GENERAL QUESTIONS
- What types of matters does your firm handle?
- Do you only represent companies?
- What geographic areas do you cover?
- What are your fees for legal services?
- Do you accept credit cards?
- Do I have to come to your office in person to hire your firm?
BANKRUPTCY GENERAL QUESTIONS
- What are the different types of bankruptcy and their eligibility requirements?
- What are the principal goals and aims of bankruptcy?
- What is the bankruptcy estate?
- What is the automatic stay and what is its scope?
- Who are the usual players in a bankruptcy case?
- What is a preference claim?
- What is a fraudulent transfer claim?
1. What type of matters does your firm handle?
Our practice is focused primarily on personal bankruptcy, business bankruptcy, commercial collections, civil litigation and bankruptcy litigation.
2. Do you only represent companies?
No, we also represent individuals as debtors in personal bankruptcy cases under chapter 7 and chapter 13 and as plaintiffs and defendants in civil litigation and bankruptcy litigation.
3. What geographic areas do you cover?
We cover New York City, Manhattan, Bronx, Brooklyn, Queens, Staten Island, New York County, Bronx County, Kings County, Queens County, Richmond County, Westchester County, Nassau County, Suffolk County, and New Jersey, among other locations. We represent clients in bankruptcy and reorganization cases before all of the Bankruptcy Courts of the Southern District of New York (Manhattan, White Plains and Poughkeepsie), all Bankruptcy Courts of the Eastern District of New York (Brooklyn and Central Islip), and in the District of New Jersey. We handle matters in other counties and districts of New York not listed above, as well as other states, on a case-by-case basis. We also have extensive practice experience before the U.S. Bankruptcy Court for the District of Delaware. We represent clients in commercial collections and commercial and civil litigation matters in the state and federal courts of New York and New Jersey, and in other jurisdictions on a case-by-case basis. We handle arbitration and mediation matters in New York and New Jersey. We can be hired as mediators anywhere. Our attorneys are admitted to practice in New York, New Jersey, California and Washington, D.C., and get admitted on a per matter basis in other jurisdictions as needed.
4. What are your fees for legal services?
Please contact us for a no obligation fee quote regarding your matter. To represent debtors in personal bankruptcy cases (Bankruptcy Code chapter 7 and chapter 13 cases) we charge on a flat fee basis. Our fees are very competitive to those of other comparable attorneys in our region. To represent debtors in business bankruptcy cases, we charge on a flat fee basis for chapter 7 liquidation cases, and on an hourly rate basis for chapter 11 reorganization cases. To represent creditors in bankruptcy cases, or defendants in bankruptcy litigation, our fees are usually based on our hourly rates. We usually perform commercial collections work on a contingency fee basis (unless the client prefers an hourly fee basis). Finally, we represent parties in civil and commercial litigation matters on an hourly rate basis, but will consider alternative fee arrangements, such as fixed fees for different phases of the case, fee caps, success fees, or blended hourly fee and contingency fee arrangements. Our hourly rates and fixed fee rates are very competitive with other law firms. For hourly rate matters we can provide our clients with a written estimate of fees and costs.
5. Do you accept credit cards?
With the exception of debtors seeking to file bankruptcy, we accept credit cards (Visa, MasterCard, American Express and Discover). For all matters we accept cash, personal checks, traveler's check, PayPal, eCheck, or bank and wire transfers. Payment plans are available in appropriate non-bankruptcy cases. In chapter 7 bankruptcy cases, in appropriate cases fees may be paid over time provided that all fees and costs (court filing fee, mandatory pre-bankruptcy credit counseling fee, etc.) are paid in full before the case is filed as required by law. In chapter 13 bankruptcy cases involving a home owner we may, in appropriate cases, accept part of our fee through the plan with Bankruptcy Court approval.
6. Do I have to come to your office in person to hire your firm?
No, if you are located outside the New York metropolitan area we can work with you by a combination of phone, e-mail, fax, and/or mail. If you are located in the New York / New Jersey metropolitan area we always like to meet clients in person, at least initially. For business clients in the New York metropolitan area, we will be glad to come to your place of business if travel to our office is inconvenient. Also, for consumer clients who are unable to come to us due to health or other reasons, we will come to you depending on the matter.
