All items from Shenwick & Associates

Posted 3 weeks 6 days ago

By Glenn Blain

ALBANY - New York's highest court handed a victory to tenants in rent stabilized apartments Thursday when it ruled their leases could not be seized as assets in bankruptcy proceedings.

The Court of Appeals, in a 5-2, decision sided with a 79-year-old Manhattan widow's argument that her rent-stabilized lease was a public assistance benefit and not an asset that could be liquidated as part of her bankruptcy case.

"When the rent-stabilization regulatory scheme is considered against the backdrop of the crucial role that it plays in the lives of New York residents, and the purpose and effect of the program, it is evident that a tenant's rights under a rent-stabilized lease are a local public assistance benefit," Judge Sheila Abdus-Salaam wrote in the majority decision.

The decision stems from the bankruptcy case of Mary Veronica Santiago-Monteverde, who has lived in her 7th St. apartment for more than 40 years and was forced to file for bankruptcy after the death of her husband in 2011.

During the bankruptcy proceedings, Santiago-Monteverde’s landlord offered to purchase her interest in the lease and the bankruptcy trustee accepted the deal.

Posted 3 weeks 6 days ago

By Jessica Silver-Greenberg

In the netherworld of consumer debt, there are zombies: bills that cannot be
killed even by declaring personal bankruptcy.

Tens of thousands of Americans who went through bankruptcy are still
haunted by debts long after — sometimes as long as a decade after — federal
judges have extinguished the bills in court.

The problem, state and federal officials suspect, is that some of the nation’s
biggest banks ignore bankruptcy court discharges, which render the debts void.
Paying no heed to the courts, the banks keep the debts alive on credit reports,
essentially forcing borrowers to make payments on bills that they do not legally

The practice — a subtle but powerful tactic that effectively holds the credit
report hostage until borrowers pay — potentially breathes new life into the pools of
bad debt that are bought by financial firms.

Now lawyers with the United States Trustee Program, an arm of the Justice
Department, are investigating JPMorgan Chase, Bank of America, Citigroup and
Synchrony Financial, formerly known as GE Capital Retail Finance, suspecting the
banks of violating federal bankruptcy law by ignoring the discharge injunction, say
people briefed on the investigations.

The banks say that they comply with all federal laws in their collection and sale of debt.

Still, federal judges have started to raise alarms that some banks are
threatening the foundations of bankruptcy.

Posted 5 weeks 4 days ago

Here at Shenwick & Associates, we counsel our clients to avoid violating any laws and regulations. While our colleagues of the criminal defense bar may lose work from such advice, it keeps our disciplinary record clean, our malpractice insurance premiums low and our clients out of trouble.

Posted 7 weeks 6 days ago

By Tara Siegel Bernard

Tracy S., 59, a technical writer for a large bank, divorced her husband just as the
housing market spiraled downward. They were forced to sell their home, just
outside Phoenix, for less than they owed, and the bank agreed to absorb the
difference, about $25,000.

“Our ability to pay and our credit was perfectly fine, but neither of us could
keep the house individually,” she said. Ultimately the house sold for about
$175,000, or 21 percent less than they originally paid.

Three years after the short sale, Tracy is a homeowner once again. She bought
a three-bedroom house for $190,000 in another Phoenix suburb this year, and
qualified for a traditional mortgage with a 20 percent down payment.

“I believed and was told that I was not going to get a mortgage for the first two
years after the short sale,” she said, asking that her last name not be used to
protect her privacy. “But after that, I hadn’t really planned and didn’t think I
would be able to get a mortgage.”

So far, she has been in the minority. Through the end of last year, only a tiny
sliver of borrowers tarnished by foreclosures and short sales during the economic
downturn had bought homes again, according to a study by Experian, one of the
Big Three credit reporting bureaus. These borrowers are generally locked out of
the mortgage market for two to seven years, depending on their circumstances.

