Habib and Zalewski P.C. a Queens New York bankruptcy firm with office location in Nassau County New York, Suffolk County New York, Queens New York, Brooklyn New York, Bronx County New York and Manhattan brings you an informative article dealing with the modification of an existing bankruptcy.

Can Bankruptcy Plan Payments Be Modified?
Chapter 13 bankruptcy plan payments can be modified in certain circumstances. The debtor’s right to modify plan payments is not absolute, however. Plan modification is often considered when a confirmed bankruptcy plan threatens to fail, and change is needed for the plan’s survival.
As soon as a debtor anticipates having trouble making a monthly plan payment, it is wise to immediately bring this fact and details of the payment difficulty to the attention of counsel. Bankruptcy counsel is then able to strategize ways to save the plan from failure and to locate viable solutions. The earlier the problem is addressed, the more options are available to the debtor. It is then prudent for a debtor (or his or her counsel) to discuss plan modifications with the trustee assigned to the case. Then, if the trustee is amenable to the proposed modifications, the debtor should file a motion for leave to modify her bankruptcy plan.
Modification Requirements
Bankruptcy plan modifications are subject to certain requirements. One of the restrictions is that unsecured creditors of the debtor are not to receive less in terms of plan payments under Chapter 13 than they would otherwise receive pursuant to debtor’s original plan. A debtor must serve a motion for leave to amend the plan, along with a copy of the proposed modified plan, to the assigned case trustee, Office of the U.S. Trustee, and creditors (or their counsel), in most jurisdictions. If there are different requirements for serving the motion for leave to amend and proposed modified plan, the jurisdiction’s local rules would address and specify those requirements.
Typical modifications of chapter 13 plans occur to do one of two things:
• change the monthly plan payment amount
• change the length of the bankruptcy plan
Provisions Outlined in the Bankruptcy Code
The Bankruptcy Code contains provisions for plan modifications in four instances in 11 U.S.C. Section 1329. Those four scenarios include:
• increases or reductions in payment amounts on particular class claims included in the bankruptcy plan
• extensions or reductions in time for plan payments
• alterations of the amount of creditor distributions for those with claims included in the plan if necessary to take into account the claim’s payment outside of the plan
• reduction of payment amounts in the bankruptcy plan by the amounts spent by the debtor to purchase health insurance
Advantages of Plan Modification
Bankruptcy plan modification may be necessary in order for a debtor to maintain and realize the multiple advantages of having an active bankruptcy case, such as:
• keeping the protections of the automatic stay
• receiving a bankruptcy discharge
• receiving the complete value of attorneys’ fees paid to date by debtor

Habib and Zalewski P.C. a Queens New York bankruptcy firm with office location in Nassau County New York, Suffolk County New York, Queens New York, Brooklyn New York, Bronx County New York and Manhattan brings you an informative article showing a trend of bankruptcy courts in dealing with student loans.

Wisconsin’s bankruptcy courts are divided over whether a Chapter 13 debtor can give preferential treatment to student loan debts.
In November, U.S. Bankruptcy Judge James Shapiro held that the debtor could not. But on March 11, Judge Susan Kelley held that the debtor could.
However, the difference in the results depended more on the circumstances of the individual debtors, than on statutory interpretation.
At issue are two provisions in the bankruptcy code. 11 U.S.C. 1322(b)(1) prohibits payment plans from discriminating unfairly against unsecured creditors. But 11 U.S.C. 1322(b)(5) provides that a debtor may maintain regular payments on any obligation on which the last payment is due after the final plan payment.
Judge Shapiro
In the case before Judge Shapiro, Robert and Carol Edmonds filed for bankruptcy in 2009. Their payment plan proposed continuing to make regular payments of nondischargeable student loan debt.
If confirmed, that plan would have resulted in the student loan creditors receiving approximately a 53 percent dividend, and the other unsecured creditors receiving only an 18 percent dividend.
The trustee objected to the plan, and Judge Shapiro sustained the objection.
He began by stating, “This court is not of the view that long-term student loans can never be separately classified (emphasis in original).”
However, because their annual income was approximately $130,000, Judge Shapiro concluded, “There is nothing in the case at bar which establishes that the debtors are unable to formulate a plan that provides for equal treatment of unsecured creditors. Student loan debts should not be paid at the expense of the other general unsecured creditors.”
Judge Shapiro further found that approving the proposed plan would result in the payment of post-petition interest, even though not all of the unsecured creditors would be fully paid, in violation of 11 U.S.C. 1322(b)(10).

