Benefits of Filing a Joint Bankruptcy Petition

Posted on December 29, 2012 by Staff Writer

Finances are always a major stress for married couples, so it important to know what options are available. When filing for bankruptcy, married couples have the choice to file individually or jointly. The process is similar either way because all held debts must be reported. It may be more valuable to consider filing jointly for the following reasons.

The first concern with people filing for bankruptcy is obviously cost. By filing jointly, couples can share documentation and other legal fees. Joint filing can also result in better protection during bankruptcy. That is because if one spouse files individually, the other spouse may be pursued for debts if they are jointly held.

The second benefit is efficiency. As long as one spouse has not filed for bankruptcy recently, the bankruptcy will go easier. The amount of work for two individual bankruptcies is generally twice as much work.

There are also a few disadvantages to filing jointly as a married couple. There are chances that jointly or separately held assets or debts may negate certain state and federal exemptions. Also, if all debts are held by one individual, it may save the other spouse’s credit score to file individually.

If you or your spouse are considering filing for bankruptcy the first step is to compile a list of all debts assets and property. The next step is to meet with a qualified bankruptcy attorney to speak about your options. Contact an experienced bankruptcy lawyer in Phoenix today.

Credit Card Tips after Bankruptcy

Posted on December 26, 2012 by Staff Writer

A Chapter 7 bankruptcy will stay on a credit report for up to 10 years. A Chapter 13 bankruptcy will stay on a credit report for up to 7 years. Everyone who applies for a credit card, car loan, or mortgage, gets their credit report reviewed. Filing for bankruptcy can make you a poor candidate for bowing money or getting credit, but there are ways to rebuild credit.

While it always seems that credit cards are the reason that people declare bankruptcy, they are one easy way to rebuild credit. There are credit cards which are termed secured, which can be used by those who filed for bankruptcy. It is termed secured because the user secures their debt by paying a security deposit to the credit card company.

Before you apply for this type of credit card, do some research and get some counseling. Make sure that the card reports to all three credit bureaus. This will allow your timely payments to affect you credit scores as much as possible. Once you have a new credit card, keep the balance around 10% to 15%. Another common mistake is closing credit cards. If you close a card, it reduces the amount of credit you have available. If you can’t stop using your cards after the balance is paid, then just cut the card in half.

Bankruptcy can be an important tool to secure your financial future. If you have any question about rebuilding your credit or life after bankruptcy, reach out to a professional. Contact a helpful bankruptcy attorney in Tempe who can guide you back into a new financial future.

Bankruptcy settlement could cost $1.9 million

Posted on December 23, 2012 by Staff Writer

Tom Martino, a radio talk show host, says he is likely to spend an additional $1.9 million to end his personal bankruptcy case.

Martino, 59, testified than an umbrella settlement with creditors in his $46 million bankruptcy could give him up to two years to pay. That will basically cost Martino all of his $90,000 in unused pocket money each month.

The unfiled agreement would require a judge’s approval, would bring the total amount that Martino would spend on the bankruptcy to about $3.4 million.

The revelation came during a hearing at court in which Martino and the Bank of America are fighting over $13,600 in unpaid credit card charges. These charges were racked up by Martino in the 90 days before he filed for Chapter 7 bankruptcy in September of 2011.

According to the Bank of America, most of these charges were from a pair of luxury vacations that Martino took with his wife of 10 years, Holly, along with their children and nanny. The second vacation was to New York.

Martino defended himself by testifying that it was common for him to have credit card bills that exceeded $10,000 a month. In the months before his bankruptcy, however, it exceeded $20,000, but the he argued that the balance was paid each month.

Holly Martino testified, saying that “I didn’t want to incur the finance charges.” She also added that she attempted to keep the cards from being canceled because she “didn’t want to lose (her) points.”

Holly Martino also added that she offered to pay the $13,600 balance in the days following her husband filing for bankruptcy. The FIA Card Services, which administers the cards, however, refused to allow her to pay the money because of his bankruptcy.

She said that she also offered to move the balances from her husband’s account to an account under her name, but the credit card company also refused that plan.

