Hundreds Of Taxi Medallions Repossessed Despite Rescue Deal That Ended Hunger Strike see article below from the Patch

 https://patch.com/new-york/new-york-city/hundreds-taxi-medallions-repossessed-despite-rescue-deal-ended-hunger-0

Which type of bankruptcy is right for you? See post at Forbes below. Jim

 https://www.forbes.com/advisor/debt-relief/types-of-bankruptcies/

How is the Biden Administration addressing student loan debt? See article below in newsy.com

 Interesting article in newsy.com (URL below) about how the Biden Administration is addressing student loan debt. https://www.newsy.com/stories/president-biden-s-policy-on-student-loan-debt-cancellation/

Hundreds of Taxi Medallions Repossessed Despite Rescue Deal That Ended Hunger Strike as reported by the City see link below

 

Hundreds of Taxi Medallions Repossessed Despite Rescue Deal That Ended Hunger Strike

https://www.thecity.nyc/economy/2022/2/20/22941508/hundreds-of-taxi-medallions-repossessed-despite-rescue-deal-that-ended-hunger-strike

Personal bankruptcy and the Deductibility of Non-dischargeable Student Loans for the Means Test

As many readers are aware, individuals whose income exceeds the median income in New York State are required to do "means testing" to determine if they qualify for chapter 7 personal bankruptcy.

In New York State the median income for a family of 1, 2 or  3 is listed below and if a Debtor’s income exceeds the state’s median income they must do means testing. 

Household Size Monthly Income Annual Income

1 $5,058.00 $60,696.00

2 $6,429.92 $77,159.00

3 $7,709.00 $92,508.00

 

If an individual wants to file for chapter 7 bankruptcy and they do not pass the means test, then there is a "presumption of abuse" and they are not allowed to file for chapter 7 bankruptcy.

The means test is an 8-page test and it is the most complicated test or calculation in the law!

Shenwick & Associates is often referred complex bankruptcy cases and we do means testing on a regular basis.

 

We are often asked whether non-dischargeable student loan payments are an  allowed deduction for means-testing. Interestingly,  the test itself does not allow a  deduct for non dischargeable  student loan payments. However there is a deduction for " special circumstances"  and many bankruptcy attorneys believe that non-deductible student loan payments should be a special circumstance deduction.

 

There is a case on point from the Western District of New York (it is not a case from the Southern or Eastern Districts), but it holds that non-deductible student loan debt can be deducted when doing means testing  and the logic of that case may be persuasive to judges in this District. The name of that case is in re Howell  477 B.R. 314 (2012). 

 

In the Howell case, the United States Trustee has moved to dismiss this Chapter 7 case on grounds that the granting of a bankruptcy discharge would constitute an abuse. The central issue in the case was  whether the obligation to pay a non-dischargeable student loan can serve as a special circumstance that will overcome a statutory presumption of abuse under 11 U.S.C. § 707(b)(2).

 

Section 707(b)(1) of the Bankruptcy Code establishes the general rule, that the Court may dismiss a case filed by an individual debtor under this chapter whose debts are primarily consumer debts if the filing would be an abuse.

 

In the Howell case, the debtor had student loan payments of $658.00 per month and if this deduction  were treated as an allowable expense, their current monthly income would fall to a level that avoids a presumption of abuse. 

 

Section 707(b)(2)(B)(i) of the Bankruptcy Code states that in any proceeding to dismiss a case for abuse, "the presumption of abuse may only be rebutted by demonstrating special circumstances.

The Court found that there was no evidence that the Debtors lead an extravagant lifestyle. 

The Debtors had three outstanding student loans. In sworn affidavits, the Debtors stated that they were not eligible for any further extensions and that as presently constituted, the loans require monthly payments through dates that range between 16 and 24 years after the filing of their bankruptcy petition.

 

The Judge held that the totality of evidence supports the absence of an abusive filing and that Section 707(b)(2)(B)(i) provides that special circumstances" may rebut the presumption of abuse. 