Judge Kelley
In the case decided by Judge Kelley last week, Jodi Johnson filed for Chapter 13 in 2010. More than $98,000 of her approximately $149,000 in unsecured debts were nondischargeable student loans incurred to attend law school.
Johnson proposed continuing to make student loan payments of $641 per month outside of the bankruptcy estate. Under this plan, the unsecured creditors would receive only $8,700 during the five-year plan.
However, if the plan were not approved, she would exit bankruptcy after five years owing more on the student loan than when she entered it.
The trustee objected, but Judge Kelley overruled the objection and confirmed the plan.
Judge Kelley found the obligations on the student loans were not “special circumstances” under 11 U.S.C. 707(b)(2)(B), rejecting the reasoning of some bankruptcy judges in jurisdictions outside of Wisconsin.
But she held that Johnson could separately classify the student loans under sec. 1322(b)(5), without unfairly discriminating against the other unsecured creditors.
Judge Kelley acknowledged the conflict with that subsection and the antidiscrimination requirement of sec. 1322(b)(1), and Judge Shapiro’s opinion in Edmonds.
Nevertheless, Judge Kelley concluded, “The Edmonds debtors had over $130,000 in combined income, and did not establish that they were unable to propose a plan that provided equal treatment of unsecured creditors. … Here, the Debtor … lives frugally, and has promised to amend again and propose even higher payments if she is able to secure a higher paying job as an attorney. Even in light of Edmonds, this Court concludes that the Debtor’s plan does not unfairly discriminate by proposing to maintain payments on her long-term student loans, while proposing to pay her other unsecured creditors less.”
Judge Kelley also cited two other opinions from bankruptcy courts in Wisconsin that have permitted a debtor to maintain full monthly payments on long-term debt. In re Hanson, 310 B.R. 131 (Bankr.W.D.Wis. 2004)(Martin, J.); In re Truss, 404 B.R. 329 (Bankr.E.D.Wis. 2009).
The cases are In re Edmonds, Case No. 09-33033 (Bankr.W.D.Wis., Nov. 5, 2010)(Shapiro, J.), and In re Johnson, Case No. 10-32528 (Bankr.E.D.Wis., Mar. 11, 2011)(Kelley, J.)

Habib and Zalewski P.C. a Queens New York bankruptcy firm with office location in Nassau County New York, Suffolk County New York, Queens New York, Brooklyn New York, Bronx County New York and Manhattan brings you an informative article on a bankruptcy means test.

Since the new bankruptcy laws have come into effect since the year 2005, bankruptcy lawyers in Queens county do a lot more to help you through the bankruptcy process, but they also cost that much more as well for their extra services they are required to do through the bankruptcy process. Under the new bankruptcy rules, you now have to go through qualification processes to determine whether or not you even qualify to have your debt removed, or how much removed. Therefore, filing for bankruptcy does not automatically mean that your debt is wiped away like it did before the year 2005.
The first thing you must do to see if you qualify to have some, or all of your debt removed is to compare your combined household income with that of the median household income of a family your same size. If your combined household income is less than or equal to the medium household income of a family your same size, then you may qualify to have some or all of your debt wiped away. However, if your income is greater, then you must go through what is called a means test, or in other words, how well you are living within your means.
To go through the means test, all of your allowable expenses are subtracted from your income. Allowable expenses are those expenses deemed absolutely necessary. All other expenses are disregarded. After all of your allowable expenses are subtracted from your income, whatever money you have left is money that you will be required to use to pay back your debt. Therefore, the more money you have left over, the more of your debt you will be required to pay. Therefore, it is possible to file for bankruptcy and still be required to pay all of your debt.
Your Queens County bankruptcy lawyer, however, will help you through all of the qualification processes and the extra paperwork involved. Your bankruptcy lawyer will not only help protect your property and rights, give you legal counseling and advice, help keep the creditors off your back, and negotiate deals for you, but they will also help you with your payment plan should you be required to pay all, or some of your debt. Keep in mind, that even if all of your debt is removed, you will still be required to attend financial counseling to help you better manage your money in the future. This is another new rule that has been in force since the year 2005.
Remember, if you file for bankrutcy, you will not be able to file for bankruptcy again for another 10 years. Therefore, it will be wise to stay out of debt. Setting aside a certain amount to save each month and making that a top priority will aid against going into further debt. Even if you are only able to save a little bit of money each month, that money will accumulate and eventually, you will have a very large savings that will keep on growing. Therefore, when unexpected financial emergencies and obligations occur, you will be more financially prepared.

