Penachio Malara, LLP – Bankruptcy Lawyers

News Bulletin: Commercial Eviction Moratorium Extended

Wed, 21 Oct 2020 17:28:00 GMT

New York State Governor Andrew M. Cuomo extended the State’s moratorium on COVID-related commercial evictions and foreclosures through January 1, 2021.

The Executive Order extends protections already in place in recognition of the financial toll the COVID-19 pandemic has taken on businesses, including restaurants.

The extension gives commercial tenants and mortgagors additional time to catch up on payments or to renegotiate lease and mortgage terms to avoid eviction or foreclosure in 2021.

As experienced foreclosure attorneys we can help you navigate new terms on your lease or mortgage.

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

The post News Bulletin: Commercial Eviction Moratorium Extended appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Business Interruption Insurance, Part 2

Sat, 26 Sep 2020 17:21:00 GMT

In part 1 of this two-part series, we covered the basics of business interruption insurance , also known as business income insurance. This article will focus on the intersection of business interruption insurance and COVID-19.

Does business interruption insurance cover losses from COVID-19?

Many insurance companies are denying business interruption insurance claims related to COVID-19. Even insurers that offer expensive “all risk” policies that cover “entirely unknown and novel risks that may arise which were not previously considered by the company” are rejecting claims.

The basis of the denials stems from the concept that the policy only covers lost revenue due to “physical loss, damage, or destruction.” However, claimants counter the insurance industry’s assertion that the virus does not cause physical loss and damage is false because coronavirus creates a dangerous property condition.

Additionally, policies that include a civil authority extension, is an argument that government orders that force a business to close or government order closing the insured’s premises or quarantining all or part of the premises and from government suspension of some modes of public transportation. If dependent properties are included in the coverage, such as a supplier’s or customer’s premises, then the coverage applies to the dependent property as well.

Is there legal recourse?

There are some potentially precedent-setting lawsuits regarding business interruption claims.

One of the lawsuits is waged by In-N-Out Burger against Zurich American Insurance Company. In-N-Out Burger asserts that their “all risk” Zurich policy should cover lost income due to California’s order that all restaurant dining rooms close to stem the spread of coronavirus.

A second lawsuit to follow is a class action suit of small businesses against Farmers Insurance. This lawsuit alleges Farmers neglected to provide insureds a fair and thorough investigation of their claims, a right protected under California law, because they denied the business interruption claims the same day the insureds filed the claims. The lawsuit also alleges that the claims denial is part of a larger strategy to dissuade small businesses from pursuing litigation. The insureds involved in this lawsuit had a uniform business owners policy with “an additional coverages” clauses that should cover business losses “due to the necessary suspension of operations during a period of restoration.”

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

More Resources

The Business Interruption Group (BIG) is a coalition of thousands of businesses to insist insurers pay out business interruption claims.

The post Business Interruption Insurance, Part 2 appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Demystifying your credit score, part 3

Fri, 18 Sep 2020 17:05:00 GMT

Welcome to the third of a three-part series on credit scores. This article looks at how you can monitor your credit score. Part 1 focuses on credit score rankings. Part 2 delves into what influences credit scores.

What is a credit score?

Your credit score is a numerical rating of your credit worthiness. Basically, the higher your score, the more favorable creditors are likely to view your applications for new credit cards and mortgages and other loans.

How do I find out my credit score?

Many financial institutions will provide you with your credit score for free, typically updated every month. The easiest way to find out, is to log into your bank account online or check your banking app to see if your FICO score is available. Many banks will even alert you if your credit score changes for any reason.

You should pull a full credit report from one of the three major credit reporting bureaus: Equifax , Experian , and TransUnion . Most people should look at their full credit report once or twice a year. If you’re working on repairing your credit, you can make sure your credit-building activities are represented on the reports by examining your credit report more regularly.

You also want to make sure your credit report is accurate. If you find an error, you should pull your credit report from the other two reporting bureaus to examine them as well. Make sure you dispute any error ( Equifax , Experian , and TransUnion ).

The post Demystifying your credit score, part 3 appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Business Interruption Insurance, Part 1

Sun, 13 Sep 2020 17:10:00 GMT

Business interruption insurance is a standard tool in a business’s risk management toolbox. But will your policy cover business income loss due to the global COVID-19 pandemic?

This is the first of two articles on business interruption insurance. This article focuses on the basics, and the follow-up is specific to COVID-19.

First, what is business interruption insurance?

Business interruption insurance is also known as business income insurance. Business interruption service helps replace lost revenue while a business is closed due to a covered loss. Coverage is typically tied to your commercial property insurance or business owner’s policy.

Many business interruption clauses read as follows ( emphasis added ):

“We will pay for the actual loss of business income you sustain due to the necessary suspension of your operations during the period of restoration . The suspension must be caused by the direct physical loss, damage, or destruction to insured real or personal property. The loss or damage must be caused by or result from a covered cause of loss .”

How is business income defined?

Business income generally has two elements:

What is considered a necessary suspension of operations?

A necessary suspension of operations means you are unable to conduct business due to the loss.

What is a restoration period?

The restoration period is the length of time it takes to recover from the interruption to the point where business can resume. This typically includes rebuilding, repairing, or replacing damaged or destroyed property.

Some policies have a waiting period of 24 to 48 hours. To be covered, the interruption and/or restoration time must exceed the length of the waiting period. However, the expiration of the policy does not extinguish the restoration period as long as the interruption occurred while the policy was still active.

What is a covered cause of loss?

Some examples of possible losses include damages due to:

Carefully read through your policy and take note of any exclusions, limits, or sublimits.

Are there additional endorsements available for business interruption coverage?

Yes. Some policies include, or are available for an additional fee, “extensions of coverage.” These extensions may include:

Service interruption protects your business from losses caused by interruptions in electrical, gas, water, telephone, or internet service. Some common exclusions include utility interruptions caused by earthquakes, or a limit on the distance that the source disruption occurs from your place of business.

Contingent business interruption protects you in the event that a primary supplier, partner, or customer affects your ability to run your business. An example of contingent business interruption is if a tornado hits and destroys the only warehouse of widgets, which are essential to make your business’s gizmos.

Attraction property, or sometimes called leader property, provides a benefit if a nearby business (legally independent from your own business) is damaged or destroyed, but you depend on that business to attract customers to your own. For instance, a water park draws tens of thousands of visitors to your small town and your ice cream shop, but the water park discovers their water supply is contaminated and must close while they sanitize the park and install special filters to remediate the water.

Civil or military authority coverage protects your business in a situation where a government authority prohibits you from running your business due to a physical loss. An example of civil authority extension is if the building inspector condemned the property due to a structural deficiency caused by a storm.

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Demystifying your credit score, part 2

Mon, 07 Sep 2020 16:51:00 GMT

In the second part of this series, we look at what influences your credit score. Part 1 of this series goes over credit score ranges. Part 3 looks at how you can monitor your credit score.

What is a credit score?

To refresh your memory, your credit score is a numerical rating of your credit worthiness. Basically, the higher your score, the more favorable creditors are likely to view your applications for new credit cards and mortgages and other loans.

How is my credit score calculated?

There are five factors that go into your credit score.

1. Payment history (35%). Payment of your past and current bills and loans is the largest indicator of your reliability to repay new ones. Lenders are required to report past due payments, so paying your bills in full and on time are critical to maintaining your credit rating.

2. Credit utilization (30%). This is a measure of how much credit you’re using to how much you have available. So, if you have a total of $10,000 of credit available on all of your credit cards and you’ve used $5,000 of it, then your credit utilization is 50%. A good rule of thumb is to keep your utilization below 30%.

3. Credit history (15%). This is the average length of time you’ve had credit open. If you’re currently 30 years old, you initiated a student loan when you were 18, and opened a credit card when you were 20, you have 11 years of credit history (the math: ((30 years old – 18 years old = 12 years) + (30 years old – 20 years old = 10 years)) / 2 forms of credit = 11).

4. New credit inquiries (10%). Every time an application for credit is made in your name your credit score goes down. Credit inquiries can occur when you apply for a mortgage, get a new cell phone provider, or open a new credit card account. However, “soft” inquiries, like credit reports as part of a background check should not impact this part of your credit score.

5. Credit mix (10%). This looks at the types of credit you have. Credit cards are considered “open-ended” while car or student loans have a definitive end.

The post Demystifying your credit score, part 2 appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Having trouble paying your mortgage?

Wed, 26 Aug 2020 17:29:00 GMT

No one wants to lose their home.

Whether a job loss, medical bills, or a divorce puts you in a precarious financial position, there are ways to mitigate a bad financial situation and keep you in your home.

What exactly is foreclosure?

Foreclosure is a legal process where a lender recovers the balance of a loan due from a borrower who has stopped making payments by selling or taking possession of the property used as collateral for the loan.

Contact your lender right away.

Many major lenders have a program to delay foreclosure, or put into forbearance, for at least 30 days. Forbearance means to “hold back.” When used in reference to loans, forbearance is an agreement between a lender and the borrower to delay or prevent foreclosure under specified conditions.

This timeline may be even longer depending on your State’s coronavirus response.

It’s ideal to contact them as soon as you know you’ll be late or miss a payment; once you start missing payments your credit rating and eligibility for relief programs takes a hit.

