This article originally appeared at Marketwatch.com on August 11, 2020, at https://www.marketwatch.com/story/us-bankruptcies-on-track-for-10-year-high-with-more-than-100-consumer-companies-already-filing-2020-08-11--------------U.S. bankruptcies are en route to a 10-year high with 424 companies filing as of August 9, according to S&P Global Market Intelligence. The group's analysis took into account both public and private companies with public debt. The coronavirus has hit consumer companies hard, with more than 100 filing for bankruptcy including Men's Wearhouse parent Tailored Brands Inc. TLRD, +4.57%, department store Lord & Taylor and work wear retailer Brooks Brothers. Nearly 100 bankruptcies are in the energy and industrials sector. Oil-and-gas producer Chesapeake Energy Corp. CHKAQ, +5.28% and small-engine maker Briggs & Stratton Corp. are among the 35 companies that have filed with more than $1 billion in liabilities.

Tenant Bankruptcy and Eviction: FAQ for Tenants and Landlords in PA If you are a tenant facing eviction, you can use bankruptcy to temporarily “stop” or stay eviction proceedings. You can also get debt such as credit card debt and medical bills discharged, and in certain circumstances pay off past-due rent over time and stay in your rental property. If you are a landlord whose tenant filed bankruptcy, you have certain rights in your property and this article will explain them. You do not have to provide free housing to a tenant who is protected from eviction by bankruptcy. We’ve helped thousands of tenants exercise their rights in bankruptcy in Pennsylvania. Contact us to schedule your free, no-obligation consultation to find out all of your rights today. Bankruptcy and Eviction on Lease FAQ 1. Does Bankruptcy Protect You From Eviction? Yes, bankruptcy can stop eviction, temporarily. If you’ve received a Notice to Vacate, we can help you file bankruptcy. The automatic stay in bankruptcy stops eviction proceedings temporarily, buying you some time to plan your next move, whether it is to find somewhere else to live and save up for that, or, pay back your landlord or strike some other deal with your landlord to remain where you are. 2. If I File Chapter 7 Bankruptcy, Can I Still Be Evicted? Yes, eventually, if you continue to fail to pay rent. The automatic stay provides a temporary stay of eviction but when your Chapter 7 case closes in four to six months, your landlord can re-commence eviction proceedings. 3. I want to Stay in My Home, Can Bankruptcy Help Me? Yes. Filing either Chapter 7 bankruptcy or Chapter 13 bankruptcy will temporarily stop eviction proceedings. Filing Chapter 13 gives you the opportunity to pay past-due rent to your landlord through your 3- or 5-year plan. If you have steady income and can afford to do that, you may be able to stay in your home. During your free consultation, we will help you figure out if you can afford that. 4. Do Bankruptcies Remove Evictions? No. If you have already been evicted for failure to pay rent, that will remain on your credit report if your landlord reported the debt to the credit agencies. What a bankruptcy can do for you is to discharge any past-due rent you owe, so if you plan on moving and just need a little time to get things together, call us at (215) 625-9600 and we can help you file and get a fresh start. 5. I Filed Bankruptcy to Stop Eviction But My Landlord Filed a Stay Relief Motion. What Can I Do? Your options depend upon whether you filed under Chapter 7 or Chapter 13. If you filed under Chapter 7, your only option is to pay your landlord and if you cannot, the court will likely grant your landlord stay relief so that they can recommence eviction proceedings. If you filed under Chapter 13 and are making plan payments and paying rent to your landlord every post-petition month, your landlord must think there are still grounds to evict you. Are you damaging the property? What other argument can the landlord make to the court that you must be removed from the property? If you are facing a stay relief motion, don’t face it alone. Contact us and we will help you explore your options for remaining in your home. 6. I’m a Landlord and I Filed an Eviction Action Against My Tenant. Does Filing Chapter 7 Bankruptcy Stop Eviction? Yes, temporarily. If your tenant has filed Chapter 7, the automatic stay will be in place during his or her case, which will last 4-6 months. The automatic stay stops eviction and any collection efforts against your tenant, so your eviction proceeding will be on hold. 7. There is a Stay of Eviction Because My Tenant Filed Bankruptcy, What Can I Do About It? A Landlord can file a Motion for Relief from the Automatic Stay, which asks the court to lift the stay as to your eviction action and allow it to proceed. The court may be persuaded to lift the stay if your tenant is very far behind in rent and/or is damaging your property. We have helped many Pennsylvania clients to make arrangements with their landlord. Give us a call at (215) 625-9600 and we can get started right away with helping you. 8. My Tenant Filed Chapter 13 and I Received Notice that I’m to Be Paid through the Plan. What Does That Mean? If your tenant owes you rent and filed a Chapter 13 bankruptcy, he or she intends to pay you that past-due rent over the course of their Chapter 13 plan. This means that during the three to five year plan,  you will regularly get a check from the Chapter 13 trustee. This also means that your tenant must make each post-petition rent payment to you timely and in full. 9. My Tenant Filed Chapter 13 to Pay Past-Due Rent, But I Want That Tenant Out. What Can I Do? Many landlords wind up in this situation in PA.  They file an Objection to the Plan and cite reasons the plan is unacceptable. It may be that the plan the debtor proposed will not pay you enough through the plan, or, it may be that you object to the tenant staying in the property because they are causing damage. In any case, the window of time the landlord has to file an objection once the debtor proposes a plan is very brief, so the Landlord must act quickly as soon as he or she receives notice of debtor’s proposed plan. 10. My Tenant Filed Chapter 13 But is Not Paying Rent. What Can I Do? Again, the Landlord can ask the Court to get out of the Bankruptcy.  They file a Motion for Relief from the Automatic Stay for nonpayment of rent. This will force the tenant to either pay or modify their plan to include those recently-missed payments. If they can’t do either, you will be granted stay relief and can commence eviction proceedings in state court. In Pennsylvania, both landlords and tenants have rights in bankruptcy when rental property and eviction actions are involved. You need an experienced bankruptcy attorney by your side to help you exercise those rights. Contact us today to schedule your free, no-obligation consultation. The post Bankruptcy and Eviction: What Landlords and Tenants Must Know appeared first on David M. Offen, Attorney at Law.

