Reasons to Convert your Bankruptcy Case

Posted on April 30, 2013 by Staff Writer

When you file a case for bankruptcy, your attorney will advise you whether you should file a Chapter, 7, 11 or 13 under the federal Bankruptcy Code. There are different advantages and rules to each type of bankruptcy plan. However, even after you have filed the case, it doesn’t have to be set in stone.

If your bankruptcy attorney advises you that you should convert your current bankruptcy case to an alternate plan, you can do so simply by filing a notice of conversion with the court as well as following up with the other changes that will be necessary.

One of the reasons that you may be advised to convert your case is if you are unable to keep up with your Chapter 13 payments. Then you may be advised to change it to a Chapter 7 debt relief case. The great thing about converting your case is that any new debt that you have accumulated may be able to be included in the new filing.

Your case can also be involuntarily converted from a Chapter 7 plan to a Chapter 13 plan if you are determined to have enough income to repay your debts through a Chapter 13 plan. This is one of the reasons that it is imperative that you divulge all of your assets and income to your attorney when you are considering filing a bankruptcy case.

Going through a bankruptcy can be very emotional and stressful. Remember, you do not have to go through the process alone, nor should you. You need to consult with an experienced and knowledgeable Arizona bankruptcy attorney who can walk you through the entire process as well address any questions that you may have about your options or the process itself. Your attorney will make sure that your best interests are represented at all times.

How To Get A Car Loan After Bankruptcy

Posted on April 28, 2013 by Staff Writer

If you’ve filed for bankruptcy and had your case discharged, you have now been freed of your legal debt obligations. However, the bankruptcy will affect your credit in a negative way for the next few years. Because of this, it can be harder than normal for you to get loans on certain things like houses or cars.

Fortunately, there are ways to still secure loans. Here are a few tips you’ll need when trying to apply for a car loan:

Wait until your bankruptcy has been officially discharged
Build up your credit again by paying your bills on time
Be aware of your current credit history. If certain accounts were designated to be closed because of the bankruptcy, it is your duty to make sure they actually follow through
Write a letter of explanation to the credit reporting agency, especially if your bankruptcy was due to extenuating circumstances and not from money mismanagement
Try to find a car loan specialist who can find a loan for someone who filed for bankruptcy
Remember that your interest will be higher on the loan because of your current credit status. From this, make sure you calculate what exactly you can afford in terms of monthly payments
Finally, make sure you refinance your car after a couple years of owning it. If you’ve continued to take steps in building your credit back up, you should now qualify for a lower interest rate

Filing for bankruptcy should not negatively impact the rest of your life. You will be able to build your credit up again through time and practice. If you’ve filed or are considering filing for bankruptcy, our law firms offer a free consultation. Contact one of our offices, located throughout Arizona and Nevada, today to learn more.

A Study of How Sadness can affect Personal Debt

Posted on April 25, 2013 by Staff Writer

People seek different ways to deal with sadness. It seems unfortunate in the grand scheme of things, but a study shows that sadness can have a negative effect on a person’s financial bottom line and also further deteriorate their mental state.

In a study run by students Jennifer Lerner of Harvard’s School of Government and Elke Weber and Ye Li of Columbia reviewed the connection between sadness and debt. The results were published in the Psychological Science journal last year.

They came up with a term called “present bias”. The unhappiness of people makes them value the present more so than the future. This leads them to put more importance on instant gratification rather than the long term consequences. So it seems natural that “retail therapy” would be an avenue that people would use to make them feel better.

The bad news is that when debt becomes a problem then the sadness can turn into depression. Especially if the debt can’t be turned around and necessitates a bankruptcy. “Many of us confuse our self-worth with our net-worth,” clinical psychologist Bradley Klontz said. “As such, financial problems can deal devastating blows to our self-esteem. Bankruptcy can lead to feelings of guilt and shame, and cause us to isolate from our family and friends out of embarrassment.”

