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Thinking about asking for a loan modification during the Covid-19 pandemic? This post may help guide you. To speak with our team directly, please do not hesitate to contact our office immediately with questions and concerns.

Since the first cases of the coronavirus in the United States in January 2020, healthcare providers, scientists and government leaders have grappled with treatment, finding vaccines or other defenses and limiting the spread. In the early months, state and local government officials in particular imposed state-at-home mandates and ordered the closure of many businesses. Since the late spring and into the summer, phased and limited openings have been allowed. Even with recent loosening of restrictions, COVID-19 has left many businesses and employees without income. The economic downturn has threatened many homeowners with the loss of their homes in foreclosure. In turn, the federal government and banks have adopted measures to help you keep your home in these challenging economic times.

A Temporary Halt to Foreclosures During Covid-19

If you have a loan backed by Fannie Mae, Freddie Mac, the Veterans’ Administration, the U.S. Department of Agriculture or the Federal Housing Administration, you have protection against foreclosure through at least August 31, 2020. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES) was enacted as an effort to mitigate against potential home loss. The law prohibits the initiation, continuation or finalization of foreclosure proceedings between March 18, 2020, and August 31, 2020, on loans backed by the federal government or by Government-Sponsored Enterprises (GSEs)--Fannie Mae, Freddie Mac or Ginnie Mae. You can find out whether your loan is backed by a GSE or the federal government and, thus, qualifies for CARES Act protection through a number of sources: *Contact your servicer. Your monthly statement should contain the name, address and telephone number of the servicer. You may also search through the site for Mortgage Electronic Registration Systems, which allows you to find the servicer based on your property address. Also, upon your written request, the mortgage servicer must furnish you the name, address and telephone number of the owner of your mortgage. *Lookup Tools. Both Freddie Mac and Fannie Mae have self-service look up tools for you to know if either owns your mortgage. To use the tool, you will need your property address and the last four digits of your Social Security Number.

Forbearance During Covid-19

With a federally-backed or GSE-backed loan, you qualify for a forbearance on payments under the CARES Act if the COVID-19 pandemic causes you financial hardship. While the specifics depend on the particular mortgage, the forbearance typically comes as a suspension of or reduction in your payments. The law gives eligible homeowners a period of 180 days, with an option to request an additional 180 days if the financial hardship continues. These programs do not relieve you of the repayment obligations. At the end of the suspension or reduction period, you will still owe the unpaid amounts. With GSE or federally-backed loans, you will not be required to make a lump-sum payment at the end of the period to cure the unpaid amounts. Instead, the loan servicers for these loans may offer options, such as: *A repayment plan *Deferrals, with the unpaid sums due either upon sale or refinance of the home or at the end of the term Once such deferral takes the form of a junior lien, otherwise known as a “COVID-19 Standalone Partial Claim,” is available to those whose loans are backed by the U.S. Department of Housing and Urban Development (HUD) or the Federal Housing Administration (FHA) and who were no more than one month behind as of March 1, 2020. Many banks and other lenders also afford forbearance plans. The length of the period and repayment terms vary by institution.

Loan Modifications During Covid-19

You can save your home through a loan or mortgage modification if you face the threat or imminence of foreclosure. The grounds for which you may claim a hardship are broader than allowed for protections offered under the CARES Act. Typically, these include: *Divorce *Illnesses or disability that result in the loss of income *Property losses not covered by insurance or other sources *Death of a family member who earned income *Hurricane, tornado outbreak, flood, earthquake or other event causing a natural or declared disaster In a modification, the lender does not grant a new loan as in a refinance. The original one still exists, but the lender agrees to change the terms. Changing the contractual agreement has as its ultimate goal lowering your monthly payment. Those engaged modifications or housing counseling often seek a payment such that the borrower’s monthly debt does not exceed 31 percent of gross income. In one approach, your bank or other lender may add the amount of delinquent payments to the unpaid balance and, in many cases, will generate a new repayment length. Your new monthly obligation will be calculated based on the new number of months and the recalculated balance. In effect, you borrow the amount of your delinquency and pay them over a period of time. Other changes may include: *Converting a variable or adjustable-rate to a fixed-rate. With this change, you seek to avoid higher monthly payments that result from increased rates. *Extending the term of the mortgage. The number of months you have to repay is increased, for example, from 30 years to 40 years. The lender then amortizes based upon the longer period of time. *Lowering the interest rate. Such changes can be temporary or permanent. *Reducing the principal balance. The lender decreases the amount of principal that you owe, so that you are paying back less. Such an agreement effectively is a partial forgiveness. You might have income taxes to pay on any reduction of principal.

Your Credit Report

The COVID-19 relief bill offers certain borrowers protection against negative credit report information arising from forbearances or modifications. By default, a lender may report payments not made under a forbearance agreement as delinquent. The CARES Act requires the lender or servicer to report your account as current if you were current on payments at the time you entered into a forbearance or modification arrangement. You get this protection even if Fannie Mae, Freddie Mac, Ginnie Mae, the Veterans’ Administration, HUD, or the U.S. Department of Agriculture does not back mortgage. If you were behind at the time the lender afforded you a forbearance or modification, the lender may continue to report your or account to the credit bureau as delinquent. Once you have cured the delinquency or default, the lender or servicer must tell the credit reporting agency that you are current. These protections apply to arrangements made between January 31, 2020, and 120 days after the end of the national coronavirus emergency.

Getting Your Credit Report

The information furnished to a credit bureau affects your score. Accurate credit reporting is crucial for a good score and your prospects of obtaining credit, insurance or even employment. For those reasons, you need to regularly review your credit report for errors that you can dispute and have removed from the report. In normal times, you get one free credit report per year from each of the major credit reporting agencies -- Equifax, Experian and Transunion. You can obtain the report through annualcreditreport.com. In response to the coronavirus pandemic, these credit reporting bureaus are providing you free weekly reports through April 2021. You may dispute errors on your report either by phone, mail or online. The Federal Trade Commission has a sample letter to guide your written dispute. If you contend that the servicer or lender has incorrectly reported you as behind rather than current, you likely need receipts or statements to show you were current at the time you sought relief. You may ask the credit reporting agency to include on your report a statement that you are presently unable to pay due to the coronavirus pandemic.

