Robleto Kuruce is proud to announce that, once again, Super Lawyers Magazine has recognized and honored both of the firm’s partners in its selections for 2020. Super Lawyers works to identify exceptional attorneys based upon their professional achievements and the recognition of their peers.
The publication named Aurelius Robleto as a Pennsylvania Super Lawyer in the field of Business Bankruptcy. Mr. Robleto was humbled and expressed his gratitude to the publication, as well as to his peers and the clients of Robleto Kuruce, who made the award possible.
For a third consecutive year, Super Lawyers has recognized Renée Kuruce as a Rising Star in the field of Business Bankruptcy in the state of Pennsylvania. Each year no more than 2.5 percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor. According to her law partner, “Renée’s third consecutive Rising Star award acknowledges her continued commitment to professional excellence and helping the firm’s clients reach their goals.”
Relief for Debtors Harmed by Response to Corona Virus
Social distancing is proving to be an effective response to the Corona Virus public health crisis. Unfortunately, those same measures will harm the economy. Most analysts agree that commercial and consumer bankruptcy filings will rise sharply. In response, Congress has acted with temporary Bankruptcy Code revisions. Now, consumer debtors may be able to decrease their monthly payments by extending the terms of their chapter 13 repayment plans. The amendments will also benefit businesses affected by the COVID-19 pandemic. The amendment expands eligibility for the relaxed, “small business debtor” bankruptcy process. The bankruptcy relief provided under the CARES Act could provide meaningful relief to debtors in business and personal bankruptcy cases.
Temporary Revisions to Chapter 13 of the Bankruptcy Code (COVID-19)
Chapter 13 bankruptcy is a voluntary “reorganization” bankruptcy for individuals. Ordinarily, chapter 13 debtors cannot extend their plan payments beyond a term of five years. That five-year maximum can prevent struggling families from saving their homes from mortgage foreclosure. Typically, debtors fund their chapter 13 plans from the income they receive during the term of the plan. Thus, plan duration and debtors’ income impose a limit on plan funding. That limit may prevent debtors from curing mortgage delinquencies through a chapter 13 plan. Bankruptcy lawyers call that problem “infeasibility.”
Bankruptcy Code revisions in the CARES Act permit modification of plans, extending up to seven years. Debtors must have court approval to extend their confirmed plans beyond a 60-month term. Debtors must also have experienced a “material financial hardship due.” The hardship must, “directly or indirectly, to coronavirus disease 2019 (COVID-19) pandemic.”
Protections Related to Stimulus Payments
The CARES Act Bankruptcy Code revisions ensure that stimulus payments won’t affect debtors’ “current monthly income” and “disposable income.” Those calculations have important implications to the chapter 13 process. Current monthly income determines whether a plan term may be three years or must extend to five. Disposable income determines whether a debtor meets the “best efforts” requirement for plan confirmation. Chapter 13 debtors often pay unsecured creditors less than 100% of their claims over the life of the plan. However, such debtors must devote all of their “disposable income” to fund the plan. If disposable income increased as result of payments from the government, they could threaten the viability of chapter 13 for some debtors. Congress wisely avoided that potential problem through its Bankruptcy Code revisions.
Small Business Reorganization Streamlined Process
The CARES Act amends Small Business Reorganization Act of 2019, increasing the debt threshold from $2,725,625 to $7.5 million. Considering the advantages offered under the streamlined “Small Business” bankruptcy, that amendment could provide a cost-effective reorganization option to many more companies.
The chapter 11 process for small businesses may be attractive to financially distressed companies, concerned about the potential cost and delay of a traditional chapter 11 filing. The cost-saving features include the elimination of the requirement of payment of quarterly fees to the United States trustee, and the absence of official appointed committees (e.g., a committee of unsecured creditors). Instead, a standing trustee oversees case administration and ensures Bankruptcy Code compliance.
The time saving characteristics of a small business chapter 11 may also be attractive. Small business debtors do not require a hearing on a disclosure statement. Unlike an ordinary chapter 11 case where parties in interest can file a plan after the debtor’s right to exclusivity expires, only the debtor may file a plan in a small business case.
Small Business Bankruptcy – Additional Advantages
Among the most enticing features of the new small business law are its simplified approach to “cramdown” and the “absolute priority rule.” Here, cramdown refers to confirmation of a plan over creditor objections. The small business process eliminates the requirement of an impaired class of creditors who voted in favor of the plan. In simplified terms, the “absolute priority rule” mandates that lower priority interest holders must not receive any value under the plan while any senior creditors have unpaid claims. Since an owner’s interest in a debtor exists at a lower priority than general unsecured claims, some courts have interpreted the absolute priority rule to prevent debtors from discharging debt without affecting ownership interests.