BANKRUPTCY GENERAL QUESTIONS
1. What are the different types of bankruptcy and their eligibility requirements?
The U.S. Bankruptcy Code provides for the following types of bankruptcy filing:
Chapter 7 -- Liquidation -- provides for the liquidation of a debtor's assets by a trustee to raise cash to pay off creditors' claims. The stages in a chapter 7 case are discussed below. Companies, as well as individuals, can file for chapter 7 (individual consumer debtors are subject to eligibility requirements, discussed below). Spouses can file a joint-case. The 2005 Amendments to the Bankruptcy Case have increased the complexity of individual consumer chapter 7 cases (discussed further below).
Chapter 9 - Municipal Bankruptcy - provides a financially-distressed municipality protection from its creditors while it develops and negotiates a plan to adjust its debts.
Chapter 11 - Reorganization - provides for reorganization of a debtor under a reorganization plan that is voted on by the debtor's creditors. However, it is possible for a business debtor to liquidate its assets in chapter 11 under a "liquidating plan". Companies as well as individuals can file for chapter 11. However, chapter 11 is typically not suitable for individual or consumer debtors unless they have a high net worth or high income. The stages in a chapter 11 case are discussed below.
Chapter 12 - Family Farmer or Fisherman Debt Adjustment - provides for adjustment of debts of a family farmer or fisherman with regular income and subject to certain debt caps.
Chapter 13 - Wage Earner Debt Adjustment - provides for adjustment of debts of an individual with regular income (spouses can file a joint-case). Total unsecured debt cannot exceed $336,900 and secured debt cannot exceed $1,070,650.
Chapter 15 - Ancillary and Other Cross-Border Case - provides a mechanism for dealing with foreign bankruptcy cases where the debtor has assets or creditors in the U.S.
2. What are the principal goals and aims of bankruptcy?
The purpose of bankruptcy is to provide a forum for a financially troubled debtor to deal with all his, her or its creditors in a single unified proceeding, and a mechanism to satisfy creditors' claims. For a business, the goal of bankruptcy is either to provide an orderly liquidation of the debtor and its assets or to reorganize. For an individual, the goal of bankruptcy is to get his or her debts wiped out. The Bankruptcy Code provides for a "discharge" of debts -- which is the elimination of the individual debtor's personal liability for his or her pre-bankruptcy debts (subject to certain exceptions discussed below). The discharge of debt is intended to give the debtor a fresh start.
3. What is the bankruptcy estate?
Upon the filing of a bankruptcy case by or against a debtor, an "estate" is created consisting of all of the debtor's property wherever located in the world. This holds true whether the debtor is an individual or business entity (such as a partnership, corporation or limited liability company). The bankruptcy estate is protected from creditors by the automatic stay discussed below.
4. What is the automatic stay and what is its scope?
The automatic stay is triggered by the filing of a bankruptcy petition. Any action taken by a creditor in violation of the stay (such as commencement of a lawsuit against the debtor after bankruptcy filing without leave of the Bankruptcy Court, or judgment enforcement of pre-petition judgments against estate property) has no legal effect and is void. The stay bars action by all creditors to enforce their pre-bankruptcy claims against the debtor and the debtor's property, regardless of whether the creditor had notice of the commencement of the debtor's bankruptcy case. There are limited exceptions to the stay, including for governmental agencies to enforce health, safety and public welfare laws and for domestic support obligations, among others. Creditors also can move to have the stay lifted for "cause" including lack of adequate protection of an interest in property. In addition, if a creditor is stayed as to property of the estate (for instance, property subject to the creditor's lien, such as a mortgage), the creditor can also obtain relief from stay if it can establish that the debtor has no equity in the property and it is not necessary to an effective reorganization.
5. Who are the usual players in a bankruptcy case?
There are a variety of players in a bankruptcy case as follows:
Debtor - is the person or business that files for bankruptcy relief.