 As many readers of our blog and emails, Congress passed a new bankruptcy law known as Subchapter V. Information about that law can be found at our blog shenwick.blogspot.com. https://shenwick.blogspot.com/2020/06/how-subchapter-v-could-save-your-small.htmlNew Subchapter V is similar to chapter 13 of the bankruptcy code but it can only be used by a business, not an individual.Some creative uses of Subchapter V are  to discharge repayment of a PPP loan, to reject a commercial lease which a tenant no longer wants to occupy, or to reject unfavorable agreements.    Subchapter V became effective on February 19, 2020 and several decisions have been announced by various bankruptcy courts which are favorable to Debtors. First, if a company filed bankruptcy under Chapter 11 can they convert their case to a case under Subchapter V? Yes. In re Progressive Solutions, Inc., No. 8:18-bk-14277-SC, 2020 WL 975464, at *5 (Bankr. C.D. Cal. February 21, 2020) (small business designated Chapter 11 debtor could retroactively proceed under Subchapter V after the case had been pending approximately 15 months).-In re Glass Contractors, Inc., No. 20-40185 (Bankr. E.D. Tex. February 25, 2020) (small business designated Chapter 11 debtor could retroactively proceed under Subchapter V after the case had been pending approximately 1 month).-In re Body Transit, Inc., 613 B.R. 400 (Bankr. E.D. Pa. March 24, 2020) (small business designated Chapter 11 debtor could retroactively proceed under Subchapter V when the case had been pending 48 days).Second, can a debtor file under Subchapter V, if the debtor is not currently engaged in business? Yes, if a majority of its debt was business debt. -In re Wright, No. 20-01035-HB, 2020 WL 2193240, at *3 (Bankr. D.S.C. April 27, 2020) (debtor who was not currently engaged in business operations qualified as “small business debtor” where 56% of its debt amounted to residual business debt).Third, does a Subchapter 5 Bankruptcy Trustee have the automatic right to retain counsel? No. -In re Penland Heating and Air Conditioning, Inc., No. 20-01795-5-DMW, 2020 WL 3124585, at *_ (Bankr. E.D.N.C. June 11, 2020) (Bankruptcy Petition #: 20-01795-5-DMW) (denying Subchapter V trustee’s application to retain counsel, which was filed as a matter of course, because the need for legal representation had not arisen). A Subchapter V trustee may not retain legal counsel automatically like a bankruptcy trustee can do in a Chapter 7 case.Clients, accountants or lawyers who have questions regarding Subchapter V should contact Jim Shenwick at 212 541 6224  or [email protected]

Democratic Platform Promises Good News on Bankruptcy and Student Loans Are you struggling with student loans you can’t pay? The Democratic Platform promises to help. The platform of the 2020 Democratic National Convention says this: Democrats will restore the prior standard in bankruptcy law to allow borrowers with student loans to be able to discharge […] The post November Elections Might Help Bankruptcy Law and Your Student Loans by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

President Donald J. Trump knows a little something about bankruptcy. At least four of his casinos and hotels have filed voluntary reorganization petitions, but could his presidential campaign be placed into involuntary bankruptcy over unpaid security bills to cities? This hypothetical provides a great vehicle for discussing the mechanics of how an involuntary petition gets filed and the consequences arising from it.Some BackgroundThe President's campaign is a corporation named Donald J. Trump for President, Inc. When the President has campaign rallies, people show up. Some of those people don't like each other which requires that security be hired. According to published accounts, the President's campaign has failed to pay at least $1.8 million to fourteen cities for costs related to his rallies. Could those cities put the campaign into an involuntary bankruptcy?Involuntary Bankruptcy 101The requirements for an involuntary bankruptcy petition are set forth in 11 U.S.C. Sec. 303(b) which provides:(b) An involuntary case against a person is commenced by the filing with the bankruptcy court of a petition under chapter 7 or 11 of this title—(1) by three or more entities, each of which is either a holder of a claim against such person that is not contingent as to liability or the subject of a bona fide dispute as to liability or amount, or an indenture trustee representing such a holder, if such noncontingent, undisputed claims aggregate at least $10,000 more than the value of any lien on property of the debtor securing such claims held by the holders of such claims;(2) if there are fewer than 12 such holders, excluding any employee or insider of such person and any transferee of a transfer that is voidable under section 544, 545,547, 548, 549, or 724(a) of this title, by one or more of such holders that hold in the aggregate at least $10,000  of such claims.To initiate an involuntary petition, there must be at least three petitioning creditors if there are more at least twelve creditors. Since there are at least fourteen cities claiming unreimbursed costs, there would need to be three petitioning creditors.Next,the claims must not be the subject of a "bona fide dispute." This is a problem for our petitioning cities. According to the link I included above, the campaign denies all liability on the basis that it was the Secret Service that arranged for security. In order for a petitioning creditor to get past this, it would either need to have a signed contract with the Trump campaign or have had the campaign acknowledge liability.Assuming that three undisputed creditors can be found, the next step is to serve the debtor with a summons. Section 303(h) sets out the test in the event the petition is timely controverted:(h) If the petition is not timely controverted, the court shall order relief against the debtor in an involuntary case under the chapter under which the petition was filed. Otherwise, after trial, the court shall order relief against the debtor in an involuntary case under the chapter under which the petition was filed, only if—(1) the debtor is generally not paying such debtor’s debts as such debts become due unless such debts are the subject of a bona fide dispute as to liability or amount; or(2) within 120 days before the date of the filing of the petition, a custodian, other than a trustee, receiver, or agent appointed or authorized to take charge of less than substantially all of the property of the debtor for the purpose of enforcing a lien against such property, was appointed or took possession.Thus, there will be two issues at trial: whether there are three qualified petitioning creditors and whether the debtor is "generally not paying such debtor's debts as such debts become due unless such debts are the