Bankruptcy Amendments Sunset Provisions
The CARES Act Bankruptcy Code revisions diverge from the existing statutory scheme. For that reason, the Bankruptcy Code revisions are temporary and will terminate after one year. The bankruptcy amendments give individuals and small businesses some advantages in their reorganization bankruptcies. However, only time will tell whether those adjustments will be enough to protect those hit hardest by the economic ripple effects of COVID-19.
Contact Robleto Kuruce if you have questions about the COVID-19 amendments, or simply want to learn about your bankruptcy options. Experienced bankruptcy lawyers will give you answers during a no-contact, free consultation.
Bankruptcy Pittsburgh. Engaging the Best Bankruptcy Lawyer for your Case May Be More Important than you Know.
In Pittsburgh, as in many other fine cities throughout the United States, businesses and consumers in financial turmoil must find the best bankruptcy lawyer to meet their unique circumstances. Many will begin their search with the cost of a lawyer central in their minds. In Pittsburgh, bankruptcy matters generally proceed as they do in other major cities; those with the best bankruptcy lawyers generally realize the most favorable outcomes. For that reason, those who seek out a cheap bankruptcy lawyer or the cheapest bankruptcy in Pittsburgh find they may have paid what they wanted but overpaid for what they received.
Those considering filing bankruptcy in Pittsburgh should consider the cost of Pittsburgh bankruptcy lawyers. Generally, by the time debtors meet with their bankruptcy lawyers, they’ve become accustomed to tightening their belts. However, engaging the cheapest bankruptcy lawyer may quickly prove to be false economy. In truth, finding the best bankruptcy lawyer for a Pittsburgh bankruptcy must a full examination of the value of that bankruptcy attorney. Of course, debtor must ask how much does it cost to file bankruptcy in Pittsburgh? But, when considering the cost of filing bankruptcy in Pittsburgh, debtors must really take into account the complexity of their cases, the extent to which adverse parties may be involved in their bankruptcy cases and what other complications may arise over the course of each bankruptcy case.
Chapter 13 debtors face similar issues as do business bankruptcy debtor but on a different scale. In a chapter 13 bankruptcy, Pittsburgh consumers often need to save their homes, vehicles and other assets that may be critical to the very survival of their families. As with chapter 11 bankruptcy, Pittsburgh needs bright, motivated lawyers to champion the cause of its consumer debtors who need to reorganize their financial burdens.
In chapter 7 bankruptcy Pittsburgh falls in line with other jurisdictions. In chapter 7 bankruptcy, individual debtors in Pittsburgh generally seek a clear pathway to discharge and a fresh start. It is important that in chapter 7 bankruptcy Pittsburgh debtors select a bankruptcy lawyer who will understand their particular circumstances and give them advice that will permit a Pittsburgh bankruptcy judge to award discharge.
In contrast to any other chapter 7 bankruptcy, Pittsburgh business chapter 7 cases demand the close attention of experienced, intelligent, creative and cautious bankruptcy Pittsburgh lawyers. Commercial chapter 7 cases are very different from the ordinary chapter 7 bankruptcy cases. A debtor must always have a good reason to file a bankruptcy in Pittsburgh that is never more pronounced than when it comes to commercial chapter 7 cases. Business debtors wind up their affairs and do not receive a discharge. On the other hand, certain other interested parties do receive the attention of a chapter 7 trustee, the United States trustee and the United States Bankruptcy Judge presiding over their case. There are occasionally (but not often) valid reasons to file a chapter 7 bankruptcy case for an entity that will not continue as a going concern.
At each level and for each chapter of the United States Bankruptcy Code, finding the best bankruptcy lawyer for a bankruptcy Pittsburgh may be the most important Pittsburgh bankruptcy decision a debtor could make. Contact us today for a free initial consultation. Learn how bankruptcy Pittsburgh can help you move forward with debt relief, a fresh start and a clean bankruptcy Pittsburgh.
Call for Your Free Consultation with a Pittsburgh Bankruptcy Lawyer to Discuss Whether Your Debts May be Discharged in Bankruptcy.
