Executory Contracts and Leases in Bankruptcy

In Chapter 7 and Chapter 13 Bankruptcy cases, debtors have an opportunity to either continue or terminate any executory contracts or leases. That typically means that debtors will list their executory contracts and unexpired leases on the bankruptcy petition and declare their intention to either to accept or to reject those contracts. If such contracts are not timely assumed, they are deemed rejected, and debtors are released from further performance under those contracts.

An executory contract is an agreement that has not been completed. A contract is an agreement between two or more parties to perform certain specified actions. Once the parties complete all contractual obligations the contract becomes fully executed and the parties to that contract have no further obligation to act under that contract. An example of an executory contract is an agreement to sell property in which the buyer and seller agree to perform certain actions including inspecting the property, making certain repairs, obtaining financing, transferring title, delivering possession and making payment. Until all contractual requirements are met, the contract remains open to be executed. One example of an executory contract that is very common is cell phone contracts.  Cell phone contracts are executory contracts during the typical two-year contract period.  By including the cell phone provider as a creditor in the bankruptcy petition, the contract is automatically terminated, and any early cancellation penalty becomes a dischargeable debt just like any other unsecured debt.

An unexpired lease is a form of contract for the use of certain specified real or personal property that has a specified length of time remaining on the length of the contract. An example of an unexpired lease is a rental agreement for the use of a car or a house where the owner agrees to provide the property to the lessee for a set number of months or years and the lessee agrees to make payments for using that property. For bankruptcy purposes, a timeshare falls into this category.

When a debtor files for bankruptcy, debtor required to list those executory contracts on the bankruptcy schedules because under Section 365 of the U.S. Bankruptcy Code, the trustee is given the power to assume or reject any executory contract or unexpired lease. In other words, bankruptcy trustee can, if he or she chooses, take over the obligation or let it lapse. If the debtor is in Chapter 7 bankruptcy, the trustee gets 60 days to accept or reject an executory contract. A failure to do so leads to an automatic rejection. In Chapter 13 bankruptcy, the trustee may usually assume or reject an executory contract or unexpired lease of residential real property or of personal property at any time before the confirmation of the Chapter 13 Plan.

Bankruptcy code section 11 U.S.C. 365 requires that the debtor assume an executory contract or unexpired lease in a Chapter 7 Bankruptcy within 60 days of filing the case; and in all other chapters of bankruptcy before confirmation of a plan. The court may extend the time to assume such agreements for cause. In the case of non-residential real estate agreements, the time to act is extended to 120 days or longer by court order.

Depending on the situation, the debtor may either assume to reject any executory contract. This decision generally depends on the existing financial circumstances.

If you contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.

Debtors and Failure to Turnover Nonexempt Assets

In Chapter 7 bankruptcy cases where debtors have nonexempt assets, debtors have an obligation to transfer those assets to the bankruptcy trustee. It is very common for such assets to be debtors’ tax refunds. In this situation, at the meeting of the creditors, debtors are asked to sign a stipulation which is usually incorporated into a subsequent court order, agreeing to turn nonexempt tax refunds, or a part of them, to the bankruptcy trustee.  If debtors do not do so, they are subject to serious consequences which may include loss of their discharge, contempt of court or monetary penalties. The loss of discharge is the most serious penalty from the debtor’s point of view, since it will leave the debts nondischargeable in this or any subsequent bankruptcy that the debtor may file.

But what if the debtors are unable to turn over such assets due to financial reasons? What if the tax refunds were used for living expenses since debtors simply had no other choice?

This issue was recently addressed in In Re Swan, Case No. 08-11210 (W.D.N.Y. 2014), where Judge Michael J. Kaplan had to decide what the consequences should be for the debtors who had failed to turn over nonexempt portion of their tax refunds to the bankruptcy trustee.  The Chapter 7 trustee sought denial of discharge, as well as a finding of contempt of court and monetary penalties. Judge Kaplan held that in the absence of dishonesty on the part of the debtors, loss of discharge would be too harsh of a remedy and the court should not automatically deny or vacate discharge. Judge Kaplan held that if failure to turn over the assets is not as a result of dishonest conduct on the part of the debtors, the appropriate remedy is a monetary judgment that the trustee would be free to collect. Further, Judge Kaplan also held that if the debtors are unable to turn over such assets to the trustee, they have an obligation to seek immediate relief from the Court.

