Phillip Mahony, Esq.
Bankruptcy, Foreclosure and Debt Settlement Attorney based in Queens, New York
It all happened so quickly. You lost your job, or your second job, or your overtime was cut, or your tenant moved out without warning and you can't find a replacement, and now the financial house of cards that you struggled so hard to keep standing has come crashing down around you. Mortgage payments, credit cards, medical bills, the car loan, your kids' tuition... You are deeper in debt every week and there is no relief in sight.
How I Can Help
The first thing I will do for you as your attorney is interview you and review your finances closely to see if bankruptcy is appropriate for your situation. If it is, I will educate you on the differences between the two kinds of bankruptcy available to most consumers: Chapter 7 and Chapter 13. Together, we will figure out which would be most helpful and which is most likely to erase as much of your debt as possible and get you the fresh financial start in life that you deserve.
To determine which type of bankruptcy is appropriate, I always start my consultations with two questions: What do you own, and what do you owe? Starting with what you own, the bankruptcy trustee will be looking to take your possessions, sell them, and use the proceeds to pay off at least some of your creditors. However, state and federal laws hold that some of your possessions "exempt" from the trustee's grasp.
Chapter 7 Bankruptcy
If all or the vast majority of your property is exempt, if your debt is mostly unsecured debt such as credit cards, medical debt and certain unsecured loans, and if your household income is under the state median average for a family your size, I will most likely be able to steer you into a Chapter 7 bankruptcy. If all goes well, your unsecured debt will be discharged, you will keep your possessions, and your case will be closed in just a few months.
Chapter 13 Bankruptcy
If your income is above the state median average, or if you have assets that are not exempt - a house with a few hundred thousand dollars in equity, for example - which you don't want to lose to the trustee, then a Chapter 13 bankruptcy might be in order. In a Chapter 13, instead of the trustee selling your non-exempt assets to pay your creditors, you keep those assets and pay your creditors yourself through a three-year or five- year (normally interest-free) repayment plan, in which your unsecured debt may be reduced sharply according to your ability to pay.
Other Helpful Provisions of the Bankruptcy Code
In addition to drastically reducing or even erasing your unsecured debt there are also provisions in both Chapter 7 and Chapter 13 that can help lower your secured debt as well. The amount you owe on your car and your real property can be significantly modified in bankruptcy. Call me for a free consultation to learn more.
You are far behind on your monthly credit card payments and now the letters threatening legal action are starting to come almost every day. Or, worse, you answer your phone and on the other end is a debt collector that you never heard of telling you that you owe thousands of dollars on a credit card that you haven’t used for years. Or, worse, you pick up your paycheck one day only to find that the city marshall has garnished a good chunk of it because you didn't show up at a court hearing you didn't know about regarding to a credit card that you never had.
How I Can Help
As your attorney, the first thing I will do for you is make sure you understand that you should not say anything if you are contacted by a debt collectors or their lawyer. Don’t tell them anything except my name and phone number. Just as in criminal law, in the field of law known as debt settlement anything you say can and will be used against you. The key word here is “will.” It’s a certainty.
The next thing I will do is check the state court database and find out what is the status of the debt settlement action. If the creditor or debt collector has not filed court papers yet, we may just wait them out and see if the documents they file with the court are legally sufficient. On the other hand, if you wish to go ahead and try to settle for a lesser amount than they claim you owe, I will give them a call and try to work things out informally.
If a court proceeding has been commenced, I can still try to work out a settlement informally, but at the same time I will file a timely answer to the complaint they filed with the court and we will fight them on such issues as standing (if they are not the original creditor, have they proven their right to bring this action?) and personal jurisdiction (can they show that they properly served you with the court papers?)
We will be in this together, but we will have federal, state and local laws to back us up. The Fair Debt Collection Practices Act, the Exempt Income Protection Act, the 2011 Treasury Rules governing seizure of bank accounts, and all the relevant provisions of New York State and New York City law will all be in our corner. Call me for a free consultation to learn more.
You’ve fallen behind on your mortgage payments. You have no other debt, or very little – no credit cards, no medical debt, no personal loans - but your budget has been extremely tight for a long time and this month, due to some unexpected but urgent expenses, you just didn’t have enough income left to make your mortgage payment. Soon one missed payment turns into two, then three, then six, then…
How I Can Help
It may take some time, but sooner or later the bank is going to be looking to enforce the provisions of the mortgage you signed in which you agreed that they can repossess your house if you failed to make timely payments. They will start this process by serving you with a legal notice – called a Summons & Complaint – that they have started a foreclosure action against you in court. They may serve the notice on you by mailing it to you, or they may have a process server knock on your door and give it to you personally.
Once you receive the Summons & Complaint, it will be my job to promptly respond by filing what is called an Answer with the court. In the Answer, I will challenge as many of the allegations in the Complaint as possible, such as the amount allegedly owed, for example, or whether the Complaint was served according to the exact requirements of New York State law, or whether the bank – if it is not the original mortgagee - even has the right to bring the complaint in the first place. Additionally, I will pull out my magnifying glass and scour every page of the Complaint making sure it is in compliance with the myriad of rules and regulations that govern this area of the law.
Loan Modification and Settlement Conferences
Meanwhile, court rules require that before almost anything else happens, the bank must work with us to try to keep you in your home by modifying your mortgage loan so that your monthly payments are more affordable. As your attorney, I will complete the loan modification application, collect from you all the financial documents the banks requires (bank records, pay stubs etc.) and do my best to steer the process to a successful conclusion.
To keep the court updated on the progress of our loan modification negotiations, you and I and the bank’s attorney will meet at the courthouse with a referee in what is called a settlement conference. Several of these conferences may take place before your loan modification application is resolved. There is no guaranty that you will get your mortgage loan modified, but the referee will make sure the bank negotiates in good faith.
If the parties are successful in reaching a loan modification, or if an alternative such as a short sale or deed in lieu of foreclosure is offered and accepted, the foreclosure action will be discontinued. Call me for a free consultation to learn more.