Covid-19 Coronavirus Bankruptcy - Ny-Bankruptcy

1. FREE CONSULTATION HOME ABOUT SERVICES LOCATIONS TESTIMONIALS BLOG FAQ’S CONTACT EMAIL OR CALL FOR A FREE CONSULTATION: 631-271-3737  WEISS@NY-BANKRUPTCY.COM OVER 30 YEARS EXPERIENCE! Chapter 11 Bankruptcy – Chapter 11 Attorneys Chapter 11 Lawyers Nassau & Suffolk Counties, Long Island A Chapter 11 Case Allows a Business or an Individual with a Larger Amount of Debt to Reorganize Their Financial Affairs. CONTACT US Name* A Chapter 11 reorganization case allows a business or an individual with significant debts and assets to protect itself from Email* its creditors while it concentrates on reorganizing its affairs. The initial filing of the Chapter 11 case immediately protects Phone* the business from its creditors. Afterwards the business goes through a period of supervised court administration during which it takes steps to improve its finances, shed unnecessary expenses, and negotiate with important creditors while Message continuing its protected status. Towards the end of the case, a Chapter 11 bankruptcy case requires the debtor to offer a plan of reorganization, which cures, extends, and in some instances, reduces many of the debtor’s obligations. When is a Chapter 11 Case Necessary or Advantageous? Initiating the Chapter 11 Case and the “Automatic Stay” Chapter 11 Administrative Requirements  The Reorganization Process

2. Loss Mitigation in Chapter 11 Cases The Chapter 11 Reorganization Plan How Has Covid-19 Affected Chapter 11 Law and Practice? Concluding a Chapter 11 Case and the Bankruptcy “Final Decree” The Potential Benefits of Chapter 11 and the Role of Our Law Office SUBMIT I'm not a robot reCAPTCHA Privacy - Terms When is a Chapter 11 Case Necessary or Advantageous? – A Chapter 11 case is necessary when a corporation desires to continue its operations despite creditor activity – like bank restraints, repossessions, evictions, tax lien closures, and foreclosure sales – that would essentially force the business to close. If the business has the potential to reorganize its financial affairs, a Chapter 11 case is advantageous in allowing a business, that may have a good reputation, and which provides a good service or product, survive its hardships and potentially come out of Chapter 11 in a stronger position. Chapter 11 is also necessary where unsecured or secured debts exceed a certain threshold that is beyond the jurisdiction of Chapter 13 cases. If the amount of the debt of an individual debtor either exceeds $419,275. in unsecured debt (as of April 2019) or $1,257,850. in secured debt (as of April 2019), an individual debtor, seeking to reorganize in bankruptcy, would need to reorganize in Chapter 11 rather than Chapter 13, based on such higher debt amounts. Bankruptcy Quick Links Initiating the Chapter 11 Case and the “Automatic Stay”  – What Is Bankruptcy?  Because starting a Chapter 11 case sets in motion an involved case of Court supervision, a client needs to have a Who Can File for Bankruptcy Protection? goal when they initiate a Chapter 11 case. The business’s budget needs to be carefully reviewed to determine the realistic expectations  in terms of reorganizing debt. The bankruptcy petition and schedules, give notice to all of a client’s What Are the Benefits of Bankruptcy? creditors, and  are prepared to give disclosure as to the client’s financial affairs and when these are filed with the What Are the Alternatives to Bankruptcy? bankruptcy court, an automatic stay goes immediately into effect to protect the client’s assets. However, while the Chapter Are There Different Types of Bankruptcy? 11 case allows a long period under a plan (see below) to pay pre-petition arrears, the debtor is required to remain current with post-petition payments for secured debt such as mortgages and equipment loans. A secured creditor not getting What Are the Qualifications for Bankruptcy? regular post-petition payments, such as mortgage payments or equipment loan payments, can move for relief from the automatic stay, which in a Chapter 11 case would usually be contested, with the debtor seeking to quickly cure the post- How Do I Rebuild Credit After Bankruptcy? petition amount in arrears. When Should a Bankruptcy Case Be Filed? Chapter 11 Administrative Requirements –