subject of a bona fide dispute." In our hypothetical, the campaign could reply that it is paying all of its nondisputed debts as they come due and provide campaign finance reports showing expenditures. They could also respond that the cities are losers who should have paid the President to visit them.Consequences of an Unsuccessful PetitionUnder our hypothetical, the Trump campaign would no doubt contest the petition and would stand a good chance of defeating it if it could show that it had not contracted for security with the cities and was paying lots of money out to consultants and for media buys and to stay at various Trump properties. Assuming that the Trump campaign defeats the petition, what are the consequences?This is covered by 11 U.S.C. Sec. 303(i) which states:(i) If the court dismisses a petition under this section other than on consent of all petitioners and the debtor, and if the debtor does not waive the right to judgment under this subsection, the court may grant judgment—(1) against the petitioners and in favor of the debtor for—(A) costs; or(B) a reasonable attorney’s fee; or(2) against any petitioner that filed the petition in bad faith, for—(A) any damages proximately caused by such filing; or(B) punitive damages.There are three options for remedies here. The first is an award of costs, which is the least severe. The second would be an award of attorneys' fees, which could be painful because according to a podcast I listened to the Trump campaign has already spent $14 million on attorneys and would likely pour a lot of money into defeating an involuntary petition. Finally, if the court found bad faith, it could award actual damage and punitive damages. In our hypothetical, the campaign accuses the cities of being losers and therefore anything they do must be in bad faith.ConclusionIn this hypothetical case, pursuing an involuntary petition against Donald J. Trump for President, Inc. could turn out very badly for the petitioning creditors. However, because they are municipalities, they could always file Chapter 9 to pay off the damages. The bottom line is that there are brightline tests to be met for filing an involuntary petition: three undisputed debts and a debtor not generally paying its undisputed debts as they come due. Attempting to file an involuntary petition can be expensive if it is not successful. Hat-tip: My partner Manny Newburger suggested this post to me.

This article originally appeared in the New York Times on August 3, 2020https://www.nytimes.com/2020/08/03/nyregion/nyc-small-businesses-closing-coronavirus.html--------One-Third of New York’s Small Businesses May Be Gone ForeverSmall-business owners said they have exhausted federal and local assistance and see no end in sight after months of sharp revenue drops. Now, many are closing their shops and restaurants for good.William Garfield, the owner of Glady’s, a Caribbean restaurant in Brooklyn, said he decided to close after his landlord told him he would need to start paying his full monthly rent.William Garfield, the owner of Glady’s, a Caribbean restaurant in Brooklyn, said he decided to close after his landlord told him he would need to start paying his full monthly rent.In early March, Glady’s, a Caribbean restaurant in Brooklyn, was bringing in about $35,000 a week in revenue. The Bank Street Bookstore, a 50-year-old children’s shop in Manhattan, was preparing for busy spring and summer shopping seasons. And Busy Bodies, a play space for children in Brooklyn, had just wrapped up months of packed classes with long waiting lists.Five months later, those once prosperous businesses have evaporated. Glady’s and Busy Bodies are closed for good and Bank Street, one of the city’s last children’s bookstores, will shut down permanently in August.The three are victims of the economic destruction that threatens to derail New York City’s recovery from the financial collapse triggered by the coronavirus pandemic.An expanding universe of distinctive small businesses — from coffee shops to dry cleaners to hardware stores — that give New York’s neighborhoods their unique personalities and are key to the city’s economy are starting to topple.More than 2,800 businesses in New York City have permanently closed since March 1, according to data from Yelp, the business listing and review site, a higher number than in any other large American city.About half the closings have been in Manhattan, where office buildings have been hollowed out, its wealthier residents have left for second homes and tourists have stayed away.Give the gift they'll open every day.Subscriptions to The Times Starting at $25.When the pandemic eventually subsides, roughly one-third of the city’s 240,000 small businesses may never reopen, according to a report by the Partnership for New York City, an influential business group. So far, those businesses have shed 520,000 jobs.While New York is home to more Fortune 500 headquarters than any city in the country, small businesses are the city’s backbone. They represent roughly 98 percent of the employers in the city and provide jobs to more than 3 million people, which is about half of its work force, according to the city.When New York’s economic lockdown started in March the hope was that the closing of businesses would be temporary and many could weather the financial blow.But the devastation to small businesses has become both widespread and permanent as the economy reopens at a slow pace. Emergency federal aid has failed to provide enough of a cushion, people remain leery of resuming normal lives and the threat of a second wave of the virus looms.The first to fall were businesses, especially retail shops, that depended on New York City’s massive flow of commuters. And months into the crisis, established businesses that once seemed invincible, including some that had ambitious expansion plans, are cratering under a sustained collapse in consumer spending.One business that will not reopen is Bank Street Bookstore, a nonprofit on the Upper West Side run by the Bank Street College of Education. More than 90 percent of its revenue was in-store sales, mostly to neighborhood parents, the college’s students and elementary schoolteachers.