This case further confirms that debtors always have to try to follow the court’s orders and, if they are unable to comply with them, they have to seek relief from the court. While the debtors in Swan did not lose their discharge, they were held in contempt of court and were subject to monetary penalties. All of this could have been avoided if they kept their bankruptcy attorney involved in the case and notified him of their financial difficulties.

If you contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.

Dischargeability of Debt and Objections by Creditors

When debtors meet with me and tell me that they want to file for bankruptcy, I ask them questions about their debts, assets, and their financial affairs over the last few years. I also ask is how long ago they last used their credit cards. If they tell me that the credit cards were used within 90 days prior to the filing, I ask them to provide me with their credit card statements and information with regard to what was bought. All of this information helps me to assess whether I am likely to see potential objections from creditors with regard to dischargeability of one or more debts.

According to 11 U.S.C. §523(a)(2), a debt is presumed to be nondischargeable if a Debtor charges more than $600 for luxury goods on a credit card with in 90 days, or takes cash advances of more than $875 within 70 days of filing for bankruptcy. This presumption can be rebutted, but the burden is on the debtor to prove that the purchases did not involve luxury goods or services.

Another reason a creditor may object to the discharge is fraud and misrepresentation of debtors’ assets or income in order to obtain credit. If debtors misrepresent their financial condition in order to obtain a loan or credit line, and the creditor relies upon such misrepresentation when agreeing to extend credit, the creditor can object. For example, if the debtor earned $15,000 a year, but stated on the credit card application that he was earning $50,000 per year in order to get get approved, this would be a material representation likely to result in objections being filed.

Hiding an asset or failing to disclose it in a bankruptcy proceeding are also grounds to challenge a debtor’s discharge. For example, if you own an investment property, especially one with equity, which could not be protected under the Bankruptcy Code, and fail to inform the bankruptcy court of this asset, then a creditor may challenge debtor’s right to a discharge pursuant to 11 U.S.C. §727. Under such circumstances, a debtor may also get charged criminally.

Finally, the transfer of assets to family members or others just before filing bankruptcy can cause a creditor to challenge the bankruptcy case. It is particularly a problem if the asset transferred would not have been fully exempt in Chapter 7 Bankruptcy, and the transfer was made with the intent to deprive a creditor of a benefit. If the debtor does this, either the bankruptcy trustee or any creditor who might have received a benefit from the sale of this asset may allege you committed a fraudulent transfer of an asset. The Federal look-back period under 11 U.S.C. §548 and New York’s look-back period is six years.

In view of the above, I always advise my clients to stop using any credit cards at least 90 days prior to filing for bankruptcy, disclose all their assets, and be honest with regard to any financial transactions.

If you contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.

Chapter 13 Discharge and Child Support Arrears

Chapter 13 Bankruptcy cases can take between 3 and 5 years to complete, and, in a current economy, as many as two thirds of all Chapter 13 plans fail.  Thus, any debtor who has completed the plan should be proud of his or her accomplishments.

However, under some circumstances, even if all of the plan payments are made over a five year period, the debtor may not receive his Chapter 13 discharge. Specifically, Bankruptcy Code Section §1328, precludes the judge from issuing a discharge if you do not certify that all domestic support obligations that have come due during the pendency of your case have been paid. Additionally, if the debtor has child support arrears prior to filing of the case, those arrears must be paid in full during the term of the plan.

If domestic support (i.e. child support or alimony) were not paid, and that failure was not excusable, the case will be closed, and the debtor will not receive the discharge. In the case of child support in Chapter 13, the debtor cannot ignore the obligation, even if the custodial parent or child support enforcement is saying and doing nothing. Otherwise, the debtor may end up with a perfect  payment history in Chapter 13, but no order of discharge.

If you are contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.

