Monthly Archives: September 2012

Recession Causing Increased Financial Difficulties for Single Moms

Posted on by
Reply

Being the only parent of your child can be hard enough even without world-wide economical problems. The recession has made things worse, however, and more and more single moms are becoming indebted. A report from NYU’s Women of Color Policy Network, “At Rope’s End,” brings to light single moms’ increasing financial problems in the country.

According to the report, over three quarters of single mothers in the United States are indebted. The most common type of debt is credit card debt, while installment debt is the second most common.

The report mentions several factors that influence the wealth and assets of households headed by single women. Race and ethnicity are often strong predictors. “Black and Latino single mothers have a median wealth of zero, whereas white women report a median wealth of $6,000,” the report claims. Education is a significant factor also. “Single mothers with less than a high school education have a net worth of zero, while those with a college degree or higher have a median net worth of $35,000.” Furthermore, younger single mothers are at a greater disadvantage than single moms over the age of 40. Over half of them have zero or negative wealth. On a final note, single mothers possess only 4 percent of the wealth of single fathers: $100 compared to $25,300.

Over the recent years, it has become increasingly difficult to be a single mother. You might have become indebted when trying to provide for your family. Creditors might be harassing you constantly, demanding the money that you simply don’t have. Filing for bankruptcy puts an end to creditor harassment. If you are a single mother and have difficulties paying your debts, you should get help from experienced lawyers. Don’t go through it alone. Contact a dedicated Phoenix bankruptcy lawyer immediately.

Singapore’s billion dollar bid for the Paulson hotel chain

Posted on by
Reply

Reuters reports that the Singapore Government Investment Corp (GIC) bid over $1 billion for a bankrupted lot of hotels that was previously owned by Hedge Fund Paulson & Co. This lot includes the Arizona Biltmore Resort & Spa.

An MSR Resort Hotel Group stated that it chose GIC as the lowest bid for the hotels considering that they have been looking for an initial bidder since May. They have also stated that there was talk with potential equity investors to reorganize the hotels prior to finalizing the GIC offer.

(GIC) is a large real-estate investor that usually manages Singapore’s foreign assets. They are the lender to the hotel group and recently made an offer to the hotel group right before the bankruptcy was filed. The GIC offered $1.5B in debt and cash but the resort chain refused, stating they would do better with creditors.

Paulson originally bought this lot of hotels in 2011 from Morgan Stanley and within a month, he included them in a bankruptcy. He stated the plan was to restructure them. The Doral Gold Resort & Spa has already been sold to Donald Trump in Miami, Fl.

Morgan Stanley Real Estate, which is a division of Morgan Stanley, purchased the lot of hotels and three other hotels in 2007 for around $4B. The hotels filed claiming $2.2B in assets and $1.9B in debt. Based on court documents, $1.5B includes up to $1.12B in cash and will pay off debt-related claims totaling $360M.

The GIC has organized a $28M breakup fee, if the hotel chain chooses an alternative bidder during the bankruptcy auction. They are hoping to hold this auction on Oct. 25. A court appointed judge will consider the bid and sales process which is scheduled on Sept. 10.

If you’re faced with financial woes and unsure of who to turn to, an experienced Arizona bankruptcy lawyer will evaluate your situation and help you decide the next action to take. This can be a scary time and you don’t have to face it alone.

Bankrupt Swift Air LLC Ditches Phoenix Suns and Other NBA and NHL Teams

Posted on by
Reply

Phoenix-based charter air service Swift Air LLC, which specializes in transporting professional sports teams, filed for Chapter 11 bankruptcy protection in June, 2012, due to ongoing financial difficulties. However, Swift continues to operate its charter air service, and, up until now, has honored all of its transportation contracts.

According to the Tennessean, however, an Arizona federal bankruptcy judge ruled earlier this week that Swift could reject certain contracts with professional sports teams as part of its corporate reorganization plan. Swift alleged in court documents that it wished to focus on providing charter air service to sports teams located only in the eastern half of the country. As a result, Swift summarily rejected its contracts with a pair of NHL teams, i.e. the Colorado Avalanche and the Nashville Predators, only weeks before their season is scheduled to start, and despite its five-year-contract with the Predators that launched in 2011. Likewise, Swift rejected contracts with two NBA teams, the Phoenix Suns and the Denver Nuggets, in favor of contracts with the Boston Bruins, Chicago Blackhawks, St. Louis Blues, Boston Celtics, and Milwaukee Bucks.