The Court stated that the non-dischargeable character of the debtors' student loans will necessitate expenses for which the debtors have no reasonable alternative. 

The Judge further found that the magnitude of the student loans will further compel substantial payments over an extended period of time, without hope for any deferral.

The Judge held that based on the debtor’s student loans and non extravagant lifestyle the bankruptcy filing was  non-abusive and the Debtor’s were granted their chapter 7 discharge.

We should note that the debtors were not attempting to discharge their student loans in their chapter 7 bankruptcy filing. 

Individuals that have questions about Personal Bankruptcy or the Means Test should contact Jim Shenwick 212 541 6224 or jshenwick@gmail.com

 

 

 

 

 

 

When to apply for a credit card after bankruptcy-see the article from Bankrate.com, URL below

 https://www.bankrate.com/finance/credit-cards/how-long-after-bankruptcy-credit-card/

Impact of Omicron on Small Businesses-see Reuters article below

 https://www.reuters.com/world/us/upside-down-again-omicron-surge-roils-us-small-businesses-2022-01-16/

Bankruptcy Deadlines must be observed!

 Bankruptcy Deadlines must be observed! The recent case of In re U-Haul, 21-bk-20140, 2021 Bkr LEXIS 3373 (Bankr. S.D. W. Va. Dec. 10, 2021) demonstrates this rule. In the U-Haul case, a creditor needed to file a proof of claim for $53 million and their attorney  waited until the last moment to do the filing. Unfortunately the attorney  did not have the proper password and the proof of claim was filed approximately 9 hours late.

Counsel for the Debtor objected to the late filed claim. Creditor counsel argued “excusable neglect” (the argument usually made by attorneys  when deadlines are missed see  Pioneer Inv. Servs. v. Brunswick Assocs. Ltd P’ship, 507 U.S. 380 (1993)) and creditor counsel lost. 

For those that do bankruptcy work on a day to day basis, this is a painful case to read. 

A lesson for all lawyers is to prepare for deadlines, observe deadlines, do not wait until the last minute to file and prepare and plan for the unexpected. Jim Shenwick, Esq.

Is Student Loan Cancellation Next? See an excellent article in Forbes Magazine URL below

 https://www.forbes.com/sites/zackfriedman/2022/01/04/is-student-debt-cancellation-next/

NYC taxi medallion baron paid for news stories to boost stock price, SEC claims see article in NY Post URL below

 NYC taxi medallion baron paid for news stories to boost stock price, SEC claims

https://nypost.com/2021/12/29/nyc-taxi-medallion-baron-paid-for-news-stories-to-boost-stock-price-sec-claims/

4 things student loan borrowers should know about the extended payment pause CNBC Article

 A very informative article about continued Federal Student Loan repayment moratorium titled "4 things student loan borrowers should know about the extended payment pause can be found at https://www.cnbc.com/2021/12/27/4-things-student-loan-borrowers-should-know-about-the-extended-payment-pause-.html

Will 15-minute delivery do to bodegas what ride-hailing apps did to the taxi industry? see link to article below

 https://www.cityandstateny.com/politics/2021/12/will-15-minute-delivery-do-bodegas-what-ride-hailing-apps-did-taxi-industry/360006/

Tenancy by the Entirety and Bankruptcy Exemptions

 Keith Fogg wrote a post on Tenancy by the Entirety and Bankruptcy Exemptions, which can be found at https://procedurallytaxing.com/tenancy-by-the-entirety-and-bankruptcy-exemptions/ 

The post and the cited case demonstrate that debtors who live in New York State and own appreciated property together (Tenancy by Entirety property) may be better off not filing for bankruptcy and instead using NYS exemptions instead. Jim Shenwick

4 Tips to Avoid Bankruptcy While Running a Startup see article below at CEOWorld.biz

 https://ceoworld.biz/2021/12/14/4-tips-to-avoid-bankruptcy-while-running-a-startup/