Finding the Best Option During the Pandemic

HUD approves agencies and people who offer housing counseling for homebuyers and those facing the possible loss of their home. As to foreclosure prevention, counselors assist you with getting information from the servicer or company on options for modification or forbearance. They explain those alternatives to you and help you determine what constitutes an affordable plan for you. To that end, if you seek housing counseling, you will need: *Your most recent payment *The regular monthly amount *The amount owed *Your recent paystubs or other information about your monthly income You can also contact your bank or lender directly to learn your options if you experience a financial hardship.
The vast majority of Americans have had their lives turned upside down by the coronavirus pandemic. They have not been able to perform their daily activities and go on any sort of vacation. Many people have also lost their jobs or faced some other sort of economic hardship. These individuals have been unable to pay all kinds of bills. Perhaps the most important bill for the vast majority of Americans to pay is their mortgage. These people want to do whatever they can to avoid foreclosure and stay in their homes. They may have to take extraordinary steps over the next few months in order to do so.

Access Temporary Mortgage Relief

One of the fastest ways to avoid foreclosure during the current COVID-19 pandemic is to access temporary mortgage relief. Millions of Americans have been thrown out of work or had their hours greatly reduced. These men and women are on hard times and a large number of American companies know this. Many mortgage companies have introduced a wide variety of plans to help people pay off their mortgages and stay in their homes. A lender has several reasons to take these steps. They want to retain customers and aid their image through such a stressful period. These companies also want to keep within government regulations. A large number of areas banned foreclosures and evictions for a significant period of time. Holding the court hearings and auctions associated with these events would have violated social distancing guidelines in places such as Long Island and New York and been dangerous for a number of people. In addition, the government also made billions of dollars in loans available to companies that have faced economic hardship from the pandemic. Many of the losses that mortgage companies suffer helping out their clients can be covered by a loan from the federal government.

Avoid Foreclosure

Home owners should try as hard as they can to structure their payments and stretch their budgets to where they do not have to foreclose on their house. Foreclosure is a terrible process that no family wants to endure. They are physically removed from their house with all of their possessions. Individuals have to find somewhere to live with little to no warning. They have a black mark on their credit that they cannot take off for several years. A person would often rather avoid all of their other payments then fall behind on their house. Avoiding many payments involve a company sending in threatening letters and bill collections phone calls. Not paying an internet bill may lead to an individual not having internet and having to go to the local cafe in order to get online. Having a car repossessed forces an individual to potentially take public transit to work. But all of these negative consequences pale in comparison to what would happen if an individual did not have their home anymore. Most people who suffer through foreclosure have to live in expensive motels until they can find an apartment of some kind. Many of the people who are foreclosed upon simply end up homeless. This is one of the worst financial tragedies that a person can endure and it does not have to happen in many cases.

Home Loan Modification

Some home owners will be eligible for home loan modification in order to help with avoiding foreclosure. This modification involves a home owner changing the structure of their loan to avoid current payments. It is particularly beneficial for individuals who are currently out of work but hope to go back soon. They can take the money they have now, save up, and eventually use extra income to pay off their mortgage at a later date. There are two main strategies that these companies have used to aid with this process. One of these is deferment. Deferment involves allowing a person to avoid a few mortgage payments now and simply tacking those payments onto the end of the mortgage. The bank may take a short-term hit but does not lose money in the long term. Individuals also expect to have more money later on and do not have to suffer any problems with their credit in most instances. The other approach is forbearance. In forbearance, an individual misses several payments and then have to pay them all back in a lump sum in the near future. If an individual can, they should emphasize taking deferment over forbearance in all cases. Many individuals cannot pay the lump sum involved in forbearance. But if it is all that a mortgage company will offer, it is certainly better than risking foreclosure with missed payments.

Filing for Bankruptcy to Prevent Foreclosure

In some rare cases, an individual's best option to avoid foreclosure is to declare some form of bankruptcy. This status is when a court declares that a person does not have the capacity to pay off their debts as they are currently constituted. There are two main options for an individual after the bankruptcy process. In Chapter 13 bankruptcy, a person sets up some sort of payment or refinance plan for at least a portion of their debt over a period of three to five years. In Chapter 7 bankruptcy, they often do not pay off a large number of their debts. Those debts are wiped clean. Bankruptcy is a problematic process for many reasons. First, it harms a person's credit immensely. They will often have this black stain on their credit report for many years. The records of their bankruptcy will be in the public domain for anyone to access. Also, there is no absolute guarantee that they will be able to keep their home. Some forms of bankruptcy do not allow a person to keep their home if they do not have a certain amount of equity. A person is basically trusting their attorney and a judge to make the best decision that helps them retain their home and avoid foreclosure. This risk is massive and is not a level of risk that most individuals should take on with their home.

Avoid Foreclosure Scams

Any individual who is potentially in the foreclosure process must look out for scams that try to take advantage of them. These scams come in many forms and mostly revolve around a person's desire to become whole with their mortgage company. Some scams promise to get an individual out of their underwater mortgage and many other debts. In a common form of the scam, the debt settlement agency advises that a person stop paying off all of their debts for a period of several months. Then, the agency advises that a person comes back with an offer to settle for all of those debts that they did not pay. The theory behind this is that the company will want something rather than nothing and negotiate with an individual. But banks often want to keep the mindset of people paying debts on time rather than gain every single time they can from a potential borrower. Therefore, they will simply foreclosed on an individual if they go too long without making their payments. This approach often costs a person several thousand dollars and is not particularly helpful in the long run.

