Bankruptcy and Closure of Paper Mill Puts 5% of Small Arizona Town Out of Work

Posted on October 29, 2012 by Staff Writer

About five percent of the population in the small eastern Arizona town of Snowflake are without a job this week. Catalyst Paper Corp. closed its paper mill last Monday putting 308 salaried and hourly workers on the unemployment line.

The company announced the closure in July amid bankruptcy proceedings for British Columbia-based Catalyst, which has three larger paper mills in Canada.

Catalyst officials said the mill was being shuttered due to lagging profit with newsprint demand down more than 10 percent annually since the end of 2008, higher freight costs and difficulty securing product orders.

With about 5,600 people in Snowflake, the mill’s workforce represents about 5 percent of the town’s population, although not all the workers live in the town. Navajo County already has a jobless rate of almost 15 percent.

Catalyst estimates that the plant generates another 1,000 spin-off jobs in the local economy that likely will be affected by the closure. The company reported that it paid $30.5 million in wages and benefits to Snowflake employees last year.

Catalyst couldn’t negotiate a sale in time to prevent the closure, so the plant will be disposed of through Bankruptcy Court. That process could yield a buyer that would reopen the facility, but not before the end of the year.

Snowflake Town Manager Paul Watson said he remains hopeful the plant will be purchased and reopened next year.

“There will be a gap there,” Watson told The Arizona Republic. “The fact that they announced this with such short notice for a project of this size I think is unfortunate. They met their legal deadline, so to speak, but as far as trying to reduce the impact to the community, I don’t think they’ve done a good job.”

Schedule a free consultation with an experienced bankruptcy attorney to see when you should file. Keep the assets you need to start over, don’t use them to pay creditors when you don’t have to. Contact a Phoenix Bankruptcy Attorney Today!

9th Circuit Rules Arizona Bankruptcies May Shield More Assets than Other States

Posted on October 26, 2012 by Staff Writer

Arizona residents may be able to shield more assets from creditors during bankruptcy than filers in other states, according to a report from Arizona Central News.

In a recent court decision, the Ninth U.S. Circuit Court of Appeals ruled against bankruptcy trustees who tried to argue that filers can only keep life insurance policies and annuities if the beneficiaries of those policies are minor children.

The judge, however, said that Arizona bankruptcy laws may allow filers to keep the value of their life insurance policies, even if the beneficiaries are not minor children. During bankruptcy, filers are often allowed to keep a number of exempt items.

In Arizona, for example, Chapter 7 bankruptcy filers are allowed to keep a vehicle worth a certain amount, their wedding rings, and other important pieces of property.

But whether filers can keep the proceeds of life insurance policies is a relatively unsettled area of bankruptcy law, so the Ninth Circuit Court of Appeals had to step in.

The appellate court dealt with two cases. One involved a woman who named her adult daughter as beneficiary of three life insurance policies worth $40,000. The other case involved a woman who also listed her adult daughter as the beneficiary of a $33,000 life insurance policy.

In both cases, the adult daughters were not dependent on their parents. As a result, in both cases, the trustees claimed that the policies should not be exempt from liquidation.

And a court at the trial level sided with the trustees, claiming that federal laws allow the trustees to gather assets like life insurance policies that are not intended for minor beneficiaries.

The appellate court, however, overturned the lower court, citing an Arizona law that allowed bankruptcy filers to exempt life insurance policies, regardless of who those policies will eventually benefit.

And the court ruled that, in this case, state bankruptcy laws trumped federal laws, which reveals just how confusing some of the interplay between state and federal rules can be in bankruptcy court.

Criteria for Filing for Bankruptcy in Arizona

Posted on October 23, 2012 by Staff Writer

There are many reasons why people find themselves making the decision to file for bankruptcy. Job loss, medical problems and divorce are some of the circumstances that can drastically affect one’s finances. Both federal and state laws apply to bankruptcy, so if you are seeking to file in Arizona, there are certain criteria you must meet.