Even as news reports offer hope of economic recovery, the figures on home foreclosures remain stuck in a recessionary winter. When the books close on 2010, banks will have repossessed a record 1.2 million U.S. homes, up 33 percent from 2009.
On Long Island, we ranked a dreadful second in a new measure published last month: Given the current rate of home sales, it would take 30.4 months to sell all the foreclosed and “distressed” properties here. Only Miami has a larger, slower-moving inventory.
The housing crisis is entering its fourth year, yet people are still losing their homes at a disastrous rate. In Nassau and Suffolk counties, 893 new foreclosure cases were opened in November alone. Despite a series of programs intended to prevent foreclosures, lenders and the federal government have failed.
A congressional panel overseeing the federal programs admitted as much earlier this month. The marquee initiative, the Home Affordable Modification Program, will end up preventing only 800,000 foreclosures, at a maximum, vastly fewer than the 3 million to 4 million it initially aimed to stop. Even more worrisome: This is the third foreclosure prevention effort launched by the federal government since 2007, and the fourth overall. The first was initiated by the mortgage writers themselves – an early washout.
The fundamental flaw in every case is relying on lenders to voluntarily reduce a borrower’s monthly payments to affordable levels. One would think that keeping the mortgage checks coming would be in lenders’ interests. By foreclosing on a home, they recover only a fraction of the value of the loan.
But apparently there are financial incentives working in the opposite direction. In our system of bundled, resold mortgages, the companies that service the loans can sometimes make more money by charging fees throughout the foreclosure process.
One way around this would be to make loan modifications mandatory. The House voted in 2009 to give bankruptcy court judges the power to reduce mortgages so that people could afford to stay in their homes. Regrettably, the Senate refused to pass this measure. It should be reintroduced.
The government’s half-steps to date reflect an unwillingness to “reward” people who foolishly signed up for mortgages they couldn’t afford. But many who are struggling have fallen on hard times for unforeseen reasons, often because of job loss. It’s a Catch-22 that some people could relocate for new jobs – if only they could sell their homes in this terrible market.
To be sure, it would be better if the housing market recovered and the value of people’s homes came back. Some believe the quickest route is to allow the foreclosures to proceed. But blaming homeowners ignores the culpability of lenders, who duped many buyers with teaser rates, balloon payments and outright lies about the loan terms – to say nothing of recent revelations that lenders couldn’t produce paperwork to prove they hold the loans. Bankruptcy court judges should be given discretion on whether a lender acted in bad faith.
A new law taking effect Jan. 22 in New York will allow bankruptcy filers to retain up to $150,000 in home equity, or $300,000 for a couple, potentially allowing many to keep their homes. Time will tell if this will be adequate.
It’s striking that during the 1930s, the most recent era when U.S. home prices fell so dramatically, President Franklin D. Roosevelt made not only a practical argument to save homes, but a moral plea: The “broad interests of the nation require that specific safeguards should be thrown around home ownership as a guarantee of social and economic stability.”
It’s time we made this commitment to stability too.