Hire an Experienced Attorney for Guidance

Many of the options listed to help with foreclosure involve complex plans and the legal process. This process is especially true of bankruptcy. There are a number of concrete steps to take with bankruptcy that a person has to make sure that they follow. A lawyer can help with all of these steps. He or she can help a person settle their debts or argue their case in front of the judge. An experienced Long Island attorney can help you avoid potential foreclosure scams. Our team can represent you in any financial dealings that they have and can help shine the way forward on getting out of what looks to be insurmountable debt.

Take Action Today

Anyone who is looking at foreclosure is in a precarious position financially. They are understandably scared and perhaps desperate. These individuals are prime targets for a wide variety of scams and cons. They have to remain careful and diligent. They also need to secure the help of an experienced real estate attorney. For more information on how to avoid foreclosure during these difficult times, contact the office of Adam C. Gomerman today and speak with our experience Long Island legal team.
The coronavirus epidemic has caused bankruptcies across the nation to skyrocket. Millions of Americans have been left marooned without a job in the wake of this devastating pandemic. A lot of people don't fear the virus quite as much as they fear the economic fallout that could result because of it. No one questions the potential for dangers that could happen because of it as we have also had to navigate the possibility of a food shortage from so many people being off work in crucial industries.

What to Do as a Business

Perhaps you have begun to consider filing for Chapter 11 or Chapter 13 Bankruptcy. You have a few things that you should first know to help you avoid this. During this time of crisis, you have a couple of different options that you might be able to fall back on. Some of the options that you have available to you include:
  • Pay the minimum on your bills for as long as possible.
  • Negotiate a settlement with your lenders.
  • Seek a crisis loan from a financial institution.
During the peak of this crisis, many financial institutions and other companies have begun to offer help to businesses at a more affordable price. This will help businesses to recover from what could be a long-haul problem that we have to face. Don't jump right into filing for bankruptcy until after you have looked at some of these possible solutions to the Covid-19 crisis.

Small Business Assistance

Some of the possible loans that you could take advantage of as a small business include: We believe that you should never take bankruptcy lightly, which is why you should first look at all the options that you have available to you to stay afloat. Especially if your business was doing good before the crisis, it wouldn't be wise to walk away from that now. You have federal programs available, but you can also take advantage of some of the local and state programs as well built to help small businesses get through this crisis.

Work with Your Creditors

In general, it doesn't make sense for you to file for bankruptcy right off the bat because a lot of lenders will be more willing to work with you during this time. For example, you could ask to have your monthly payments lowered during this time to help with paying for it. Especially if things were going well for your business before this crisis, you may find it more advantageous to try to wait out the storm. Do your best to stay afloat and keep paying your bills. You have lawmakers, regulators and banks that have all come together during this difficult time to help companies get through it. You might as well take advantage of these programs while you have it available to you. When Congress passed the $2 trillion relief package, this blocked lenders from opening the foreclosure proceedings on any loans that have been federally backed. That means that you don't have to go to foreclosure court just yet in most cases. Most people during this time are understanding that there are issues that exist, and they're willing to work with you because of those issues.

Ask for Assistance

During the Covid-19 crisis, many companies understand that everyone is having problems. Because of those problems, they're willing to work a special payment plan, suspend rent and mortgage payments and forgive late fees. However, to get this relief during the coronavirus, you will also have to ask for it. You should first learn about the options that you have available to you during Covid-19 because you may not even have to file for bankruptcy.

Protecting Your Credit

Especially during the time of the coronavirus, you don't want to have to worry about credit repair after. To get past the need for credit repair, you might first contact your lenders to see if they will work with you. It can get difficult, but we advise that you try to make the minimum on your payments because this show them that you're doing your best to stay on track with them. In addition, it won't harm your credit score as much as an actual late payment. If you happen to see any information online that doesn't check out, you can choose to dispute the information. You have to make this dispute with each bureau. That's another one of the reasons that we don't believe people should file for bankruptcy. That remains on your credit score for seven years. We should emphasize that a Chapter 13 remains on your credit report for seven years. Let's say that you go through the court to file a Chapter 7. With Chapter 7, this stays on your credit report for up to 10 years. That will be extraordinarily damaging to you, and it can keep you from getting loans in the future to succeed as a business owner.

What Happens as the Relief Program Ends?

You should understand how this relief may not be there forever, and once the Covid-19 crisis ends, it is likely that you will have to pay your bills regularly again. Because of that, you should stay prepared. In fact, you should beware of how some companies might even require that you pay all the bills that you had missed up until that point, which could be devastating if you don't prepare for it. What can you do to prepare? You might ask your lender if they can lower the monthly payment or the interest rate to help you with getting back on your feet. They could do this for mortgages, credit cards and auto loans.

How to Handle Getting behind on Your Debts

Let's say that you have gotten behind on your mortgage. You might fill out the application for loan modification. This will help to rework the terms of the mortgage so that it will look more favorable than what it might have been from before. Let's say that you got behind on your credit card during this time. How can you respond to it? During the coronavirus crisis, it may not be wise to pay it all off at once. You can use the money for emergency circumstances instead. As of right now, some credit card companies have even agreed to wipe out overdue balances to help people get through this difficult time. Keep in mind, however, if you already happen to be up to date, most companies won't work with you during the time of the coronavirus. If you're facing Chapter 11, however, you could still have resources available that can help you to get through it unscathed. You simply have to look at the difference assistance programs available at the federal, state and local level. You have many different choices available, but you want to apply quickly because some of these programs have been filling up. You could also work a payment plan that may be helpful.

It Costs Money to File for Bankruptcy

Believe it or not, you won't get off the hook from debts because it still costs anywhere from $300 to $350 to file for bankruptcy. It costs to go broke. However, you might be able to work payments on this that will make it more affordable. Covid-19 has brought many American businesses to their knees, and with no definite end in sight, we have to prepare for the long haul of this crisis. This is the most significant crisis that we have seen since World War II, which should give you an idea about the gravity of the situation. Because of that, many programs have been offered out to help people get back on their feet.