Develop a budget to help you trim expenses.

Creating a budget gives you control over your financial situation. A budget will help you identify and cut unnecessary expenses that are diverting funds from your mortgage payments and other critical bills.

The single rule in budgeting is that your income must cover your expenses. And you have just two options to change the outcome:

First, calculate your total take-home (after taxes) income. If your pay varies week to week, average it over three months to come up with a monthly value. And if your income varies significantly by season, you will need to save more during your peak income to cover expenses incurred during you lower pay season.

Next, study your spending habits and categorize expenditures into essential expenses (housing and utilities, groceries, transportation to and from work, daycare, insurance, and any loans or debt payments) and non-essential expenses (eating out and entertainment, new clothes, vacations, gifts, and donations).

Tip: Sometimes banks or credit card companies provide an annual breakdown of your spending into several categories. This can speed up your budgeting process.

Now is the time to be ruthless in cutting expenses. End subscriptions like streaming services or cable, eliminate take-out, and delay vacations until you’re on more secure financial footing.

We have some other financial planning tips here.

Consider selling high-value assets.

Selling high-value assets like a second vehicle or boat, electronics, or jewelry may help you cover additional mortgage payments to give you some breathing space and time to create a longer-term plan.

Essential expenditures are fair game, too. If you only have one vehicle, consider swapping it in for a lower-cost car.

If you’re unemployed you may have additional options.

There are federal and state emergency assistance programs designed to facilitate forbearance and prevent foreclosure due to a job loss. Considering coronavirus-related legislation, these programs are constantly evolving.

Seek other forms of relief.

A loan modification or even Chapter 13 bankruptcy can keep you in your home. If those options fail, a short sale can spare you foreclosure proceedings.

Considering a foreclosure prevention company?

Foreclosure prevention companies often charge you the equivalent of two or three mortgage payments. This money is better spent paying your mortgage! Call us first and we’ll help you determine whether or not you’ll benefit from debt relief companies or legal services. If we can’t help you, we’ll provide you with alternative solutions.

We are here for you.

With more than 30 years of financial law experience, we can help:

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

The post Having trouble paying your mortgage? appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Demystifying your credit score, part 1

Thu, 20 Aug 2020 16:16:00 GMT

Welcome to the first of a three-part series on credit scores. This article focuses on credit score rankings. Part 2 delves into what influences credit scores. And Part 3 looks at how you can monitor your credit score.

What is a credit score?

Your credit score is a numerical rating of your credit worthiness, or from a lender’s perspective, what their risk is in extending credit to you. Basically, the higher your score, the more favorable creditors are likely to view your applications for new credit cards and mortgages and other loans.

In the U.S., the most widely used credit score is the FICO score, first developed by the Fair Isaac Corporation. There are 29 different FICO scores, many of them industry-specific; for example, the automotive lending industry utilizes a FICO score tailored to predict that likelihood an individual will repay a car loan.

General FICO scores range from 300 to 850. Industry-specific scores are wider, from 250 to 900.

What is considered “good” credit? What about “bad” credit?

Different financial institutions may rank credit using slightly different numeric ranges—sometimes wider ranges, sometimes narrower, or with the ranges shifted a bit. This is a fairly broad representation of numeric credit scores, rankings, and interpretations.

The post Demystifying your credit score, part 1 appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Recovering from Bankruptcy

Wed, 12 Aug 2020 20:00:00 GMT

Bankruptcy means a fresh financial start for your family but discharging your debt is only the first step to repairing and building good credit.

Create and stick to a monthly budget.

In your post-bankruptcy life it is critical to live within your means. Otherwise, you may backslide into debt. Creating a monthly budget will help you examine your spending habits, prioritize and reduce expenses, and work toward rebuilding your credit.

The single rule in budgeting is that your income must cover your expenses. And you have just two options to change the outcome:

Tip: Sometimes banks or credit card companies provide an annual breakdown of your spending into several categories. This can speed up your budgeting process.

Now is the time to be ruthless in cutting expenses, especially non-essentials. End subscriptions like streaming services or cable, save take out or dining out for special occasions, and delay vacations until you’re on more secure financial footing. Essential expenditures are fair game for reductions, too. Consider a lower-cost vehicle, selling a vehicle, or moving to a less expensive home.

If you’ve cut your expenses and still come up short, you may need to increase your income. Look for a higher paying full-time position or add a part-time job or gig to your income stream.

Your goal should be that about 60 percent of your income goes toward essential expenses (if you can decrease that to 50 percent, even better!). From the remaining 40 percent, allocate 10 percent to savings, 10 percent to an emergency fund, 10 percent to retirement, and 10 percent to non-essentials.

Pay your bills on time.

Paying your bills on time is critical to rebuilding your credit. About 35 percent of your credit rating is based on your payment history.

Automate your bill paying as much as possible to limit your risk. Most banks offer free online bill pay, and most utilities and other vendors allow and encourage automated online payments.

You can often set your own payment date. This will not only help manage your cash flow, but by selecting a payment date a few days ahead of the due date you can mitigate any potential problems.

Monitor your credit report.

Initially, you’ll want to ensure that all the debut discharged as part of your bankruptcy is noted on your credit reports. Your best bet is to check all three major credit reporting bureaus: Equifax , Experian , and TransUnion .

Beyond this initial check, you should regularly monitor your credit report to ensure its accuracy and reflects your credit-building behaviors, like paying bills on time. You don’t need to check each credit reporting bureau monthly; one is typically sufficient.

Monitoring your credit report is a great way for you to track your progress in repairing your credit.

Tip: Many banks now have partnerships with one or more credit bureaus so you can monitor your credit score just as easily as checking your bank balance.

If you find an error, you should check all three and make sure to dispute it ( Equifax , Experian , and TransUnion ).

Don’t close old accounts.

While it might be tempting to close some of those old accounts, your credit score will take a hit if you decrease your total credit limit. So keep old accounts open, but maintain a zero balance on them.

Open a credit card and pay it off in full each month.

After bankruptcy, you need to rebuild your credit.

Use your new credit card wisely: make small purchases that you can know you can pay off in full each month. The idea is to build a positive credit history that shows you have restraint (you are not maxing out your card) and responsibility (you pay off the balance each month). And, about 30 percent of your credit rating is how much debt you’re carrying.

Tip: Sometimes it can be difficult to get approved for a “regular” (unsecured) credit card if you have bad credit. Consider applying for secured credit card instead. A secured credit card requires you deposit money into your account, that amount is your credit limit, and the credit card company will use the deposit to cover your debt should you not pay your bill.

Open a retail credit card.

After you’ve established a positive credit history with your secured credit card, consider opening a retail card. One aspect of your credit rating is the types of credit in use, so a retail card will show an improvement in your overall rating.

Just remember to make small purchases and pay it off in full each month.

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

The post Recovering from Bankruptcy appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

News Bulletin: Eviction Moratorium Extended

Tue, 11 Aug 2020 06:29:00 GMT

Critical Executive Order on eviction comes just in time.

Governor Cuomo announced an extension of a moratorium on evictions during the coronavirus pandemic. The moratorium was due to expire at midnight, but is now extended to September 4, 2020.

The Governor’s Executive Order is covered under the Tenant Safe Harbor Act . The Act provides protections for tenants that are unable to pay their rent because of the pandemic. Governor Cuomo signed the Act into law on June 30, 2020.

In order to be considered covered under the Tenant Safe Harbor Act, a judge will consider:

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

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Avoiding Foreclosure: Loan Modifications and Short Sales

Mon, 27 Jul 2020 20:01:00 GMT

No homeowner wants to experience a foreclosure. Losing a job, unexpected medical expenses, or a divorce or loss of a spouse can put you into a precarious financial position and behind in your mortgage payments.

Fortunately, there are ways to avoid foreclosure and bankruptcy.

What is a loan modification?

A loan modification can help make sure you don’t default on your loan, leading to foreclosure, or need to declare bankruptcy. Best of all, you get to stay in your home.

According to the U.S. Department of Housing and Urban Development (HUD), a loan modification is defined as “a permanent change in one or more terms of a borrower’s loan, allows the loan to be reinstated, and results in a payment the borrower can actually afford.”

Do I need an attorney to seek a loan modification?

Some lenders will ignore a homeowner’s efforts to initiate a loan modification or make an offer that is undesirable. Even though hiring an attorney is an added expense, it may save you in the long run. Working with a lawyer will also send a message to your lender that they must deal honestly and cooperatively with you. And, over the years, we’ve developed mutually beneficial working relationships with many lenders in New York State.

An attorney should shield you from debt collectors, uncertainty, and keep you informed of the best options. Your lawyer will provide you with solid legal representation, which includes analysis, interpreting contracts and legal codes, and arbitration to reach a fair agreement. Your attorney will ensure that you understand the terms before you agree to a modification offer. This is especially important since most modifications stipulate that you are ineligible for another modification for 12 months once the offer is accepted. All of the services your attorney will provide you will be spelled out in a retainer agreement before you embark on the loan modification process together.

Note: While there are legal and ethical loan modification companies, many more exist to take advantage of your situation. An experienced attorney will help you avoid scams.

