Bankruptcy and Medical Bills

Posted on May 31, 2013 by Staff Writer

With the implementation of Obamacare getting closer, there are several questions about what the Affordable Care Act will do for Americans facing high medical bills due to an ongoing illness or disease. According to the Washington Post, “the nonpartisan Congressional Budget Office estimates that 30 million more Americans will have health insurance by the end of decade.” That’s a big number, but it doesn’t take into consideration those Americans who will indeed have coverage, but who “will still face big financial burdens after they gain insurance coverage,” a sub-sect that will likely exist, according to two new academic studies cited in the Washington Post.

According to Reuters News Service, “medical bills are behind more then 60 percent of U.S. personal bankruptcies.” U.S. researchers told Reuters that, “for middle-class Americans, health insurance offers little protection,” and even healthcare reform isn’t on the right track. Dr. Sidney Wolfe of the Health Research Group at Public Citizen told Reuters that “expanding private insurance and calling it health reform will fail to prevent financial catastrophe for hundreds of thousands of Americans every year.”

Arizona has long had one of the highest rates of both personal and consumer bankruptcies in the country. Though that number significantly decreased from 2011 to 2012—according to Arizona Bankruptcy Courts, by 22.2 percent—Arizona residents are still at a high risk of bankruptcy. In 2012, there were 27,298 bankruptcy filings in Arizona, the large majority of which were in Phoenix.

As Obamacare is implemented, everyone will be looking to see if the expanded coverage will reduce bankruptcies due to medical bills. Stephanie Woolhandler, a professor at the City University of New York, conducted research to determine this on a smaller scale after the state of Massachusetts expanded healthcare coverage, and found that “in 2009, two years after the insurance expansion took effect, just about half the debtors (52 percent) attributed their bankruptcy at least in part to medical bills,” according to the Washington Post. “In 2007, before the expansion, the number stood at 59 percent.”

If you or someone you know is considering bankruptcy because of medical bills or any other reason, don’t go through it alone. Contact a dedicated Arizona bankruptcy attorney today.

Image courtesy of Vichaya Kiatying-Angsulee / FreeDigitalPhotos.net

Important Documents to Share with your Bankruptcy Lawyer

Posted on May 28, 2013 by Staff Writer

If you have debt problems or are considering filing for bankruptcy, it is best to hire an experienced bankruptcy lawyer who can assist you in sorting out your financial problems. Your lawyer will want to see a number of documents in order to give you the best possible advice and legal representation. These documents can include, for instance, your financial or legal records, according to an article.

Important financial documents you may have to share with your attorney can include the following:

your latest bank statements
bills from possible creditors
the most recent payment coupons for property such as vehicles and real estate
bills or invoices for any purchase you have made in the previous year
receipts

You should also show your bankruptcy lawyer files from previous litigation, especially if judgments have been entered against you, files from your previous lawyers, and any divorce decree or similar order that tells you to pay child support or maintenance.

Additionally, there are other documents that your lawyer may need to see in order to provide you with the best possible assistance. They are: canceled checks for expenses you cannot document in any other way; your correspondence with creditors, particularly threat letters; insurance policies; tax returns, vehicle titles; your lease or mortgage; promissory notes you have signed; lawsuits; and all documents relating to debts you own or debts owed to you.

If you are contemplating filing for bankruptcy in Arizona, you should consult a knowledgeable bankruptcy lawyer as soon as possible. The advice and assistance of an experienced lawyer can benefit your case significantly. Please contact a capable Arizona bankruptcy attorney today.

Image courtesy of Stuart Miles/Freedigitalphotos

Budgeting Tips for Post Bankruptcy Financial Success

Posted on May 25, 2013 by Staff Writer

Bankruptcy can take a huge toll on your finances and on your life in general. It is a very stressful situation, and once you have been officially discharged from bankruptcy, it’s important to form good habits to get yourself back on your feet financially.

Budgeting is one of the most important steps in becoming financially stable. You can easily avoid future financial trouble by carefully planning a budget and determining how your money will be spent each month. However, the trickiest, but most important, part of budgeting is sticking to your plan.

In order to begin budgeting effectively, you must first figure out what your monthly income is. This total will consist of all the money entering your account, which can include your salary, benefits or grants, or things such as child maintenance payments.

The next step is to work out what your total monthly costs are. You should do this by considering the highest priority expenses, such as your rent/mortgage, food, utility bills, etc. After you do this, you can easily take away the total from your monthly income, leaving you with your disposable income. The key is to never spend more than this amount, your living costs should be covered each and every month.

After coming out of bankruptcy, you should also take a few steps in order to better manage your money, which you can do in many ways. For instance, checking your bank account on a daily basis is a useful habit, letting you be constantly aware of where you stand financially. Setting up Direct Debits for your monthly utility bills will also be helpful; so that you can be sure all of your expenses will be paid exactly when they are due.