Trustee - is the person appointed by the U.S. Trustee in a chapter 7 case (or elected by creditors to replace the person appointed by the U.S. Trustee in a chapter 7 case) to collect and liquidate the assets of the debtor. In a chapter 11 case, if the Court orders the appointment of a trustee for cause one is appointed by the U.S. Trustee and takes over the management of the debtor and ousts its existing management. Most trustees are attorneys or accountants.
U.S. Trustee - A branch of the Department of Justice tasked with overseeing the administration of bankruptcy cases. The U.S. Trustee plays an oversight role, particularly in chapter 11 cases.
Creditors Committee - A committee of creditors appointed in chapter 11 cases by the U.S. Trustee usually consisting of creditors who hold the seven largest unsecured claims against the debtor. The creditors committee acts as a representative body to advance the interests of unsecured creditors as a whole. In many bankruptcy cases there is insufficient creditor interest for a creditors committee to be formed. Committee members are unpaid but receive reimbursement of expenses. A creditors committee may, subject to Bankruptcy Court approval, hire professionals, such as attorneys, accountants and financial advisors to represent the committee and advance the interests of unsecured creditors in the bankruptcy case. The fees of such professional are paid out of the debtor's bankruptcy estate and not by individual committee members.
Bankruptcy Court - The bankruptcy court is a federal court of the United States and constitutes a unit of the district court. In some locations the bankruptcy court is housed in the same building as the district court, while in others it is in a separate building.
Bankruptcy Judge - A bankruptcy judge is a judge appointed for a 14 year term by the Court of Appeals in the federal district in which the bankruptcy court is located. Most bankruptcy judges previously worked as attorneys in private practice or for the government.
Secured Creditor - A creditor that is secured by a lien against property of the debtor as the result of a voluntary agreement that the debtor entered into (such as, for example, a bank loan secured by a lien on assets, a mortgage on real estate, or a car loan secured by a vehicle), or as the result of a court judgment or order (such as, for example, a judgment lien recorded against real estate, or a writ of attachment against a debtor's equipment), or as the result of a particular law (such as tax liens, that create a lien against the debtor's property when certain notice and filing requirements are met).
Unsecured Creditor - A creditor who has a claim that is not secured by a lien against property of the debtor.
Priority Creditor - Certain types of claims are priority claims under the Bankruptcy Code. These are claims that get paid in full before any distribution is made to general unsecured claims. Priority claims include most tax claims and domestic support obligations (alimony, child support, etc.).
6. What is a preference claim?
A preference under the Bankruptcy Code is a payment on a pre-existing debt made to a creditor within 90 days prior to the date of the debtor's bankruptcy filing (or one year in the case of a transfer to an "insider" of the debtor) that allows the creditor to recover more than it would recover if the assets of the debtor were liquidated in a case under chapter 7 and the creditor received a proportionate distribution on its claim along with other creditors in same class and entitled to the same priority of treatment under the Bankruptcy Code. The intent of the Bankruptcy Code is that similarly situated creditors should receive equal treatment. The preference law is intended to advance this and also prevent pre-bankruptcy collection efforts that disrupt the debtor's business or financial affairs. Trustees (or debtors in possession in chapter 11 cases) have the ability to pursue preference claims. Trustees and DIPs often bring preference claims against all recipients of payments by a debtor during the 90 day pre-bankruptcy preference period. There are a number of defenses under the Bankruptcy Code to a preference claim that a defendant in a preference case may be able to utilize, most notably the "new value defense" and "ordinary course of business defense".
7. What is a fraudulent transfer claim?
Claims of fraudulent transfer under the Bankruptcy Code are based on a transfer of money or other property of the debtor made within one year (two years for cases filed after October 17, 2006) prior to the date of the debtor's bankruptcy filing, regardless of whether the transfer was made voluntarily or involuntarily by the debtor, if
(1) the debtor made the transfer with actual intent to defraud creditors, or
(2) received less than reasonably equivalent value in exchange for the transfer and was either (a) insolvent (i.e., debts greater than assets or unable to pay debts as they became due in the ordinary course of business) or became insolvent because of the transfer, or (b) engaged in business for which the remaining capital of the debtor left after the transfer was unreasonably small. There are a number of defenses under the Bankruptcy Code to a fraudulent transfer claim that a defendant in a fraudulent transfer case may be able to utilize.