Another reason to engage with a bankruptcy attorney to assist you with your loan modification is that they will help you collect and complete all of the required documentation accurately and within a timely manner. What could take you days to complete on your own, can be completed by an attorney in a matter of hours.

In short, your chances for a successful outcome are higher if you work with a bankruptcy attorney to negotiate the best interest rates and substituting fixed interest rates for adjustable rates, waiving accrued interest, agreeing on payment extensions, and reducing balances.

What is a short sale?

A short sale is when you sell a property for less than the balance you owe on the mortgage.

Why should I consider a short sale?

If a loan modification isn’t viable, selling your home via a short sale may be your next best option.

A seasoned bankruptcy attorney will help you negotiate with your lender on the getting the balance of your home loan to reflect the current market value. This means that when the house sells the bank will get that money back, and most of the time the lender will consider the mortgage paid in full.

Additional benefits to a short sale:

Your lender must approve a short sale. You will be required to submit an offer letter, as well as a “hardship letter” explaining why you can no longer make your mortgage payments, and include financial documents like income statements and medical bills to back up your claim. A bankruptcy attorney will help you understand what to file with your lender, and the terms of your short sale. This ensures you don’t miss important details that can cause problems later.

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

The post Avoiding Foreclosure: Loan Modifications and Short Sales appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Are you struggling to make rent during this trying time?

Tue, 21 Jul 2020 14:18:00 GMT

There’s good news. New York State just launched a special rent assistance program. Eligible households will receive a one-time rental subsidy for up to four months rent, payable directly to the landlord.

Who is eligible?

To be eligible, you must meet all of the following criteria:

How do I apply?

You can apply online here or download the application form here . Foreign language guidance and applications are also available here .

The Rent Relief Program is only accepting applications for a two-week window; applications must be postmarked by July 30, 2020. It is prudent to apply as soon as you can.

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

Additional Resources

New York State Homes and Community Renewal has a dedicated call center to provide residents with help Monday through Saturday, 8 a.m. until 7 p.m at 1-833-499-0318 or email at covidrentrelief@hcr.ny.gov .

For Frequently Asked Questions and more information, visit the Rent Relief Program website .

The post Are you struggling to make rent during this trying time? appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

New State Regulations for New York Bars & Restaurants

Sat, 18 Jul 2020 06:35:00 GMT

It’s no secret that the hospitality industry is one of the hardest hit by COVID-19.

Bars and restaurants faced months-long closures or flipped their business plans on their head to stay afloat by converting to a curbside pick-up and delivery model.

Restauranteurs, and their employees, looked forward to their region’s economic reopening to throw open their doors, however cautiously, again.

Restaurants and bars must follow new statewide alcohol service requirements.

To continue to slow the spread of COVID-19, Governor Cuomo recently announced new statewide requirements:

“Three strikes and you’re closed” policy in New York City.

Governor Cuomo also announced a new policy in New York City to ensure the safety of patrons and staff at City restaurants and bars. If any establishment receives three violations for noncompliance with state social distancing and mask requirements, the State will close the business.

If the violations are serious, they may result in immediate loss of the food establishment’s liquor license or business closure prior to a third strike.

And if these penalties aren’t enough, any food establishment that faces disciplinary charges by the State Liquor Authority will have the establishment’s name and location posted publicly on a weekly basis.

The “three strikes and you’re closed” policy may be extended to other regions of New York State if the State determines similar level of noncompliance.

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation regarding the financial health of your restaurant or bar, or for matters regarding commercial litigation.

Additional Resources

Restaurant and bar policy and enforcement announcement from the Governor’s office .

COVID-19 guidance from the State Liquor Authority .

The post New State Regulations for New York Bars & Restaurants appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

What are your rights as a business owner in the time of COVID-19?

Fri, 10 Jul 2020 19:22:00 GMT

Just as important as your responsibilities ( covered here ), business owners have rights to protect themselves, employees, and clientele.

Can I require patrons to wear a mask?

In most cases, yes. Just like many businesses have a “No Shirt, No Shoes, No Service” policy, you may also have a “No Mask, No Service” policy for your clients and customers. You may ask someone to leave the premises if they do not comply with your posted policies.

However, under the Americans with Disability Act someone who has a disability that prevents them from wearing a mask cannot be refused service due to their disability.

Current guidance dictates that children younger than two years old not wear masks, either.

If you are going to institute a “No Mask, No Service” policy, be sure the policy is posted on your door prior in clear view to all customers before they enter. You may also consider providing disposable masks at the door if someone doesn’t have their own.

Develop a plan for your employees to enforce the policy—how they should approach the noncompliant individual, how to manage an individual with a disability that prevents them from wearing a mask (perhaps limiting the number of customers and clients from entering while they are conducting their business), and how to safely escalate (or de-escalate) the situation.

If your business engages with members of the public frequently, such as in retail or food service, you may want to come up with a script and rehearse different situations with your staff so they’re more comfortable and confident in asking clients and customers to wear a mask.

What do I do if an employee is too scared to return to work?

These are uncertain times and it is not unreasonable for people to be concerned about their health, and the health of their families. There are several circumstances where an employee may not be able to return to work, and accommodations will need to be made.

An underlying health condition may make them more at risk for infection, for instance. In this case, reasonable accommodations need to be made by the employer. If working from home isn’t feasible due to the nature of their position, they will likely qualify for extended unemployment under the CARES Act.

If the employee feels that their place of business isn’t following the prevailing conditions of work in the area in terms of safety, they may also be eligible for unemployment. However, if that is the case, as the business owner you may need to put in place policies and practices to come into line with your business cohort.

If it is a matter of childcare being closed due to COVID-19, the Families First Act will provide a short-term paid leave benefit ( read our article about it here ).

But fear alone isn’t enough for an employee to not return to work and stay on unemployment.

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

Additional Resources

The Centers for Disease Control and Prevention’s Interim Guidance for Businesses and Employers .

The National Federation of Independent Businesses has a comprehensive Small Business FAQ section , including on issues surrounding reopening.

The New York State Department of Health has a Novel Coronavirus Information page .

Read the Workplace Rights and COVID-19 Fact Sheet by the New York Legal Assistance Group (NYLAG) for a summary of city, state, and federal laws that protect employees.

The Department of Labor has a Families First Q&A here.

The post What are your rights as a business owner in the time of COVID-19? appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

What are your responsibilities as a business owner in the time of COVID-19?

Wed, 08 Jul 2020 14:16:00 GMT

As states, counties, and cities lift restrictions, business owners are caught between the proverbial rock and a hard place: you want to reopen your business, but what are your obligations as a business owner?

Before you flip the sign to “OPEN” take time to create policies.

Recovering from a global pandemic isn’t the time to forge blindly ahead.

Examine your human resources policies , paying attention to elements relating to:

Make sure your staffing plan and schedule complies with capacity limits based on Executive Order and Department of Health recommendations, as well as your physical space. This may mean:

Ensure your staff, clientele, contractors, and vendors are healthy before entering your business by instituting policies and practices to screen for potential coronavirus exposure and signs of illness. The policy should include who is responsible for conducting or reviewing the screening and clear instructions if an individual does not “pass.” Some businesses are instituting a pre-entrance screening questionnaire that includes questions about:

Provide adequate personal protection equipment (PPE) and other hygiene measures to staff and business visitors. Some possible measures include:

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

Additional Resources

The Centers for Disease Control and Prevention’s Interim Guidance for Businesses and Employers .

The National Federation of Independent Businesses has a comprehensive Small Business FAQ section , including on issues surrounding reopening.

The New York State Department of Health has a Novel Coronavirus Information page .

Read the Workplace Rights and COVID-19 Fact Sheet by the New York Legal Assistance Group (NYLAG) for a summary of city, state, and federal laws that protect employees.

The Department of Labor has a Families First Q&A here.

The post What are your responsibilities as a business owner in the time of COVID-19? appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Intro to Guardianships

Thu, 02 Jul 2020 15:14:00 GMT

Who is an Incapacitated Person?

An Incapacitated Person, or ward, is someone who needs help to care for themselves, manage their property, or handle their financial affairs. They may be too young or lack the cognitive or communicative capacity to make decisions for themselves, or to be able to give informed consent for personal, medical, or financial affairs. In this case, the Court may name a Guardian.

What is a Guardianship Proceeding?

Guardianship proceedings are commenced by filing an Order to Show Cause and a Verified Petition.
The County Court or Supreme Court must hear clear and convincing evidence of incapacitation. They need to see evidence that the person is likely to suffer harm because they are unable to provide for their personal needs and they cannot adequately understand and appreciate the nature and consequences of their inability (Article 81 of the NYS Mental Hygiene Law).

If the Court decides that a Guardian is needed for the ward there are criteria for the Guardian, as they are assuming the legal right to make decisions on behalf of the ward. They must be a legal resident or citizen of the United States. They must be at least 18 years of age and free of a criminal record.

What is a contested guardianship?

Sometimes the interested parties may not be able to agree if the person is genuinely incapacitated, which is why the Court makes the determination. Other times, there is a contested guardianship beyond whether or not the individual is incapacitated. These contested guardianships cases are where there are disagreements about the scope of the guardianship, or if multiple parties filing petitions for guardianship.

We are here for you.