Martino said that he planned to pay off the charges on the cards as he always had, but he would like an apology from the Bank of America for suing him over the amount, which the bank has yet to do.

It isn’t expected that U.S. Bankruptcy Judge Michael Romero will decide until January whether the credit card debt is dischargeable.

Many personal bankruptcy cases are for smaller amounts than millions of dollars, but they are all played out the same. If you find yourself in a situation where you must file for bankruptcy, contact an Arizona bankruptcy attorney today. These attorneys around the state can help you file for bankruptcy.

Arizona College Students Have the Lowest Levels of Student Debt in the Country

Posted on December 20, 2012 by Staff Writer

A study by the Institute for College Access and Success found out that almost half of all Arizona college students graduated in 2011 were in debt, the average debt being about $20,000. Arizona is 45^th in the US when it comes to student indebtedness. On a national level, two-thirds of graduates getting a bachelor’s degree in 2011 had $24,854 in debt. According to a report “Student Debt and the Class of 2011,” states in the South and West generally had lower debt levels, while in the Northeast and Midwest the levels were higher.

There are many factors that explain the results, for example, tuition costs, scholarships, low income and family resources. Arizona’s rank is probably due to the availability of scholarships in the state. “Arizona students in public college do receive considerable grants and scholarship aid from universities,” said report author Mathew Reed. An Arizona Board of Regents spokeswoman agreed that scholarships are a contributing factor to the low debt levels. In the year 2010 and 2011, the public universities granted almost $400 million to thousands of students.

Another factor is Arizona’s reasonable education costs. Although tuition and fees at the state’s public universities have increased in recent years, they still remain competitive among similar institutions and this almost certainly contributes to the state’s lower-than-average student debt.

Although students in Arizona do not have high debts on a national level, $20,000 can still be too much in a tight financial situation. If you have a hard time paying your debts, it is worthwhile to consult an experienced bankruptcy lawyer. Work out your debts in a reasonable way. Contact a knowledgeable bankruptcy attorney in Arizona at your earliest convenience.

Arizona Mortgage Laws Boosting Recovery of Housing Market

Posted on December 17, 2012 by Staff Writer

Outdated mortgage laws are to blame for the sluggish housing rebound, according to experts. A recent study by an assistant real state professor Andra Ghent found out that in so-called “judicial states”, where foreclosures must be done through a long and complicated civil court process, the housing market is recovering disappointingly slowly. Outdated mortgage laws combined with the current housing crisis should be a good enough reason to change the laws to a different kind of system, for example, such as the one in Arizona, Ghent said.

Arizona is a “nonjudicial state” where lenders do not have to go through a complex court proceeding so as to foreclose on properties, which is faster and not as expensive. This has allowed the housing market in Arizona to recover better than the markets of judicial states. For example, median home prices have increased considerably within a year: in the metro Phoenix area the year-over-year increase was 27 %.

Defenders of the judicial foreclosure process, however, are of the opinion that such laws give borrowers more time to talk with the lender and prevent other problems, for example, lenders not signing mortgage documents properly. But in many of these cases, the borrowers would have lost their homes anyway, and often less paperwork means fewer problems with the documents.

According to Ghent, the mortgage laws should be streamlined all across the country. “Can you imagine how much money, time and resources we could save, if we didn’t have 50 different sets of laws, paperwork and legal-expertise requirements?” she said.

If you are falling behind on your mortgage payments and realize that you may be faced with a foreclosure, you should get assistance from legal professionals who know what do in these situations. Contact a capable bankruptcy attorney in Arizona today.

Phoenix Restaurant Chain Struggles with Bankruptcy

Posted on December 14, 2012 by Staff Writer

Bill Johnson’s Big Apple restaurants may soon close their doors unless the owners manage to sort out the chain’s financial problems, according to a story in the Arizona Republic. Bill Johnson’s Restaurants Inc. would have been out of business by the end of October, but a judge’s ruling allowed the company to take out a $300,000 loan and continue its operations.