Like many businesses offering luxury services, even to high-paid professional athletes, Swift apparently has suffered as a result of the recession and an increasingly competitive market. As a result, it has chosen to narrow its demographic focus in an attempt to salvage the business and restructure its debts. If Swift is able to do so through the Chapter 11 bankruptcy process, it will be able to begin operating at a profit while still paying down debt and avoiding incurring further debts that might lead to additional financial problems.

If your business has become overwhelmed by debt, harassed by creditors, and is losing profits on a daily basis, you may need the restructuring and debt relief that Chapter 11 bankruptcy relief can offer. Only a qualified business bankruptcy lawyer in Arizona may be able to help. Contact our office today, and see what options for financial relief we can offer your business.

Arkansas Football Coach Files Chapter 7 Bankruptcy

Posted on by
Reply

The Washington Post recently reported that Arkansas football coach John L. Smith has filed for Chapter 7 bankruptcy relief in the U.S. Bankruptcy Court for the Western District of Arkansas. Smith’s preliminary bankruptcy petition alleges that Smith has assets valued at between $1 million and $10 million, and debts of between $10 million and $50 million.

According to statements by Smith, he made substantial real estate investments in Kentucky, along with other investors, when he was coaching at Louisville from 1998 – 2002. After the real estate market softened, Smith and the other investors began to lose money on the investments.

Arkansas athletic director Jeff Long told the Associated Press that Smith had been honest about his impending bankruptcy and financial status, and that it would not be held against him, particularly in today’s economy. For his part, Smith took steps to discuss his financial situation publicly over the summer so as to avoid embarrassing the school and creating a distraction as the Razorbacks began their football season.

This story is an illustration of how even relatively highly paid public figures can succumb to substantial financial losses, especially in today’s weakened economy. Whereas many investors historically made millions from the real estate market, these same investors have seen nothing recently but massive losses.

Fortunately, Chapter 7 bankruptcy provides a means for many individuals to liquidate their non-exempt assets and apply the proceeds toward their outstanding debts. At the same time, any remaining balances on eligible debts can be discharged through Chapter 7 bankruptcy proceedings. If Smith is successful in his Chapter 7 bankruptcy petition, then, he will be able to retain a certain number of assets that are exempt under state and/or federal bankruptcy laws, and free himself of the debt burden that he has accumulated due to the substantial declines in real estate values in recent years.

If you are in a financial situation similar to Smith’s, you should consult an experienced Phoenix bankruptcy lawyer today, and see if you are eligible for Chapter 7 bankruptcy relief.

Owning a Home After Bankruptcy

Posted on by
Reply

Arizona was hit notoriously hard by the housing market crash of 2008, making several top ten lists for foreclosures and drops in new home sales. The state is on its way to a full recovery, however. In August 2012, according to RealtyTrac, the state was down to 57,438 homes currently in foreclosure, as opposed to the 3.2 million that were foreclosed in 2008. According to a 2009 article published in the Phoenix Biz Journal, the foreclosure rate rose 225 percent from 2006 to 2008 in the state.

Bankruptcy and foreclosure often go hand in hand, and one can result in the other. As foreclosure rates drop across the state, so are the rates of personal bankruptcies. In May of 2012, the USA Today reported that late home payments are decreasing faster in Arizona than in the nation as a whole, reflecting the positive trends in the state. As former homeowners pull out of bankruptcy, they will look again to owning a home. This is another example of how the housing market recovery and bankruptcies are related.

It may seem impossible to immediately take on a new mortgage after bankruptcy, especially if foreclosure is what led to financial insolvency. Yet counterintuitive as it sounds, taking on credit—and using it responsibly—is the only way to recovery after bankruptcy. New mortgage restrictions that have been passed and made into law over the past few years, which include mandates of insured clarity of the borrower. Taking on a new, easy mortgage could be the best way to recover from bankruptcy.

Interest rates will be higher, of course, but these will lessen as time passes, providing that you never make a delinquent payment. Understanding the ins and outs of bankruptcy is a complicated process, and shouldn’t be gone through alone. Contact a dedicated Arizona bankruptcy lawyer today.

Image courtesy of FreeDigitalPhotos.net

Arizona’s Homestead Exemption

Posted on by
Reply

Bankruptcy can be a confusing process, especially with the long list of exemptions that work in some states and don’t in others. Seeking specific information about the bankruptcy code in your state is an imperative part of the bankruptcy process, before, during, and after you’ve hired a bankruptcy lawyer.

