According to a ruling from a Buffalo, NY bankruptcy court judge, a 27 percent proposal is deemed sufficient to address debts for one debtor. The debtor offered pay this portion of a judgment one law firm had received for managing her divorce, and the judge in question felt that this met the basic â€œgood faithâ€ standard required to settle the debt.
Even though this payment from the debtor would not cover anywhere near the full amount sought by the firm, the judge felt that the debtorâ€™s willingness to increase her offer from the previous five percent and ten percent suggestions was enough to show good faith.
The law firm billed the woman in question over $120,000 for her divorce, agreeing to allow her to skip payments for a five year period so she could focus on financial recovery from the fallout of her marriage. After this period was up, however, the debtor was supposed to pay $75,000 received from mortgaging or selling the condo she had purchased with the funds she received from the divorce outcome.
According to the judge in the case, debts have to be treated in a manner known as â€œfundamentally fairâ€ for Chapter 13 filings. Part of the reason this case received so much attention in legal circles and the media was because in the past, the same judge ruled that the condo purchased after her divorce could be shielded from creditors in her bankruptcy filing because it met the homestead exemption.
If you are considering bankruptcy in New York, you need to consult with a lawyer who can advise you whether it is in your best interests to pursue Chapter 7 or Chapter 13 bankruptcy. Chapter 7 may be a better fit if you will be unable to set up a payment plan to address your outstanding debts. Consult with your attorney to learn whether you qualify. Jayson Lutzky is a Bronx, NY lawyer who represents individuals in bankruptcy. He has over 32 years of experience and has helped many highly satisfied clients. Mr. Lutzky offers free in-person consultations. Call 718-329-9500 to set up an appointment or visit www.MyNewYorkCityLawyer.com to learn more about Mr. Lutzky.