For some people, it has to get worse before it can get better. Filing for bankruptcy can alleviate your money issues and allow you to have a fresh start If you feel like bankruptcy is your best option, then contact a legal professional who can help you through the process. An experienced bankruptcy attorney in Phoenix can show you the options for turning around your situation so contact them today.

image courtesy of freedigitalphotos.net

New Bankruptcy Laws Possible in Arizona

Posted on April 23, 2013 by Staff Writer

New bankruptcy laws may be enacted soon in Arizona, according to VerdeNews.com. The new laws have been proposed by the head of the House Judiciary Committee in an effort to “update Arizona’s dated and sometimes anachronistic bankruptcy laws,” according to VerdeNews.com. There wouldn’t be anything in the new laws that would allow individuals to seek protection from creditors, however, because “those are set in federal law.” That same federal law, however, allows each state to determine just what assets a person filing for bankruptcy can keep, and Representative Eddie Farnsworth, the lawmaker seeking change for Arizona laws, said that the “list for Arizona is long overdue for an overhaul.”

An example of this is that if a person in Arizona files for bankruptcy, law allows him to keep “one kitchen table and one dining room table with four chairs each.” Other permissible items, according to VerdeNews.com, include “three living room lamps, one radio alarm clock, one vacuum cleaner, and a choice of one television set, radio or stereo.” Yet the total value of all these cannot exceed $4,000. This law doesn’t allow for the inclusion of family heirlooms. “One person may have a hutch from their great grandmother that they want,” Farnsworth said. His revision to the law would give more flexibility to people filing bankruptcy when it comes to deciding which specific pieces they’d like to keep when breaking up their home.

Arizona was one of the hardest-hit states in the economic recession, experiencing more personal bankruptcy filings than the average state. Yet those numbers are dropping, according to Arizona Bankruptcy Court statistics. The district including Phoenix, Tucson, and Yuma, for example, had 22 percent less bankruptcy filings in 2012 than in 2011—from 35,072 total filings in 2011 to 27,298 total filings in 2012.

That doesn’t mean, of course, that all residents in Arizona are in the clear. If you or someone you know is considering bankruptcy, the most important first step is to seek the counsel of an attorney. Don’t go through it alone. Contact a dedicated Arizona bankruptcy lawyer today.

Image courtesy of FreeDigitalPhotos.net

Mortgage Applicants May Be Subject to Gender Bias

Posted on April 18, 2013 by Staff Writer

The Woodstock Institute has recently started a study about joint mortgage applications. Early findings reported in this article show that applications for home purchases and refinances were more likely to be approved if the first name on the application was male.

The study covers six Chicago-area counties and uses facts from the 2010 Home Mortgage Disclosure Act. Woodstock also studied loan data on about 257,000 purchase and refinance mortgages, for applicants with incomes of $20,000 to $999,000 and loan amounts of $20,000 to $800,000. Home purchase applications with a women’s name first were 24 per cent less likely to be approved; on refinance applications, the approval was 39 per cent less likely when a women’s name appeared first.

In addition, the study also showed that if the woman signing the applications is of African-American descent, she is 34 per cent less likely to be approved for home purchases and 44 per cent less likely for mortgage refinances.

The vice president of Woodstock believes that this shows there is some sort of gender bias going on, even if it is unconscious. However, an assistant vice president at Glenview State Bank wouldn’t consider it discrimination. She claims that since loans are being declined to both men and women, it can’t be considered a discriminatory practice.

Although the early findings are only from one year of data, Woodstock does believe these results are troubling. And while they plan to go back to 2007 for the complete study, they don’t think they’ll find any significant changes.

Purchasing or refinancing a home in this economy can be tough. If you’re looking to refinance your home because of money problems, our bankruptcy attorneys can help. Contact us to learn more.

Image courtesy freedigitalphotos.net

The Two Kinds Of Personal Bankruptcy

Posted on April 12, 2013 by Staff Writer

If you’re filing for individual bankruptcy in Arizona, you have two options available to you: you can either file for a Chapter 7 or a Chapter 13. Like anything in life, there are both advantages and disadvantages to both. Before you file, it’s best to get a clear understanding of each and how they’ll affect you immediately and in the future.

