Offices - (305) 891-4055 - www.bublicklaw.com
Filing for bankruptcy is not an easy decision.You will need to weigh in factors such as your capacity to pay off creditors, the list of exempt property and nonexempt assets you have which will be placed in a bankruptcy estate, where you can get legal advice, and even how your credit score will be affected after filing.
Knowing what to expect when you file for a chapter 7 bankruptcy will help you decide if this is your best option and make it easier for you to accept the trade-offs. For individuals seeking debt relief, the following section describes the pros and cons of a chapter 7 bankruptcy petition.
Chapter 7 Bankruptcy Filing: Four Trade-offs
Debt management comes with certain trade-offs. Bankruptcy filers who are seeking to discharge some of their debts must be willing to accept the following prior to filing a petition:
- Loss of properties and assets
Based on the evaluation of the bankruptcy trustee appointed by the court, a debtor in possession of personal property or assets that are not exempt under bankruptcy laws must place these in the bankruptcy estate. These will be auctioned and proceeds shall be used to pay back lenders what you owe. Credit cards will also be lost, and you will also have to prepare for filing fees.
- Bad credit score
Having a history of declaring bankruptcy will be reflected in your credit record. This will affect debtors’ chances of applying for a loan or mortgage in the future. New credit lines may only be opened after a period of about three years and at a higher interest rate.
- Limited number of Bankruptcy filings
Once you have filed for bankruptcy, you may file for another Chapter 7 petition only after a period of six years. Moreover, if the bankruptcy court finds that you have enough disposable income, your case may be converted to Chapter 13 or the “reorganization bankruptcy”, where you will need to draft a repayment plan.
- Maintenance of Certain Debt Obligation
A court ordered bankruptcy discharge notice does not cover the following debts: unpaid child support, student loan balances (unless evidence of undue hardship resulting to one’s inability to follow the payment plan, is proven before a bankruptcy judge), as well as alimony.
Chapter 7 Bankruptcy Filing: Four Advantages
After knowing the disadvantages of a Chapter 7 bankruptcy, you are probably wondering what could be some reasons to support a decision to file for bankruptcy protection. Read on to know four advantages of filing personal bankruptcy.
- Immediate Relief from Collection Activities
The most prominent effect of filing a Chapter 7 bankruptcy is that the court will issue an automatic stay which shall put on hold all of your debt collectors’ harassment activities, phone calls, and even lawsuits.
- Faster Bankruptcy Proceedings
After you have filed your Chapter 7 case, bankruptcy processing will only take three to six months before relief from debt is attained.
- State exemptions
You can keep some property. Liquidation of assets shall only apply to properties owned by the time you file bankruptcy. Salary, wages, and new properties bought after you file for Chapter 7 will not be seized.
- Eligibility to File for Other Bankruptcy Types
You may only file one Chapter 7 bankruptcy every six years, but this does not mean you cannot file for other types of bankruptcies, such as Chapter 13, when you experience another financial distress and need to have your debts discharged.
Are you considering filing for bankruptcy? A bankruptcy attorney may help you assess your situation and provide sound advice on how best to move forward.
Before filing bankruptcy, you need to know that bankruptcy cases do not always end up with the same outcome. This is why setting your expectations based on the information provided above will help avoid any regrets after the court decision has been released. Accept that debt relief would come at a cost. However, you may be able to minimize your loss by letting a bankruptcy lawyer guide you through the process.
Bankruptcy lawyers can help filers preserve their valuable assets when a Chapter 7 bankruptcy is the only viable option. If you are in need of one, you may contact bankruptcy attorneys from Northwest Debt Relief Law Firm, who offer free consultations. You do not need to face your financial troubles alone, contact their law firm now to discuss your options.
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June 3, 2020
The collapse of the New York City taxi medallion market will be remembered as one of the greatest government failures in Gotham’s history. The bankruptcies and foreclosures, the suffering and the suicides were not the consequences of market forces beyond the city’s control. Instead, this enduring crisis is the product of a deregulated, overpriced, over-leveraged market that the city not only failed to regulate, but also helped create through auctions, advertising and approvals of predatory transactions.
As the city wrestles with how to uplift the hundreds of thousands of New Yorkers whose lives and livelihoods have been devastated by COVID-19, we must never forget that among those hit hardest are the more than 21,000 yellow and green taxi drivers who have been struggling to stay afloat well before the outbreak of coronavirus. Far from being an excuse for delay, COVID-19 is a call to action on behalf of all working people, and especially those taxi workers who were already underwater with crushing debt.