Bankruptcy and Cash Advances

Most of my Chapter 7 bankruptcy clients have a lot of credit card debt that was accumulated over time. That debt may have come from making purchases, incurring services charges and interest, as well as taking cash advances  on credit card. While most of credit card debts are dischargeable in bankruptcy, credit card cash advances may represent a significant problem for potential bankruptcy filer.

According to the Bankruptcy Code, any cash advance, or combination of cash advances from one lender, totaling more than $875, obtained within 70 days of the bankruptcy filing date is presumed to be non-dischargeable. This particular provision is included in Section 523(a)(2)(C)(i)(II). The dollar amount of the cash advance, changes every three years.

This provision was included in the Bankruptcy Code because the Congress was concerned that consumers, who obtained significant cash advances relatively close to time they filed for bankruptcy, knew or should have known that they would be seeking bankruptcy relief, and should not be able to eliminate such debts. Another reason for that provision was to prevent consumers from taking cash advances immediately prior to a bankruptcy filing.

However, in terms of procedural issues associated with cash advances taken out with 70 days prior to the filing, in order to have the court declare that the debt is non-dischargeable, the creditor must file objections in the bankruptcy court. Specifically, the creditor must file an adversary proceeding. Since there are filing fees and other expenses associated with such filings, if the amount of the cash advance is not particularly large, most creditors will not bother filing an adversarial proceeding.

However, since a cash advance may result in an adversary proceeding, I always ask my clients about them and, in appropriate situation, may ask the client to postpone the bankruptcy filing until after the expiration of the 70 day period.

If you are contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.

Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and Creditors’ Chain of Title

It is fairly common for Chapter 7 and Chapter 13 debtors to have credit cards that went into default some time ago. It is also common for credit card issuers to sell of delinquent credit card accounts.

In Chapter 7 and Chapter 13 Bankruptcy, all creditors are notified of the bankruptcy filing and can file claims. It is common for a new entity to file a proof of claim as successor or assignee of the original credit card issuer, but often such proof of claim does not include any evidence that the claim was, in fact, assigned. This situation is commonly referred to as a missing chain of title, missing proof that the claim has been legally transferred or assigned to the new owner.

Here in Rochester, United States Bankruptcy Court Judge John C. Ninfo II has issued several decisions addressing this issue. In one of them, In re Doherty and In re Benedetti, he held that in Chapter 7 Bankruptcy, the successor creditor was obligated to prove it was the legal holder of the claim.

In Doherty, Chapter 7 Bankruptcy Trustee filed his objection to the successor creditor’s claim arguing that (1) successor creditor was not scheduled as a creditor in the petition; (2) although the debtors had scheduled the creditors that the successor creditor alleged originally held the claims, there was no breakdown in the proofs of claim to support the amounts alleged to be due,which differed from the amounts the debtors had scheduled; and (3) there was no assignment or bill of sale produced to  demonstrate that the successor creditor was the current holder of any of the claims that were alleged to have been sold and assigned to it.

Judge Ninfo held that the successor has failed to produce a chain of title from the alleged original holders of the claims to it by either a series of assignments or bills of sale, or by any other acceptable proof of ownership. As a result, he disallowed successor creditor’s claims, since there was no proof that it was a proper creditor entitled to file a proof of claim under Section 501 of the Bankruptcy Code.

This issue can be extremely important in Chapter 13 Bankruptcy cases where it may impact duration of the plan as well as the amount of money paid by debtors under the plan. In Chapter 7 Bankruptcy, this issue becomes particularly significant in asset cases, i.e., situations where debtors have nonexempt assets that the bankruptcy trustee may sell to pay the creditors.

If you are contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.

 

Bankruptcy, Credit Unions and Cross-Collateralization of Loans

One issue that periodically comes up in bankruptcy cases is cross-collateralization of assets by credit unions. What does that mean? Cross-collateralization is basically the use of collateral from one loan to secure other loans.

Most credit unions, including local credit unions here in Rochester, New York, use “Loanliner” documents. These form agreements are used by financial institutions for their lending transactions. Included in standard Loanliner lending agreements is a provision in which the borrower agrees that all other loans with the lender are cross-collateralized. The cross-collateralization clause from a recent Loanliner agreement reads: “the security interest also secures any other loans, including any credit card loan, you have now or receive in the future from us and any other amounts you owe us for any reason now or in the future.”