The most important requirement is that you must be a resident of Arizona. It’s the laws of the state you live in that determine what property you are allowed to keep when declaring bankruptcy. To determine if you can file in Arizona, count back two years from the date you will file, and then count back another 180 days from that date. If you were residing in Arizona during that time then you will be covered by Arizona state law.

People who file for bankruptcy are required to pass a means test. Your family income for the past six months must not be more than what the Arizona median income limit for your size family is. That information can be found on the U.S. Trustee Program Median Income Table. The only exception to this rule is loss of income from either medical conditions or military service.

Bankruptcy does not eliminate all debt. Income and property taxes, student loans, child and spousal support, as well as fines for any crimes you have been ordered to pay will not be included in the bankruptcy. And typically, any loans that are secured with collateral, such as mortgages or vehicle payments also will not be included.

It is important when filing for bankruptcy to consult with an experienced Arizona bankruptcy attorney who can help guide you through the legal process and ensure that everything that is filed is exactly to court requirements. Contact us at one of our locations across Arizona today!

Credit Card Debt Rises, Delinquencies Fall

Posted on October 20, 2012 by Staff Writer

Credit card debt is on the rise for the American consumer, which could be bad news for the number of bankruptcies as the holiday shopping season approaches. According to the American Banking Association Banking Journal, “average credit card debt per borrower increased from $4,699 in the second quarter of 2011 to $4,971 in the quarter that just ended—a rise approaching 6 percent.” According to TransUnion, this average is, however, still low compared to the $5,719 average that peaked in the second quarter of 2009.

The news isn’t all bad, however. At the same time that debt reached its relative new high, “the second quarter saw the national credit card delinquency rate fall to 0.63 percent, down ten percentage points from the first quarter.” This, according to TransUnion, is the lowest level since the second quarter of last year, and last year was the lowest level of delinquencies since 1994.

This could be indicative either of the fact that American consumers have begun to learn to spend within their means, or that they have adjusted to paying higher rates of credit card debt as a percentage of monthly expenditures. Either of these could be one reason that the number of bankruptcies in Arizona has continued to drop recently. According to CreditCards.com, Arizona rose six spots from number 21 to 15 for the listing of bankruptcies per capita. Better management of credit card debt—including a reduction in number of delinquencies that follows the nationwide trend—would have a direct impact on the number of bankruptcies in a state.

If you or someone you know is considering bankruptcy, as a result of credit card debt or unmanageable delinquencies, don’t go through it alone. Contact an experienced Arizona state bankruptcy attorney today.

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Retaining Assets During Bankruptcy in Arizona

Posted on October 17, 2012 by Staff Writer

For many Arizona residents, bankruptcy is the only option to escape the crippling burden of debt or foreclosure. Chapter 13 is commonly called the “wage earner’s bankruptcy,” as workers can continue to keep a portion of income that they earn during bankruptcy to help get their feet back on the ground. Filing a Chapter 13 bankruptcy is a bit more complicated than the straightforward Chapter 7. According to the U.S. Federal Bankruptcy Courts, a Chapter 7 provides for “liquidation,” which means “the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.”

In Arizona, according to the Arizona state bankruptcy courts, a Chapter 7 bankruptcy provides for a Homestead Exemption, of up to $150,000 for either a home (including mobile homes), plus the land upon which the home is situated. Personal property exemptions can be up to $4,000 and money, benefits, and proceeds up to $20,000. There are a few other property exemptions—making Arizona one of the best states in which to file a Chapter 7 bankruptcy—but if you’re interested in retaining the majority of your assets, including money earned while in the throes of bankruptcy, filing a Chapter 13 might be better for you.

The biggest advantage of a Chapter 13 over a Chapter 7 filing, according to the U.S. Bankruptcy Code, is that “Chapter 13 offers individuals an opportunity to save their homes from foreclosure.” If a person files for Chapter 13, he can “stop foreclosure proceedings and may cure delinquent mortgage payments over time.” In a state such as Arizona, which was hit particularly hard by foreclosures and the imploding of the housing market, a Chapter 13 filing might be a better option for cash-strapped residents.

If you or someone you know is considering bankruptcy, don’t go through it alone. Contact a dedicated Arizona state bankruptcy attorney today.