By JOHN G. EDWARDS in 
LAS VEGAS REVIEW-JOURNAL

The Federal Trade Commission has banned consulting firms from charging up-front fees for negotiating modifications of residential mortgage loans. The prohibition took effect Jan. 31. Eric Witkoski, chief of the attorney general’s Bureau of Consumer Protection and the state consumer advocate, called money spent on mortgage modification consultants a bad bet for consumers.
“It’s worse than some of the odds at the casino tables,” Witkoski said.
Most mortgage modification consultants, sometimes called foreclosure consultants, will be unable to continue in business because of the commission’s rule, industry insiders say.
“It’s going to be very difficult to provide service under the FTC ruling,” said Mandy Peacock of Citizens Home Advocacy.
Mortgage Lending Commissioner Joseph Waltuch said the constraints of the federal rule “will have substantial impact” on the number of licensed consultants for mortgage loan modifications. “It was a terrible decision by the FTC,” said Ian Hirsch, owner of Fortress Credit Services, a mortgage modification firm.
Hirsch said the rules were adopted at banks’ insistence. Banks don’t want advocates representing homeowners who are struggling to avoid foreclosure through modification of interest rates and monthly payment amounts of principal reduction, he said.
“It’s intended to kill an industry,” Hirsch said. “It was overreaching and certainly not in the consumer’s best interest.”
Getting a lender to agree to modify a mortgage is difficult, Witkoski said. Homeowners seeking to avoid foreclosure should keep their cash, rather than paying a consultant to help obtain a possible mortgage modification, he said.
Unethical mortgage modification firms often fail to do any work after collecting fees, industry observers say. To eliminate that risk for consumers, the FTC rule prohibits mortgage modification firms from getting paid in advance.
“By banning providers of these services from collecting fees until the customer is satisfied with results, this rule will protect consumers from being victimized by these scams,” commission Chairman Jon Leibowitz said in a statement.
While Queens New York has been bedeviled by illegal mortgage scams, Hirsch and Peacock were licensed by the Mortgage Lending Division to help homeowners obtain mortgage loan modifications from lenders. Hirsch said no one ever filed a complaint with the division against his firm.
Peacock persuaded the Legislature to allow licensed mortgage modification companies to collect fees in advance if they set up trust accounts to hold a client’s money until the work is completed. The mortgage division also required loan modification companies to post $75,000 to $100,000 in surety bonds before licensing.
But it may be difficult for Queens New York homeowners to recover those payments if a mortgage modification firm goes out of business and keeps the advance fees.
To recover the money, a consumer must sue in small claims court and get a judgment. The consumer must try to recover the lost money from the defunct mortgage consultant firm. The consumer may then ask the surety bond company to cover the loss, said a lawyer who spoke anonymously.
Many mortgage modification consultants say they cannot survive without charging fees in advance. Mortgage modification consultants say it’s difficult to collect their fees after they have obtained a mortgage modification.
As a result, the FTC ban is expected to put many mortgage modification consultants out of business.
Peacock said her standard fee is $2,900. Hirsch said he typically charges $2,500 for mortgage modification assistance that may continue over a year. Peacock and Hirsch say they hope to continue operations but say the FTC rule makes their operations difficult.
Attorneys may continue to provide mortgage loan modification assistance, but only in connection with Queens , New York bankruptcy cases and other legal proceedings, according to the FTC rule. Some nonprofit mortgage assistance services are exempted from the rule.
FTC critics argue that the rule won’t deter illegitimate mortgage modification firms from taking consumers’ money up front. Most of the approximately 30 enforcement actions taken this year by the Mortgage Lending Division against mortgage modification consultants were against consultants who had no license to operate in New York.

It might not be that easy to file for chapter 13 bankruptcy although there is a provision for filing personal bankruptcy under the same. This is because to qualify for chapter 13 probable bankruptcy filers are required to meet certain specific conditions. Here is some vital information regarding the eligibility requirements for chapter 13 which could guide you in your effort if you are considering filing chapter 13 in near future.
It may not be possible for all debtors to qualify for chapter 13 bankruptcy and repay their debts since; there could be certain eligibility requirements that are stipulated by the bankruptcy law. This is because to be eligible for a typical chapter 13, debtors need to satisfy the below mentioned criteria.
• If you are business owner and the debts have arisen out of business for which you are totally responsible as a person, you could qualify for chapter 13.
• Commodity brokers or stockbrokers may not be eligible for filing chapter 13 but could file for personal bankruptcy under chapter 7 bankruptcy laws to get their debts discharged.
• In case the total amount of secured dues such as home loans or IRS liens exceeds $1,010,650, you might not be allowed to file chapter 13.
• On the contrary, if the amount of unsecured debts such as medical or pending utility bills, credit card debts, etc. is more than $ 336,900, then also you may not be eligible for chapter 13.
• To qualify for a chapter 13, you need to provide proof for having enough income, after carrying out deductions of permitted expenses and payments, to pay for secured debts through a court approved monthly repayment plan.
• As per chapter 13 bankruptcy rules, probable bankruptcy filers are required to furnish evidence for filing federal as well as state income tax returns for the last 4 years prior to the date of filing bankruptcy. Any failure to submit the same or inconsistency in filing income tax returns could result in rejection of your bankruptcy case.
In any case, a chapter 13 monthly repayment plan could be successfully funded if you have the following income sources.
• Income generated by self employment
• Benefits accrued from social security
• Any commissions earned on freelance basis
• Benefits received through worker’s compensation
• Income derived from public benefits or royalties
• Money received from alimony in case of divorce
• Monthly salaries, wages or pensions
• Seasonal employment or disability benefits
• Income on account of unemployment or strike
• Money derived from child support benefits or rents
• Profits accrued from sale of property
• Monthly income earned by a working spouse
From the aforesaid it is quite evident that you need to have proper personal bankruptcy information provided by a competent Queens New York bankruptcy lawyers when you are considering filing chapter 13. Remember, even personal bankruptcy which includes medical or credit card bankruptcy can be filed under chapter 13 if you have expert advice.