Coming back from bankruptcy is a long, challenging process, but there are ways to get back up on your feet again. If you or somebody you know has just been discharged from bankruptcy and have any questions about how to improve your habits, contact an experienced Arizona bankruptcy attorney today.

The Bankruptcy Means Test

Posted on May 23, 2013 by Staff Writer

Back in 2005, President George W. Bush signed a new bill into law on October 17^th. It was the Bankruptcy Abuse Prevention and Consumer Protection Act and changed the ways that bankruptcies are managed in the United States. One way is by compelling filers to receive certified credit counseling as a step to securing a bankruptcy. Another way that the bankruptcy process has been changed is by creating a “means test” to qualify for bankruptcy.

This “means test” is necessary because of differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 is also known as a liquidation bankruptcy because it discharges most debts through the sale of a debtor’s assets. Chapter 13, on the other hand, is a reorganization of debts. It allows you to keep most of your assets but sets up a repayment plan which lasts up to 5 years.

To qualify for a Chapter 7 bankruptcy, one important form that must be filled out is the “means test”. It is one of the ways to qualify for a liquidation bankruptcy. The “means test” reviews your current monthly income to see if you are able to repay your creditors in a Chapter 13 bankruptcy. If you can’t, then you are eligible to file for a Chapter 7 bankruptcy.

Current monthly income is an average of the six months leading up to your filing consisting of complete calendar months. This is all income from work, insurance, unemployment compensation, interest, and other forms of money earned. It is not including payments that were earned from previous months but paid in the six month period.

This will provide an accurate picture of your household income, which will be reviewed in two different ways. If your monthly income is below the median income for the same size household in your state, you qualify for a Chapter 7 bankruptcy. If it does exceed the median income, the rest of the “means test” will see if you have enough “disposable income” to repay your bills. For more information about bankruptcy or to file, contact an experienced bankruptcy attorney in Phoenix today.

image courtesy of freedigitalphotos.net

Can You Be Evicted During Bankruptcy?

Posted on May 18, 2013 by Staff Writer

Filing bankruptcy is meant to help filers to eliminate debt and get a fresh financial start. If a bankruptcy filer does not have money to pay their bills, they may wonder: what happens if I cannot pay my rent? Am I protected from eviction?

In order to evict a tenant, a landlord must have definite cause. Before the eviction process begins, a written notice must be sent to the tenant. This notice should list specific reasons why the tenant must leave and a time period in which they must be out.

The notice can be sent if the tenant has broken the lease, failed to pay rent, or failed to move out after the end of the lease term. If, after receiving the notice, the tenant fails to take action or leave the property, the landlord can begin the process of eviction.

The renter is then served with a summons. At that time the renter can file a response and go to the court hearing. If the renter does nothing, the landlord is given default judgment. A Writ of Possession is passed on to a law enforcement official, who assists the landlord in taking possession of the rental property. The renter and their belongings will be removed by the officer. The landlord will change the locks and ensure that the property is secure.

However, all of this can halt if a bankruptcy has been filed prior to a judgment on eviction.
During bankruptcy the renter is given an automatic stay, halting the eviction unless the landlord petitions the bankruptcy courts. A reschedule for an eviction hearing will be made which can take up to four weeks. This allows the bankrupt renter a little time before they have to move.

If you are trying to determine whether bankruptcy is right for you and how to proceed as a renter during the bankruptcy process, contact an Arizona bankruptcy lawyer who will guide you through the process and make it easy to understand.

Image Courtesy of Freedigitalphotos

Filing for Chapter 7 Bankruptcy

Posted on May 14, 2013 by Staff Writer

Personal bankruptcy is covered in the United States Constitution to protect innocent citizens from economic destruction. Personal bankruptcy is broken down into two parts in the Bankruptcy Code of the Constitution, differing by way of payment plans.

Chapter 7 bankruptcy is often referred to as straight bankruptcy because it is typically what people think of when they hear the term “bankruptcy.”

When someone qualifies for Chapter 7 bankruptcy, the majority of his or her debts will be discharged, however, some of his or her property may have to be surrendered. There is no payment plan for Chapter 7 because the debts are simply forgiven.

To qualify for Chapter 7, the filer will have to pass a Means Test. The test is very complicated, however, most people can pass. The hardest part is gathering the necessary information.

Most property that you receive after you file for Chapter 7 bankruptcy does not become part of the bankruptcy, although there are a few exceptions to this rule. These exceptions include income tax refunds for years prior to bankruptcy, divorce property awards, inheritances and life insurance that the bankrupt person becomes entitled to within 180 days of filing, which must all go to pay the debts.

Ideally, the assets of the debtor can be collected and sold for the benefit of the various creditors. All assets that are not excluded and are owned on the petition date are able to be taken for this purpose. Very often, however, the debtor has no assets, in which case there will be no property taken from him or her.

If you are considering filing for bankruptcy, contact a bankruptcy attorney for assistance. We have Arizona bankruptcy attorneys across the state who can assist you with your bankruptcy case today.

What is Reaffirmation in Bankruptcy?