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Rebuilding Your Credit Following Bankruptcy

Posted on October 14, 2012 by Staff Writer

One common concern of many consumers is that if they file for bankruptcy proceedings, whether it be under Chapter 7 or Chapter 13, that there will be an irrevocable mark on their credit reports from which they will never recover. The reality is that filing for bankruptcy will undoubtedly lower your credit score significantly. A lower credit score will make it more difficult for you to qualify for credit, and may subject you to higher interest rates when you do qualify for credit. However, the damage to your credit score will not last forever, and you can easily make strides to rebuild your credit following your bankruptcy discharge.

After your bankruptcy is complete, you are likely to be able to get a credit card with at least a small credit limit. By using that card regularly and making timely payments each month, you can slowly begin to rebuild your creditworthiness. Likewise, you are likely to qualify for a vehicle loan fairly quickly following your bankruptcy. Although interest rates on these loans can be high, making regular, on-time payments also can help rebuild your credit score.

Fortunately, as reported in a recent Bloomberg article, federal law is increasingly attempting to protect consumers by ensuring that their credit scores are correct and that there is easy access to their credit reports on a routine basis. For instance, under the Fair Credit Reporting Act, you can access a free copy of your credit report from each of the three major credit reporting companies each year. Furthermore, starting October 1, 2012, the Consumer Financial Protection Bureau, as created by the Dodd-Frank law of 2010, will begin supervision of the records and practices of companies in the business of credit-reporting. This new supervision is designed to ensure that consumers and lenders receive the same credit scores and information from credit-reporting agencies.

In many cases, bankruptcy is the best option to stopping creditor harassment and dealing with overwhelming amounts of debts. Fortunately, while bankruptcy may temporarily lower your credit score, with time and hard work, you can successfully rebuild your credit score. Contact your experienced Las Vegas bankruptcy attorney today for more information about the effects of bankruptcy on your credit score, and to get answers about whether bankruptcy relief is right for you.

Financial Future Improving for Valley Residents

Posted on October 11, 2012 by Staff Writer

According to a recent article in The Republic, bankruptcy filings in the Phoenix area are continuing to drop at a rapid rate. According to the U.S. Bankruptcy Court located in Phoenix, there were 1,809 bankruptcy filings last month, a figure that is nearly 26% lower than the 2,431 bankruptcy filings that occurred in August, 2011. This is the 19^th straight month of declining bankruptcy filings for the area. Similarly, on the state level, there were 2,479 bankruptcy filings statewide in August, which represents a 23% decrease from August, 2011.

These figures come amidst other modest improvements in the local economy, such as fewer loan defaults and slight improvements in housing prices. Although there have been marginal improvements in employment growth, the overall employment market for the area still appears to be rather sluggish. Local economists, however, are expecting at least moderate economic growth over the next several months and into 2013.

Researcher Credit Karma also reported that Valley residents are carrying substantially less credit card debt, a factor that traditionally results in increased bankruptcy filings. The average Valley resident is carrying $4,948 in credit card debt, which is approximately 16% lower than the average credit card debt load for a Valley resident in August, 2011. Likewise, average mortgage loan and student loan balances have dropped, although auto loan balances have increased.

Despite these positive statistics, however, the nation remains mired in an economic slump, and many Arizona residents continue to struggle with mounting debts. If you and your family are in this situation, then bankruptcy may be an option for you. Consult with an experienced Phoenix bankruptcy attorney today, and explore the different avenues of debt relief that are available to you, including the various types of bankruptcy proceedings.

Arizona Bankruptcies Continue to Fall

Posted on October 8, 2012 by Staff Writer

New data shows that bankruptcies in Arizona have continued to decrease over the last year. Filings in the Phoenix area have fallen at a double digit pace year over year. The US Bankruptcy Court in Phoenix released that in August of this year, only 1,809 people filed for bankruptcy compared to 2,431 in 2011. That decrease is 26 percent, continuing the streak of 14 consecutive double digit decreases.