Habib& Zalewski p.c. from there queens offices bring you an interesting guidline for filing Chapter 7 or Chapter 13 Bankruptcy
The new filing system has made much difficult to get approval for chapter 7 or chapter 13 bankruptcy. But, Steve Zalewski & Associates p.c. expert and affordable Bankruptcy attorneys can help you out. It provides excellent services for filing all types of bankruptcy and helps you to emerge out of debts.

Why people declare bankruptcy? Which type of bankruptcy should they declare? These are all common questions which people usually ask. But there is no particular answer and “it all depends” on individuals. For few filing bankruptcy help may be the only answer to overcome debts. For few it may be the only means to save home, car or any other valuable asset. The new legislative has made filing bankruptcy much more difficult and all the debts are not eliminated. Few things like student loans are not discharged under bankruptcy. The new filing system makes it difficult to get chapter 7- a liquidation process wherein all the debts are cleared. Thus nowadays filing bankruptcy has become expensive than in past times it used to be. But Steve Zalewski & Associates p.c. expert and affordable Bankruptcy attorneys can make it easier for you; it provides services for filing all types of bankruptcy.

Chapter 7 bankruptcy laws
To be eligible to file for chapter 7 bankruptcy, the debtor should meet few guidelines. He should attend a credit counseling course and this should be from a registered provider. One should also meet the income guidelines as per chapter 7 bankruptcy rules.
Chapter 7 bankruptcy is a liquidation process and it’s much difficult to qualify than a chapter 13. After a person has got bankruptcy credit counseling and it’s clearly documented that debtor doesn’t have necessary income to pay of the debts than one can get approval.

Chapter 13 bankruptcy laws
Chapter 13 bankruptcy is a repayment plan and its set up by the credit counseling service. Here the debts are not eliminated but a repayment plan of 3-5 years is implemented. The debtor has to pay his debt within these years and get discharge of all his debts. But one should take note that bankruptcy remains on the credit report for 7-10 years and thus one should only file it when there are no other options left.

Credit card bankruptcy is also one option, its designed to repair the credit after one have filed bankruptcy and discharged the bankruptcy debts.

Filing bankruptcy can be a method to release the debts but this should not be taken lightly and it should be the last option available to discharge the debts. It’s considered as the biggest mark on the credit score and rating thus one should only choose it only when required.

When businesses find themselves unable to keep up with their financial obligations, filing a commercial bankruptcy can help reduce or eliminate their debts. A business bankruptcy attorney in Brooklyn and queens New York based law firm Habib and Zalewski Esq. can help you determine if filing is the right debt reduction strategy for your company.

Business Bankruptcy Choices
There are several chapters in the bankruptcy code that are commonly used by business filers. For companies who want to reorganize, Chapter 11 is commonly selected. For companies who don’t have the capacity to repay debts over time, a Chapter 7 filing is often commenced.

Most commercial bankruptcy filings are voluntary. However, there may be times when creditors petition the courts to bring an involuntary commercial bankruptcy action against a debtor company to ensure a fair distribution of assets.

Business Chapter 11
Chapter 11 is the most common reorganization chapter filed by businesses. In this chapter, the commercial debtor stays in business throughout the proceedings. Once the petition is filed, the automatic stay comes into effect where creditors are prevented from taking any action to collect debts and allows the debtor to cure defaults in leases and secured debt. The company develops a detailed reorganization plan which outlines exactly how the company will operate while they continue to make debt payments to creditors. The plan must be approved by the bankruptcy court, but in order to meet approval, the company may have to negotiate with or take suggestions from creditors. Often settlements can be reached with creditors where they accept a percentage of the total debt owed.

A business bankruptcy attorney at our Brooklyn and Queens, New York law firm can help you determine whether Chapter 11 reorganization is the best solution for your company.

Business Chapter 7
If a company does not want to, or cannot realistically complete a Chapter 11 reorganization, they may choose to file for Chapter 7 or liquidation instead. In this chapter, an automatic stay also begins right after filing, which prevents creditors from any debt collection actions. A trustee is appointed to manage the proceeding and sell the company’s assets to repay part of all of the debts. Often upon filing the trustee will close the business and take possession of its assets.