Newburgh Bankruptcy Lawyer

Our Services: Bankruptcy Lawyer in Newburgh, NY

The Law Offices of Michael D. Pinsky, P.C. offers skilled legal representation to clients across the Hudson Valley who are navigating bankruptcy. We serve clients in Beacon, Fishkill, Wallkill, Walden, Middletown, New Windsor, Highland Falls, Washingtonville, Ulster County, and Westchester County. Some of our New York bankruptcy services include the following:

• Helping you understand How to File Bankruptcy in New York
• Consumer bankruptcy:
  • Chapter 7 Consumer Bankruptcy
  • Chapter 11 Consumer Bankruptcy
  • Chapter 13 Consumer Bankruptcy
  • The Automatic Stay
• Business bankruptcy:
  • Chapter 7 Business Bankruptcy
  • Chapter 11 Business Bankruptcy
  • Chapter 12 Business Bankruptcy
  • Business Debt Restructuring
  • The Automatic Stay
• Answering your Bankruptcy FAQ’s

What is bankruptcy?

Bankruptcy is a complex area of the law within the federal legal system. Congress is vested with the power in the United States Constitution to create uniform laws on the subject of bankruptcy. Article I, Section 8, Clause 4 of the Constitution provides in pertinent part that: “Congress shall have the power . . . to establish . . . uniform Laws on the subject of Bankruptcies throughout the United States. . .. ”

While access to bankruptcy is not technically a constitutional right, the framers of the Constitution of 1787 thought it was important enough to put in the emerging nation’s foundational document. Congress has enacted bankruptcy legislation various times since the 1800’s. The most recent changes in the Bankruptcy Law were made effective in 2020.

The next bankruptcy laws were the Bankruptcy Acts of 1898 and 1938, the latter known as the Chandler Act. A thorough revision to the nation’s bankruptcy laws in 1978, called the United States Bankruptcy Code, modernized the bankruptcy process. This restructuring led to challenges to the jurisdiction of bankruptcy courts and bankruptcy judges. (Bankruptcy judges are appointed for 14-year terms, unlike United States District Court judges who are appointed for life, ostensibly to be free from outside influence.) Those jurisdictional challenges in turn led to further revisions to the nation’s bankruptcy laws, notably the Bankruptcy Amendments and Federal Judgeship Act of 1984 (“BAFJA”). A number of further revisions followed, with the most comprehensive being the Bankruptcy Abuse and Consumer Protection Act of 2005 (“BACPA”).

BAPCA created a number of new requirements for individuals seeking bankruptcy protection. The statute had the (intended) effect of making obtaining bankruptcy relief for individuals more complex and somewhat more time-consuming.

The most recent changes to the Bankruptcy Code were made effective in February 2020. They are the Small Business Reorganization Act (the “SBRA”, or subchapter V of chapter 11) and the Honoring American Veterans in Extreme Need Act (the HAVEN Act).

What kind of court is the bankruptcy court?

The Bankruptcy Court is unlike most other courts you may be familiar with. The United States Bankruptcy Court is a unit of the United States District Court. Bankruptcy cases are “referred” from the District Court to the Bankruptcy Court by standing order. That reference may be withdrawn in a particular case by the District Court if the Bankruptcy Court is determined to be outside of its jurisdictional limits. Decisions in the Bankruptcy Court are made by a Bankruptcy Judge, and not by a jury. That is, when there are disputes, the Bankruptcy Judge resolves them at the trial level. In most Chapter 7 bankruptcy cases, there are no disputes and the client never appears before the Bankruptcy Judge. In Chapter 13 cases, you will meet the Bankruptcy Judge at least once, in a typically non-threatening hearing on confirmation of your Chapter 13 plan of reorganization.

Bankruptcy is like an aircraft carrier: you can fly a lot off of it. You can operate a business (except in Chapter 7), discharge debts, sue and be sued (although pre-filing collection cases, foreclosures, etc. are stayed), challenge your taxes, reject certain contracts and leases, bifurcate (split) claims secured by a lien into their secured and unsecured components, strip off entirely unsecured liens, in certain cases recover repossessed or foreclosed property, and more. It is always best to have a Newburgh bankruptcy lawyer to help you through these matters.

What is the bankruptcy estate?