Posted on May 10, 2013 by Staff Writer

Filing for bankruptcy is a way to get a legal fresh start with one’s finances. Reaffirmation is when the debtor agrees to pay off certain debts in full, even if the debt may have been discharged in bankruptcy. While discharging debts may seem like the best option, it can sometimes mean losing assets that may have been used as collateral against debts. If you have assets or property you want to keep through your bankruptcy process, reaffirmation might be beneficial for you.

In a Chapter 13 bankruptcy, debts are reorganized so that the debtor can continue making payments over a set time period. However, in Chapter 7 bankruptcy, the filers debts are discharged. A debtor has four choices in a chapter 7 bankruptcy:

Return the property to the debtor.
The asset can be sold and the profits given to the creditor.
The debtor can pay the current value of the asset to the creditor.
Reaffirmation. This is when the debtor continues to make payments as if there is no bankruptcy filing.

In the short term, it is easiest to eliminate debt. However, if the asset that the debtor cannot afford is a vehicle or a home, it may be worth it to keep the asset. Reaffirmation allows this, if the debtor can afford payments.

If there are assets you are not willing to part with, consider reaffirmation. It is important to discuss your options, including reaffirmation, with a bankruptcy attorney in Arizona who understands your situation.

Image courtesy of freedigitalphotos

When is a Bankruptcy Completely Finished?

Posted on May 7, 2013 by Staff Writer

One of the major steps to wrapping up a bankruptcy is the Discharge. A discharge means that all of your “dischargeable” debts have been completely erased. Discharges are typically entered 70 to 90 days from the date of your 341 hearing. Many people believe that their bankruptcy is over once a discharge has been entered; however this is not the case. There is one very important step after the discharge, ‘closing’.

After the discharge your trustee must “close” out your bankruptcy in order for it to be completely over. A trustee can close a case anywhere from a couple weeks to a couple months after the discharge has been entered. Once your case has been closed an entry will appear on the docket that reads:

“The estate having been fully administered, further administration of the reopened case having been completed, or the case reopened for the filing of further proceedings which either have been filed and no further court action is required or were not filed within 90 days of the reopening; IT IS ORDERED that the case is closed and if a trustee has been appointed, the trustee is discharged from and relieved of his trust. Jurisdiction is retained over any pending adversary(s).”

In most cases the timing of the bankruptcy closure is not an issue; however, it can become important in some certain instances. For example, if you are want to sell your home or any other real property this cannot happen until the bankruptcy has been officially closed. The reason why you can’t sell the property is because the automatic stay is still in effect.

How Social Media can affect your Bankruptcy

Posted on May 3, 2013 by Staff Writer

We have all heard for many years about employers and divorce attorneys looking into your social media profile to see if you are being honest about everything that you have claimed. Creditors are even turning to social media to see where you are as far as income and assets.

There are so many social media outlets today and it seems that as the time goes by, there are new ones introduced all of the time. Between Facebook, Twitter, LinkedIn, and Google+, you can find out almost anything that you want to find out about a person. This is especially important to remember when you are claiming to have financial difficulty. Remember, your creditors want to be paid and if they can find evidence that you are not being honest about your income and assets, it could be a problem for you.

If you are telling the bankruptcy court and your creditors that you don’t have the means to pay for your current debts but you are taking vacations and posting the pictures to your social media profile, they could use that as evidence against you. If you are claiming that you don’t have any assets but you are posing in a brand new car, this can totally change the way that your case may play out.

Living above your means may be one of the very things that have landed you into a financial pickle. Once your Arizona bankruptcy attorney has advised that filing bankruptcy is a viable option for you, you must be very honest about any assets that you have and disclose all income that you have coming in. if you are putting contradicting statements and photos on your social media profile, it can cause a big headache later. The best thing is to be honest from the beginning.

Do I Need to be Flat Broke in Order to File Bankruptcy?

Posted on May 2, 2013 by Staff Writer

No, you do not need to be completely broke in order to file bankruptcy. In fact, most of our Arizona bankruptcy clients have jobs and many own homes. You don’t need to be living under a bridge or in a park to qualify for bankruptcy. Regardless of how much or how little money you make, you can file bankruptcy. Additionally, regardless of how much or how little debt you have there will be a chapter of bankruptcy right for you.

When we meet with a potential client, we look at salaries and income to analyze them for determining eligibility under the means test. Most of our clients qualify for eliminating their debts with Chapter 7 bankruptcy. Those who do not qualify for Chapter 7 bankruptcy because they make too much money can still seek relief under Chapter 13.

Bankruptcy relief is available to anyone who is over-burdened by their debts and has difficulty paying them. So even if you have a regular, steady job and are earning healthy a healthy salary you can still seek bankruptcy relief. For many Arizonians bankruptcy is the only realistic way out of their stressful financial situation.

Additionally, most assets are protected by exemptions. So even if you own a home, car, and 401k we can most likely protect them. Take the first step in tackling your serious debt problems by meeting with one of our skilled Phoenix bankruptcy attorneys.