New York Bankruptcy Lawyer Blog

The recent bankruptcy filing by Lehman Brothers Holdings, Inc. in the U.S. Bankruptcy Court for the Southern District of New York caught many people by surprise. It is the largest corporate bankruptcy to date in terms of assets and liabilities.

Holders of bonds, notes and other obligations issued or guaranteed by Lehman Brothers Holdings, Inc. wonder what their options are and whether they need to hire a New York bankruptcy lawyer to protect their rights. People doing business with non-debtor subsidiaries of Lehman Bros. wonder what steps they should take to protect their rights going forward.

There are certain steps that it is advisable for creditors in a bankruptcy case to take:

1. Obtain Legal Advice re Effect of Bankruptcy Filing on Your Rights.

Different creditors have different rights and remedies depending on the nature of their legal and contractual relationship with a debtor in bankruptcy. Provisions of the Bankruptcy Code give particular rights to certain parties (such as financial institutions, forward contract merchants, etc.) for certain type of financial contracts (such as forward contracts, securities contracts, etc.). Whether or not a creditor is subject to the benefit of particular rights specified in the Bankruptcy Code requires review of the legal obligation in question. In addition, the Bankruptcy Code provides for different rights for different categories of creditors, depending upon whether their claims are administrative claims arising after the filing of the bankruptcy, secured claims, etc. As the Lehman Bros. banruptcy case is pending in Manhattan it may be useful to hire a Manhattan based bankruptcy lawyer who is familiar with the Southern District of New York Bankruptcy Court to provide this advice.

2. File a Proof of Claim.

A creditor will often want to file a proof of claim in a bankruptcy case to ensure that it is eligible to participate in distributions to creditors, unless it has been scheduled in the debt schedules filed by the debtor and is satisfied as to how it has been scheduled. While a creditor is not required to hire a bankruptcy lawyer to prepare and file a proof of claim, it is often advisable to do so (particularly if the amount of money at stake is large). A Manhattan bankruptcy lawyer who is familiar with litigating claims objections in the U.S. Bankruptcy Court for the Southern District of New York can provide valuable assistance to a creditor in preparing a proof of claim for filing in that court.

Continue reading " I Own Bonds or Notes Issued by Lehman Bros. - - Do I Need to Hire a New York Bankrutpcy Lawyer " »

In response to questions we received from clients and prospective clients in New York City, Bronx, Queens, Manhattan and Westchester, in a series of 4 posts we are exploring the most common alternatives to personal bankruptcy for New Yorkers faced with money problems.

A prior post on our blog I Live in New York and Am Considering Bankruptcy -- Should I Try Negotiating with My Creditors First? covered negotiating directly with creditors and/or collectors.

A second post I Live in New York and Am Considering Bankruptcy -- Should I Try Debt Settlement First? addressed so called debt settlement or debt negotiation.

A third post I Live in New York and Am Considering Bankruptcy -- Should I Try Credit Counseling First?
addressed credit counseling as an option.

In today's post we will explore whether doing nothing is a viable option and what it means to be judgment proof.

Instead of Bankruptcy Should I Do Nothing -- Am I Judgment Proof?

Unfortunately many people with financial problems by default seem to select the “Do Nothing” approach. This is the “ostrich approach” (the large bird that can’t fly that sticks its head in the sand when there is trouble). Unlike fine wine, personal financial problems don’t age well (they age more like fish left out in the hot sun).

If you have financial problems and ignore them they are likely to follow a very predictable path – COLLECTIONS followed by COLLECTIONS LAWSUIT followed by JUDGMENT followed by JUDGMENT ENFORCEMENT including wage garnishment and bank account seizures. If you deal with the problem at any early stage you may be able to nip it in the bud before it becomes a collections lawsuit or a judgment. By the time you are faced with collections lawsuits and judgments, doing nothing will usually not help you. Your creditors will not sit back and do nothing — they will most likely move forward in the collections process to try to get judgments against you and to enforce those judgments.

Continue reading " I Live in New York and Am Considering Bankruptcy -- Should I Do Nothing -- Am I Judgment Proof? " »