The housing market was hit especially hard in Arizona during the 2008 economic downturn, and the rate of foreclosures in Arizona was exceptionally high. At the end of 2011, according to RealtyTrac, there were 8,217 properties in Arizona that were being foreclosed—1 in every 346 housing units. In fact, Arizona was in the top three states for rate of foreclosure, alongside California and Nevada.

Because of this, Arizona residents who are currently facing financial insolvency are more concerned with keeping their home than ever before. Luckily, Arizona state bankruptcy code includes a Homestead Exemption. According to a report issued by the Arizona state government, a homestead is a “dwelling with its land and buildings occupies by the owner as a home.” Arizona bankruptcy law, according to the report, “does not recognize federal property exemptions, but establishes exemptions specific to Arizona residents.”

The Arizona Homestead Exemption protect up to “$150,000 of a person’s equity in the person’s dwelling from attachment, execution, or forced sale.” Married couples may only claim one homestead exemption in a bankruptcy case. It’s easy to claim this exemption: it’s automatic, which means that no written claim is required.

If, for whatever reason, such as if a debtor has more than one property that could qualify for the exemption, the person filing bankruptcy must waive the exemption and “record the waiver in the office of the county recorder.”

There are a couple of federal regulations to state homestead exemption laws, such as that “a person cannot exempt any amount of interest, which is acquired within 1,215 days prior to filing for bankruptcy and that exceeds $125,000 in value.” These and other such stipulations are part of what makes filing for bankruptcy such a confusing process. Don’t go through it alone. Contact an experienced Arizona bankruptcy attorney today.

Image courtesy of FreeDigitalPhotos.net

Bankrupt Arizonans may be able to keep specific assets

Posted on by
Reply

According to the AZ Business Gazette, Arizonans may have found a clever way to legally shield their assets from creditors during the bankruptcy process.

The 9th U.S. Circuit Court of Appeals banned the argument of trustees regarding people that have recently declared bankruptcy. The argument stated these individuals did not have to surrender the values of their life insurance annuities and policies if the beneficiaries were minors. This was based on a unanimous decision.

According to the judge– “That’s just how the law reads in Arizona.” The question of policies and annuities may not apply to all individuals looking for protection from creditors. Arizona laws allow exemptions that differ from others but these can be critical.

A perfect example of these exemptions involves the cash surrender value of a 2 year old life insurance policy. The policy states that he beneficiary must be immediate family, for example:

  • Spouse
  • Parent
  • Child
  • Sibling
  • &/or any other dependent family member

There were arguments from the trustees that these exemptions shouldn’t apply because children weren’t dependents.

Smith, a man who wrote for the unanimous appellate panel, stated the arguments were simply a “misreading of the law”. He explained that the “other” in the documents is referring to diversity. The judge stated “A beneficiary will fit into two different categories, either as previously stated or another dependent member of the family”.

The judge commented that “If the legislature wanted the exempt members to only be dependents, the legislature should have exempted ‘these dependents’, opposed to listing specific family members.

Smith followed up by saying “if the courts adopted the trustees’ understanding, the wording of the law would not make sense because the exempted members that were on the list, would be inapplicable.

He continued to say that even if the term “other” meant obscure, something the courts aren’t acknowledging is that it still wouldn’t support the arguments of the trustees. The impression that certain items were sold off or exempt from liquidation is not exclusive to these insurance policies and annuities.

The list of allowable exemptions is pretty systematic. This list includes:

  • Musical instruments with values below $250, used solely for personal use. This limit would also apply to manuals, books, and other published documents.

Individuals declaring bankruptcy can keep specific items, which includes:

  • Bibles
  • Firearms

The law permits one bible and one gun, as long as the weapon isn’t valued higher than $500.

If you are considering a bankruptcy, consult with an Arizona bankruptcy lawyer first and they will be able to advise you on the best way to handle your situation. A knowledgeable bankruptcy attorney in Arizona will be able to help you determine which of your assets you will be able to hold on to when you file for bankruptcy.

The Bankruptcy which Stops Mortgage Foreclosure

Posted on by
Reply

If you miss a mortgage payment, you may be starting a scary process. Your lender will start reaching out to you to get you back up to date with your payments, so that you can stay at your house. When there are no reasonable options left to your lender, the foreclosure or trustee sale process may be started. It is a scary but very valid reality for many people across the USA. Just because a lender doesn’t have any other options but to start the foreclosure process doesn’t mean that you don’t have any other options to keep your house.

