New York Bankruptcy

Overview of Automatic Stay

by Stephen Kass on September 11, 2012

The automatic stay comes into effect upon filing for bankruptcy. It stops most creditors from pursuing their debts. Actions that are stopped by automatic stay include any collection actions, lawsuits that began prior to bankruptcy, including actions against debtor’s property, creditor’s pre-petition judgments such as liens and foreclosures, and other acts taken against the debtors or his property.

Some debts and certain kinds of actions are exempt from automatic stay and will not be effected by a debtor filing for bankruptcy; those actions include evictions of non residential property where the lease has been terminated prior to commencement of bankruptcy, criminal actions, actions concerning alimony, certain actions taken by taxing authorities, any education loans, and various others.

Obtaining Relief from Automatic Stay

Some of the creditors that seek relief include secured creditors, litigation parties that want litigation to continue, and contract parties that want to terminate a contract upon being notified of debtor filing for bankruptcy, and plaintiffs who want to name a debtor in a lawsuits for insurance policy reasons.

In order to obtain relief from automatic stay creditors have to file a motion. The motion for relief must be made after notice of bankruptcy filing by the debtor. Subsequently, not more than 30 days after the motion is filed, a court will hold a hearing, or two hearings, depending on the jurisdiction, to determine whether or not to grant relief.

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Purse Snatching Can Lead to Bankruptcy

by Stephen Kass on September 8, 2012

In March 2012, NYDailyNews.com reported a thief swiped a $25,000 crocodile handbag from the Ralph Lauren boutique on the upper East Side in New York, NY.  The thief wore a tan three-quarter-length coat with a maroon scarf, black pants and black boots when she left Madison Ave. at E. 72nd St. with the bag draped over her left arm on February 12, 2012, reported the police.

When stealing a purse, someone can be charged with a crime or get into civil legal trouble.  Under tort law, taking a purse can be considered trespass to chattel or conversion.  In criminal law, a person is unlikely to get away with not paying any fines or monetary penalties by filing bankruptcy.  Before using bankruptcy as a means to settle a debt, a person needs to engage an experienced New York bankruptcy attorney.  Bankruptcy does not discharge all debts.

Debts that are not dischargeable in bankruptcy include fines, restitution and criminal penalties.  Restitution and criminal penalties are government imposed money punishments. Examples include:  (1) Fines for agency regulation violations, (2) Interests, penalties for not paying estimated taxes on time, (3) Restitution ordered to be paid to crime victims, (4) Fines for misdemeanors and felonies, (5) Charges for time spent in jail such as after being arrested for driving under the influence.

Restitution is money a court orders a criminal defendant to pay a crime victim for economic losses related to a crime.  Economic losses may be the cost of a stolen purse, loss of wages, property damages, and medical costs.  The crime victim can place a lien on the defendant’s real property for the restitution amount, and use a restitution award to negotiate non-economic and punitive damages in a civil case.  Punitive damages are used to punish someone so that other people will be scared off and not engage in similar unlawful conduct.  The defendant is made an example to the rest of society.

One type of crime every-day people get involved in is driving under the influence.  When convicted for driving under the influence, the person may incur driving under the influence debt, resulting from personal injury claims for drunk driving.  In bankruptcy, this kind of debt may not be dischargeable.  Many people who get arrested for driving under the influence seem like honest people who pay their bills, and do not realize they are criminals similar to a purse snatcher.

A criminal conviction for any crime can result in fines depending on the number of prior offenses and whether property or people are harmed.  The fines can put a person in debt for life.  Eventual bankruptcy does not normally wipe out this type of debt.

For bankruptcy questions, contact an experienced New York bankruptcy attorney.

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Difference Between Chapter 7 and Chapter 13

September 2, 2012

Under Chapter 7, all the Debtor’s non-exempt property becomes property of the trustee, the trustee then liquidates that property and distributes the proceeds to creditors. The Debtor receives a discharge, which usually results in the discharge of all credit cards and medical bills. Under Chapter 13, the Debtor remains in possession of ALL their property […]

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Reaffirmation Agreements

August 21, 2012

Reaffirmation Agreements allow debtors to retain dischargeable prebankruptcy debts; debtors sign reaffirmation agreements because they voluntarily decide to pay off their prebankruptcy debts even though they are dischargeable. In some cases debtors retain debts for moral reasons, however, the majority do so in order to keep their property or to continue a relationship with a […]

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Post-Bankruptcy Filing Debtor Education

July 10, 2012

Chapter 13 bankruptcy is also known as the “wage earner bankruptcy.” It lets an individual to keep property such as a house, and repay debts over an allotted period of time, such as three to five years. Chapter 7 bankruptcy is for those who do not have many assets they want to keep.  After filing […]

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