When a case is filed under one of the chapters of the United States Bankruptcy Code, a bankruptcy estate is created. That estate (with certain exceptions) consists of everything that the filer (called the “debtor”) owns or has a vested right to receive on the date the case is filed, now or in the future. Examples of vested future rights are personal injury cases or claims, and inheritances or marital property settlements received within 180 days of the date of filing.

Generally speaking, in reorganization cases under chapters 11, 12, and 13, the bankruptcy estate expands to include property and rights received during the pendency of the case.

In a case under Chapter 7 of the Bankruptcy Code, the bankruptcy estate is administered by a fiduciary appointed by the Office of the United States Trustee, a division of the United States Department of Justice. Those fiduciaries are called Chapter 7 trustees. They are private persons (usually lawyers), reviewed and approved by the Office of the U.S. Trustee, bonded and insured for their role, and serving on a panel. Panel trustees randomly assigned cases as cases are filed by bankruptcy lawyers and sometimes by individuals filing for relief without a lawyer.

A Chapter 7 trustee is incentivized to more or less aggressively represent the interests of unsecured creditors (credit card companies, doctors, hospitals, creditors extending personal loans, etc.) by how their compensation is structured. Trustees are paid a small fee (from your court filing fee) if no assets are collected, liquidated, and distributed in a case. But the trustee is rewarded by a commission on a sliding scale paid from any assets the trustee recovers, liquidates, and distributes to unsecured creditors.

Chapter 12 and Chapter 13 trustees are paid a commission on the funds paid into and disbursed from Chapter 12 or 13 plans of reorganization. However, unlike Chapter 7 trustees, chapter 12 and 13 trustees have no power to collect or liquidate any assets. Power over the use of estate property remains with the Chapter 12 and/or Chapter 13 debtor.

In Chapter 11 bankruptcy, a debtor in the usual case remains in possession of estate property and continues to operate its business. That right may be forfeited as the result of gross mismanagement, serious conflicts of interest, or other conduct determined by the Bankruptcy

Court to be inconsistent with the debtor in possession’s duties as a fiduciary for the benefit of its creditors.

What are the core functions of the bankruptcy court?

Two basic functions are at the core of the Bankruptcy Court’s responsibilities: (i) the allowance of claims and distribution of assets on those claims; and (ii) the issuance of the bankruptcy discharge.

Will my property be liquidated if I file a Chapter 7 case?

In the ordinary Chapter 7 case filed by persons residing in Orange, Sullivan, Ulster, Dutchess, Putnam, Greene, and Colombia counties, no unprotected assets of sufficient value are, as a practical matter, subject to seizure or sale by a Chapter 7 trustee. In a typical case, the trustee conducts a meeting with the debtor on the record and files a document on the docket of the case stating that, after examination, the trustee has determined that there are no assets of the bankruptcy estate to be liquidated (administered), and that the debtor should receive a discharge. Such a case is referred to as a “no-asset” chapter 7. That is not because the debtor doesn’t own any assets, but rather because any assets that the debtor owns or has a right to receive are protected in some fashion from seizure by the Chapter 7 trustee. In a no-asset Chapter 7 case, creditors are not requested to file claims, and the claims allowance process is not conducted. Absent objection, the second core bankruptcy function of issuing the Chapter 7 discharge takes place, and the debtor gets a fresh start, free from personal liability for most or all of his or her debts.

What is the bankruptcy discharge?

The discharge is a court order that makes debts that arose before the commencement of the case uncollectible as a matter of the debtor’s personal liability. In other words, a creditor may not attempt to collect a debt from a debtor after issuance of the discharge, except to the extent that the creditor’s claim was reduced to judgment before the commencement of the bankruptcy case, and that judgment became a lien on the debtor’s property before the commencement of the case. Alternatively, a creditor may proceed to collect a debt after issuance of the debtor’s discharge if the creditor’s claim against the debtor is not dischargeable.

Contact a Bankruptcy Lawyer in Newburgh, New York

The Law Offices of Michael D. Pinsky, P.C. represents clients throughout New York’s Hudson Valley in a full range of bankruptcy matters. Contact our office today to learn how a Newburgh bankruptcy lawyer at our firm can help guide you through every step of the bankruptcy process.