3. Upon the filing of the Chapter 11 petition, the entity filing for Chapter 11 relief becomes a “debtor-in-possession” or a What Is a Chapter 7 Bankruptcy Case? fictional new entity that is allowed to operate it’s business under court supervision. The business must file What is Chapter 7 Long Island Means Testing? monthly operating reports, show up at creditor meetings and  court status conferences, and file motions when it What Is a Chapter 13 Bankruptcy Case? seeks permission to engage in actions outside of the ordinary course. Because such requirements are potentially involved, What is a Chapter 11 Bankruptcy Case? the business is required to be represented by a retained attorney and usually seeks to have its accountant retained in the New York Bankruptcy Resources case. The Chapter 11 administrative requirements allow post-petition oversight and disclosure, so that the bankruptcy court and the Office of the U.S. Trustee, who oversee the case, can monitor the progress of the reorganization and the likelihood that the debtor could offer a feasible plan of reorganization. The Reorganization Process – Foreclosure Quick Links During the Chapter 11 case the client will on a monthly basis go back to making post-petition mortgage payments What Is Foreclosure? and otherwise keep up with its on-going post-petition financial obligations. However, the client is prohibited from What if I'm in Default and/or Threatened with Foreclosure? curing pre-petition debts during the Chapter 11 case, until a plan of reorganization is approved.  Certain creditors or creditor groups are important in a case and the debtor may have to negotiate and reach an  accommodation with such creditors in What if I'm Served with a Summons & Complaint? order to successfully reorganize. Secured creditors having an interest in cash collateral, rents,  inventory and/or other assets need to be given “adequate protection” under a cash collateral agreement, so that the debtor is given permission to Should I Defend the Foreclosure Action? use cash and/or other collateralized assets. Mortgage holders need to receive monthly post-petition mortgage payments and landlords and equipment lessors need to receive post-petition monthly payments. Unsecured creditors may potentially What are Some Foreclosure Defenses? be represented by an official committee of unsecured creditors if there are enough interested unsecured creditors. Leases Should I Attend Foreclosure Conferences? and executory contracts can be assumed or rejected in a Chapter 11 bankruptcy case, thereby allowing the debtor to “cherry-pick” among its agreements and keep the ones that work and reject the ones that are not economically viable. What to Do in a Prolonged Foreclosure and/or if a Judgment Has Been Entered?  There are deadlines in a Chapter 11 case in terms of the time that the debtor has to assume or reject certain leases, the time for the debtor to have exclusivity in offering a reorganization plan and the time by which the plan must be filed and What to Do if There's Notice of a Foreclosure Sale? approved. If a debtor meets the administrative requirements in a case and the case appears economically viable, the court will next require the debtor to offer a plan of reorganization. However, if the debtor has trouble meeting the administrative What if My Home Was Already Sold in a Sale? requirements and/or if the case appears not to be economically viable, the court could dismiss the case, which would cause the debtor to lose bankruptcy court protection, or in the alternative the court could convert the case to a Chapter 7 liquidation case, where the business  would be closed and its assets  sold to satisfy the claims of creditors. Loss Mitigation in a Chapter 11 Case