“We had to keep reinventing the business every week to two weeks, based on new guidelines,” Caitlyn Morrissey, the store’s manager, said about the past months. “Our cornerstone was in-person sales, not web sales.”Image“Our cornerstone was in-person sales, not web sales,” said Caitlyn Morrissey, the manager of Bank Street Bookstore, a children’s book shop that is closing for good. “Our cornerstone was in-person sales, not web sales,” said Caitlyn Morrissey, the manager of Bank Street Bookstore, a children’s book shop that is closing for good. Credit...Amr Alfiky/The New York TimesUnlike larger firms, small businesses — bookstores, bodegas, bars, dental practices, gyms and day care centers — typically do not have the financial resources to overcome a few rough days or weeks, let alone months.There is no clearinghouse for reliable data on the number of small businesses that have closed in New York or nationwide. The actual number of permanent closings in New York is probably higher than Yelp’s tally since it largely focuses on consumer-facing businesses. A small business is generally defined by economists as those with under 500 employees.From March 1 to the end of April, during the height of the pandemic in New York City, businesses in the city that use the payment company Square saw their revenues drop by half, according to an analysis the company provided to The New York Times. The most significant revenue declines were in the Bronx and Manhattan, the company said.As part of a $2.2 trillion emergency aid package adopted in March, the federal government set aside about $500 billion in small-business loans to keep workers employed and companies afloat. But business owners said they have spent all or most of their loans, paying salaries and bills, including rent.More help for small businesses is part of negotiations as the Trump administration and Republicans and Democrats in Congress try to iron out another rescue package.While the worst of the pandemic in the United States struck New York City first, small businesses across the country have been clobbered.Between early March and early May, roughly 110,000 small businesses nationwide shut down, according to researchers at Harvard.In New York, the restaurant and hospitality industry has been one of the hardest hit. More than 80 percent of the city’s restaurants and bars did not pay full rent in June, according to the NYC Hospitality Alliance.Among those restaurants was Glady’s in Brooklyn. Its revenue plummeted by two-thirds since March, to about $12,000 per week in June. The majority of its sales were from tropical rum drinks served through a side window of the restaurant.The owner, William Garfield, said he decided to close in June before officials started allowing outdoor dining after his landlord said he had to start paying the full monthly rent, $8,000, starting in July. Mr. Garfield said the healthy revenue from drink sales was still not enough to make ends meet.“We were thriving,” said Mr. Garfield, 32, said about Glady’s business before March. “I would disagree with the sentiment that if someone had a thriving business they should be able to survive this.”Mr. Garfield has another restaurant, Mo’s Original, and a bar next door, both of which he plans to keep open. His staff among his businesses has shrunk from 56 to seven.He has spent almost all of his small-business stimulus loan, known as Payroll Protection Assistance, about $72,000. His insurance company denied his business interruption claim, citing New York State’s order that restaurants were “essential businesses” and could stay open.“It’s the most frustrating situation because it’s not about passion anymore or the work you put in or the hours you put in,” he said. “It’s all about the mitigating circumstances that are out of your control.”In recent weeks, “For Lease” signs have started to appear on storefronts on streets throughout New York, evidence that businesses that tried to ride out the initial months or abruptly shift to new online business models could no longer survive.Business owners said they are at a tipping point. They have exhausted their federal, state and local aid. And while some landlords have offered breaks on rent, some business owners say others have been less flexible.Owners say they also have to cope with constant uncertainty — not just the threat of a resurgence of the virus but also having navigate shifting reopening plans.Restaurants in New York City were expecting to restart indoor dining in July. Owners bought food and supplies for what they thought would be larger crowds. But days before the restrictions were to be lifted, officials halted the plans, citing rising cases in other states that had allowed indoor dining.Nearly a third of the 2,800 businesses in New York City that have permanently closed were restaurants, according to Yelp.The remaining businesses represent a broad swath of the city’s economy, including small law firms, beauty stores, spas and cleaning companies.“As a small-business owner, I’m surprised that more businesses have not closed yet,” said Andrea Dillon, the owner of Busy Bodies, a day care she opened on Fulton Avenue in Brooklyn in 2016.Ms. Dillon said she noticed the ripple effect of the pandemic in late February, a few weeks before the city shut down. Parents and caregivers were canceling upcoming birthday parties and classes.By early March, she realized that her entire business model — in which up to 70 children and adults cram into a play space with toys and live music — could not coexist with the coronavirus.She asked her landlord for a break on her $6,000 a month rent, but he refused. Ms. Dillon said she decided in early April to close down.“The face of New York City storefronts, they will not be forever changed,” she said. “But they will be changed for the foreseeable future.”While her management company did not offer a break on rent, another landlord, Brian Steinwurtzel, said he was doing just that for some of his roughly 2,000 tenants in New York City, many of them small businesses. Mr. Steinwurtzel, the co-chief executive at GFP Real Estate, said he helped them apply for federal assistance and lowered their rents while business is down.“It doesn’t make any sense to kick them out or fight with them as long as we are all working together,” Mr. Steinwurtzel said. “We believe we are all in it together, and we all have to help each other out.”The most vulnerable small businesses in New York City might be those operated by minority or female owners. Recent studies have shown that these were largely shut out of federal aid. There are about 10,500 business that New York City has certified as minority- or female-owned.A survey of such businesses released by the New York City Comptroller’s Office found that 30 percent of them believed they were likely to fold within the next 30 days.Among those businesses is ThroughMyKitchen, a catering and snack company owned by Evelyn Echevarria. Before March, she derived most of her income from selling goods at street fairs and catering. Her last event was in March, catering a 120-person wedding in South Carolina.She is surviving on unemployment benefits, but the largest portion of that, the federal stimulus of $600 per week, expired at the end of July. She also received $2,000 in assistance from the city.“It’s been very, very hard,” Ms. Echevarria, 58, said. “The small businesses won’t be able to survive this. This, to me and many others, is devastating. It’s devastating.”Sheelagh McNeill contributed research.