Creditors objected to the loan and would have wanted Bill Johnson’s to accept an investor offer to buy its remaining assets for $1.8 million. They claimed the loan would not be enough to keep the company going for more than just a few weeks. However, the company said that the offer was not sufficient to pay off its debts, which are currently over $4 million.

Bill Johnson’s Restaurants Inc. was founded in 1956 and operates five Western-style restaurants in the Phoenix area. The company willingly filed for Chapter 11 bankruptcy a year ago after a lawsuit where the company’s shareholders accused it of not paying required pension benefits. Chapter 11 bankruptcy allows a business to reorganize its debts.

Bill Johnson’s hopes that the loan will allow the restaurants to become profitable again and exit bankruptcy. Efforts have been made to improve profitability, for example, the company has hired a consulting firm. It may take a while before the family-owned business gets back on its feet; it has lost over $600,000 since filing for bankruptcy.

There are many complex bankruptcy laws and regulations that can seem confusing. If you or a family member is faced with a bankruptcy, you will want to hire a seasoned lawyer who knows how to best handle your case. The sooner you get assistance, the sooner you can solve your problems. Contact a knowledgeable bankruptcy lawyer in Arizona today.

Image courtesy of FreeDigitalPhotos.net

Judge Rejects Charitable Pledge Claim in Bankruptcy Case

Posted on December 11, 2012 by Staff Writer

What happens if you’ve made a charitable pledge to a non-profit organization and then find yourself in a financial position where you need to file for bankruptcy? Can that charitable organization hold you to that pledge – even filing a claim in bankruptcy court for the amount you pledged to give?

That’s exactly what St. Joseph’s Foundation did. They filed a claim against a supermarket chain that had pledged $25,000 per year for 10 years to the foundation, but then filed for Chapter 11. The foundation’s argument was that the chain received benefit from the pledge with all the free media exposure and community goodwill when the pledge was announced. Bashas’ Inc. made the pledge in 2006 and filed for bankruptcy in July 2009. St. Jospeph’s was looking for $155,000, the amount they said the chain owed up until September 2009.

Other debtors objected to the claim and the bankruptcy court rejected it, calling it an “unenforceable charitable pledge”. A federal district court judge affirmed the decision. The foundation filed an appeal with the 9th U.S. Circuit Court of Appeals, but while the appeal was pending, both parties worked out a $50,000 settlement. According to a report in Thomason Reuters News & Insights, no debtors objected this time, but the bankruptcy court rejected the deal, stating that it was “neither fair nor equitable to the debtors’ estate and their creditors.” Returning back to federal district court, the same judge again affirmed the bankruptcy’s court decision, saying “the probability of St. Joseph’s success in the litigation is near zero.” The judge went further to state that “Bashas’ suffers the injustice here for having to waste limited resources defending itself against an exercise in avarice.”

This is an example of why you should not try to file for bankruptcy yourself. If you are considering filing, you should hire an experienced Arizona bankruptcy attorney to protect you and your estate against claims such as this one.

Appeal Courts Uphold Social Security Income Exemption in Bankruptcies

Posted on December 8, 2012 by Staff Writer

Several U.S. Circuit Courts of Appeals have recently upheld the protection of Social Security benefits, reaffirming those benefits cannot be included as projected disposable income. U.S. Code SSR 73-22c: Section 207 (42 U.S.C. § 407) protects against levy, attachment or other legal process against someone’s benefits. However, lately there have been more cases where trustees have tried to incorporate those funds into bankruptcy settlements. Both the bankruptcy courts and the appeals courts have been consistent with rejecting those settlements.

Thomson Reuters News & Insights recently reported about a case from the 10th U.S. Circuit Court of Appeals. In a Chapter 13 bankruptcy case filed in March 2010, the petitioner didn’t include his SSI benefits for his monthly income or his disposable income. He did include a portion of the income as projected income in his plan to pay back creditors. But the trustee rejected the plan, insisting all the benefit should have been calculated into the plan and the bankruptcy court rejected the plan. The petitioner filed another plan, under protest, which included all the SSI funds. The court accepted that plan, but the case was eventually dismissed for non-compliance when it was determined that the petitioner made payments according to his original plan, not the one accepted by the court.