Penachio Malara LLP regularly represents clients in guardianship proceedings and contested guardianship cases and disputes. Many of the issues we see in contested guardianship proceedings reoccur in other cases related to real estate and finance. We try to make this emotional process as painless as possible. Please contact our office at 914-946-2889 for a free consultation.

The post Intro to Guardianships appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

A Roundup of our Favorite Student Loan Podcasts

Wed, 10 Jun 2020 14:53:00 GMT

As newly minted high school graduates are turning their sights to college in the fall, we wanted to share some of our favorite student loan related podcasts to help educate the next generation of college students of their rights and responsibilities.

If you know a rising college freshman, please share these resources with them!

Paying for College: What to Know Before You Go

NPR Life Kit (June 14, 2019)

https://www.npr.org/2019/06/05/729907683/paying-for-college-what-to-know-before-you-go

How to Survive College When You’re Paying Your Own Way

NPR Life Kit (June 12, 2019)

https://www.npr.org/2019/06/05/729906856/survive-college-when-youre-paying-your-own-way

Pay Off Student Loans the Smart Way

NPR Life Kit (June 10, 2019)

https://www.npr.org/2019/06/05/729904698/pay-off-student-loans-the-smart-way

Our Student Loan Secrets, Part 1

Death, Sex, & Money (June 28, 2017)

https://www.wnycstudios.org/podcasts/deathsexmoney/episodes/our-student-loan-secrets-part-one-death-sex-money

Our Student Loan Secrets, Part 2

Death, Sex, & Money (June 29, 2017)

https://www.wnycstudios.org/podcasts/deathsexmoney/episodes/our-student-loan-secrets-part-two-death-sex-money?tab=summary

Our Student Loan Questions Live, Part 1

Death, Sex, & Money (September 13, 2017)

https://www.wnycstudios.org/podcasts/deathsexmoney/episodes/our-student-loan-live-part-1

Our Student Loan Questions Live, Part 2

Death, Sex, & Money (September 14, 2017)

https://www.wnycstudios.org/podcasts/deathsexmoney/episodes/our-student-loan-live-part-2?tab=summary

The Student Loan Nerd Helping Borrowers One Email at a Time

Death, Sex, & Money (October 2, 2019)

https://www.wnycstudios.org/podcasts/deathsexmoney/episodes/betsy-mayotte-student-loan-death-sex-money

What The CARES Act Means for Your Student Loans

NPR Life Kit (April 27, 2020)

https://www.npr.org/2020/04/24/844048425/what-the-cares-act-means-for-your-student-loans

Student Loans and the Pandemic: Your Questions Answered

Death, Sex, & Money (April 27, 2020)

https://www.wnycstudios.org/podcasts/deathsexmoney/episodes/pandemic-student-loans-death-sex-money

The post A Roundup of our Favorite Student Loan Podcasts appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Help for Business Owners: The Economic Injury Disaster Loan (Part 2)

Wed, 06 May 2020 15:57:00 GMT

Please note: This information is valid and up to date as of April 29, 2020.

The first round of funding for the Economic Injury Disaster Loan (EIDL) was fully allocated, but the President signed H.R. 266 on April 24, 2020, increasing the total authorized funding of the program to $20 billion, to remain available until funds are depleted.

Please continue to check back as changes and updates are made to the federal program.

If you haven’t already read Part 1 of this series, please take a look here.

An EIDL helps businesses maintain a reasonable capital to meet current financial obligations.

The Small Business Administration’s (SBA) disaster loans are the primary form of federal assistance for private sector disaster losses. Unlike the PPP , the loan is available directly from the federal government, and is the only form of SBA assistance that is not limited to small businesses.

The loan amount is based on the amount of economic injury, the applicant’s credit score, and is capped at $2 million. There are no upfront fees or early repayment penalties. The interest rate is 3.75 percent. EIDLs less than $200,000 do not require a personal guarantee.

A $10,000 emergency grant cash advance was previously available to applicants, but it is unclear if it remains available.

Note: Applications are being processed in a first come, first served basis.

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

Additional Resources

Interested in the Paycheck Protection Program? Read about here.

What you need to know about the CARES Act.

If you still need to lay off or furlough employees, check out our unemployment post .

Get more information about unemployment benefits from the New York Department of Labor .

Do you have employees taking Families First leave? Read our Families First post and review the Department of Labor’s Families First Q&A here.

The post Help for Business Owners: The Economic Injury Disaster Loan (Part 2) appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Help for Business Owners: The Paycheck Protection Program (Part 1)

Fri, 01 May 2020 15:16:00 GMT

Please note: This information is valid and up to date as of April 29, 2020.

While the first round of funding for the Paycheck Protection Program was fully allocated in its first week, Congress approved an additional $310 billion in funding for the program on April 27, 2020. Congress also closed several loopholes in the process during the second round of funding.

Please continue to check back as changes and updates are made to the federal program.

The COVID-19 crisis is having a profound impact on our economy, and especially small businesses.

It is particularly tough for businesses like restaurants and bars, construction and contracting, small retailers, and others in the service industry. The financial repercussions will be felt long after New York State is no longer on PAUSE.

Business owners need to act now to stave off Chapter 11 Bankruptcy.

The Paycheck Protection Program (PPP) helps you keep paying your employees.

The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. It included several measures designed to help small businesses, notably the Paycheck Protection Program (PPP). The initial PPP fund was seeded with $350 billion and Congress recently allocated another $310 billion.

The PPP is a federally guaranteed small business (fewer than 500 employees, or meets other federal requirements) loan to be used to maintain your payroll or business mortgage, rent, and utility payments. Your business must be in operation prior to February 15, 2020.

The loan can be for up to 2.5 times your average monthly payroll costs, not to exceed $10 million (calculate your eligible payroll costs here ). There are no fees charged by the government or the lender, and no collateral or personal guarantees are required. The loan has a maturity of 2 years and an interest rate of 0.5 percent.

The loan may be forgiven in its entirety if you maintain your payroll during the crisis or promptly restore payroll afterward. The forgiveness may be reduced if there is more than a 25 percent decrease in payroll.

Note: Approach the financial institutions you already conduct business with to see if they are participating in the program.

Lenders may require you to be a customer, even if you open an account for the express purpose of applying for the PPP.

Some smaller banks, credit unions, and other businesses like payroll processors and Paypal are also participating in PPP lending.

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

Additional Resources

What you need to know about the CARES Act.

If you still need to lay off or furlough employees, check out our unemployment post .

Get more information about unemployment benefits from the New York Department of Labor .

Do you have employees taking Families First leave? Read our Families First post and review the Department of Labor’s Families First Q&A here.

The post Help for Business Owners: The Paycheck Protection Program (Part 1) appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Student Loans & COVID-19

Thu, 30 Apr 2020 14:47:00 GMT

Student Loans & COVID-19

If you’re one of 44.7 million Americans with student loan debt, you may be eligible to receive debt relief from the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Knowing your choices will help you make other prudent decisions about your finances during this unprecedented time .

The CARES Act only applies to federal student loans.

The CARES Act directed federal student loans owned by the United States Department of Education, to go on administrative forbearance from March 13, 2020 until September 30, 2020.

This means you can discontinue making payments on those loans now through September 30, 2020.

If you elect to continue to make payments during the forbearance period, the full amount of your payments will be applied to the principal of your loan once all the interest that accrued prior to March 13 is paid. So any payments you make during forbearance may help you pay off your loan faster.

If your monthly loan payment is automatic or you use an ACH, check your statements! If a loan payment has been processed after March 13, you may be entitled to a refund. Please contact your loan servicer .

Note: There are some federal student loans that are no longer owned by the federal government, for instance the Federal Family Education Loans and Perkins loans are now owned by commercial lenders and the institution you attended.

Is there any relief for privately held student loans?

Yes, if you’re in New York State.

For privately held loans, the New York State Department of Finance and the largest student loan servicers in the State agreed to provide relief for borrowers experiencing financial hardship . Relief includes:

You must contact your student loan servicer directly and request relief due to financial hardship related to COVID-19.

Additional Resources

Not sure what type of student loan you have? Check your monthly statement or your credit report to see if your loan servicer is on the complete list of federal loan servicers here.

More questions? Call the Federal Student Aid Information Center for assistance (FSAIC) at 1-800-433-3243.

The post Student Loans & COVID-19 appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Bankruptcy 201: Help for Homeowners

Tue, 28 Apr 2020 21:51:00 GMT

Chapter 13 bankruptcy can help you stay in your home.

Also known as “wage earners bankruptcy,” because it is intended for individuals that have steady income, this form of relief allows you to restructure your debt in an organized way. All of your debt is consolidated into one reasonable monthly payment, and the debt is paid off over a three- to five-year period.

While the bankruptcy process is pending, creditors are prohibited from foreclosing on your home, repossessing your car, or garnishing your wages. This protects you from harassment from debt collectors and prevents new collection actions from being taken against you.

What kinds of debt are covered by Chapter 13 bankruptcy?

Secured debt is prioritized in Chapter 13 bankruptcy cases. Payments are made to a court-appointed bankruptcy trustee who distributes money to the creditors according to a specific payment plan. Mortgages, taxes, child support, and student loans are paid first. Credit card debt is the last to be paid.

What assets will be liquidated?
None.