Most people are hesitant to file for bankruptcy. They’ve been told, over and over again, that it’s only something to use as a “last resort.” Instead, filing bankruptcy can be a savvy financial move to employ, especially after circumstances change. For example, right now thanks to Covid-19, unemployment is at an all-time high. There’s a […] The post Are You Waiting Too Long to File Your Philadelphia Bankruptcy? appeared first on .

This story originally appeared in the New York Daily News on July 20, 2020 ,https://www.nydailynews.com/coronavirus/ny-coronavirus-taxi-medallion-report-covid-pandemic-20200729-mpk7gcu5ovd3zhuuhev4cfr6lu-story.html--------Coronavirus has left the city’s yellow taxi business gasping for breath.Ridership was down 92% in June — and just one in five of the city’s 13,500 yellow cabs even hit the streets, according to data the city Taxi and Limousine Commission released Wednesday after months of delays.When New York became the epicenter of the outbreak in April, the amount of money yellow cab drivers grossed before expenses was down to $54 per day, a decline of 70% from the $176 per day they grossed in February. Their gross rebounded to $105 per day in June, but was still 47% lower than the $195 cabbies took in daily in June 2019.Uber, Lyft and other app-based car services also hurt — but their drivers’ losses weren’t as steep.Nearly 50,000 app-based drivers stopped working between February and June, which helped driver pay remain stable.TLC data shows app-based drivers who kept working through the pandemic earned just 5% less in June than they did the same month last year. In June they were doing roughly 251,696 rides per day, nearly 14 times the 18,325 rides yellow cabs saw.App-based drivers are still doing more business than the the 217,000 daily rides yellow cabs recorded in February, before the pandemic.“It’s quite remarkable how Uber and Lyft have bounced back to a degree, while taxis have much less,” said Bruce Schaller, a transportation consultant. “What you see in the numbers is more of the same of what you saw pre-pandemic, with Uber and Lyft doing much better than the yellow taxis both as an industry and for drivers individually.”A woman wears a face mask near the Port Authority in Midtown Manhattan in March.A woman wears a face mask near the Port Authority in Midtown Manhattan in March. (Luiz C. Ribeiro/for New York Daily News)Owners of New York City’s taxi medallions — which give drivers the exclusive right to take street hails in the busiest areas of Manhattan — were in trouble before the pandemic hit.Medallion owners faced an average debt in January of about $700,000 — a figure that began to balloon in 2014 when the app-based companies Uber and Lyft began to siphon rides away from cabs.Now the outlook for their business is even worse.“If this isn’t a wake up call for the city and its leaders, then we will know who was responsible for ending this industry and I still wouldn’t say it was COVID,” said Bhairavi Desai, president of the New York Taxi Workers Alliance and a medallion owner.More people working from home means fewer people commuting by yellow taxis. And with air travel down 85%, fewer people are visiting New York for business or tourism — meaning cabbies can’t count on fares and tips from out-of-towners.The pandemic has forced nearly 9,000 yellow taxi drivers off the streets since March, giving them little income to pay off their piling bills.Medallion owners in January called for the city to help find “mission-driven investors” who could help bring down some debt. Now, with the nation facing a severe recession, that option appears to be off the table.Yellow Taxis are seen parked on 37th Street and 11th Avenue on April 6.Yellow Taxis are seen parked on 37th Street and 11th Avenue on April 6. (Luiz C. Ribeiro/for New York Daily News)App-based drivers who stopped working during the pandemic also face uncertainty.Varinder Kumar, 47, stopped driving for Lyft in March out of fear for his health.Kumar said he plans to return to work next month if Congress does not renew the $600 in weekly unemployment benefits he’s received from the federal government since April. The extra money is slated to stop coming on Friday.Varinder Kumar, a Lyft Driver who left work in March out of fear for his health.“I was making less with unemployment than I was when I was driving in February,” Kumar said. “But I have a family and I need to keep them safe. I won’t make the same money as I did before the pandemic if I go back to work either.”“If things don’t work out maybe I’ll move to another state that is not so expensive,” he added.Schaller expects many more app-based drivers will begin to return to the streets in the coming months, which could lead to a reduction in their average pay.Unlike yellow cab drivers, if Kumar returns to work he would benefit from the city’s minimum wage and paid sick leave rules. He also won’t face the insurmountable debt that taxi medallion owners are having an even harder time paying off due to dismal ridership.But Schaller said the crisis could bring an ugly reckoning to the yellow taxi medallion business: It could force many medallion owners who are still hanging on to file for bankruptcy, and effectively reset the entire industry.“The question is: Does this huge drop end up basically flushing all the bad debt down the toilet?” Schaller said. “The thing about the taxi industry is, it could be healthy if you just started over. Bankruptcy could give you a fresh start.”