4. In the case of an individual debtor, often the debt that requires reorganization in Chapter 11 is a mortgage that is in arrears. One way of dealing with mortgage arrears is to offer a plan where the debtor will “catch up” or cure mortgage Modification Quick Links arrears under a traditional Chapter 11 plan which typically seeks to cure the arrears over five (5) to eight (8) years. However, now that many foreclosures are based on arrears of many years, and therefore the arrears are very high, a “catch up” plan What Is a Mortgage Modification? would not always work, since it may be too expensive on a monthly basis for many debtors to pay both the post-petition monthly mortgage payment directly to the Lender and a separate “catch-up” payment, designed to cure all debts and How to Obtain a Mortgage Modification? secured debt arrears. This is especially true where mortgages are for higher amounts as is generally true in Chapter 11 What to Do if Denied/Approved for a Modification? cases filed by individual debtors. Therefore, in recent years seeking a mortgage loan modification, through Loss Mitigation programs adopted by most Bankruptcy Courts and Judges,  has become a standard way to proceed for individual debtors in What if My Lender is Being Overly Difficult? Chapter 11. Loss Mitigation is the pursuit of a mortgage modification by the debtor overseen and encouraged by the Bankruptcy Court so that the Court is able to pressure both the debtor’s and lender’s attorneys to coordinate over What Are Options Besides Mortgage Modification? documents and information in order to determine if the debtor qualifies and should get a modification of their mortgage. Can We Help with Modifications & Negotiations? The sequence, in terms of seeking Loss Mitigation, is that the debtor in the initial part of the Chapter 11 case makes a motion in front of the Bankruptcy Court for Loss Mitigation where it tries to show that it has the financial ability to sustain a potential modification of the the defaulted mortgage loan, if a hypothetical modification was offered. The Lender’s attorneys have the right to oppose that motion and to try to show that the debtor would not be able to sustain a modification economically or that the Lender has otherwise decided already to deny the debtor for other factors. Assuming Debt Negotiations Quick Links that the motion for Loss Mitigation is granted, the debtor and the lenders attorney’s are required to attend regular Loss Mitigation conferences to determine if the the efforts to obtain a modification are still viable. During this time, while applying for Loss Mitigation, the Chapter 11 debtor pays a hypothetical “adequate protection” payment to the Lender, Foreclosure Non-retention Options usually similar to their former mortgage payment, to demonstrate an ability to pay the monthly estimated amount if the Foreclosure Retention Options modification was approved and to prevent the Lender’s secured position from deteriorating while the potentially long Credit Card Reductions reorganization continues. Business Debt Negotiations Land Lord-Tenant Settlement If the the Loss Mitigation efforts are still viable, and have hope of a modification agreement being ultimately realized, the Medical Debt Bankruptcy Court will keep adjourning the conferences. But if the Loss Mitigation efforts look like they are failing, and if Credit Repair reapplication or appeal options on the modification are not realistic, the Bankruptcy Court will end Loss Mitigation and eventually ask the Trustee overseeing the case to move for dismissal of the Chapter 11 case. On the other hand, if the opposite happens and the Loss Mitigation efforts result in a trial modification that the debtor accepts and pays regularly

5. directly to the Lender, from anywhere from three (3) months to a year, the Lender will eventually offer the debtor a permanent modification agreement. Assuming the debtor wishes to accept the permanent modification agreement, it is FREE CONSULTATION subject to Bankruptcy Court approval, after a motion to the Court. Once the permanent modification agreement is approved by the Court, the loan modification may be part of an overall Chapter 11 Plan under which the debtor can now seek to Evening Appointments Available 631.271.3737 reorganize all of their debts and needs to be confirmed by the Court. Although the confirmed Chapter 11 plan only generally lasts an average of five (5) to eight (8) years, and mortgage modifications are usually from thirty (30) to forty (40) years in duration, the majority of the modification would continue past the end of the Chapter 11 plan. Alternatively, if the defaulted mortgage was the only debt the debtor needed to address, and an overall plan reorganizing several/many debts is unnecessary, the debtor can also decide to voluntarily dismiss the case, since the case many not be needed once the permanent modification is obtained and approved. However, if the defaulted mortgage was only one of many debts or other major debt for the Debtor, the loan modification should be part of an overall Chapter 11 Plan that seeks to reorganize all of the debtor’s debts and needs to be voted on by the debtor’s creditors and approved by the Court.   The Chapter 11 Reorganization Plan – The Chapter 11 debtor must offer a plan of reorganization and a disclosure statement within a certain amount of time as dictated by law and by the bankruptcy court. The Chapter 11 plan is a potentially a complex plan that divides the debtor’s creditors into groups of “classes” that vote on the plan. The amounts due to creditors are either scheduled by the debtor or are asserted by creditors in proofs of claim that are filed prior to a proof of claim bar date that is set by the court. To the extent the debtor disagrees with a filed proof of claim, it can move by motion to object to the claim. The plan is usually approved within a year in a small business reorganization case and usually proposes to pay creditors over a period of time, that may vary between different cases, but is often between 3 to 7 years. Under the plan, secured debt arrears and priority tax arrears need to be cured in full over the plan repayment period, but unsecured debt is often paid at a small pro-rata percentage. By giving the debtor time to propose the plan and time to make plan payments, which may be at a reduced rate, the plan may allow a debtor the “breathing spell” necessary to reorganize. To confirm a plan, the debtor needs its creditors to vote for the plan by certain margins in each class, or alternatively the debtor could “cram down” a rejecting class of creditors if a class below it votes in favor of the plan. Accompanying the proposed plan, is a disclosure statement, under which the debtor is required to give creditors certain information to help them decide whether to vote on the proposed plan.  Under the disclosure statement the debtor must give certain financial information about the debtor’s

