Bankruptcy is intended to provide debtors with the opportunity of a fresh start by modifying their debt obligations, but the downturn in the economy and the real estate market has spurred a number of filings that can only be described as desperate bankruptcy petitions filed by entities hoping for a “miracle.” See In re RYYZ, 490 B.R. 29, 33-34 (Bankr. E.D.N.Y. 2013). While not every case can be successfully restructured, despite the good intent of many debtors, filings must still be made in good faith.1 However, these baseless and ultimately futile bankruptcy filings continue to occur despite the previous attempts by Congress to set some parameters and minimize the misuse of the reorganization process.2
Several cases that have crossed the undersigned’s path (directly or by word of mouth) have simply been remarkable wastes of time for our judiciary and generated unnecessary legal fees that needed to be paid by the creditors. These examples manifest at their core a misunderstanding of how the process should work and when bankruptcy truly can assist a debtor. What follows is a highlight of just a few cases that demonstrate how the failure to appreciate the law and the impact of a filing can lead to nothing more than delay, wasted resources and, at times, disaster for the debtor.
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