Driven to Disaster: Why Major Cities Must Abolish the Paid Taxicab Medallion System-see the article below

 https://brownpoliticalreview.org/2021/12/driven-to-disaster-why-major-cities-must-abolish-the-paid-taxicab-medallion-system/

James Shenwick, Esq. is proud to announce that he has been selected as a 2021 Top Rated Lawyer by Martindale Hubbell

                   2021 Top Rated Lawyer by Martindale Hubbell.

James Shenwick, Esq. is proud to announce that he has been selected as a 2021 Top Rated Lawyer by Martindale Hubbell

Pandemic Wiped Out NYC’s Taxi Industry & Now Uber Prices are Soaring see the article at Jewish Voice below

 https://thejewishvoice.com/2021/11/pandemic-wiped-out-nycs-taxi-industry-now-uber-prices-are-soaring/

IRS Announces Major Change to Offer in Compromise Policy for Taxpayers Owe Federal Taxes

 The IRS announced a policy change in their Offer in Compromise ("OIC")program (for people who owe federal taxes) where for OICs accepted after November 1, 2021, the IRS will forego taking the post-OIC acceptance  tax refund for the year of acceptance. An excellent article on this topic can be found at https://procedurallytaxing.com/major-change-to-offer-in-compromise-policy/ 

A New Bankruptcy Bill Would End the ‘Texas Two-Step’ and Eliminate Non-Debtor Releases in Chapter 11

The proposed law would prohibit “divisive mergers” in Chapter 11, a corporate reorganization tool made available by Texas and Delaware that allows companies to assign liabilities to a subsidiary that can then seek the protective auspices of bankruptcy. See an excellent article on this topic at

https://www.jdsupra.com/legalnews/new-bill-would-end-the-texas-two-step-3111746/?origin=CEG&utm_source=CEG&utm_medium=email&utm_campaign=CustomEmailDigest&utm_term=jds-article&utm_content=article-link

Evictions are Rising Nationwide

 Evictions and Bankruptcy

On November 7, 2021, the New York Times published an article titled "With Cases Piling Up, an Eviction Crisis Unfolds Step by Step". The article can be found at https://nyti.ms/3mPXsGf 

The article stated that evictions are on the rise nationwide. We are receiving more and more calls and emails from individuals facing evictions and/or businesses in distress at Shenwick & Associates.

The first step an individual or business facing eviction should take is to consult with an experienced litigator or landlord-tenant attorney.  

Can bankruptcy help these people and businesses? Yes, it can. Bankruptcy can provide temporary or permanent relief from many of these problems.

By filing a bankruptcy petition, all litigation against the Debtor (person or company that owes money) is automatically stayed pursuant to section 362 of the bankruptcy code. The purpose of section 362 is to give the debtor breathing room!

Chapter 13 of the Bankruptcy Code allows an individual debtor to reorganize pursuant to a   confirmed chapter 13 plan. A chapter 13 plan could permit the debtor to keep their house or lease, despite the pending eviction action. Chapter 13 plans are generally funded by 3 to 5 years of the debtor's future earnings. Corporations and limited liability companies cannot file for chapter 13 bankruptcy.

Individuals who don't want to keep their lease or home and owe money to banks, landlords, or creditors can file for chapter 7 bankruptcy, which will wipe out their debts and give them a "fresh start."

Corporations or LLCs may file Chapter 7 or Chapter 11 bankruptcy or a new Subchapter V Chapter 11 bankruptcy. 

Debtors' finances are reviewed holistically, including the property they own, who owes money to them, a recent tax return and an after-tax monthly budget. For business we review their Income Statement, Balance Sheet, a recent tax return and guarantees. 

If you or your business is contemplating bankruptcy, call or email Jim Shenwick, Esq. 212 541 6224 or jshenwick@gmail.com to learn about your options.