If you have questions about the bankruptcy process during this difficult time, please contact our Long Island bankruptcy and credit repair office: The Law Office of Adam C. Gomerman.
With cases of COVID-19 now nearing close to 180,000 in the United States, significant and perhaps irreparable damage has been dealt to the economy. Worryingly, there’s almost certainly more disruption to come. Layoffs have already begun, with unemployment applications hitting a historic high with more than three million workers filing for jobless benefits last week and bankruptcies are up.

This means many Americans are already being subjected to financial hardship due to the spread of COVID-19. The good news, for many Americans who are homeowners, banks and lenders have been instituting financial relief programs related to their homes. This can include measures like deferment of mortgage payments for a period of time, loan modifications, waiving late fees on loan products or even lowering interest rates. In some cases, this measure might help in avoiding foreclosures, bankruptcy, and more.
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The thought of losing your Long Island home because of an unforeseen financial hardship can keep you awake at night. You might be struggling to make ends meet because of job loss or an unexpected financial setback. Anxiety sets in because you do not know how you are going to make your mortgage payments and cover your daily living needs. Take a deep breath. There are options available that will help you keep your home and gain control of your debt. You can choose to lower your monthly payments by obtaining a loan modification, refinancing your mortgage, or filing bankruptcy. Whichever option you choose, it is important to contact your mortgage servicer or bank as soon as possible. The longer you wait, the fewer options you have.

What Is Loan Modification?

A modification is a form of loss mitigation designed to protect both the borrower and the lender. The lender agrees to change the terms of the mortgage to make monthly payments more affordable. Lenders can permanently change the terms of the mortgage by:
  • Extending the duration of your agreement
  • Adding past due payments to the unpaid principal balance
  • Reducing your interest rate
  • Forbearing payments for a short-term
  • Changing your mortgage type (for example changing an Adjustable Rate Mortgage (ARM) to a Fixed-Rate Mortgage)
Some Long Island homeowners may benefit from the government-sponsored Flex Modification program created to assist borrowers who have Fannie Mae and Freddie Mac home loans. The program can reduce a borrower’s mortgage payment by around 20 percent by adding the past due amounts to the outstanding loan balance, modifying the interest rate, extending the loan terms, or setting aside some of the principal balance before recalculating the monthly payment. This is called a forbearance and is a temporary option to get you back on your feet. You may be eligible for the Fannie Mae or Freddie Mac Flex Modification program if:
  • The loan is a conventional first mortgage
  • The borrower has enough income to make the monthly payment, and
  • The loan was acquired at least 12 months before Flex Modification evaluation
There may be other programs offered by your state. For example, the New York State Mortgage Assistance Program (MAP) provides a zero percent interest deferred payment mortgage loan up to $80,000 to New York homeowners who have exhausted all other avenues of help. This program is available statewide, so it does not matter whether you live on Long Island or in Buffalo. According to the New York Housing Conference, you can use the funds to bring your mortgage current, get a modification, or pay off property tax arrears. Typical loan recipients are low- to moderate-income homeowners with an average household income of $53,311. Long Island residents can receive assistance and personal counseling through the Community Development Corporation of Long Island

Modification Eligibility for New York Homeowners

Eligibility varies from lender to lender, but the process begins by completing and submitting an application with the required documentation to the lender. The list of required documentation will vary but the following documents are generally required:
  • Proof of income and an expense finance worksheet
  • Tax returns for the last two to three years
  • Proof of additional income such as alimony, social security, disability, child support
  • Bank statements, and
  • Proof of your hardship which can be a hardship letter or affidavit
  • Proof of additional debt such as student loans, credit cards, and car loans
If find yourself having difficulty with the modification application or you feel your lender is not abiding by state laws, consider contacting our Long Island office and we can guide you through the process. You do not need to hire an attorney to obtain a loan modification, but employing a qualified professional can make the difference between keeping your home or losing it foreclosure.

Refinance

Refinancing your loan replaces your old loan agreement with a new one and can be completed by either your current lender or a new one. To qualify for a refinance, you must be creditworthy and not owe more than the house is worth. While creditworthiness is not a major concern with a modification, a lender or bank does require that you be able to make the new payments. Unlike a modification, you may have to pay closing costs and other fees to complete the mortgage refinance process.

Mortgage Modification and Bankruptcy

Chapter 7 and 13 are the most common types of bankruptcy filed by individuals. Chapter 7 bankruptcy is a liquidation process in which the trustee sells non-exempt assets and uses the proceeds to pay creditors. There are no provisions in a Chapter 7 bankruptcy that allows you to keep your home, but it gives you time to find other housing or enter a loan workout plan with your lender. There is nothing that states your lender cannot agree to a modification after you file a Chapter 7. However, this is at the lender’s discretion. A Chapter 13 bankruptcy generally allows you to keep your home and pay creditors under a court-supervised repayment plan over three to five years. Once the court approves the repayment plan, the lender cannot foreclose. Additional advantages of a Chapter 13 bankruptcy include:
  • Automatic stay (an injunction that temporarily prevents creditors from pursuing or continuing credit collection actions)
  • Extending your secured debt over the life of the repayment plan
  • Protecting third parties such as co-signers
  • No direct contact with your creditors. Payments are made to the trustee who disburses the payments to the creditors
According to the United States Courts, you do not need an attorney to file bankruptcy. However, due to the long-term legal effects surrounding a bankruptcy, hiring a bankruptcy lawyer who will work to protect your rights, recommend the best bankruptcy for you, and guide you through the process adds an additional blanket of security should a problem arise.

If you would like more information on the home loan modification process, or if you have questions regarding bankruptcy filing, considering contacting The Offices of Adam C. Gomerman. Our Long Island based team of attorneys has years of experience in advising clients on the home loan modification process and personal bankruptcy process.
Most Long Island residents who are under financial duress look for relief. Some need a fresh start and some need a financial plan to prioritize debt, but most importantly, people need help. One such way to get assistance is by the protection of the bankruptcy laws. For an individual, there are two chapter filings that can provide relief, and they are Chapter 7 and Chapter 13.