Considering a debt consolidation or debt relief company?

Before you, your clients, or your friends consider debt consolidation or debt relief from companies like Freedom Debt Relief, New York Debt Relief, or National Debt Relief, please call us and we will determine whether or not you would benefit from such debt relief companies. If we cannot help you with our legal services, we will recommend alternative solutions.

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

Additional Resources

Want to read the actual legal code governing Chapter 13 bankruptcy? Find it here.

Chapter 13 bankruptcy not the right solution for you? Learn about Chapter 7 bankruptcy.

Take action now to reduce your expenses. Learn to trim your household costs and prioritize spending.

Do you need unemployment benefits? Read our recent article on unemployment in the time of COVID-19.

The post Bankruptcy 201: Help for Homeowners appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Bankruptcy 101: A Fresh Start for Individuals and Families

Tue, 21 Apr 2020 20:44:00 GMT

There is an unnecessary stigma surrounding bankruptcy.
Instead, think of it as an opportunity for a fresh start.

Bankruptcy can offer you a fresh start if your financial situation has become unmanageable due to a loss of job, medical bills, or mountains of credit card debt you can’t get out from under.

The most common type of bankruptcy is liquid bankruptcy.
This is also known as a straight bankruptcy, or Chapter 7 bankruptcy. Chapter 7 refers to the chapter in the United States bankruptcy code that governs this type of bankruptcy case.

In a Chapter 7 bankruptcy, the debtor’s existing assets are sold, or liquidated. The net proceeds are distributed to the creditors pro rata , or proportionally. While the bankruptcy process is pending, creditors are prohibited from attempting to collect on any of their claims from the debtor. This protects you from harassment from debt collectors.

Compared to other types of bankruptcies, Chapter 7 bankruptcy is usually a simple and straightforward process if you’re working with an experienced legal advocate. It costs less than other forms of bankruptcies and is well suited for those with little or no assets.

What kinds of debt are covered by Chapter 7 bankruptcy?
Chapter 7 bankruptcy can eliminate most or all of your unsecured debt. However, debts like student loans, child support, and taxes are non-exempt.

What assets will be liquidated?
Your personal property like household goods and clothing, as well as any public benefits or personal injury damages you’ve accumulated in a bank account are exempt from liquidation. You may also be allowed to keep motor vehicles up to a certain value and a portion of the equity in your home.

In fact, many Chapter 7 cases are called “no asset cases” because there are no non-exempt assets to collect.

You will need to surrender stocks and bonds, investments, and cash and bank accounts to pay your debtors. Your bankruptcy trustee, an independent party, administers the orderly collection and distribution of your assets to creditors.

Considering a debt consolidation or debt relief company?
Before you, your clients, or your friends consider debt consolidation or debt relief from companies like Freedom Debt Relief, New York Debt Relief, or National Debt Relief, please call us and we will determine whether or not you would benefit from such debt relief companies. If we cannot help you with our legal services, we will recommend alternative solutions.

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

Additional Resources

Want to read the actual legal code governing Chapter 7 bankruptcy? Find it here.

Take action now to reduce your expenses. Learn to trim your household costs and prioritize spending.

Do you need unemployment benefits? Read our recent article on unemployment in the time of COVID-19.

The post Bankruptcy 101: A Fresh Start for Individuals and Families appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Know Your Rights in the Time of COVID-19

Fri, 17 Apr 2020 16:17:00 GMT

In this time of uncertainty, it’s hard to know what your rights are when it comes to job loss, housing, and even elections. Hopefully this guide helps provide some light on what your rights are during COVID-19.

Please note: This post was last updated April 23, 2020. Deadlines and material changes to Executive Orders are subject to change.

You can file for unemployment, even as a member of the gig economy.

Self-employed and contract workers who have lost wages due to the pandemic are eligible for unemployment and can now file online. If you’re self-employed, follow these instructions for filing a claim.

Additionally, New York State is waiving their traditional seven-day waiting period for unemployment benefits due to COVID-19 closures or quarantines.

For more details, read our post on your options if you’re out of work due to COVID-19.

You don’t need to choose between your family and a paycheck.

The federal Families First Coronavirus Response Act is designed to alleviate the financial burden of caring for your family during this trying time.

Learn more about eligibility and benefits here.

Evictions are on pause.

New York State Executive Order 202.8 bans both residential and commercial evictions for renters until at least June 20. At this time, any pending eviction cases are adjourned, and new cases may not be filed. Cases may be filed after the moratorium is lifted; if you’re able, please continue to pay your rent in full.

There is pending legislation to extend the moratorium for six months.

If your landlord is threatening you with eviction or a police offer attempts to perform an eviction, even with an existing warrant, follow the instructions here.

Mortgage lenders are providing temporary relief.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act protects homeowners and business owners with a temporary foreclosure moratorium and mortgage forbearance for federally backed loans if you are experiencing financial hardship due to COVID-19.

Mortgage forbearance means you can defer your payments temporarily, without incurring penalties or negatively impacting your credit score. Depending on your lender, the full amount of deferred payments may be due when the forbearance period concludes: if you are able to make payments, even partial payments, it is in your best interest to continue to do so.

The Consumer Financial Protection Bureau has a comprehensive guide to navigating mortgage relief options.

Additionally, the New York State Department of Financial Services issued a directive to New York State mortgage servicers to provide 90 days of mortgage relief to borrowers impacted by COVID-19. The Governor made this binding in Executive Order 202.9. Relief includes:

Utilities

The New York State Department of Public Service instructed all major electric, gas, and water utilities to suspend disconnections due to economic hardship related to COVID-19.

Additionally, on March 13, 2020, the Federal Communications Commission launched the Keep Americans Connected Pledge to ensure everyone will continue to be able to access the internet during the pandemic. More than 650 companies across the country signed the pledge.

Vehicle registrations and inspections and driver’s license expirations are on hold.

New York State Executive Order 202.8 suspends expiration dates for vehicle registrations and inspections as well as driver’s licenses.

You can renew registrations online. Depending on your license type, you may be able to renew online. And automotive shops are currently considered essential businesses if you would like to have your vehicle inspected.

You can defer your student loans.

The CARES Act provides relief to borrowers whose loans are owned by the federal government.

You must contact your student loan servicer directly and request relief due to financial hardship related to COVID-19.

Banks are offering additional support to their customers.

New York State Executive Order 202.9 instructs banks to temporarily eliminate ATM, overdraft, and late payment fees.

Some financial institutions are offering additional services to their customers. Forbes has a list of banks and what they’re offering customers, but you should always check with your bank directly as their offerings are subject to change.

Certain insurance policies may not be canceled due to non-payment.

New York State Executive Order 202.13 extends the grace period for paying life insurance premiums to 90 days.

New York State Executive Order 202.14 extends the payment of health insurance policies to June 1, 2020. Insurers are required to pay for claims during this period, and may not retroactively cancel the policy.

If you lost your health insurance due to job loss, you can apply for coverage through the State.

If you lost employer covered health insurance, you may apply through the New York State of Health within 60 days of losing coverage, through May 15, 2020.

You and your family may also be eligible for Medicaid, the Essential Plan, subsidized Qualified Health Plans, or Child Health Plus.

There are no copayments required for telehealth visits.

In order to prevent the spread of coronavirus, the New York State Department of Financial Services is requiring insurance companies to waive all copays for in-network telehealth visits, regardless of the nature of the visit.

You can take advantage of free mental health services.

Stress from job loss, financial strain, homeschooling, and social distancing is real. Nearly 9,000 mental health professionals are offering free online mental health services.

Call the State’s hotline at 1-844-863-9314 to schedule your first free appointment.

You may have one support person present during labor, delivery, and immediate post-partum.

New York State Executive Order 202.12 ensures that no one needs to give birth alone.

You can vote by absentee ballot.

New York State Executive Order 202.15 allows voters to request and vote via absentee ballot for any election held on or before June 23, 2020.

Download an absentee ballot application here, and make sure to check the box for “temporary illness of physical disability” as the reason for requesting the ballot.

Completed applications may be mailed, emails, or faxed to your County Board of Elections no later than the seventh day before the election.

Watch out for scams.

Unfortunately, fraudsters are taking advantage of these uncertain times. Read a statement and guidance from New York Attorney General James on avoiding scams.

We are here for you.

Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

The post Know Your Rights in the Time of COVID-19 appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Families First Act

Mon, 13 Apr 2020 14:49:00 GMT

Social distancing and work from home orders, quarantine, and school closures are challenging New York’s families. The federal Families First Coronavirus Response Act is designed to alleviate the financial burden of caring for your family during this trying time. The intent is to ensure that you, as an employee, do not need to choose between a paycheck and public health.

What are the benefits offered by the Families First Act?

Not all employers must provide Families First leave.
Certain public employers and private employers with fewer than 500 employees must provide leave. Small businesses with fewer than 50 employees may be exempt from providing the additional ten weeks leave if the requirements jeopardize the viability of the business.

How do I make best use of this benefit?
Provide notice to your employer as soon as you know you will need to use the Families First leave. After the first paid day of sick leave, your employer may ask you to follow reasonable notice procedures to continue receiving paid leave.

Will my leave hurt my employer?
While some employers may be exempt from Families First, the federal government will reimburse your employer for your wages.