Chapter 7:
If you file for Chapter 7, what happens when your case is successfully discharged is that most of your debts will be cleared, and no obligation to pay them back. Additionally, the process of a Chapter 7 usually takes a few months—which is much quicker than many other debt solutions offered.

Unfortunately, although your debts are cleared, there is the possibility you can lose some of your property during the proceedings. Any property you own that is considered non-exempt may be taken by the courts in order to help pay back your debt to the creditors.

You are also only allowed to file for a Chapter 7 once every eight years, and you must qualify to do so.

Chapter 13:
If you happen to be extremely fond of your property and do not wish to lose any of it, it’s better for you to file for a Chapter 13. When filing for this type of bankruptcy, the bankruptcy trustee is not allowed to liquidate any of your property for creditors. You can also keep any cosigners you might have out of the proceedings.

The disadvantage to filing for Chapter 13 is that you still need to pay back your debts. You will set up a payment plan, which usually takes three to five years to complete. There is a chance you can get the amount reduced, but it will not be wiped clean. You may also have higher court fees than you would in a Chapter 7.

Speaking to a qualified Arizona attorney will also help you decide what to file if you have to file for bankruptcy. Our attorneys work throughout Arizona and Nevada, and offer free initial consultations. Contact us today to learn more.

Avoiding the Sinkhole of Medical Debt

Posted on April 10, 2013 by Staff Writer

A recent U.S. News and World Report article reports that debts from medical expenses are one of the most common reasons for filing bankruptcy. As more and more people struggle with the ever-increasing costs of health care, there are a few steps that can be taken in order to avoid falling into insurmountable medical debt.

Staci

First, always at least maintain catastrophic health insurance coverage. A plan with a very high deductible won’t provide you with relief for minor or routine medical expenses, but it will avoid you being stuck with tens of thousands of dollars of medical bills which you may never be able to pay off if you suffer a major illness or injury.

Next, make sure that the care that you choose to receive is the most cost-effective care possible under the terms of your medical insurance policy. For instance, many insurance policies contract with certain doctors or medical facilities that are considered to be in-network providers. In this case, going to an out-of-network provider will likely result in much higher costs than if you simply went to an in-network provider. By taking all reasonable steps to comply with the terms and conditions of your insurance policy, you can minimize your out-of-pocket costs.

Other important steps to avoiding medical debt are to pay only what you owe and negotiate those bills that you do owe. Make sure that you are only charged for the care that you received and that your bills contain no errors. Once you have determined that your bill is correct, try negotiating a payment plan or applying for financial assistance to have some of your debt forgiven, which is available through many hospitals and other medical providers.

You can also use a regular savings account, a flexible spending account, or a health savings account to build up funds that can be used in case of medical emergency. By having money available in case these kinds of expenses occur, you can avoid going into debt to pay medical bills.

Finally, if you have unavoidably racked up thousands of dollars of medical bills, bankruptcy may be a solution for you. Contact your Phoenix bankruptcy attorney today, and discover whether bankruptcy is a viable option for you.

Consumers Turn to 401(k) Plan Funds for Emergencies

Posted on April 8, 2013 by Staff Writer

A recent Reuters report states that 30% of households whose income is $50,000 or less cash out their 401(k) plans when they are desperately in need of cash. Despite the early withdrawal penalties and taxes assessed on 401(k) plan proceeds, consumers are increasingly turning to their hard-earned 401(k) plans when an emergency arises. These types of emergencies might include an unexpected job less, a medical crisis, a work injury, or an unanticipated move. Rather than dipping into an emergency fund or savings account, families are relying on their 401(k) plans, simply because they have no other source of cash.

Among lower and middle-class Americans, in particular, studies show that most do not save at the level needed for retirement, and many do not save at all. Similarly, a recent report by the Corporation for Enterprise Development showed that the number of workers who participate in employer-based retirement plans has dropped in at least 25 different states. As a result, these families may have no choice but to raid what small retirement savings that they already have.