Bankruptcy Exit Strategies in Chapter 11 Bankruptcy Cases Following the Decision of the Supreme Court in Jevic
Business bankruptcy lawyers carefully watched the case of Czyzewski v. Jevic Holding Corp. as it wended its way from a bankruptcy court in Delaware, through the Court of Appeals for the Third Circuit and on to the Supreme Court. At issue in the case was whether a bankruptcy court could enter a dismissal order that provides for distributions in defiance of the priority provisions of the Bankruptcy Code without the consent of affected creditors. Justice Breyer, writing for the majority, explained that the Court’ simple answer to this complicated question is “no.” Czyzewski v. Jevic Holding Corp., 580 U.S. ____, No 15-649, slip op. at 11 (Mar. 22, 2017).
Our simple answer to this complicated question is “no.”
Notwithstanding the clarity and simplicity of that answer, the holding of Jevic does not spell the end of structured dismissals or even structured dismissals that depart from the priorities accorded to creditors under the Bankruptcy Code. Rather, Jevic prohibits only orders dismissing chapter 11 cases which provide for a distribution that departs from the priorities set out in the Bankruptcy Code without the consent of the side-stepped creditors with impaired claims.
The Court found important that the two other paths for resolution of a chapter 11 bankruptcy case, plan confirmation or conversion, expressly prohibit courts from circumventing the waterfall of claim priorities. The absolute priority rule in section 1129(b)(2) prohibits cramdown of a chapter 11 plan upon impaired creditors if the holders of junior claims or interests are to receive anything under the plan. In a case converted to a case under chapter 7, the trustee is charged with distributing property in keeping with the priority provisions of the Bankruptcy Code. Section 726 tracks the absolute priority rule scheme set out for cases under chapter 11.
Structured Dismissal Orders in Chapter 11 Bankruptcy Cases After Jevic
We expect that many bankruptcy courts will be inclined to read Jevic narrowly and apply its bar only to those cases where parties seek structured dismissal orders that dishonor the waterfall arrangement of priority of distributions in bankruptcy cases when the adversely affected creditors object to that treatment. We are certain that, irrespective of how structured dismissal jurisprudence may develop after the Jevic case, business bankruptcy lawyers will continue to press the envelope in terms of creative resolutions in commercial bankruptcies.
Understand the impact that filing a bankruptcy case could have on your credit score. You may be surprised.
Understanding the Interplay Between Your Credit Score and Filing a Bankruptcy Case.
Generally, individuals considering the to file a voluntary bankruptcy petition already have at least some issues with their credit. Pittsburgh bankruptcy lawyers generally discuss those credit issues during a free initial consultation with their clients. Especially when it comes to chapter 7 bankruptcy cases, individuals typically consider filing to escape a dire financial situation. Even consumers who pay their minimum payments on time may have poor credit scores because of very high debt to income ratios. Often the maxed-out credit cards are accompanied by several late payments. Worse, many consumers give up on even the minimum credit card payments but still remain reluctant to file a bankruptcy case.
Filing a Bankruptcy Case Might Actually Improve Your Credit.
The filing of a bankruptcy case is an adverse credit event which, in isolation, might appear to result in a reduction to your credit score. However, continued default on credit facilities, non-reduction of debt and no exercise of credit could be worse than taking the affirmative step a bankruptcy case to address your financial issues. A bankruptcy case could be the quickest way to correct a badly skewed debt to income ratio. Your credit score might also be dramatically improved when certain of your creditors’ claims are retired. Because there are rarely quick-fixes for credit issues, it is often helpful to consider how your financial condition might change within the next 24 months.
Refusing to File Bankruptcy Could Delay Your Fresh Start.
For consumer debtors, chapter 7 bankruptcy usually means a fresh start after getting a discharge. The chapter 7 process moves quite quickly in comparison to the timeline of a chapter 13 case. In chapter 13, debtors pay a portion of what they owe to their creditors over a period of three to five years. It doesn’t take long for debtors find that the chapter 13 plan period is not a prison sentence. When a chapter 13 plan is confirmed it strikes a new deal between a debtor and her creditors. At the successful conclusion of that chapter 13 plan, debtors are rewarded with a completion discharge (in fact, the chapter 13 discharge is actually more broad than the quick chapter 7 discharge ).
A Pittsburgh Bankruptcy Lawyer Can Help You Establish Your Path Forward.
For many people in financial distress, the path outward is not entirely clear. People are sometimes overcome by the weight of their then-present conditions and can’t see forward to a reasonable future as careful stewards of their own assets. In other cases, people financially incapable of caring for themselves could overcommit to their responsibilities. For a true idea of of your financial future, please contact us for a free initial consultation.