Additional Resources
Read the Workplace Rights and COVID-19 Fact Sheet by the New York Legal Assistance Group (NYLAG) for a summary of city, state, and federal laws that may protect you.

The Department of Labor has a Families First Q&A here.

The post Families First Act appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Disaster Financial Planning: Five Actions You Can Take Now

Sun, 05 Apr 2020 16:00:00 GMT

These are scary times, but you do have some control. Take action now to make a difficult situation a little easier.

Additional Resources

The US Department of Labor expanded the criteria to be eligible for unemployment benefits to include loss of income due to quarantine, risk of exposure or infection, or to care for a family member. Read our recent post on unemployment and learn more at the New York State Department of Labor website .

If you’re experiencing food insecurity, the Supplemental Nutrition Assistance Program (SNAP) may be beneficial to you and your family. It provides a cash benefit for food expenses. For information on eligibility and to apply online, click here . Food pantries are another source of food during trying times; locate a pantry in New York City , Westchester County , Rockland County , and elsewhere in the Hudson Valley .

COVID-19 has significantly impacted the restaurant and bar industry. If you are a bartender experiencing a shortage of cash due to coronavirus, the USBG National Charity Foundation is offering grants. You do not need to be a member to apply.

The Hebrew Free Loan Society is offering a Coronavirus Financial Impact Loan to qualified individuals facing financial hardship due to the pandemic. There are income limits and a co-signer is required, but there is no loan fee or interest.

The uncertainty of the pandemic is a major stressor, impacting not only your financial well-being but also your family’s physical and mental health. NYC Well can connect you to free, confidential mental health support. You can speak to a counselor via phone, text, or online chat and receive a referral to mental health care providers if necessary. They also have an extensive wellness app library. Visit NYC Well for more information.

The post Disaster Financial Planning: Five Actions You Can Take Now appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

What Are my Options If I am Out of Work Due to COVID-19?

Wed, 01 Apr 2020 15:08:00 GMT

This is an unprecedented time.

The COVID-19 pandemic is resulting in many people losing work. Since mid-March, more than 22 million people filed for unemployment benefits in the United States.

If you lost your job due to COVID-19, you may be eligible to claim unemployment insurance benefits.
The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. The Act provides enhanced unemployment insurance benefits ($600 per week) and pandemic unemployment assistance (an additional $600 per week for individuals that do not typically qualify for traditional unemployment).

New York State is waiving their traditional seven-day waiting period for unemployment benefits due to COVID-19 closures or quarantines.

Self-employed and contract workers who have lost wages due to the pandemic may also be eligible for unemployment and can now file online. If you’re self-employed, follow these instructions for filing a claim.

There are several ways to expedite your unemployment claim.
If you are filing a new unemployment insurance claim, the day you should file is based on the first letter of your last name. Find out what day to apply here . Claims will be retroactive to your first day of unemployment.

The fastest way to file a claim is online , with your NY.gov ID. Step by step instructions are available here.

The quickest way to receive your benefits is through direct deposit. Otherwise, you will need to wait for the Department of Labor to mail you a debit card.

You may also be protected by paid sick leave and family leave laws.
Read our post about the Families First Act here .

In the meantime, everyone can benefit from trimming back expenses.
Read our post here on how to save money during this period.

We are here for you.
Call (914-946-2889) or email us at Francis J. Malara or Anne Penachio with any questions or for a free consultation.

Additional Resources
Read the Workplace Rights and COVID-19 Fact Sheet by the New York Legal Assistance Group (NYLAG) for a summary of city, state, and federal laws that may protect you.

What you need to know about the CARES Act.

Get more information about unemployment benefits from the New York Department of Labor .

The post What Are my Options If I am Out of Work Due to COVID-19? appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

What Every Business Owner Should Know About Commercial Litigation

Mon, 24 Jul 2017 18:12:00 GMT

As a business owner, understanding the world of commercial litigation can be confusing and overwhelming. This is because it is a very complex and broad legal area which includes a variety of business issues. Commercial litigation needs are constantly growing as more and more Americans start new business ventures. Working with a trusted attorney is the first step to ensuring your business’ legal needs are met.

Intellectual Property

An organization’s intellectual property is often the “secret sauce” that they provide their clients and customers. This can include trademarks, patents and copyrights for their products and business functions and are often worth thousands if not millions of dollars in revenue. Sometimes a legal professional is needed to simply apply for the proprietary documentation for these products and processes, while other times their expertise is required if there is a case of infringement on these legal registrations.

Corporate and LLC

If you are a business owner, chances are good that you have either a corporation or LLC. No matter what the designation of your business venture, you have specific legal obligations. In addition, there are many areas of legal distress you may encounter as a business owner that fall under the category of corporate litigation. These might include non-compete agreements, non-disclosure agreements, mergers and acquisitions, management issues and employment agreements. It is also important to remember that no matter the size of your organization, you still could be impacted by the same corporate litigation issues that affect much larger companies.

Franchise

Franchises are a way that many individuals get into business ownership. A restaurant or other business venture that starts out as a single location can offer franchise agreements to other individuals who can use their model to build the same business in another geographic location. This type of litigation requires a lot of legal documentation for both the creation of a franchise as well as selling, purchasing and maintenance. The franchise agreement should spell out all the details require how a franchise is expected to operate.

Working with an attorney who is experienced in business litigation is paramount for a business owner’s success. The team at Penachio Malara LLP has been providing trusted legal counsel for business owners in White Plains, New York and surrounding communities since 1991. Contact them today for a free consultation.

The post What Every Business Owner Should Know About Commercial Litigation appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Chapter 11 Bankruptcy: Creditor vs. Debtor

Tue, 27 Jun 2017 13:58:00 GMT

For a business in financial distress, Chapter 11 bankruptcy, also known as a business reorganization bankruptcy, offers a win-win solution for both you and your creditors. Creditors recover a larger percentage of debt than would be possible with liquidation, while you are able to repay a more manageable portion of debt and remain open for business.

People have been known to say, “where you stand depends on where you sit.” Nowhere is this more applicable than in bankruptcy. Your perspective on the case will depend on the role you play, the risks you face and/or the objectives you hope to achieve. The debtor, its equity-holders, bank lenders, the U.S. Trustee and even the judge each bring a unique set of perspectives, concerns and goals to a chapter 11 case. Today we discuss the roles of creditor and debtor.

Role of the Debtor

NOLO states that, “generally, the debtor continues to operate its business as the ‘debtor in possession.’ The bankruptcy court can appoint a trustee to take over operations from the debtor if it finds sufficient cause. Cause for appointing a trustee includes fraud, dishonesty, incompetence, and gross mismanagement of the debtor’s affairs.”

According to the American Bankruptcy Institute, while the debtor ordinarily continues in business after it files Ch

apter 11, it loses control over major decisions to the bankruptcy court. Among other things, the bankruptcy court must approve:

Role of Creditors

According to NOLO, creditors may support or oppose actions that require bankruptcy court approval. The bankruptcy court will consider input from creditors in deciding how to proceed. Formal votes by creditors; however, are taken only in connection with proposed Chapter 11 plans.

Unsecured creditors usually participate in the Chapter 11 case through a committee that is appointed to represent their interests. The unsecured creditors’ committee can retain attorneys and other professionals to assist it at the debtor’s expense. In some cases, equity security (i.e., shareholder) and other committees also take an active role.

There are a number of ways a Chapter 11 bankruptcy can be structured. An experienced bankruptcy lawyer at Penachio Malara, LLP can help you to develop a workable restructuring plan, retain control of your assets, and represent you with creditors and the courts. We work closely with financial professionals to formulate a restructuring plan that will be attractive to creditors and help you avoid liquidation.

Because a Chapter 11 bankruptcy can be very complex, it’s essential to have a seasoned Chapter 11 bankruptcy lawyer representing your interests. Contact Penachio Malara, LLP for a free initial consultation to discuss your situation. With nearly 25 years of experience serving clients in the Westchester, Putnam, Rockland and Dutchess Counties of New York, you can count on reliable legal counsel and a strong commitment to a positive outcome.

The post Chapter 11 Bankruptcy: Creditor vs. Debtor appeared first on Penachio Malara, LLP - Bankruptcy Lawyers .

Debt Collection Relief: Reclaiming Your Peace of Mind

Tue, 25 Apr 2017 14:20:00 GMT

Do you receive phone calls at all hours from aggressive debt collection companies at home and work? Do you have past due notices clogging your mailbox? Receiving hostile letters about unpaid financial obligations? Have you been visited by an unwelcome collections representative?

Debt collectors make more than a billion contacts with consumers each year, according to ACA International , the debt collection trade group. Unfortunately, in some of those contacts, rogue debt collectors step way over the legal line.

Fair Debt Collection Practices Act (FDCPA)

Debt collectors are required to abide by a Federal law, the Fair Debt Collection Practices Act (FDCPA). When a debt collector first contacts you about a debt, you have the right to request them to verify the debt is yours. If the debt collector can’t come back with proof that you owe the debt, they’re not allowed to contact you anymore.