To that end, I am calling for the city to immediately establish a Medallion Asset Relief Program (MARP) to reset medallion values to $250,000 for the 6,250 medallion owner-operators, or those who own and operate 20 medallions or fewer, through a government guarantee of every taxi medallion in NYC. A program such as this, modeled after the federal Home Affordable Refinance Program (HARP), would cost the city as little as $20 million to implement over the next five years — a small investment that would ultimately create nearly $1.4 billion in new equity for drivers that would help them for decades to come.
While the average medallion loan currently holds a value of about $500,000, the actual value of those medallions averages less than $150,000. By resetting these values to $250,000, which is a much more accurate value for a working business, this would give owner-drivers the opportunity to restructure their loans at considerably more favorable rates, lowering their monthly payments to just over $1,000.
Simply, MARP would rehabilitate the medallion as an asset, enable the affordable refinancing of medallion loans, lower monthly loan payments for owners and restore confidence in the medallion market. It is a win for all parties but the profiteers, who are deservedly denied a bailout.
By creating a city-supported backstop to cover missed payments by drivers, the interest rates on these loans would immediately go down, substantially lowering payments for drivers to a value far more consistent with what their businesses earn, leading to a lower default rate.
The status quo for New York’s taxi industry is immoral and untenable, as our city continues to abide a system that condemns over-leveraged medallion owners to debt slavery with no end in sight. Moreover, MARP is significantly more cost-effective than a bailout, a venture the city would have to spend hundreds of millions — if not billions — that we simply cannot afford.
As the city weighs various proposals to help the countless New Yorkers across every industry who are struggling, it is critical we remember that among those hit hardest by the current pandemic are the taxi drivers, who were already fighting to stay afloat for years before coronavirus took hold of our city and economy. They played by the rules set by the city and are now enduring extraordinary financial hardships made even worse by the pandemic. Both the financial and human toll brought on by the medallion debt crisis cannot be overstated.
It is clear that the pandemic has exponentially exacerbated the financial problems that drivers faced before the outbreak, making this not just the perfect opportunity for the city to step up and take sweeping action to save the drivers and fix the industry, but the only viable option for saving the jobs and businesses these drivers have poured their lives into.
MARP is an elegant solution to a long-standing crisis that has been compounded by COVID-19.
If you are looking into filing bankruptcy in Dallas, you must already be having stressful financial problems. You may probably think that it will save you attorney’s fees if you do it on your own. However, you may be unaware that it is a costly mistake in the long run. Working with an experienced Dallas bankruptcy attorney will not only save you money but also time and the tension brought about by bankruptcy proceedings.
You need to know that should you decide to file bankruptcy in Dallas on your own, you will still be required to pay the same filing costs and fees. You must also be aware of how complex a bankruptcy case is because even for the simplest of cases, you need to accomplish several tasks, from filling out extensive forms, compliance to local court protocols, up to in-depth research on exemption laws. Any oversight may cause major setbacks such as the risk of losing nonexempt properties, your debt not being approved for discharge, or worse, you can be charged for fraud.
All these complications may be avoided if you work with experienced Dallas bankruptcy attorneys. You may find the bankruptcy lawyers who can help you at Allmand Law because they will work hard to bring you the best possible outcome.
What exactly do bankruptcy attorneys do for their clients?
1. Bankruptcy attorneys will make sure that all options and the different types of bankruptcy are made known to you so that you may file the bankruptcy case that best fit your financial circumstances.
Among the many types of bankruptcy, only two of them are most applicable to individual debtors: Chapter 7 and Chapter 13. Both of them provide protection from your creditors but your decision which one to file will be based on your situation.
- A Chapter 7 bankruptcy works through the liquidation of assets to pay off creditors. Bankruptcy Chapter 7 is usually fast, with discharges received within three to four months, allowing debtors the chance for a fresh start. A bankruptcy court appoints a trustee who collects all of a debtor’s non-exempt property and sells them to pay back the creditors. A debtor is allowed to keep what is known as exempt property. Chapter 7 bankruptcy is suitable for low-income debtors with little or no assets with which to pay off their debts. However, it costs more to file for Chapter 7 bankruptcy than Chapter 13 and there is a greater risk of losing your property due to foreclosure. In most cases, you will be able to qualify for Chapter 7 bankruptcy because income alone is not the sole determining factor. If you are eligible, you will need to file an official petition and submit other forms to the Dallas bankruptcy court. These documents contain detailed accounts of all your debts and describe your current financial status.