The news comes as a shock to the citizens of the valley. An independent survey of 500 residents measured financial optimism at a record low not seen since June 2009. This is due partially to the fact that the employment market has yet to make a full recovery. Factors such as improvements in housing prices, employment growth, strong corporate performances and other factors seem to ease private debt.

An example of the reduction of private debt is overdue credit-card balances. Valley residents’ debts are down 16 percent compared to the past year through August to an average of nearly $5,000. Credit-card debt is a major kind of debt which consumers seek to ditch by declaring for bankruptcy. The same is true for mortgages and student loan balances over the past year for Phoenix residents. Luckily the news about Phoenix is merely a microcosm of the whole state of Arizona. Arizona is also seeing a decline in bankruptcy filings.

While this is good news for people in Arizona, it doesn’t mean they’re out of the woods yet. There are still people who need a fresh start while the economy is recovering. If you believe that bankruptcy is your only option, contact an expert bankruptcy attorney in Arizona today.

Arizona Exemption Info

Posted on October 5, 2012 by Staff Writer

It is good to have some idea of the legal intricacies you might be dealing with when filing for bankruptcy, so we will go through some of the exemptions in Arizona bankruptcies. Bear in mind, however, that having the basic knowledge is not the same as having an experienced bankruptcy attorney on your side. As it is said in the United States Bankruptcy Court District of Arizona’s information release: “This pamphlet is not intended to give you legal advice, and it is not a substitute for the legal advice specific to your situation that you should obtain from a qualified attorney.”

Bankruptcy exemptions are a way to let you keep some of your property in case of a bankruptcy. We recently discussed the homestead exemption in our blog, so it makes sense to discuss the personal property exemption next.

The Arizona Personal Property Exemption allows husband and wife to double personal property exemptions, and here are a few assets that are listed under this exemption with the main guideline of “Household furniture, furnishings and appliances personally used by debtor in an amount not to exceed $4000 (fair market value)” :

– one kitchen and one dining room table with four chairs each, plus one chair per each dependent resident after the total exceeds four

– one living room couch

– two beds, plus one additional bed for each dependent of the debtor who resides in the household

– one bed-table, dresser and lamp for each bed allowed above

– bedding for each bed allowed above

– one television set or radio or stereo

– one stove

– one refrigerator

– one washing machine

– one clothes dryer

– one vacuum cleaner

The full list can be found in the exemption information release, but a knowledgeable bankruptcy lawyer will know exactly what you are entitled to when you are going through your bankruptcy proceedings. Basic information can help you understand what you are dealing with, but nothing can replace the help of a skilled bankruptcy attorney. Contact our bankruptcy attorneys today.

Bank’s Filing Error Can Rid You Of Your Credit Card Debt

Posted on October 2, 2012 by Staff Writer

If a bank makes a mistake with their filing while legally pursuing a debt, it can be a lucky day for the person who owes the money. According to a story on azcentral.com, a filing error can cost a bank their ability to collect a credit-card debt.

The Arizona state Court of Appeals said a trial judge made the right decision in refusing to grant damages to Citibank. The bank’s attorneys failed to attach a necessary affidavit and failed to appear in court, so the judge made the decision to set the damages owed to them at zero.

Court records indicate that Gary and Robin Davis were sued by the bank for their debt of $28,785. The bank’s complaint had an attached affidavit signed by a Citibank representative that listed the total, but it also referred to ”statement transaction detail” as ”Exhibit A,” even though there was no exhibit attached to the complaint.

The couple did not show up in court, and the bank sought a default judgment, but they did not list a specific amount and referred back to the original complaint. The judge scheduled a hearing because of the the missing affidavit, but neither party managed to appear at the hearing.

Because the affidavit constantly referred to the missing Exhibit A, making it incomplete, and the bank’s attorneys did not show up in the hearing to present a breakdown for the total sum, Judge Michael Bluff ruled that Citibank will receive $328 in costs but no damages.

It is rare that a filing error like this occurs, so if you are not able to pay back your debt, make sure you have qualified legal help to determine the best course of action for you. Bankruptcy might be a necessary action, and it should not be handled without a dedicated professional to help you. Contact us today, and make sure you have an experienced Arizona bankruptcy attorney working your case.