For families in this predicament, who tend to have lower lifetime wages and overall household earnings, one medical emergency or a sudden job lay-off can mean the difference between living in relative comfort and barely scraping by. No person is immune from these events happening in their lives, although some wealthier Americans might be less likely to encounter an emergency such as a devastating job loss. In any case, once a family is facing such an emergency, the reality is that even the proceeds of their 401(k) accounts, less taxes and penalties, may not be enough to help them deal with increased expenses, decreased income, and crippling debts.

When financial hardship leads to debts that quickly have become overwhelming, bankruptcy may be an option that offers a way out. By filing for Chapter 7 bankruptcy, you may be eligible to discharge debts such as medical bills and credit card debt, although some debts, like student loans and back child support, cannot be discharged. On the other hand, if you are gainfully employed, you may be able to take advantage of Chapter 13 bankruptcy proceedings, which can enable you to pay back your debts over a three to five-year time period.

For more information about how bankruptcy may be an option for you, contact your Arizona bankruptcy lawyer for a comprehensive consultation about your financial situation.

Why Does Bankruptcy Exist?

Posted on April 5, 2013 by Staff Writer

At its core, consumer bankruptcy exists to give people a fresh start and a second chance. Since the “great recession” began several years ago millions of people in this country have filed bankruptcy. People have found themselves trapped in a cycle of endless debt—struggling just to make their minimum payments each month. Often through illness, divorce, death, job loss, or poor choices people find themselves hounded by unrelenting creditors.

These creditors can garnish paychecks and levy bank accounts. In most states a creditor with a judgment can garnish 25% of a person’s gross paycheck. That’s approximately 40% of a person’s take-home-pay! Most people struggle to live off of 100% of their paycheck let alone only 60% of it. Additionally, these creditors can also “levy” bank accounts by seizing the available funds.

A bankruptcy filing gives someone a fresh start. From the minute a bankruptcy is filed it becomes illegal for creditors to ever contact a debtor attempting to collect on a debt. The automatic stay prevents creditors from garnishing, levying, or liening the bankruptcy filer’s property. The unrelenting stress is gone and bankruptcy filer can begin their new financial life. Credit ratings slowly rise, credit becomes available, and it will eventually be as if the bankruptcy had never happened.

Get the fresh start and second chance you deserve by contacting one of our skilled bankruptcy attorneys today!

What issues do debtors face when they don’t use a bankruptcy attorney?

Posted on April 3, 2013 by Staff Writer

On January 15, 2009 an Airbus A320 left New York City’s LaGuardia Airport headed for Charlotte, North Carolina. A few minutes after takeoff the Airbus struck a flock of birds and lost power to both of its engines. First Officer Skiles and Captain Sullenberger successfully ditched the plane in the Hudson River. Because of their exceptional training and experience not a single passenger or crew member was killed in the crash.

Chances are you’re not trained at flying a commercial jet. However, today’s commercial planes are so sophisticated they can literally fly themselves. These planes are capable of taking-off, flying, and landing themselves. So in theory you could get into a jumbo jet and fly it across the country. But would you really want to? What happens if there is an emergency? What if a motor goes out? Or the planes navigation system stops working?

It is the same with bankruptcy. Every day there is more and more resources available to the average consumer. There are document preparers, books, libraries, and websites with plenty of useful information. But what happens if there is an emergency in your bankruptcy case? What if your trustee files an Objection to an Exemption you took? What if a creditor requests a 2004 Exam? If you don’t have an experienced bankruptcy attorney on your side you’re going to be in for a bumpy ride.

A person filing bankruptcy without an attorney is considered a pro se filer. Pro se legal representation means advocating on one’s own behalf before a court, rather than being represented by a lawyer. Pro se bankruptcy filers are held to the same standard as an attorney. So if you would have to spend an inordinate amount of time to try and understand all the requirements.

I’ve seen many cases where a pro se filer lost a lot more money than they ever would have paid an attorney. Bankruptcy is very complicated and many of the rules are nonsensical. So let our attorneys help you navigate the rough skies of bankruptcy.