Credit unions often use this clause in vehicle loan agreements to secure all other credit union debts with the vehicle. This may surprise someone when they discover that the debt on the car may include a personal loan, a line of credit, and credit card balances.

There are a few options in bankruptcy if the debtor has a cross-collateralized auto loan. If a Chapter 7 Bankruptcy case is filed, the debtor can request that the credit union prepare a reaffirmation agreement for the vehicle without regard to other debts. In this situation, the debtor is asking the credit union to voluntarily strip off the cross-collateralized loans. If the credit union rejects such request, the debtor has two options: (1) surrender the vehicle and discharge all debts to the credit union; or (2) redeem the vehicle.

If the debtor surrenders the car, the credit union takes the car back and sells it, usually at auction. Any deficiency left on the car loan and all additional cross-collateralized debts owed to the credit union are discharged in the Chapter 7 Bankruptcy. If the debtor in Chapter 7 Bankruptcy chooses to redeem the car, the debtor gets to keep a vehicle by paying the value of the vehicle, not the total debt that is owed. While somewhat similar to a Chapter 13 Bankruptcy cram-down, redemption requires that the payment to the secured creditor must be made in a lump sum and does not allow for payments over time.

If the debtor is filing a Chapter 13 Bankruptcy, the loan can be crammed-down to match the vehicle’s value provided that the loan is over 910 days old. Any remaining debt is treated as unsecured debt and is discharged at the end of the Chapter 13 case. Another option is to surrender the vehicle just as in Chapter 7 Bankruptcy.

If you contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.

Importance of Providing Accurate Information in Your Bankruptcy Petition and Schedules

I have previously written how important it is for debtors to provide their bankruptcy attorney with accurate and complete information. Debtors have an absolute obligation under the Bankruptcy Code to disclose their assets, liabilities and income to the bankruptcy court. Once in a while, a debtor may forget a creditor or overlook an old debt. Not every debt appears on the credit report either. When a debt is omitted from the bankruptcy petition, under the Bankruptcy Code, there are several possible solutions.

Initially, if the debtor realizes that a debt was overlooked during the bankruptcy, the debtor is required to file amended schedules and identify the creditor. If this happens, the bankruptcy attorney should be notified and he will amend the schedules.

If a pre-bankruptcy debt is discovered after the bankruptcy case has been closed and discharge granted, there are a couple of possible options. In some situations, it will be necessary to request that the bankruptcy court reopens the bankruptcy case and discharge the debt. In other situations, especially in no asset Chapter 7 Bankruptcy cases, the debt is considered discharged as a matter of law, even though it wasn’t listed in the schedules. Finally, some types of debt, such as student loans, cannot be discharged under most circumstances, and will survive the bankruptcy.

The bankruptcy courts expect the debtor to provide a full and complete disclosure of both assets and liabilities. In Chapter 7 Bankruptcy asset cases and Chapter 13 Bankruptcy cases, an omission matters a great deal since listed creditors receive payments through the bankruptcy court. If a debtor deliberately fails to list a creditor, that debt is likely be declared non-dischargeable and will survived the bankruptcy. Under appropriate circumstances, courts have denied debtor a bankruptcy discharge because of the debtor’s intentional failure to list all debts or revoked already issued discharge.

If you contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.

Hardship Discharge in Chapter 13 Bankruptcy

When a debtor files for Chapter 13 Bankruptcy in New York, the typical end result is either a 3 or 5 year plan requiring the debtor to pay his disposable income to the bankruptcy trustee, who in turn will pay to the debtor’s creditors. Occasionally, a debtor may suffer further financial reverses or health problems, so that the repayment plan is no longer affordable, and there is not possibility of modifying the plan. While one of the options is converting the Chapter 13 Bankruptcy into Chapter 7 Bankruptcy, it may not always be possible because of the means test issues.