To provide a sense of comfort, the term bankruptcy does not necessarily mean that you lose everything. This is a common fear, however, there are certain exemptions that are in place that allows you to protect your property. These exemptions allow certain items to be protected against being sold in the repayment to creditors. These exclusions vary from state to state and is totally dependent upon where you reside. Regardless of the state that you live in, an attorney is necessary who will work on your behalf. The Law Offices if Adam C. Gomerman are licensed in the State of New York and are happy to speak with any Long Island resident regarding bankruptcy and the oftentimes confusing questions surrounding asset protection and bankruptcy exemptions. 
Millions of Americans, and thousands of Long Island residents, are drowning in a sea of debt. This debt has many different causes. Some people are faced with underwater mortgages for houses they never should have bought. Other people are forced to pay massive medical bills or run up tens of thousands of dollars on credit cards. These people are often overwhelmed by the process of asking for help or applying for discharge. This feeling can be mitigated somewhat by the emergency discharge process. Emergency bankruptcy is by no means a solution to a person's financial problems. Instead, it is a tool that a person can use to stem the damage from their obligations and eventually get back on track. If you are looking for emergency bankruptcy filing in New York or on Long Island, contact The Law Offices of Adam C. Gomerman today to speak with an experienced Long Island bankruptcy attorney.

Why would one need an emergency bankruptcy filing?

The process of gaining official debt liquidation or repayment is a time-consuming one. It can involve signing and processing a number of forms and aggregating a considerable amount of financial data. This process can be stressful for a person who has nothing else to do. But people who are going through discharge are incredibly stressed and face pressure from a number of different areas. They are often being harassed by creditors and bill collectors. The tactics of many bill collectors are ruthless and unscrupulous. Some collectors knock on a person's door and directly demand the money that is owed. They can call at many hours of the day and constantly send pieces of mail threatening wage garnishment. In many instances, bill collectors will try illegal tactics such as impersonating law enforcement. They count on people facing overwhelming bills to be too overwhelmed to fight back and file charges. In many instances, that assumption is correct. Some parts of the bill collection system are irreversible. Many banks will have a foreclosure sale for people who are far enough behind on their debts. These sales are final and cannot be undone. Therefore, people sometimes need an emergency option to stop the foreclosure system at any time. Emergency creditor relief filing is useful for these situations. A person can go through an immediate filing and secure an immediate halt on a foreclosure procedure. They can then work their way through the procedure and secure protections for their property. Preparing a filing is much easier when a person is able to do so in the comfort of their own homes.

Types of bankruptcy Long Island, New York

Along with filing for official protection from their creditors, individuals looking for an emergency filing on Long Island or New York need to determine what kind they are filing for. Chapter 13 is a common form that involves a person setting up a sanctioned debt repayment plan out of their regular income. This type of bankruptcy is for people who have a considerable income and still work a job. It can be less debilitating to a person's overall credit score and credit history than a Chapter 7 discharge. In Chapter 7 in NY, a person secures discharge of their debt except for special cases such as student loan debt. Chapter 7 discharge takes away many types of property from a person and sells that property in order to help discharge debt. Creditors, like credit card companies and hospitals holding medical bills, line up and are paid according to the importance of their bills as determined by a court. Some creditors will receive nothing in a process that reflects the risk they took on when they made a loan or extended a line of credit. People who go through Chapter 7 often are unable to borrow money for seven years. They have to start over financially from scratch but are able to do so without fear of foreclosure or constant calls from bill collectors.

Steps to filing for bankruptcy on long island

There are multiple steps to filing for bankruptcy on Long Island. The first step to an immediate bankruptcy filing is filling out a skeleton form. This form has a number of sections that must all be filled out quickly. There is a general information petition where an individual lists their identifying information, the basics of their situation, and what chapter they would like to file under. A person fills out this form along with a list of creditors and their addresses. This list is essential to informing these persons that they need to stop all collections procedures while a person is filing for official protection from their creditors. Then, a person needs to address the credit counseling requirement. They must show that they have attended credit counseling and that it has been unsuccessful in allowing them to meet their credit obligations. Finally, there is the filing of a form of dismissal along with the skeleton form. The form of dismissal provides for a legal justification to dismiss a case if the full amount of paperwork is not turned in within 14 days. All of these forms are filed together along with a fee. If a person cannot pay the fee or wants a payment plan, they can file a form requesting a waiver. All of these forms are quickly reviewed and put into action. Once the Long Island court accepts the emergency filing with the blessing of a lawyer review, they can immediately send out notices to creditors stopping all actions. The creditors then have 14 days to wait until it becomes clear what a person is going to do. If the person does not file their paperwork, they can go back to wage garnishment or foreclosure in order to retrieve their bills. But if they succeed in filing the paperwork, they are once again halted and have to go through the discharge process.

What to do next?

Any individual who is considering an immediate bankruptcy filing in Long Island needs to first consult an attorney and a financial adviser. The financial adviser and attorney will help an individual gauge their financial situation and determine if discharge is right for them. Many people feel overwhelmed by their bills and simply want out as quickly as possible. Professionals will help a person determine if they need to go this drastic step and what they need to do. Most courts in NY require that a person also go through credit counseling before filing for bankruptcy. The person should follow the suggestions of credit counseling as they attempt to work their way out of their debt problems. If a person has to file for emergency bankruptcy, they should first start by quickly filling out the required forms with the help of an attorney. Then, they should focus on filling out other required forms associated with creditor protection with the help of a lawyer. These forms include itemized lists of different pieces of property and means test forms as well as lists of expenses and income. Such forms help a court better ascertain a person's financial situation and the best way for creditors to receive as much as they reasonably can. A person needs to put all of their time and effort into filling out these forms on time. Missing a filing deadline can be debilitating in many ways. It can lead to a person being poorly treated in any future discharge filings as well.