We are a debt relief agency. We help people file for relief under the United States Bankruptcy Code. We are proud to have continuously expanded our clients, reach and success rate. Please contact us if you have a challenging bankruptcy or commercial law concern. We are excited to review your condition with you.
BAPCPA set in place certain restrictions for consumer debtors seeking a fresh start. Such debtors are required to undergo a course in credit counseling prior to filing a voluntary bankruptcy petition. The course must be administered by an approved agency and may vary in cost from approximately $15 to $25. The credit counseling course can generally be completed in-person or by telephone but many people find it most convenient to complete the course online. Once the course is completed, the approved counseling provider will generate a certificate of completion which it will direct to the bankruptcy lawyer for filing on the first day of the bankruptcy case. In certain rare instances, debtors may file their bankruptcy case without completing the course and then submit a certificate of exigent circumstances which could excuse tardy compliance with the pre-petition credit counseling rule.
BAPCPA also brought with it a means test that sometimes creates a rebuttable presumption of abuse when debtors in cases under chapter 7 have monthly income in excess of relevant median income for their state. Often in those cases, the Office of the United States Trustee will issue an inquiry letter upon such debtors or their counsel requesting support for the determination that a particular chapter 7 filing is not abusive.
The Bankruptcy Code also places strict restrictions upon debtors’ eligibility to for a discharge for a period of time after having received a bankruptcy discharge in a prior case. The law also severely limits the applicability of a bankruptcy discharge to student loan obligations and to many kinds of tax claims. If the political appetite to expand debtors’ rights existed, even very modest adjustments to the Bankruptcy Code could result in substantial relief for many consumers.
Whether the President Elect’s bankruptcy experience will affect the development of our nation’s bankruptcy laws is not clear. A less polarized Congress could be better positioned to pass new legislation. Moreover, filing the many judicial vacancies of the United States Courts will affect how the law is interpreted—not least when at least one of those appointments will be to the United States Supreme Court. For the time being, Pittsburgh bankruptcy lawyers will anxiously monitor the development of bankruptcy law.
We are a debt relief agency. We help people file for relief under the United States Bankruptcy Code.
How Moving to Another State May Affect Your Bankruptcy Case
People considering filing a bankruptcy case who have recently moved to another state or are planning an out of state move may need to address special considerations during the bankruptcy planning process. Out-of-state moves can affect bankruptcy filings in at least two major ways: the venue in which debtors may file their bankruptcy cases and the law governing how much property those debtors can keep out of the reach of their creditors.
On the question of venue, there are two factors that determine where a debtor may file a bankruptcy case. Jurisdiction for a bankruptcy case may validly hinge upon the location of any of debtors’ domicile, residence, principal place of business or principal assets in the United States. That’s the reason why so many large companies that seem to have little or no connection with Delaware or New York are able to file chapter 11 bankruptcy cases in bankruptcy courts in those states. However, the second part of the venue question is one of timing. If the relevant location was not constant for the six-month period preceding the filing of the case, jurisdiction is only appropriate in the districts where those things existed for the majority of that six-month period (or, if there were more than two jurisdictions, the one where those things were for the longest portion of that 180-day period). For many debtors in cases under chapter 7 and chapter 13, the practical impact is often that they must have lived somewhere for longer than three months before they are able to file a bankruptcy case their new home state.
Exemption rights are the legal rights available to debtors under the Bankruptcy Code to shield property from their creditors. The nature of those substantive rights depends on the debtors’ residence. Congress left it to the individual states to determine whether a state’s residents could chose between the federal or state exemption schemes or were limited to either the state or federal exemptions. Debtors are entitled to the exemption law of the state in which they have been domiciled for the two-year period preceding the filing of their bankruptcy cases. However, if a debtor has not lived in one state for the entirety of that two-year period, the debtor’s exemptions will be determined according to the law of the state in which his or her domicile was located for the majority of the six-month period preceding the two-year period before the case was filed (whew!).
In most instances, Pennsylvania residents who file consumer bankruptcy cases can chose between the state and federal exemptions. The election of an exemption scheme is an important and consequential decision. An experienced bankruptcy lawyer can help with that selection in order to maximize your exemptions rights.
The Automatic Stay – What it is and How it Can Help You Protect Your Assets
Section 362 of the Bankruptcy Code provides one of the most important protections extended to debtors in bankruptcy cases. With certain exceptions, the automatic stay applies the moment a bankruptcy case is filed and prevents the commencement or continuation of adverse litigation or collection activity. For individuals attempting to stave off a scheduled sheriff’s sale of their home or avoid the repossession of a vehicle, the automatic stay is federal law strictly prohibiting foreclosures and repossessions in most instances.