If debtor can’t keep up with Chapter 13 plan payments, U.S. Bankruptcy Code includes a provision called a Hardship Discharge that provides relief for debtors who can’t continue with a Chapter 13 bankruptcy.  The hardship discharge is contained for in 11 U.S.C. 1328(b). The debtor who cannot complete the repayment plan, can ask the court for a hardship discharge. In most cases, the discharge is only available when the following conditions are met:

Through no fault of his own, debtor has experienced circumstances that are beyond his control that makes it impossible for him to continue to make plan payments.
The payments made so far in the Chapter 13 Plan are at least as much as each creditor would have received in a Chapter 7 bankruptcy liquidation case, i.e., the “best interest” test is satisfied.
The repayment plan can’t be modified to allow debtor to continue making payments at a lower amount.

When it is expected that the period of hardship is short, the bankruptcy courts prefer that debtor moves to modify his Chapter 13 Plan to pay a lower amount than was originally agreed upon until circumstances change for the better.  Given the present economic difficulties, bankruptcy courts, here in Rochester and elsewhere in New York, are willing to consider a hardship discharge as a way to move the case forward rather than risking dismissal or conversion to Chapter 7 Bankruptcy.

If debtor cannot continue to work as a result of an illness or injury, it is likely that his income was reduced significantly or he may not be able to work at all. In some cases, debtor might not have any money left over once his basic living expenses are met. In this case, a hardship discharge may be the answer. It will eliminate any debts that are dischargeable in a Chapter 7 bankruptcy.

If you contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.

Second Mortgage In Chapter 7 and Chapter 13 Bankruptcy

It is common for someone who is about to file Chapter 7 Bankruptcy to have a pending or upcoming foreclosure action.  It is also common for the debtors to have a house that is “under water”, i.e., to owe more on their first mortgage than their house is worth.  It is also common for the debtors to have a second mortgage such as a standard mortgage, line of credit or a home equity line of credit. If the first mortgage exceeds the value of the home, it is clear that the second mortgage has no equity in the house to support it, and is fully unsecured.

Once the debtors or their bankruptcy attorney realize the above, the debtors have a choice to make. They can file a Chapter 7 Bankruptcy, assuming that they can pass the means test. If the debtors are eligible for Chapter 7 Bankruptcy, their personal liability under both mortgages can be eliminated. Then, the debtors can decide to pay the first mortgage only. They may also decide to take a calculated risk that the second mortgage holder would try to foreclose on its mortgage.  But would the lender actually commence a foreclosure?  Initially, unless the second mortgage holder acquires the first mortgage, it would end up with a house subject to a first mortgage that exceeds what the house is worth.  That would likely make any such attempted foreclosure a money losing proposition.  Also, if the first mortgage holder forecloses, that foreclosure would eliminate the second mortgage.

Another option that the debtors have is to file Chapter 13 Bankruptcy. While Chapter 13 will carry with it a repayment plan that may last as long as 5 years, it also allows for “lien stripping”, otherwise known as “Pond” motion.  In Chapter 13 Bankruptcy, the totally unsecured mortgage is wiped away and no longer a lien on the debtors’ home.  Then, the second mortgage is treated as unsecured debt that gets repaid in the bankruptcy in accordance with the terms of their repayment plan. According to bankruptcy courts’ decisions, the debtors have to receive a Chapter 13 discharge before the lien is stripped.

Most of the decisions addressing Chapter 7 Bankruptcies hold that the debtors cannot “strip” their fully second unsecured mortgage in a Chapter 7 Bankruptcy case.

One important reason for many debtors to stay in their house after Chapter 7 is that it may cost them less to pay the mortgage than to rent another place to live.  The second mortgage becomes a lot less important since the debtors may be able to strip it right away in Chapter 13, and, if economic conditions don’t improve, the debtors might be able to strip it 4 years from the date they filed their chapter 7 case – when they are eligible for a discharge under Chapter 13.

Another option that may be available to some debtors is to have their mortgage recast under the new Home Mortgage Modification Program.  In my experience, here in Rochester, lenders are willing to work with debtors to recast their mortgages.  Assuming that the debtors have ability to pay their mortgage, and meet other financial requirements, their mortgage may be modified by their lender.

If you are contemplating filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, or are dealing with debt problems in Western New York, including Rochester, New York, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation with a Rochester, NY, bankruptcy lawyer.