Legally Speaking Cassandra Savoy, Esq. OP/ED
A friend who worked in mid-town for a major Fortune 500 firm told me that his firm had given up three of the five floors they leased. Employees are working remotely, and the expectation is that most people will not return to the site, but will continue to work remotely and for those who need to come in to the office, they will share space with others and only have to come in a couple of days per week.
So, I began to wonder…what happens to the cleaning staff? What happens to the pool secretaries? Another friend was an executive chef in a major restaurant. They had a huge lunch business. That restaurant has closed its doors forever. What will happen when the pandemic is finally over and those who have been unemployed – through no fault of their own I might add – for more than a year are left scrambling for the few available jobs.
I suspect that many people who have survived with unemployment, and due to the courtesies of creditors will find themselves at the end of their rope and for many, the only available “out” may be the bankruptcy court. The goal of bankruptcy is to discharge the debtor’s debts and give him a fresh start.
For most people, the process begins by filing a Chapter 7 or Chapter 13 bankruptcy petition. The goal of a Chapter 7 petition is to allow the debtor to liquidate and clear away many types of unsecured debts like credit card debt. If you’re far behind on your bills and don’t have the means to make monthly payments and living expenses, this may be the way to go.
On the other hand, if you own a house and have other assets, a Chapter 13 may be better option. In a Chapter 13, your total amount of your debts may be reduced, and you will have a payment plan to repay your creditors. In every bankruptcy case, a trustee is appointed.
While the overarching role of the trustee is to collect and liquidate the petitioner’s property (called “estate”) and to distribute the proceeds to creditors. Many people are unaware of just how powerful the trustee is. The trustee collects and reduces to money the property of the bankruptcy petitioner and close the estate as quickly as possible. The trustee ensures that the debtor either keeps or surrenders property that secures consumer debt; the debtor makes all payments to the trustee who, in turn, pays the creditors. The trustee can terminate the Chapter 13 if you fail to keep your part of the bargain.
The Chapter 13 process can go over several years depending on the income of the debtor and size of the debt.
· Debts that you left off your bankruptcy petition,
· Many types of taxes;
· Child support
· Alimony;
· Fines or penalties owed to government agencies;
· Student loans; and,
· Personal injury debts arising out of a drunk driving accident
Bankruptcy is complicated. You will likely need an attorney who regularly works in the bankruptcy court to help you. This is not the time to go it alone. You could end up in a worse position that when you started!