Posted 8 weeks 1 hour ago

Here at Shenwick & Associates, many of our clients are understandably concerned about how to protect their assets from creditors––especially their home. While there are limits on how much asset protection we can provide clients when presented with an immediate crisis (i.e. a foreclosure sale), with advance planning, there are several strategies debtors can use to protect their most valuable asset. Let's look at a few of these asset protection techniques and devices:

1. The homestead exemption. Most, but not all states provide a homestead exemption (for example, New Jersey has no state law homestead exemption, forcing debtors to use federal bankruptcy exemptions, which are currently $22,975 per debtor, to retain any equity in their home). On the other end of the protections spectrum are states like Texas and Florida, which place no limit on home equity that can be protected from creditors. In New York State, the homestead exemption varies by region of the state, but for downstate counties, the homestead exemption is $150,000 per debtor. While that's a significant amount, given the value of real estate in the New York metropolitan area, many homeowners have much more equity in their homes than can be protected under the homestead exemption.

Posted 11 weeks 5 days ago

By Tara Siegel Bernard
Six months after his wife learned that she had a rare vascular disease of the brain,
Frank, now 66, lost his job as director of sales of a telecommunications company.
His wife, to whom he had been married for 36 years, died just two months later.
He was still grieving when he learned that he had kidney cancer. The tumor
was operable, but the exam brought to light a long list of other serious problems,
including a pulmonary embolism and a heart-rhythm disorder.

That was in 2009, in the depths of the recession, and finding a new job was
difficult. Two years later, after struggling to pay medical bills not covered by
insurance and other debts, Frank filed for bankruptcy. But that did not erase the
giant pile of federal Parent Plus loans that he had taken out to help put his three
children through college. Since he could no longer work, Sallie Mae, the loan
servicer, ultimately suggested applying for a disability discharge, which would
cancel the debts.

He qualified, and last July, his loans, which had ballooned to $150,000 in
forbearance, were wiped away. “I felt like a Buick had been lifted off my
shoulders,” said Frank, who lives in upstate New York.

Posted 38 weeks 1 hour ago

By James B. Stewart

Anyone who wonders why law school applications are plunging and there’s
widespread malaise in many big law firms might consider the case of Gregory M.

The silver-haired, distinguished-looking Mr. Owens would seem the
embodiment of a successful Wall Street lawyer. A graduate of Denison University
and Vanderbilt Law School, Mr. Owens moved to New York City and was named a
partner at the then old-line law firm of Dewey, Ballantine, Bushby, Palmer &
Wood, and after a merger, at Dewey & LeBoeuf.

Today, Mr. Owens, 55, is a partner at an even more eminent global law firm,
White & Case. A partnership there or any of the major firms collectively known as
“Big Law” was long regarded as the brass ring of the profession, a virtual
guarantee of lifelong prosperity and job security.

But on New Year’s Eve, Mr. Owens filed for personal bankruptcy.

According to his petition, he had $400 in his checking account and $400 in
savings. He lives in a rental apartment at 151st Street and Broadway. He owns
clothing he estimated was worth $900 and his only jewelry is a Concord watch,
which he described as “broken.”

Mr. Owens is an extreme but vivid illustration of the economic factors roiling
the legal profession, although his straits are in some ways unique to his personal

The bulk of his potential liabilities stem from claims related to the collapse of

Posted 47 weeks 3 hours ago

By NATALIE KITROEFF Stacy Jorgensen fought her way through pancreatic cancer. But her struggle was just beginning.
Before she became ill, Ms. Jorgensen took out $43,000 in student loans. As her payments piled up along with medical bills, she took the unusual step of filing for bankruptcy, requiring legal proof of “undue hardship.”
The agency charged with monitoring such bankruptcy declarations, a nonprofit with an exclusive government agreement, argued that Ms. Jorgensen did not qualify and should pay in full, dismissing her concerns about the cancer’s return.
“The mere possibility of recurrence is not enough,” a lawyer representing the agency said. “Survival rates for younger patients tend to be higher,” another wrote, citing a study presented in court.

Posted 50 weeks 4 days ago