The petitioner then appealed to the District Court, which reversed the decision and ruled Social Security income does not need to be included in the “projected” disposable income calculation. The trustee then filed an appeal with the 10^th Circuit, who upheld the District Court’s ruling. In its ruling, the Court said, “The mere placement of the adjective ‘projected’ in front of the words ‘disposable income’ does not imbue the term ‘disposable income’ with different substantive components.”

A week later, the 5^th U.S. Circuit Court of Appeals also ruled that Social Security benefits are not disposable benefits. According to a report in Findlaw, a trustee rejected the proposed plan of a couple who had filed for Chapter 13 because they only included $200 of the $1854 they received each month from Social Security on their declared income list. In their proposed plan, creditors would receive all their declared income, leaving the couple with $1654 each month, the balance of their benefit. The trustee wanted them to declare their entire Social Security check. The appellate court rejected the trustee’s challenge, finding that a debtor is not statutorily-required to include Social Security income in his projected disposable income calculation.

Bankruptcy protection can be a complicated and confusing process. If you are collecting Social Securtiy benefits and are considering filing, contact a qualified Arizona bankruptcy attorney to ensure that your rights are protected.

What you need to know about Chapter 7 Bankruptcy

Posted on December 5, 2012 by Staff Writer

The Bankruptcy code in America is federal, meaning it is the same throughout the nation. Therefore, experiences with bankruptcy and experiences with debtors are very similar no matter where one is at. One example of similarity is, the bankruptcy court immediately stops creditors from their collection efforts no matter where the case is filed. Across the entire United States, filing a chapter 7 bankruptcy will stop all foreclosures, lawsuits, phone calls, and all other harassment from debt collectors. Chapter 7 will also release unsecured debts including medical bills and credit card debts. This release removes debts very similarly regardless of the city or state in which the bankruptcy has been filed in. Laws known as the exemption laws, which may have a large impact on each bankruptcy case, dictate what property debtors can keep through the bankruptcy process.

The cost of filing for bankruptcy varies greatly by where you file, based on jurisdiction. Fees charged in larger cities like Phoenix and Tucson are often greater than fees charged in rural areas. This is because additional overhead money required in bigger cities to keep the practice active. In general, there are two fees most commonly associated with filing for bankruptcy: a filing fee and an attorney’s fee. For a chapter 7 bankruptcy, the filing fee is $306. If this fee is unaffordable, it is possible to petition the court to have the fee waived or pay it in installments. Attorney’s fees for chapter 7 cases are, on average, $900-$2000, depending on the involvedness of the case. Many people have a misconception that filing for bankruptcy is just filling out a few papers, but it is much more complicated than that, more so for some people than others.

If you find yourself needing to file for bankruptcy, contact an experienced lawyer in Arizona. Avoid mistaking it as a simple procedure and get necessary assistance to file bankruptcy correctly, to avoid mistakes that could end badly. Contact Arizona Bankruptcy attorneys for help now.

Why it is a bad idea to make minimum payments on credit cards

Posted on December 4, 2012 by Staff Writer

Paying the minimum balance on a credit card will leave you paying much more for an item than it was originally worth. Credit card companies make money by getting you to pay interest on items that you purchase with their cards.

By paying the minimum balance on credit cards with high interest rates, you are further delaying payment while racking up new charges for every month your balance is not paid in full. For example, if you purchase a bicycle that costs $100 using a credit card with a 29% interest rate. Every month that you do not pay the original balance you are charged additional interest. Therefore, the credit card company will add 29% interest to your remaining balance.

Compounding Interest

Another important factor to consider is compounding interest. What is it? When you make a payment that is not the full amount of the balance, interest is added to the principle (what the item originally cost). Instead of the next month the principle going back down to the original cost of the item, the principle is now the original cost plus any accrued interest. In this way, interest then gets added to the interest, and so on and so forth. This is why credit card debt can so quickly snow ball out of control. If you are struggling to make your credit card payments then let us help you. A Chapter 7 bankruptcy may be what you need to give you a fresh start.