This story, Landlords Jump the Gun as Eviction Moratorium Wanes. https://www.nytimes.com/2020/07/23/business/evictions-moratorium-cares-act.html) originally appeared on New York Times on July 23, 2020.The CARES Act temporarily protects millions of renters from being kicked out of their homes for nonpayment. Filings aren’t supposed to resume until after Friday.Legal Aid lawyers say a tenant received an eviction notice from this apartment complex in Tucker, Ga., even though she’s protected under the CARES Act.Legal Aid lawyers say a tenant received an eviction notice from this apartment complex in Tucker, Ga., even though she’s protected under the CARES Act.Credit...Melissa Golden for The New York TimesBy Matthew Goldstein July 23, 2020The four-month pause that has protected millions of Americans from eviction cases is set to expire at the end of this week. But that hasn’t stopped landlords across the country from trying to get a head start forcing renters out.Landlords in Tucson, Ariz., filed dozens of eviction cases last month despite the federal moratorium, which was put in place because of the coronavirus crisis. Legal aid lawyers had to go to court to stop the eviction of a San Antonio renter who had lost her job during a citywide stay-at-home order. And in Omaha, a court found that a struggling renter’s attempted eviction had violated the emergency law.As the number of Covid-19 cases has surged across the country, a disturbing trend has emerged: landlords commencing eviction proceedings even though the CARES Act relief law currently protects about 12 million tenants living in qualifying properties.Yolanda Jackson, a special-education paraprofessional in the DeKalb County schools outside of Atlanta, lost her job in March when the schools shut down. Ms. Jackson, a mother of two, has yet to receive an unemployment check, despite confirmation that she was approved, and hasn’t been able to pay her rent. A charitable organization agreed to cover her missed payments, but so far the manager of her complex, LaVista Crossing Apartments, hasn’t sent the necessary documentation to accept it.“I have tried everything in my power not to get to this point,” Ms. Jackson said. “I’ve been here seven years, and they will not work with me. I am just stressed out and trying to hold it together.”She received an eviction notice in late June, and the manager said in a court filing that the property wasn’t covered by the federal moratorium. But on Tuesday, lawyers for Legal Aid in Atlanta decided to take her case after finding that the complex is in fact listed as having a federally backed mortgage — making it covered by the CARES Act moratorium.Yolanda Jackson, still waiting for unemployment benefits after losing her job during the pandemic, is trying to fend off eviction from LaVista Crossing.Credit...Melissa Golden for The New York TimesLawyers for LaVista Crossing did not respond to messages seeking comment.At least two other residents of the apartment complex have been served with eviction notices for nonpayment, said Lindsey Siegel with Atlanta Legal Aid. “Many Legal Aid clients are facing evictions simply because their unemployment benefits haven’t come through,” she said.State and local governments have also issued eviction moratoriums, but the CARES Act is the furthest reaching, covering as many as 12.3 million renters living in an apartment complex or single-family home financed with a federally backed mortgage. But like other moratoriums, it’s about to expire: After Friday, landlords can begin filing eviction notices for failure to pay rent. It will be at least 30 days after that before any tenants are kicked out.The moratorium has been a lifeline for millions of unemployed people, allowing renters waiting on slow-to-arrive aid to stay in their homes and make up the payments later.But the far-ranging and hastily assembled CARES Act — which, among things, had provisions for direct relief payments, a temporary expansion of unemployment insurance and hundreds of billions of dollars in small-business aid — does not penalize landlords who violate the moratorium.Paula Cino, a vice president for policy and government affairs at the National Multifamily Housing Council, a landlord group, said there had been some legitimate confusion at the outset with the federal moratorium and local and state eviction pauses.“That said, I wouldn’t minimize the fact that there is the potential for bad actors in this space,” she said. “Even if they weren’t initially taking advantage of the system, they have the responsibility to better understand.”Once an eviction case enters the legal system, it can have lasting consequences: Even a wrongfully filed action can be difficult to remove from court records and keep turning up when renters go through background checks.“An eviction judgment stays on a tenant’s credit report for seven years, is grounds for wage garnishment and makes it more difficult for a tenant to find future housing,” said Stacy Butler, a law professor at the University of Arizona who has been tracking violations of the CARES Act.Even with a moratorium in place, landlords have been serving eviction notices in places across the country, housing advocates say.Even with a moratorium in place, landlords have been serving eviction notices in places across the country, housing advocates say.Credit...Melissa Golden for The New York TimesThe moratorium bars the start of evictions for nonpayment for about 12 million renters in properties that have federally backed mortgages.The moratorium bars the start of evictions for nonpayment for about 12 million renters in properties that have federally backed mortgages.Credit...Melissa Golden for The New York TimesThe scope of the problem is elusive. Wrongly evicted renters might not bother trying to challenge their landlords, sometimes because of their immigration status, or because they do not know they have the right.But wrongful evictions have been reported across the country. The Private Equity Stakeholder Project, a consumer advocacy group, found more than 100 filings in apparent violation of the CARES Act in Arizona, Texas, Florida and Massachusetts.And in a survey of 100 legal aid lawyers in 38 states, by the National Housing Law Project, all but nine said they knew of attempts at illegal evictions in their cities. The problem prompted the group to create a draft complaint to challenge a violation of the CARES Act moratorium.Judges have been troubled, too. The Texas Supreme Court issued a statewide order on Tuesday requiring landlords to certify whether the CARES Act applies to an eviction case, and Arizona’s Supreme Court took a similar action earlier this month.Lawmakers in Washington are debating another relief law — including possible stimulus payments, aid for governments and schools, and a decision on what to do about the extra $600 weekly unemployment benefit — and housing advocates want it to have more help for renters.The landlord group is in favor of help for tenants, too. The National Multifamily Housing Council said it favored the creation of an emergency rental assistance program of up to $100 billion. But the organization opposes a “protracted extension of a federal eviction moratorium.”If the moratorium is extended in another relief bill — it is part of the $3 trillion package passed by House Democrats — there are calls from housing advocates to give it enough teeth to keep landlords from trying to skirt the rules.