Articles from Hayward, Parker, O'Leary & Pinsky

It is generally true in a New York bankruptcy case that the Chapter 7 Trustee has a “look back” period of six years prior to the bankruptcy filing to examine asset transfers and commence litigation to set aside any that are deemed to be fraudulent transfers. This is because the Bankruptcy Code allows a Chapter 7 Trustee to set aside asset transfers that would be “voidable under applicable law by a creditor holding an unsecured claim…”.

Debtors sometimes are unable to open a checking account after receiving their bankruptcy Discharge.   These debtors typically had a troubled history with their bank, generally involving fraud, bounced checks or excessive overdraft activity, resulting in this negative information being reported to a check reporting company known as Chex Systems.  Such negative information remains in this database service for five (5) years and is readily accessed and utilized by its members (usually financial institutions) in making decisions about who will be allowed to open a checking account, etc.

Any exploration of this topic requires an understanding of reaffirmation agreements. Under New York bankruptcy law (In re Boodrow) a debtor does not have to sign a Reaffirmation Agreement for a mortgage on real estate. This is a good thing (especially when dealing with second or third mortgages), since a signed Reaffirmation Agreement causes you to remain personally liable for the mortgage debt after bankruptcy, and for any resulting deficiency judgment determined to be due after a foreclosure of the “reaffirmed” mortgage.

Many clients “surrender” their house as part of their Chapter 7 bankruptcy and assume that said act will allow them to put their homeowner's “experience” totally in their rear view mirror. Unfortunately, in the context of dealing with secured debt (such as mortgages or car loans) in bankruptcy, the term “surrender”does not mean what many... Read More »