- Chapter 13 bankruptcy is called “wage earner plan” because it allows Chapter 13 filers with a regular income to pay off all or part of their outstanding debts through an approved repayment plan, within three to five years. It is often called “reorganization” The purpose of the reorganization plan is to show how you will fully pay all priority claims, such as child support, unpaid wages, and taxes, within three to five years. Unsecured debts like credit card debts and medical bills may be partially paid overtime. Even if it takes longer to discharge debts in Chapter 13 bankruptcy and there are higher income requirements in order to qualify, there is an assurance that you can keep your property and catch up on missed mortgage, car, and nondischargeable priority debt payments
2. Your bankruptcy attorney will make sure that you comply with bankruptcy requirements
The bankruptcy laws require correct and complete documentation upon filing bankruptcy. This includes numerous pages of forms to fill out and gathering and organization of supporting documents prior to filing. The reason for doing so is to prevent your bankruptcy case from being dismissed without discharging your debts because of non-compliance with bankruptcy requirements for filing, incomplete documentation, or other administrative issues.
Below is a list of the requirements you need to accomplish:
✔ Completion of the mandatory pre-filing credit counseling class within the 180 days before your bankruptcy filing.
✔ Filing of the required bankruptcy forms detailing all of your current debts, assets, income, and expenses, as well as your plans regarding loans that are secured by collateral (such as car loans).
✔ Settlement of court fees such as the filing fee, administrative fee, and in Chapter 7 cases, the trustee surcharge.
✔ Attendance to the 341 meetings where the bankruptcy court trustee, as well as your creditors, will ask you questions about the information you provided in your forms.
✔ Timely payments on your Chapter 13 repayment plan.
✔ Observance of court orders.
3. Your bankruptcy lawyer may help protect your property.
Although some property is protected by exemptions, our experienced Allmand Law bankruptcy attorneys will work hard so that you will be able to take all you are entitled to, with little or no loss of non-exempt property, while avoiding unexpected losses.
4. Your bankruptcy attorney will make sure that tax refunds and other receivables are accounted for.
It is critical to jot down all money due to you as property in your bankruptcy forms and consider the right timing when filing your bankruptcy. Failure to do will result in losses on proceeds of lawsuits, upcoming tax refunds, inheritance or life insurance proceeds, bonuses, and sales commissions.
5. Your bankruptcy lawyer will provide sound advice on dealing with credit cards and loans.
Trust that our Allmand Law bankruptcy attorneys will guide you on how to deal with your credit card debts and payday loans. Experienced bankruptcy attorneys will thoroughly explain how to deal with these personal debts and, at the same time, explain to you how your bankruptcy filing may affect your credit rating. Despite the possibility of the effects on your credit rating, you may rest assured that our Allmand Law bankruptcy attorneys will do our very best to have your credit restored in the soonest possible time.
6. Your bankruptcy attorney will take care of foreclosures and repossessions.
We, at Allmand Law fully understand the value of your house, vehicles, and personal property to you. It is therefore a given that we are committed to ensuring prevention of any foreclosure and repossession of your most treasured properties.
7. Bankruptcy lawyers will also take care of situations that may affect your loved ones.
Our empathic Dallas bankruptcy attorneys will find the most efficient way to take care of your debts, most especially if you are undergoing a challenging time such as divorce proceedings. They will work hard so that the bankruptcy process will go as smoothly as possible, with minimal effect on your family, children, and your inheritance.
8. Bankruptcy attorneys will assist you on how you can pay your creditors.
A Dallas attorney, knowledgeable in bankruptcy, will go over your financial records and to gather information on the type of debts you have. Doing so will enable your bankruptcy attorney to figure out which debts are qualified for bankruptcy discharge and look for ways to handle any remaining debt. Your bankruptcy attorneys at Allmand Law will gladly help you in settling and negotiating debts and provide you guidance on how to prevent drowning in debt again in the future. This may include educating you on the budget setting, prioritizing expenses, and cutting down on unnecessary spending.
9. Bankruptcy lawyers will make sure that you pay off your debts fair and square.
Our Dallas bankruptcy attorneys will see to it that you pay your creditors fairly before filing for bankruptcy. It is against bankruptcy laws to pay off larger amounts to specific creditors such as family or friends. This is regarded as preferential transfer and will get you in trouble. This could result in lawsuits by your bankruptcy trustee and recovery of the money that should have been distributed evenly among all creditors.
10. Bankruptcy attorneys will provide advice for free.
Our friendly Dallas bankruptcy attorneys at Allmand Law are here to address any clarifications or questions that may be hounding you. Give us the opportunity to help you by letting us examine your financial situation.
Call us at Allmand Law for a free consultation and let us help you get started on the road to financial freedom.
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