If the debt is proven to be yours, collectors can’t call you before 8 a.m. or after 9 p.m. your local time. They can’t call you repeatedly, and they can’t call you at anytime you’ve previously stated is inconvenient. You do not need to endure the constant stress of hostile telephone calls, written correspondence and collector visits. There are actions you can take to stop the harassment.

Automatic Stay

Filing bankruptcy provides for an “automatic stay” which would forbid this creditor harassment by federal law. Debt collection companies are required to cease activity on your accounts immediately once a bankruptcy petition has been filed. Creditors and debt collectors who fail to end their efforts against you place themselves in danger of legal action.

When should I contact a lawyer?

If debt collection companies commit any of the following acts:

Our experts can help protect and assert your legal rights. Contact our office for an initial consultation at no charge and protect yourself from debt collection companies. Anne Penachio and Frank Malara will work tirelessly to protect your legal rights and stop debt collection companies from breaking the law. Since 1991, the firm’s overriding goal has been to safeguard the rights of clients by using every tool and technique available under the law to stop debt collection.

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How Do Chapter 13 Bankruptcy Payments Halt a Foreclosure?

Wed, 01 Mar 2017 14:57:00 GMT

Chapter 13 Bankruptcy provides opportunities for homeowners to delay or prevent foreclosure and pay off back debt on their mortgages. In some cases, homeowners can also eliminate the amount of second or third mortgages. In order for this option to work, you need to generate enough income to at least meet your current mortgage payment and your other basic expenses at the same time you’re paying off the mortgage arrearage.

When does it make sense to file a Chapter 13?

When you file a Chapter 13 Bankruptcy petition, all foreclosure proceedings must stop until your Chapter 13 repayment plan is approved by the court. This is called the “automatic stay.” If your repayment plan includes provisions for paying off your mortgage arrearage, then once the plan is confirmed (approved by the bankruptcy judge) the lender is bound by the plan and cannot continue with the foreclosure, assuming you make your regular mortgage and bankruptcy plan payments.

After you complete your three to five-year plan, the company that financed your mortgage will have received the money owed; unsecured creditors such as a credit card issuer or a department store card may not have received anything. But it doesn’t matter; execute your Chapter 13 Bankruptcy payment plan and all debt balances are eliminated. Once that happens, your financial life begins all over again!

Whether you’re dealing with the possible loss of your home or your business, an experienced Chapter 13 bankruptcy attorney at Penachio Malara, LLP can help you get life back on track. If you’re the victim of job loss, wage garnishment, or creditor harassment in New York City or Westchester, Putnam, Rockland and Dutchess Counties, call our White Plains, NY law office now for a free consultation at (914) 946-2889.

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Six Things You Should Know About Chapter 11 Bankruptcy

Tue, 24 Jan 2017 16:54:00 GMT

Chapter 11 bankruptcy is typically filed by a company or organization when they need to undergo financial reorganization. While the company is still generating capital, bad investments or other operational issues, often place them in a position of financial distress. Filing Chapter 11 allows the business to restructure itself and evaluate its current holdings in an effort to recover from their current financial issues. Here are six other things you should know about Chapter 11.

Filing for Chapter 11 bankruptcy is seldom on anyone’s list of planned business practices; however, it can be a useful tool to help an individual or company get out of a difficult financial situation. Due to the intricacies involved in Chapter 11 proceedings, it is imperative to hire qualified and trusted legal representation to ensure that the filing is drafted and presented correctly.

If you or someone you know is considering filing for Chapter 11 bankruptcy, contact the legal team at Penachio Malara, LLP for a free consultation. They have successfully represented clients in bankruptcy proceedings since 1991.

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5 Things You Should Know About Chapter 7 Bankruptcy

Thu, 29 Dec 2016 19:21:00 GMT

In today’s debt laden economy, consumer credit debt and foreclosure are rampant. According to Nerdwallet.com , the average household debt in the US is over $132,000. While all this might seem overwhelming, if you are facing insurmountable debt, there are options to help rebuild your future. Chapter 7 bankruptcy is an option that enables individuals to dig out of debt and get back on their feet quickly. Here are five things you should know about filing chapter 7 bankruptcy.

Facing a bankruptcy can be a stressful and uncertain time. It is important to work with a trustworthy and reputable attorney who can help you understand your rights and the intricacies of the entire filing process.

Our team here at Penachio Malara, LLP has been providing knowledgeable representation of bankruptcy issues for over two decades. We serve clients in Great Plains, New York, and surrounding communities, including New York City, Younkers and the Bronx. Contact us today for a free consultation to discuss your options.

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4 Ways to Boost Your Credit Score

Fri, 11 Mar 2016 15:47:00 GMT

Boost Your Credit Score: 4 High-Impact Tips

The credit score is a short three-digit number with a very high impact. The purchase of a home, obtaining an auto loan or other important financial milestones are all dependent on this carefully calculated measurement. But at times, we stumble financially, and our credit scores are adversely affected, leaving us to wonder, “What can I do now?”.

The good news is that you can rebuild your credit score, regardless of your situation, but it takes time.

Here are four areas to focus on that make a high impact.

Credit Balances … Keep Them Low

Even if you’ve filed for bankruptcy, eventually creditors will offer you accounts again. It usually starts with a prepaid account, and once you pay that on time, they’ll offer an unsecured credit card. Once you start using credit again, though, keep your balances low.

One of the major factors in your credit score is how much revolving credit you have versus how much you’re using. Keep the amount you’re using to 30 percent or less. For example, let’s say you have a $1,000 limit. Don’t use more than $300 at a time.

Reduce Credit Inquiries

When you apply for credit, it may cause a small dip in your credit rating. With the exception of certain types of loans, such as mortgages and auto loans, don’t apply for multiple accounts at one time. For example, if you’re shopping for a credit card, avoid applying for multiple cards (especially if you’re testing the waters to see who will approve you).

Pay Bills on Time

This might seem intuitive, but it’s a large part of your credit score so it’s worth noting. Your payment history has a 35 percent impact on your FICO score calculation. So even if you’ve paid bills late in the past, if you start making consistent on-time payments, eventually your credit score will improve.

If you are having trouble making a payment on time, contact your creditor right away and make arrangements. Doing so could prevent an adverse mark on your report.

Avoid Closing Unused Accounts

Closing old accounts is tempting. After all, you aren’t using them anymore, so why bother keeping them open? But the amount of time that an account is open weighs into your credit score. Accounts that are open longer are favorable, so avoid using those old accounts, but keep them open.

Check Your Credit Report Annually

You can get a free credit report online each year. As you raise your credit score and improve your rating, it’s important to review the report annually. Look for errors — accounts that don’t belong to you, inaccurate reports of late payments and other issues. You can then correct these errors so they don’t have an impact on your ability to secure credit in the future.

Be Patient and Persistent

Credit score improvement is a slow and steady process. Continue to work on it diligently each month. The work pays off, with not only an easier time securing credit but also an overall lower cost.

If you have questions or would like more information, please contact us at 914-946-2889 for a free consultation.

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Six Common Myths About Personal Bankruptcy

Thu, 25 Feb 2016 00:32:00 GMT

Filing bankruptcy is not an easy decision. It’s often surrounded by months and even years of financial difficulty. Yet filing creates many unknowns and fears about the future, such as:

There are many myths about personal bankruptcy. But separating the myths from the truth is helpful for making the best decisions about your future.

Here are six of the most common myths about personal bankruptcy:

Myth No. 1: People filing for bankruptcy are financially irresponsible. The fact is that the majority of bankruptcies are not caused by reckless spending but rather by serious financial hardship. In fact, the top reasons for bankruptcy include job loss, illness and going through a divorce.

Myth No. 2: Bankruptcy will get rid of all past debts. There are some assets that are exempt from bankruptcy relief, such as alimony and child support, and some types of student loans. Make sure you understand which debts are exempt from the proceedings.

Myth No. 3: Filing bankruptcy will result in the loss of your home. If you have significant assets — such as a house and a vehicle — your attorney may recommend Chapter 13 bankruptcy. This would allow you to keep these assets and set up a payment plan.

Myth No. 4: You will lose your 401(k) or retirement accounts. Certain assets, such as retirement accounts, are exempt from bankruptcy proceedings. However, if you take money from those accounts before filing, those assets will not be exempt.

Myth No. 5: Bankruptcy will ruin your credit. It’s true that your credit will suffer in the short term, but over time it can get better. In fact, many people are surprised by how quickly they start receiving credit card offers in the mail. Start by getting a secured credit card and making regular payments. After about a year, you may be able to get a regular credit card.

Myth No. 6: You can file bankruptcy only once. There are limits on how many times you can file bankruptcy; however, people can file more than once. For example, for Chapter 7 relief, you must not have filed for Chapter 7 bankruptcy in the past eight years.

Bankruptcy is a major financial disruption, but in some cases it’s the best way forward. If you have questions or would like more information, please contact us at 914-946-2889 for a free consultation.

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Divorce is a Leading Cause of Bankruptcy

Mon, 14 Dec 2015 22:18:00 GMT

A Leading Cause of Bankruptcy Is Divorce: Tips to Protect Yourself From Financial Exposure

The overall divorce rate is declining , but in the United States, it still remains a top cause of bankruptcy proceedings. Sometimes debt adds fuel to an already turbulent marriage, moving it closer to divorce. Other times, the divorce itself causes financial strain, as both individuals need to adjust to supporting their own household, when previously they shared all the expenses.