Conclusion

An emergency bankruptcy filing should be viewed as a final step in the debt repayment process. People should do everything they can in order to avoid this drastic step. It may not be particularly helpful in the bankruptcy process after the emergency declaration has been granted. Enlisting the help of a lawyer may also cost money that a person does not think they have. But the process may be worthwhile if it means the difference between keeping or losing one's house.

To speak with a qualified, experienced bankruptcy attorney on Long Island today, contact our offices immediately to schedule your consultation.
Owning a company can be stressful, especially if your personal finances are in jeopardy. Bankruptcy seems to be the logical way out for financial woes, but you must wonder how this will affect your establishment. The structure of the company will dictate if any of the company assets can be used to pay back your creditors.

You have a few options when it comes to bankruptcy, but it's best to speak with an attorney to properly advise you on the best route. As an individual, you can file either a Chapter 7 or Chapter 13.
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If you don't have the right amount of health insurance coverage, a serious health complication or injury that results in a trip to the hospital can cause you to be provided with costly health care bills that you have no way of paying. In many cases, these bills are unable to be repaid in a timely manner, which can cause the affected individual to file for Chapter 7 in an attempt have their debts discharged. If you're thinking about filing for bankruptcy because of the medical debts that you owe, it's important that you speak with a reputable attorney who can help guide you through this extensive process.

What Chapter 7 Bankruptcy Entails

Chapter 7 bankruptcy is available to certain individuals who are no longer able to make their loan payments and pay off their credit cards. When a person files for this form of bankruptcy, some of these debts will be erased and discharged. In order to repay what you owe, most of your possessions will be sold, which includes any cars that you own and even your home. You might want to consider the Chapter 13 option if you want to be able to hold on to some of your more important possessions.

While in Chapter 7 bankruptcy, you must continue to pay child support, spousal support, utilities, mortgage, rent, income tax, and insurance. If you belong to a homeowners' association, you must pay it. Chapter 7 is for individuals or business entities. Your checking account should not be in a lienholder's bank. Because you can lose your insurance by filing for Chapter 7 bankruptcy, your insurance policies should be paid a year in advance. Rental cars, leased furniture, leased business equipment, and home appliances not paid for in full are examples of items that can be returned to their owners. You can discharge the deficiency balance.

Post-Petition Payments and Chapter 7

Post-petition payments are due after you file your initial petition for Chapter 7 or those that you'll continue to pay after your debts are discharged. Medical bills incurred prior to filing your petition may be discharged. Bills from the same doctor while you're waiting for your final discharge must be paid. Examples of post-petition payments are student loans, debts for extravagant purchases, and court judgments and expenses.

Automatic Stay During Chapter 7


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When debt becomes overwhelming, bankruptcy may be an option to help a person gain control of their finances and start fresh. The Law Offices of Adam C. Gomerman can help with your student loan questions as it relates to bankruptcy. A bankruptcy can often provide relief and potentially a discharge of many types of debt. However, those with high student loan payments are not always able to get relief. In general, student loans are not often considered for discharge. To receive any kind of relief from student loans in bankruptcy court, a person would have to prove that paying these loans would cause an undue hardship before this relief could even be considered. In these situations, the assistance of an attorney is often recommended to help ensure the right information is provided to the bankruptcy courts to ensure consideration for this debt is taken.

Student Loan Debt and Chapter 13 Bankruptcy

For many people with a regular income and high debt, Chapter 13 bankruptcy is the option they choose to find relief. Chapter 13 provides a method for consumers to have their bills reorganized and provides an affordable payment plan over the next three to five years. Often, the remaining debt can be discharged after the repayment period. However, bills considered non-dischargeable cannot be wiped out. Student loans are considered this type of debt.

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Filing bankruptcy on Long Island is a decision that should not be taken lightly by anyone. The process can be intricate and confusing for most novice filers who attempt the legal task without the assistance or representation of an experienced attorney. The ramifications following a bankruptcy petition acceptance is long-term in most situations regardless of the chapter being requested. It is important to understand that filing a bankruptcy petition is the equivalent of asking the government to intervene in a private credit arrangement to block the creditors from exercising their rights to pursue legal remedies against an account discharge. The creditors can always contest the terms, and the court refuses more petitions than filers realize. It is not an automatic process by any stretch, and petitions filed without legal representation are commonly rejected by the court for a variety of reasons. Even qualifying within the scope of the means test can be complicated for a DIY bankruptcy petitioner.

Preparation is Key to a Successful Chapter 13 Case

The best method of beginning the process is doing a complete workup well before filing. All aspects of the petition should be addressed on a practice version and evaluate the best information for each step. The first step will be evaluating the information needed for the means test, which will determine if you can even file. Each chapter of bankruptcy is different as well. Those seeking to discharge overwhelming debt will typically use Chapter 7, but all clear personal assets could be marked by a judge for sale with the proceeds being applied as payments to creditors. Chapter 13 filings are different to a large degree, and they are normally used to keep from losing a home or some other type of real estate that would be vulnerable for sale or possession in a Chapter 7 petition. The means test is also used to qualify for Chapter 13 as well, and the terms of the repayment plan must be acceptable to all other parties.

Chapter 13 Repayment Plans

DIY pro se bankruptcy petitioners must develop a feasible repayment plan that is usually set at five years for all outstanding debt to be considered paid current. Chapter 13 can include some discharging of debt as in a Chapter 7 filing, but the real advantage of a Chapter 13 filing is that it can protect a home from foreclosure and protect your credit rating in the end. Sometimes creditors will renegotiate outstanding accounts to avoid inclusion in a bankruptcy petition, but these must be finalized before the petition becomes effective. This is a component of filing for bankruptcy where having a legal representative negotiating an agreement is a real advantage. The purpose of a Chapter 13 petition is effectively a debt consolidation plan that repays as many creditors as possible while protecting a dwelling and minimized the credit rating damage to the petitioner. More on how Chapter 13 can impact your credit here.
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Bankruptcy was designed to provide consumers a method of restructuring, reducing or eliminating debt, although not all types of debt can be eliminated through bankruptcy. The two most common types of bankruptcy are Chapter 7 bankruptcy, which is a debt discharge, and Chapter 13, which is a debt restructuring. Both types of bankruptcy guidance are offered by The Law Offices of Adam C. Gomerman here on Long Island.