Your first option is to file for a Chapter 7 bankruptcy, which is the type of bankruptcy when your assets and possessions are used to pay for your debts. When a Chapter 7 bankruptcy is filed, it puts a hold on any action that a trustee may start. Though it is only a temporary means to keep your house, because the bank or mortgage company can file for a Motion To Lift Stay. There are certain cases, such as failure to keep up with mortgage payments, when a court will grant such a motion which can allow the bank or mortgage company to continue their debt collection actions. You will have to try to make arrangements to pay any outstanding balance in order to circumvent this Motion To Lift Stay. This process can last between 30 and 60 days after the bankruptcy is filed.

Your second option is to file for a Chapter 13 bankruptcy, which is when you can make smaller payments to erase your debts with your disposable income. With the filing of this type of bankruptcy, you can make the mortgage company or bank accept smaller payments in order to stay in your house. Only a portion of the debt is paid back for the duration of the Chapter 13 bankruptcy, which is around 3 to 5 years. The mortgage company or bank has no way of stopping the bankruptcy process with a Motion To Lift Stay, as long as the payments are made monthly.

If you have been considering filing for bankruptcy to keep your home, it may be time to seek out help. There are many intricacies to consider when making such a decision so it is important to have the best advice while trying to secure your financial future. Don’t wait too long before contacting an experienced bankruptcy attorney in Tucson, because it is essential to receive support through this difficult time in your life.

A General Chapter 7 Bankruptcy Process

Posted on by
Reply

A Chapter 7 bankruptcy is a particular kind of bankruptcy which tries to eliminate debts by selling off assets like cars, clothing and the like. Every state has different exceptions for assets which cannot be used to pay off debts, as a starting point when considering filing for a Chapter 7 bankruptcy. It will also be beneficial to know what the process of bankruptcy will entail.

The first step is to fill out a petition for bankruptcy fully and completely. You will need a clear record of all creditors owed, all expenses and incomes, including all personal assets and the exceptions appropriate to the assets you hold. This finished petition must accompany a certificate showing the completion of a debt counseling program. Essentially, this certification teaches alternatives to filing for bankruptcy. It is a requirement of the federal bankruptcy law, which allows you to file your petition for bankruptcy. Verify that the certificate you are seeking is from an authorized service, otherwise you will waste time and money.

At that point, there will be notification from the bankruptcy trustee, who is the court-appointed official overseeing your bankruptcy. This notification will ask for you to supply additional documentation such as automobile titles, bank account statements, and tax returns. There will also be a notice that will require your attendance at a 341 meeting. A 341 meeting will require you to truthfully answer questions posed by your trustee and your creditors. You will need to obtain a second certificate to verify that you received credit counseling. This certificate must be filed with the clerk’s office within 45 days of the 341 hearing.

If everything is done on time, then the petition will be filed within 3 months from the 341 meeting for your debts to be discharged . This does not finalize your filing because the trustee will have to completely analyze the bankruptcy information. At that point, the trustee will make the final determination on your case. If you have looked into your other options, but bankruptcy seems like your only option, please contact a qualified Phoenix bankruptcy attorney today.

Fair Debt Collection Practices Act

Posted on by
Reply

There are many laws that provide protection to debtors from aggressive debt collectors. The most widely known law for protecting the public is the Fair Debt Collection Practices Act (FDCPA). Often debt collectors violate the law through their relentless collection efforts.

Common FDCPA violations:

  • Made threats
  • Called repeatedly
  • Called at unusual hours
  • Told someone other than your spouse about your financial situation
  • Mislead you about the debt status or the amount you owe
  • Implied that you have committed a crime by failing to pay your debt
  • Misrepresenting their employer or acting like that work for a government agency.
  • They’ve talked to or sent letters to other people about your debt.

If your FDCPA rights have been violated, our Arizona bankruptcy law firm can help you file a FDCPA lawsuit against the debt collector. By filing a FDCPA claim you may be able to receive statutory damages, actual damages for medical costs and lost wages, and reimbursement for your FDCPA attorney’s fees and all other FDCPA filing fees.

Debt collectors want to avoid FDCPA lawsuits because it increases their debt collection costs and insurance rates. It also adds to their cost of business to defend FDCPA lawsuits and can result in additional government regulation.
As a consumer, you may feel at a loss to defend yourself against the complicated debt collection tactics many collection agencies use, but as a consumer you have rights. If your rights, which are established under the Fair Debt Collection Practices Act (FDCPA), are violated, you have a right to compensation.
If you have had your FDCPA rights violated, call an Arizona bankruptcy lawyer, we have the resources, and experience necessary to recover the damages you deserve.