“There should also be clearly delineated enforcement mechanisms and steep penalties for landlords who flout the law,” said Diane Yentel, president of the National Low Income Housing Coalition, which has set up a webpage to help tenants determine if their rental is covered by the CARES Act.With some forms of aid slow to arrive, the eviction moratorium has allowed struggling tenants to stay in their homes.With some forms of aid slow to arrive, the eviction moratorium has allowed struggling tenants to stay in their homes.Credit...Melissa Golden for The New York TimesNelson Mock, an attorney with Texas RioGrande Legal Aid, said lawyers across Texas had seen “landlords trying to sidestep the issue.”Juanita Herrera DeLeon, 57, who lost her job in March during San Antonio’s stay-at-home order, had to fend off an eviction attempt despite the CARES Act moratorium.Soon after Ms. DeLeon lost her job, the manager of her apartment complex, the Olmos Club Apartments, tried to lock her out by installing a device on her doorknob. It was removed after she complained to the police, but she said the complex had tried other tactics to get her to leave, like posting on her front door a three-day notice to vacate the premises.That was when she sought help from RioGrande Legal Aid. In a statement filed with her lawsuit, she said the property manager “did not leave me anything in writing about locking me out” before the first attempt.The suit was recently settled; Mr. Mock said he was not permitted to discuss the terms.Jason Adelstein, a lawyer for the Olmos Club Apartments, said, “The dispute was settled between the parties, my client denies any wrongdoing, and due to the terms of the settlement agreement between the parties there can be no further comment.”The issue of CARES Act violations may be worst in Arizona.In June alone, at least 80 eviction proceedings that were started in the local courts in Pima County appeared to violate the CARES Act, according to research by a team that included Ms. Butler, the law professor in Tucson. Many were filed by small landlords, and it’s hard to know whether the filings were intentional or a mistake, she said.One property owner, however, was responsible for filing more than a dozen cases against residents of the Cordova Village apartment complex on Tucson’s south side.The landlord, Equilibrium Properties, which operates several apartment buildings in Tucson and Washington, D.C., said in an emailed statement that the eviction filings had been made in error. The company, which received at least $150,000 under the Paycheck Protection Program established by the CARES Act, said it had moved to vacate the proceedings and was “rescinding all notices for nonpayment that have been given to tenants.”“Moving forward,” the company said, “we will take every effort to comply with the CARES Act.”

This story, Federal Aid Has So Far Averted Personal Bankruptcies, but Trouble LoomsOnce federal benefits dry up, highly indebted consumers could be forced to file.originally appeared in the New York Times on July 17, 2020 athttps://www.nytimes.com/2020/07/17/business/personal-bankruptcies-coronavirus.html----------------Federal Aid Has So Far Averted Personal Bankruptcies, but Trouble LoomsOnce federal benefits dry up, highly indebted consumers could be forced to file.Credit card debt piled up for Jess Brown, and the $600 federal unemployment supplement has kept her afloat. That benefit ends this month.Credit card debt piled up for Jess Brown, and the $600 federal unemployment supplement has kept her afloat. That benefit ends this month.Credit...Eamon Queeney for The New York TimesMary Williams WalshBy Mary Williams WalshJuly 17, 2020The United States went into the Great Lockdown with the most household debt in history, stagnant incomes for all but high earners and armies of people telling pollsters they were living paycheck to paycheck. Then, for millions, their paychecks stopped.But instead of a stampede to the bankruptcy courts, personal bankruptcy filings — a useful, if extreme, indicator of the financial health of the American consumer — dropped sharply from April through June, even as unemployment soared, according to calculations by the American Bankruptcy Institute based on data from Epiq Global, a legal research and analytics firm.Bankruptcy Filings and Household DebtAmerican households had more debt than ever when the pandemic sent unemployment soaring this spring. But bankruptcy statistics have yet to reflect the struggle to manage that debt; personal bankruptcy filings are in sharp decline.“Filings have just gone through the floor,” said Henry E. Hildebrand III, a consumer bankruptcy trustee in Nashville. Such trustees supervise the finances of people who have declared bankruptcy and agreed to pay creditors over three to five years. Mr. Hildebrand usually gets 350 to 400 new cases a month, he said, but last month he added just 107. Nationwide, the drop in personal bankruptcy filings is the biggest in 15 years.One reason for this counterintuitive picture: The federal government’s stimulus package, which, beginning in April, has put cash into unemployed people’s hands on a weekly basis, allowing them not just to buy groceries and pay rent, but to pay down existing debt.As of mid-June, the Treasury Department had issued nearly $270 billion worth of stimulus payments to some 160 million people. Unemployment benefits, which normally average about $340 a week, were temporarily increased by $600 a week. Some unemployed people now have more income than when they were working.But those benefits are set to expire this month. Congress will take up the issue of whether to extend them, along with other emergency aid, when the Senate returns next week, but if no more aid is forthcoming after July — given the double-digit unemployment rate and a resurgent virus in many parts of the country — a far more dire portrait of the financial pain of millions of Americans is set to emerge in the coming