6. finances, including projections, that explain to the court and to its creditors what the debtor anticipates from its finances if it reorganizes, and a liquidation analysis, that explains the alternatives if the debtor liquidates. Usually after the debtor offers one or more  proposed plans of reorganization and disclosure statements, the disclosure statement must be approved by the court and the plan must be approved by a vote of the creditors. Assuming that the plan is approved, the debtor must begin to pay its pre-petition creditors as agreed under the plan. If the plan is not approved, the debtor can try to amend the plan and offer it again for a vote. However, if the debtor cannot successfully confirm a plan, or if the case does not appear to be economically feasible, the court can dismiss  the case or convert it into a Chapter 7 case. How Has Covid-19 Affected Chapter 11 Law and Practice? The Coronavirus Aid, Relief and Economic Security (“CARES”) Act which was passed in by the United States Congress in the early part of the 2020 Coronavirus pandemic and signed into law by the President, on March 27, 2020, included not only emergency assistance to families and businesses affected by the pandemic but also some substantive changes to the Bankruptcy Laws, as follows: CHAPTER 11 and COVID-19 –  The CARES Act, passed by Congress and signed by the President at the end of March 2020, included changes to the U.S. Bankruptcy Code which were intended to help deal with the Covid-19 pandemic. One of the major changes was the temporary expansion of the use of Subchapter 5 of Chapter 11 of the Bankruptcy Code, which was already part of the Small Business Reorganization Act of 2019, by vastly raising the debt cap to $7.5 million, thereby expanding the applicability of a statue which was passed to make the reorganization of small businesses more expeditious, efficient and affordable. The most innovative change in subchapter 5 was having a businessman, rather than attorneys from the United States Trustee’s Office, operate as the trustee over the Subchapter 5 Chapter 11 cases. The oversight of the case by a trustee with business experience, as opposed to an attorney from or appointed by the United States Trustees Office, would potentially shift the expertise and and interests of the trustee in a direction which focuses on the businesses’ financial health, as opposed to a more traditional Chapter 11 trustee’s focus on strict technical compliance with administrative requirements.The other improvements under Subchapter 5 are a streamlined and shorted process of getting Chapter 11 Plan approval by dispensing with the requirement for a disclosure statement and allowing for a shortened and less complex Chapter 11 plan and approval process. Concluding a Chapter 11 Case and the Bankruptcy “Final Decree”