But regardless of the circumstances, if you are going through a divorce, there are steps you can take to reduce risk and mitigate financial exposure.

Here are a few tips for getting started:

If the divorce is amicable, work out debt issues before filing for divorce. Under the best of circumstances, it’s ideal to start “untangling” before filing for divorce. Does your spouse have credit card debt? If so, ask him or her to request a balance transfer onto an account in their name only. This goes for other debts as well.

Take inventory of all debt that belongs to your spouse. In some cases, your spouse may have debt that you aren’t aware of. Pull a credit report and inventory all debt.

Close all shared accounts. Once you start the divorce proceedings, it’s important that all shared accounts be closed. For example, did the court order your spouse to pay for his or her auto loan, yet, it’s still got your name on the loan? Ask your spouse to refinance the loan into their name only.

Monitor your credit report. If you have joint financial obligations and your ex-spouse stops making payments on the account, it can be reported on both of your credit reports. Ideally, you’ll close all joint accounts, but if any still exist — such as a mortgage — keep close watch on the payment activity.

Understand your ex-spouse’s plans for bankruptcy. If your spouse is planning to file bankruptcy after the divorce — and you don’t — debtors on any joint accounts may come directly after you for the full balance. Stay in communication with your ex-spouse if possible, and ask to be notified of any plans that would affect you financially.

Adapting to the financial changes that come with divorce is difficult, and there are situations where bankruptcy does make sense. If you are faced with divorce and are interested in exploring bankruptcy options, please contact us — the law firm of Penachio Malara LLP can help. Call 914-946-2889 today for a free consultation.

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Medical Bills: Making the Debt More Manageable

Mon, 09 Nov 2015 14:48:00 GMT

Medical Debt

Medical bills are the number one reason for personal bankruptcy, with 2 million people annually filing for this reason. And even those who don’t file for bankruptcy still struggle with repaying these bills. In fact, about 56 million adults, which accounts for 20 percent of the population between ages 19 and 64, will struggle to pay health care-related obligations this year.

If you’re facing a large amount of medical debt, what’s the best way forward and when does it make sense to explore bankruptcy?

Getting Debt Under Control

You may feel overwhelmed at the prospect of paying back thousands of dollars in medical debt. Moreover, your ability to pay these obligations may feel impossible. But the first step in getting this type of debt under control is making the debt more manageable. Here are a few tips.

Read your bill carefully. Whether you have medical insurance or not, you should scrutinize all medical bills. Look for billing errors — double billings, medications you didn’t receive and other items that are out of place. Your hospital may not give you an itemized bill unless you ask for one.

Negotiate your balance. Medical providers often don’t want to send patients to collections; they just need to get paid. Explain your situation, and ask if they’ll consider reducing your bills to a manageable amount.

Request a payment plan. If you can’t pay the entire amount upfront, request a payment plan. You may be surprised to learn how far you can stretch the payment terms on this type of debt, making repayment doable. However, make sure to get a written confirmation of your plan.

Ask about special hospital plans. Many hospitals, especially nonprofits, offer programs that offset the cost of care for those in need. Don’t feel embarrassed to ask a hospital financial counselor what your hospital offers.

Despite your best efforts, there are times when all your resources have been exhausted and medical debt is simply unmanageable. For these cases, it makes sense to speak with an attorney about bankruptcy options. Medical bills are usually considered “general unsecured debts,” and as a result, you may be able to eliminate these obligations through Chapter 7 or Chapter 13 bankruptcy.

For more information, please contact us today at 914-946-2889 for a free consultation.

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Tips for Navigating Job Loss and Avoiding Bankruptcy

Sat, 22 Aug 2015 16:45:00 GMT

Twenty-two percent of bankruptcy filings are linked to job loss

Even when you dislike your job, it’s rare that you’re overjoyed by the announcement that your employment is ending. And in some situations, it can feel downright devastating. So much of our lives can be wrapped up in our jobs, as we spend a good chunk of our time there each week. Moreover, your initial thought after getting the news might be, “Oh shoot, how can I ever pay my bills? Will I have to file for bankruptcy?”

If you are faced with the loss of your job, here are several tips that will help you navigate the financial waters:

Cut expenses to the bare minimum

You might be thinking, “I don’t have much to cut.” But you might find there’s more than you think. For example, small changes such as cancelling cable TV, getting a better rate on insurance, switching cell phone providers and cutting back on the “luxury items” – gym memberships, coffee and others – are a good start. You may not balance your budget by cutting expenses alone; after all, you just lost an income. But it will make things more manageable in the meantime.

Seek hardship programs with your lender

Do you own a home? If so, work with your lender from the start. Programs such as forbearance, in which your monthly mortgage payment may be temporarily suspended or reduced for a specific amount of time, can be a lifesaver after job loss. Loan modification is another option that may change the terms of the loan – such as interest rate or time allowed for repayment – to ease your monthly obligation.

Take inventory of all other loan obligations

Do you have a vehicle loan, student loan or other financial obligations? If so, lenders for these assets may have forbearance or loan modification programs as well. Arrange for these quickly before you start being late on payments.

Balancing the budget

After seeking the loan modifications that you need and reducing expenses, you may still find you’re in the red. And that’s OK, because remember, job loss is temporary. In the meantime, it’s wise to take inventory of your assets and identify anything that you can sell to balance the budget in the short term.

Seek the advice of a bankruptcy law firm

A job loss might feel devastating as you scramble to meet financial obligations, but many people find that it’s a gift. They find the courage to try new interests and job opportunities they may have passed over in previous years because they were afraid to leave a steady paycheck. Or they may be spurred into self-employment and starting that business they always dreamed about. Either way, taking small steps forward is the best way to navigate this time in your life.

If you are faced with the loss of your job, struggling with debt and have questions, please contact us — we can help. Call 914-946-2889 today for a free consultation.

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Can I Discharge My Debt Through Chapter 7 Bankruptcy?

Thu, 16 Apr 2015 14:13:00 GMT

You may be wondering, Can I Discharge My Debt Through Chapter 7 Bankruptcy?

Are you considering filing for chapter 7 bankruptcy? If so, you aren’t alone, with over 619,000 filings reported in 2014. This decision is fueled by many personal circumstances, such as loss of employment, being underwater on a mortgage, or the most common — medical bills.

In fact, 62 percent of consumer bankruptcies are caused by medical bills, with the American Journal of Medicine finding that the majority of people who file bankruptcy are middle-class, well-educated homeowners.

But before making the decision to file, you likely have many questions, such as “Will chapter 7 bankruptcy truly eliminate my debts?”

Discharging Debt

For the majority of people, the goal of filing for chapter 7 bankruptcy is to eliminate debt. And in many cases, this form of bankruptcy can discharge a variety of debts, such as medical bills, back rent and utility bills, along with unsecured debts — such as credit cards — and even secured debts, like your mortgage (as long as you surrender the property).

However, there are some cases where discharge is denied, such as if any of the acts listed below have been committed:

Other Debts

In addition to the situations listed above, it’s important to know that some other debts may survive bankruptcy. Take, for example, child support, alimony payments and, in some situations, student loans or taxes. And even if a debtor receives a general discharge, some of the debts listed below may be exempt from discharge, including:

Regardless of your situation, if you have questions about chapter 7 bankruptcy – we can help. Filing for chapter 7 bankruptcy is a major financial decision, and we understand that having the facts upfront is essential. For more information, simply call 914-946-2889 today.

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Bankruptcy Under Chapter 13: Reorganize-Restructure-Reduce Your Debt

Mon, 05 Jan 2015 22:14:00 GMT

A Chapter 13 bankruptcy allows a person to reorganize-restructure-reduce his or her debt. A Chapter 13 proceeding pursuant to federal law allows a debtor to seek relief under Chapter 13 of the Bankruptcy Code which allows a person to repay all or a portion of his or her debt under the supervision and protection of the Court. Chapter 13 is for people with regular income. A person who is overwhelmed with debt, however, has a job and is capable of repaying some of his or her debt but could not possibly pay all of his or her debt. Chapter 13 can help a person with a job who is overwhelmed with debt. In many cases Chapter 13 can modify loans, lower interest rates, and favorably deal with mortgage arrears.

In a Chapter 13 bankruptcy, a debtor provides the Court with the plan for the repayment of all or a portion of his or her debts. The Court must grant approval for the plan to be successful. Once the Court approves the debtor’s Chapter 13 bankruptcy plan, most creditors will be barred from collecting money from the debtor.

A Chapter 13 Bankruptcy is completed in either three or five years, depending on the debtors circumstances. The debtor must make regular payments to the Chapter 13 bankruptcy trustee, who collects money paid by the debtor and pays creditors a fraction of the original debt. The completion of all of the payments, identified in the Court-ordered plan, releases the debtor from obligation for the rest of his or her dischargeable debts.

A Chapter 13 Bankruptcy allows you to reorganize-restructure-and reduce your debt. Chapter 13 leaves all of your debts behind you. On the contrary, had you tried to make monthly minimum payments on credit cards. You may never be able to get out of that hole. Despite the best intentions and best efforts debt often prevails at the expense of harmony in one’s life.

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