Before you can file any forms for your discharge, you’ll need credit counseling from an agency that’s government-approved. This is mandatory and should be completed immediately before filing. Many consumers file for Chapter 7 on their own, which is called “pro se” or “pro per” representation. Although filing Chapter 7 for yourself will be arduous and tedious, if you are detail-oriented, you can do it and save some money on attorney fees. However, it’s always wise to have an attorney peruse your forms before you file them so that they aren’t returned for errors or improper filing procedures.

Learn the Bankruptcy Law in New York State

Laws have changed regarding bankruptcy, so familiarize yourself with the most recent changes, and ensure that you follow the instructions provided by the clerk’s office. Sometimes, issues can arise from matters as simple as using the wrong typeface, so be sure you’re aware of the information details about the correct process for filing. In preparation for filing Chapter 7, you’ll need a list of all your assets and liabilities. This includes your:
  • Home and other real estate
  • Furniture and appliances
  • Vehicles, tools, and equipment
  • Bank accounts, stocks, bonds, securities, cash on hand
  • Jewelry, clothing, and other personal assets
  • Animals used for commercial purposes or expensive hobbies
You’ll also need a list of all your creditors including credit cards, student loans, child support or any other entity to which you owe money or make monthly payments. You’ll need addresses and account numbers. Some types of debt, such as child support or student loans, are not dischargeable through bankruptcy, so make sure that filing Chapter 7 will accomplish your goals. Most of your assets will be liquidated in Chapter 7 so be prepared for that event. It will also become a matter of public record and will be available for friends, family, co-workers and prospective employers. Hiring a lawyer before you file may be money well spent so that you pursue the best course for your circumstances. It’s possible that a Chapter 13 or another avenue may be better for you.

Documentation Needed to File Chapter 7 Bankruptcy

You’ll need proof of income for the last six months as well as proof of expenses. Only consumer debt is considered, business debts aren’t included in this type of bankruptcy. This documentation is necessary in order for the court to determine your disposable income each month. If your median income is less than the median income for your area, then you’ll most likely be allowed to file for Chapter 7. If you have significantly more income than the median in your state and city, then the court may require additional proof of your need to file. Some individuals aren’t required to take the means test, including:
  • Disabled veterans
  • Some active duty personnel
  • Those with business debt rather than consumer debt
Some types of income aren’t included in the means test, such as:
  • SSI, SSDI, TANF, and Social Security Retirement
  • Payments to a victim of terrorism
  • Payments to a victim of a war crime
Income that’s included in the means test includes:
  • Wages, including bonuses and overtime, tips, commissions
  • Net business income
  • Rental income, royalties, dividends, annuities
  • Unemployment and worker’s compensation
  • Spousal support
  • State disability payments
The court will use all the financial information you provide -- income, expenses, and assets -- to conduct a means test that will determine your eligibility to file bankruptcy. The means test is only used for individuals or couples, it’s not used for businesses who file. If you urgently need to file Chapter 7 or Chapter 13 but time constraints limit your ability to amass and complete the forms, you may be able to submit an emergency filing that will provide you with the court-ordered stay that will protect your income and assets from being seized or attached. Laws governing Chapter 7 and Chapter 13 vary by state, but most don’t allow non-attorney personnel to provide legal advice or information to pro se representatives, so court clerks won’t be able to answer any legal questions. Some states allow you to initiate your case online, and you may be eligible for a fee waiver if you can’t afford the filing fees, which vary by state.

The Chapter 7 Bankruptcy Process

Once you have the information necessary to complete the forms, the following procedures will guide you through the process:
  • Get credit counseling if you haven’t already done so. Ask our office for credit help.
  • Obtain the forms, including the fee waiver if needed.
  • Complete the forms.
  • Consult with an attorney or a legal service to ensure that the forms are completed correctly.
  • File the forms. Protection from creditors is immediate upon filing your case.
  • A trustee will be assigned to your case and usually, the trustee is a lawyer.
  • A meeting of your creditors will occur and you’ll probably need to attend unless you have hired a lawyer.
  • Your eligibility to file will be determined.
  • Secured debt and property that isn’t secured are processed.
  • You’ll receive your discharge and your case will be closed within about a month..

Life After Chapter 7 Bankruptcy

After your case has been discharged, you’ll need to work on rebuilding your life and your credit. With the proliferation of Chapter 7 and Chapter 11 filings in recent years, more programs are available that will help with rebuilding credit and rebuilding your life. It was an event that was necessary, it happened. Don’t castigate yourself, use it as a learning tool and profit from the experience.
Many people face serious problems with debt. One small event or emergency has the potential to create situations where these people are unable to keep up with the payments on these debts. This can create further complications with that debt and may have devastating effects on their credit ratings. Low credit ratings cause issues in many aspects of a person’s life. It can prevent them from getting further credit. It can also have an impact on getting a job or even renting a home. Fortunately, there are methods available for gaining control of one’s debt.

Bankruptcy is an option available for people to gain control of their finances. Chapter 13 Bankruptcy provides a method for restructuring debt. A repayment plan is made that provides an affordable method for people to get their debt under control. There is also Chapter 7. This option is for those with little or no income. This type provides a process to allow debtors to discharge their debt. However, applicants must pass the Bankruptcy Means Test to be eligible for a Chapter 7.
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Chapter 7 eliminates your unsecured debts. It is commonly called liquidation bankruptcy or liquidation chapter. Chapter 13 allows you to repay your creditors over a three-to-five-year period. This chapter is called a wage earner plan. In some instances, filing Chapter 7 is better than filing the alternative bankruptcy chapter option. Below is information about the advantages of filing Chapter 7 instead of Chapter 13.