7.  After several months of the debtor’s making the initial payments to its creditors under the Chapter 11 plan, the debtor needs to apply to the court for a “final decree” by demonstrating that it has successfully begun to implement the plan. Upon the issuance of the final decree, the court closes the Chapter 11 case but keeps jurisdiction over the plan,  if disputes arise as to the plan terms and as to whether the debtor is making its payments as required under the plan. Essentially the debtor’s protection from its creditors continues while it is making payments under the Chapter 11 plan, but if the debtor defaults on the plan, its creditors do have the right to relief by showing non-payment to the court. Assuming that the debtor is still a viable business,  Chapter 11 cases are often highly effective in giving the business an opportunity to reorganize and reduce debt over a protracted time while being protected from its creditors. The Potential Benefits of Chapter 11 and the Role of Our Law Office – The Law Office of Ronald D. Weiss, P.C. has often represented  businesses seeking to reorganize before the United States Bankruptcy Court in Chapter 11 cases, including in the filing and amending of numerous documents and the plan needed to proceed in Chapter 11. The Law Office of Ronald D. Weiss, P.C. represents Chapter 11 bankruptcy clients in the Eastern District of New York (which has jurisdiction over Suffolk County, Nassau County, Queens County, Brooklyn, and Staten Island, New York) and in the Southern District of New York (which has jurisdiction over Manhattan, Bronx and Westchester County, New York).  Chapter 11 cases, like other types of bankruptcy cases can effectively help a client deal with its debt, however, a Chapter 11 case be complex, and to effectively proceed in a Chapter 11 case a business is required to be represented by a bankruptcy attorney. The Law Office of Ronald D. Weiss, P.C. can discuss and advise you about Chapter 11 bankruptcy and how and whether it can help your particular circumstances. A Chapter 11 reorganization is an involved and potentially lengthy bankruptcy case and requires special knowledge and expertise. The Law Office of Ronald D. Weiss, P.C. has represented many businesses and individuals in the greater Long Island and New York areas in Chapter 11 reorganization cases and can review with you issues relevant to a potential Chapter 11 case. Our consultations are free, the advice may be invaluable. Please call us at (631) 271-3737, or e-mail us at weiss@ny-bankruptcy.com for a free consultation at our Melville, Long Island law office, to discuss with an attorney whether a Chapter 11 case may help your business deal with its financial obligations.   Featured Testimonial

8. “Ronald Weiss helped me file a Chapter 13 and was very successful. My debts were discharged and I was able to save my house. Ron’s firm never rushed me, everything was thoroughly explained to me, and all my questions were answered. I am very thankful for the outcome of my case.” Review by: Lou R. Reviewing: Long Island Chapter 13 Attorney Date published: 2020-01-09 Rating:★★★★★ 5 / 5 stars *DISCLAIMER: Please note that every case is different and presents its own unique set of variables. Thus, no guarantee can be made that you will obtain the same or similar result as a previous client.   lient. LAW OFFICE OF RONALD D. WEISS, P.C. Uniondale Branch Office Location 626 RexCorp Plaza Rm 681 Hauppauge Branch Office Location 150 Motor Parkway Suite 401, Rm 424 MELVILLE MAIN OFFICE LOCATION 734 Walt Whitman Rd #203, Melville, NY 11747  631-271-3737  Weiss@Ny-Bankruptcy.Com  (516) 858-3003 BY APPOINTMENT ONLY NY 11556 (631) 223-4810 BY APPOINTMENT ONLY NY 11788

9. Manhasset Branch Office Location 1129 Northern Boulevard Suite 404 Bohemia Branch Office Location 80 Orville Drive Suite 100, Rm 225 Valley Stream Branch Office Location 70 East Sunrise Highway Suite 500 (516) 853-3003 BY APPOINTMENT ONLY NY 11030 (631) 223-4502 BY APPOINTMENT ONLY NY 11716 (631) 479-3243 BY APPOINTMENT ONLY NY 11581 Hicksville Branch Office Location 100 Duffy Ave Suite 510 (516) 853-3003 BY APPOINTMENT ONLY NY 11801     We accept most major credit cards: The Law Office of Ronald D. Weiss, P.C. is a debt relief agency as such term is defined under the United States Bankruptcy Code. Our law firm concentrates in bankruptcy law and in foreclosure solutions. This is an attorney advertisement. This website is designed for general information only. The information presented on this website should not be construed to be legal advice nor the formation of an attorney-client relationship. Past results do not guarantee future outcome. © 2020 Long Island Bankruptcy & Foreclosure | Law Firm. Powered by WebDesignYou Corp. PDFmyURL.com - convert URLs, web pages or even full websites to PDF online. Easy API for developers!