Tell your bankruptcy attorney of any existing or potential lawsuits against you and all possible adverse creditor actions. Generally, it is advisable for your lawyer to immediately give notice of the bankruptcy filing to such creditors to advise them that your assets are shielded by the automatic stay.
Creditors who knowingly violate the automatic stay are subject to mandatory sanctions for your actual damages arising from the violation. Additionally, courts may award punitive damages and attorneys’ fees for such willful violations. In the event of a stay violation, your bankruptcy attorney can best advise you on how to respond.
Creditors wishing to protect their interests may file certain motions before the bankruptcy court. Commonly, creditors file motions for relief from the automatic stay so that they can continue their collection efforts. Your lawyer can discuss your goals with you and help you decide whether to defend a motion for relief from stay. Additionally, certain secured creditors may move for adequate protection payments and demand that debtors provide evidence of insurance. When those kinds of motions arise, your bankruptcy professionals will be available to help you respond.
The automatic stay provides debtors in bankruptcy cases breathing room and puts a halt to chaotic creditor collection efforts. That stay may enable debtors to confirm a plan of reorganization, cure outstanding payments or provide for an orderly turnover of an asset. To assess your goals and map a path toward a fresh start and financial freedom, contact us today for a free initial consultation.
If you are behind on your mortgage payments, filing a chapter 13 bankruptcy may help you avoid foreclosure. If you are behind on payments to the point where a foreclosure complaint has already been filed by your lender, filing a bankruptcy case will immediately halt it. The moment a bankruptcy case is filed, something called the automatic stay is put into effect. The automatic stay is a powerful provision of the Bankruptcy Code which prevents any creditor or party-in-interest from continuing litigation against you or depriving you of your property.
Chapter 13 bankruptcy also helps you repay your past due mortgage payments. Often, once you are several months behind on mortgage payments, you lender may refuse to accept any payment less than the total amount of the arrearages plus penalties and interest as payment, and consider the payment of a single mortgage payment a partial payment. This perpetuates the vicious cycle. A chapter 13 bankruptcy case allows you to pay off any arrearages over a three or five year time period – making catching up far more manageable. Often times, chapter 13 bankruptcy is the only practical option for those substantially behind on their mortgage payments.
There are other solutions for debtors with no other problematic and significant debt beyond mortgage arrearages. Mortgage modification, an arrangement to mitigate the lender’s loss and lower your monthly mortgage payments, can serve as a solution as well. Modification is a negotiation and loan restructuring process which back loads your mortgage arrearages and sometimes (though not always) lowers your monthly mortgage payment. This process often extends the term of your loan allowing your even greater advantages than might otherwise be available in a chapter 13 case limited to five years.
If you are behind on your mortgage payments and have mortgage arrearages in excess of what you can pay back, give us a call for a free consultation to discuss a solution based on your individual goals and problems with debt.
Bankruptcy | Mortgage Modification | Loss Mitigation
Bankruptcy is an option for consumer debtors who have fallen behind on their mortgage payments. If your lender has initiated a foreclosure action or has requested that you short-sell your property or execute a deed-in-lieu of foreclosure, you may wish to consider other options that will permit you to remain in your home.
Most lenders offer loss mitigation or modification options. Borrowers who qualify for mortgage modification may see their interest rates lowered, principal balances reduced or mortgage term extended so that the monthly payments become more manageable. In some instances, lenders may be willing to recapitalize mortgage arrearages, rather than requiring the borrower to make a lump sum, cure payment. Mortgage modification applications are highly structured and lenders typically will not render any decision without a package that is 100% complete with current versions of all documents requested. While many borrowers attempt to modify their mortgage without the assistance of a lawyer, an attorney who practices in the area can be very effective.
A chapter 13 bankruptcy case is also a highly effective way to preserve an at-risk interest in real property. Unlike chapter 7 bankruptcy, bankruptcy under chapter 13 of the United States Bankruptcy Code allows debtors with a regular source of income to repay their creditors some or all of what they are owed over a period of three to five years. For debtors who have reasonable mortgage terms but who have fallen behind on their mortgage obligation and just need some time and space to catch up, a chapter 13 filing may be the answer. When a debtor needs both time and better mortgage terms, a chapter 13 case, together with participation in a loss mitigation program might represent that debtor’s best opportunity to save their home and get a fresh start.
Behind on a mortgage obligation? Don’t wait until your lender forecloses on you—get a free consultation with an experienced bankruptcy lawyer today.