months. Bankruptcy experts say consumer bankruptcy filings will then start to rise.The banking industry is already gearing up for a wave of defaults on everything from mortgages to credit card debt. Several of the nation’s biggest banks, including JP Morgan Chase, Wells Fargo and Citigroup, said in their second-quarter earnings reports that they had added tens of billions of dollars to their reserves to cover losses they expect to incur on business and consumer loans.Jess Brown, 42, quit her marketing job two years ago to start a small house-sitting business, but ended up crushed under more than $40,000 of credit card debt. The card companies offered her rehabilitation plans, but only if she let them automatically withdraw the payments from her checking account. That led to overdrafts and bank penalties.Not knowing what else to do, last October she dropped out of those plans, moved in with relatives in North Carolina, changed her phone and avoided the debt collectors. She went online to learn about budgeting and compound interest and tried to research consumer bankruptcy, too, but got mostly spam from debt-consolidation companies.Then came the pandemic. With her patchy recent earnings record, Ms. Brown was eligible for just $135 a week of regular unemployment compensation. But the supplementary $600 has kept her afloat and given her the means to keep looking for work. Ms. Brown tries not to think what will happen if the federal relief stops.“It only brings me emotional distress,” she said.For the economy as a whole, which is driven by consumer spending, that extra $600 a week has been “nothing short of a game-changer,” said Matt Schulz, chief industry analyst for LendingTree, the online credit marketplace. The company recently reviewed a large sample of credit card data from 800,000 users and found that unpaid balances, late payments and usage all fell from February to May, as the federal money began to flow.“Instead of just squeaking by, that extra money has allowed many Americans to actually pay down debt and increase savings in ways that would be unimaginable under normal terms of unemployment,” Mr. Schulz said.But even if Congress extends the relief measures, they are a temporary salve that will do little to change the long-term patterns of income stagnation and indebtedness that have left American households so vulnerable to a financial shock. Total household debt reached $14.3 trillion in the first quarter of this year, according to the Federal Reserve Bank of New York — a record.ImageHenry E. Hildebrand III, a consumer bankruptcy trustee in Nashville. His caseload has plunged.Henry E. Hildebrand III, a consumer bankruptcy trustee in Nashville. His caseload has plunged.Credit...Brett Carlsen for The New York TimesMost of the economic gains from the last 30 years of economic growth, except for the Great Recession, have been going to top earners, leaving the bottom half of wage-earning America struggling — and highly indebted. Research from Gabriel Zucman and Emmanuel Saez, professors at the University of California, Berkeley, showed that in 2018, those in the bottom half carried debt that was 219 percent of their income. And that’s who was hit first and hardest by the economic shock this spring.Nearly 40 percent of households earning less than $40,000 a year had already lost at least one job by May, according to the Federal Reserve, which has been analyzing household finances closely. That compares with just 19 percent of households earning $40,000 to $100,000, and 13 percent of households earning more than $100,000 a year.A survey done in May by the Census Bureau showed further that younger households, and those with less education and lower earnings, were likeliest to be losing income in the shutdowns. They were also likelier to say they could not make their rent or mortgage payments and had sought forbearance.Jenny Doling, a consumer bankruptcy lawyer in San Diego, said consumers whose debts started to snowball were generally better off seeking protection in bankruptcy right away. That’s because bankruptcy automatically halts creditors’ collection efforts, giving insolvent consumers a safe place to work out their three- to five-year repayment plans, and possibly save important assets like a house or a car.But for many, the idea of bankruptcy comes with the threat of a stigma.“Filing bankruptcy, for consumers, is sort of an admission that you’re a financial failure, and people just can’t admit that,” said John Rao, a lawyer at the National Consumer Law Center in Boston. “They still think that they can pull out of it somehow.”People also get sticker shock when they hear that the cheapest consumer bankruptcy case, a liquidation, is likely to cost about $1,500. In 2005, amid concerns that spendthrift consumers were abusing the bankruptcy system, Congress tightened the laws, increasing the cost of a case and requiring legal fees to be paid upfront. The next year, the number of cases fell to around 600,000 from more than two million in 2005, but began climbing again in the aftermath of the 2008 financial crisis. Last year, 752,160 cases were filed; this year, if filings continue at their current rate, there will be 590,854 by the end of December.While consumers struggle, they often turn to their credit cards to make ends meet, thinking they will pay down the balance when they’re called back to work. In the meantime, they make just the minimum monthly required payment.Each month’s unpaid interest, accruing at 20 percent or more, is then tacked onto their principal balance, causing their debt to balloon even if they don’t buy anything.“It becomes completely unmanageable,” Mr. Rao said.That’s what happened to Ms. Brown. She had good credit when she quit her job in early 2018, and lined up a series of house-sitting gigs in Europe, using her credit cards for airfare and food as she moved from country to country. She was stunned to see how fast the interest compounded. But she also found that when she hit the maximum on one card, other issuers would give her new ones. Sometimes they came with offers of a gift card if she spent a lot more money quickly.Realizing she had no way out, she returned to the United States.“I had a wall of credit card debt that was waiting for me,” she said. She kept trying to make a go of her house-sitting business. Then the economy went into shutdown, and people stopped traveling. “In one day I had six cancellations,” she said.For now, Ms. Brown said, the debt collectors have been leaving her in peace. But any day, she said, she may open the door and find a process server standing there with the papers for a bank’s lawsuit.“It’s not a question of ‘if’ but ‘when,’ and it weighs on me heavily,” she said.