Chapter 7 Advantages for Your Financial Situation

Chapter 7 bankruptcy is the fastest way to get out of debt for most Long Island residents. For example, the Chapter 7 process takes a minimum of three months to complete. The maximum amount of time to complete the process is six months. The actual time period depends on many factors such as how many cases were filed before your case and the complexity of your case. Chapter 13 takes a minimum of three years. If you have a longer repayment time, it’s five years before you can complete the bankruptcy process.

Other advantages of Chapter 7 Bankruptcy include:

1. No monthly payment plan. Chapter 13 requires a payment plan. A payment plan takes three-to-five years. Each month, you must pay the trustee presiding over your case a set payment. The monthly payment is determined at the start of your case. These monthly payments are distributed among your creditors.
How a Loan Modification May Help Reduce Your Monthly Mortgage Payments For homeowners struggling to keep up with their mortgage payments,there are programs available to help avoid foreclosure. However, because these programs are legal agreements, it is prudent for borrowers to consult a lawyer. One viable alternative to foreclosure is a loan-modification program that is an adjustment to the terms of the existing mortgage. Loan modification is designed to provide either temporary or permanent financial relief by reducing the amount of the monthly payments via a reduction in the principle, interest rate or by extending the term of the loan.

Loan-Modification Options

There are several forms of loan modification, with some being better than others. However, the lender that holds the mortgage may not provide all the available loan-modification types.

The full list of options include:

Will Filing for Chapter Bankruptcy 13 Ruin My Credit Score?

When you decide to file bankruptcy, it will be reflected on your credit report for years to come. As such, there is really no way around the brutal truth that filing will have a negative effect on your rating. If you are able to afford a repayment plan, choosing to file under Chapter 13 bankruptcy may help you recover more quickly and save your financial reputation.

Why Creditors Prefer Chapter 13 Instead of Chapter 7

It's no secret that lenders prefer Chapter 13 filing to that of Chapter 7 bankruptcy, but why exactly is this? It basically boils down to the fact that with Chapter 13, your creditors have some hope of future payment. In contrast, when you file under Chapter 7 bankruptcy, if you qualify, their chances of receiving any payment is dim.

Your Credit Score Under Chapter 7 Bankruptcy

Under Chapter 7, unsecured debts, such as medical bills and credit card companies, don't usually receive any kind of payment. This is because Chapter 7 doesn't require you to make payments to creditors or set up any kind of payment process. Instead, any owned property that cannot be protected under your state's exemption laws must be turned over to a trustee that is assigned by the court. Your trustee then sells the property for whatever they can get for it and uses the proceeds from the sale to pay off your creditors. However, most filers are able to exempt the majority, if not all, of their assets, thus keeping them out of the reach of the court. This means there is often nothing left to pay off the creditors.
For many consumers, getting a fresh start and putting past financial obligations behind them can be achieved by filing for Chapter 7 bankruptcy. Many people get so over their heads in debt that this is the only way to get out. In order to do so, they will need to work on their credit score by taking the right steps. This includes keeping all credit card balances low and paying off bills on time or even before the due date. However, it is important to realize that filing for Chapter 7 bankruptcy won’t just magically repair a credit issue overnight. It can take ten years for a bankruptcy to disappear from a credit report, depending on the exact bankruptcy chapter that was filed by a qualified attorney. Upon successfully completing your Chapter 7 bankruptcy process, our firm is happy to provide credit repair as a service to help expedite the process.

Understanding Your Credit Report

Many people are very surprised at the types of personal data a report contains. To be specific, you can expect to see these three different kinds of information:

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Chapter 7 bankruptcy may be a way to solve your financial problems, but it is not the only way. Chapter 7 bankruptcy liquidates nonexempt property to equitably distribute your wealth to your creditors. If you own a small business or sole proprietorship, you can file under Chapter 11 to liquidate a few nonexempt assets to pay settlement amounts on your delinquent accounts, make extra payments to reduce the principal, or extend the duration of your loans, sales contracts, or leases. Under Chapter 11 or Chapter 13, you can reduce your installment payments by paying for three or five years. You may be able to increase your cash flow by removing encumbrances from your mortgage or your primary business property. If you owe primarily taxes, child support, student loans, or accounts secured by collateral, you can’t discharge or liquidate them. You can file a Chapter 13 repayment plan to repay your secure creditors over three to five years.

Pass the Bankruptcy Means Test

The means test calculates your disposable income. You must pass the test to qualify for liquidation of your nonexempt assets and discharge of your past due accounts. High income does not disqualify you. High income individuals with unusual expenses, such as, high mortgage or car loan payments, delinquent taxes, school loan payments, child support arrears, and medical bills qualify for Chapter 7 bankruptcy.

Official Chapter 7 Means Test calculation

The official Chapter 7 means test calculation form attached to the U.S. Bankruptcy Court website begins with your monthly income adjusted with your spouse's monthly income. It considers the number of exemptions on your federal income tax form, and asks for your specific costs of food, clothing, health care, monthly mortgage or rent, other loans secured by your home, ownership and operating costs of vehicles, taxes (federal, state, local, self-employment, Medicare, and social security), telephone, and other necessary expenses. Your disposable income is your combined monthly income minus the summation of all your living expenses. Lastly, if your disposable monthly income times 60 is less than $7,700, you pass the test. If your disposable monthly income times 60 is more than $12,850, you are presumed to be abusing the Chapter 7 process.
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When Long Island borrowers fall behind on bills and can no longer make their minimum monthly payments, they usually consider calling a Long Island bankruptcy attorney and filing for relief. The two bankruptcy options available are Chapter 7 or Chapter 13. Depending on your situation, either option may be the answer you need to move forward and repair your financial life.

One of the mistakes many people make is waiting too long to seek out help. You can stop aggressive collection action before you have your car repossessed or a bank account frozen. These types of disastrous events can be prevented by seeking relief by the courts.
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