Author Archives: Staff Writer

Apple Purchases Factory of Bankrupt Company near Phoenix

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bankrupt company, bankruptcy sale, Arizona Bankruptcy AttorneyLast month, technology giant Apple announced its plan to repurpose a factory site near Phoenix with the intention of opening a new data center. Once the property of GT Advanced, Apple bought the factory in 2013 after the New Hampshire-based company declared bankruptcy. In addition, Apple is reportedly trying to help more than 600 former employees of the bankrupt company.

According to Associated Press reports, GT Advanced’s Arizona factory had previously manufactured sapphire glass: an incredibly strong and resistant material that works well in smartphone construction. Prior to the release of the iPhone 6, there was considerable speculation as to whether or not Apple’s newest smartphone would use the durable glass components for its touchscreen. Ultimately, Apple chose to use a different material, which placed considerable financial strain on sapphire glass manufacturers.

However, Apple’s forthcoming Apple Watch will make use of sapphire glass. Despite the demand, GT Advanced fell into insurmountable debt and will not be producing the material for the Apple Watch. GT Advanced claims, however, that Apple bears significant responsibility for the failure of the bankrupt company.

Bankruptcy Is a Reality for Companies in Almost Every Industry

While the full details of GT Advanced’s financial situation are still developing, the case should serve as a reminder that even when companies are delivering cutting-edge services, they can still fall into difficult financial circumstances. Although companies often close their doors after filing bankruptcy, many have the opportunity to stay in operation. For business owners, bankruptcy may seem like a frightening prospect, but in many cases, it creates a pathway to financial stability.

Often, individuals and business owners fall into debt for reasons outside their control. Financial markets are constantly changing and evolving. Competition and new technologies can instantly make a company’s products or services irrelevant. In these cases, business owners must take steps to maintain financial stability, and filing bankruptcy may be part of that process.

Bankruptcy Law in Phoenix, Ariz.

Whether you are a business owner or an individual, if you would like to speak with an experienced Phoenix bankruptcy lawyer, contact Arizona Bankruptcy Attorneys today. To learn more or to schedule a free consultation, call us at 602-468-3328.

Bankruptcy Fraud: Real Housewife Serving Sentence

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fraud, federal crime, Phoenix bankruptcy lawyerA former reality TV star looks “amazing” in prison, according to her teenage daughter. The 14-year-old girl added that jail officials had helped her mother put on makeup, and that the family’s first visit together was “fun.”

“Real Housewives Of New Jersey” cast member Teresa Giudice began serving a 15-month federal prison sentence for bankruptcy fraud. Upon her release from the Federal Correctional Institution in Danbury, Connecticut, her husband will begin serving a 41-month sentence for bankruptcy fraud and tax evasion. As a non-citizen, he also faces possible deportation proceedings.

According to court records, the couple filed Chapter 7 Bankruptcy in 2009 but failed to disclose their income from the reality TV show. The matter was subsequently referred to a grand jury for bankruptcy fraud prosecution.

Bankruptcy Fraud

It is almost impossible to conceal fraud from bankruptcy trustees, as they have easy access to tax returns, W-2s, W-4s, and most other financial documents. Moreover, the trustees are normally attorneys, or at least legal and/or accounting professionals, so they are not easily fooled. Prior to the hearing required in most bankruptcy cases, commonly known as a 341 meeting, the trustees carefully review both the petition and schedules, looking for red flags. They may also review other documents, looking for inconsistencies. Other times, debtors may give vague or evasive answers at the 341 hearing.

If the trustees suspect fraud, they may open a Rule 2004 investigation. This rule gives trustees sweeping powers to interview witnesses and subpoena documents in order to gather enough information to take the matter to the next level.

  • Adversary Proceeding: This is the normal remedy if the debtors are trying to conceal an asset, like a bank account, rental property or a boat, that rightfully belongs to the bankruptcy estate. As part of a motion for turnover, the trustee can request a temporary restraining order to prevent the debtors from selling or otherwise disposing of the contested asset.
  • Criminal Prosecution: This is typically the next step in the process, especially in a case of egregious fraud. Specific offenses include filing a false petition, making a false oath, and filing a false claim. These three are normally present in every bankruptcy fraud matter. Other offenses include bribery, embezzlement, and knowingly concealing assets.

The maximum punishment for these crimes is typically five years in prison, plus substantial fines and court-imposed restrictions.

Bankruptcy fraud is a very serious crime. For a free consultation with an experienced Phoenix bankruptcy attorney who can help you clear your debts and avoid scrutiny, contact our office today. Bankruptcy can stop repossession, foreclosure, and creditor harassment.

Report: Filing for Bankruptcy on the Decline in Arizona

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Everyone wants to save money and make smart investments, but debt is holding many Americans back from a financially comfortable lifestyle. In some cases, an unexpected event or injury can lead to insurmountable debt, which is why many individuals and business owners choose to file bankruptcy.

If you are considering bankruptcy, regardless of your financial experience and knowledge, the advice of a bankruptcy attorney may prove invaluable. An experienced lawyer can assess your case and discuss your options.

Bankruptcy Rates Down in Arizona for the Third Consecutive Year

According to Tuscon.com, the number of individuals and businesses filing for bankruptcy fell as much as 16 percent in some areas. Phoenix, in particular, saw some of the most significant decreases. Experts have attributed this to the end of the recession, as well as the faster economic recovery in the Phoenix area.

The truth, however, is that bankruptcy is still a concern for many Phoenix residents. Even in the strongest economies, individuals and businesses can fall on tough financial times, which is why responsible finance strategies are highly encouraged for all.

Practical Money-Saving Advice

When it comes to tackling debt, particularly high-interest credit card debt, it is always a smart idea to pay more than the monthly premium or minimum balance. Not only will this help reduce the overall debt quicker, but it will also promote a healthier credit score.

There are other day-to-day choices that can go a long way toward saving money. One of the simplest is cutting down on the amount of money and time spent on eating out. In addition to being more cost-effective, value-conscious grocery shopping and cooking at home can contribute to a healthier lifestyle.

Bankruptcy Law in Phoenix, Arizona

Sometimes, filing for bankruptcy is inevitable, but you should not commit to doing so until you have discussed the options with an attorney. Consolidation and other strategies may help your situation, and filing for bankruptcy may not be necessary.

If you would like to speak with an experienced Phoenix bankruptcy attorney about your financial situation, call Arizona Bankruptcy Attorneys at 602-468-3328 for a free consultation.

 

Congress To Reconsider Student Loan Discharge

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As discussed in a previous post on this blog, student loans are generally not eligible to be discharged, even in bankruptcy. A Maryland Democrat, however, wants to change the Bankruptcy Code and make student loans dischargeable. Representative John Delaney recently introduced the Discharge Student Loans in Bankruptcy Act of 2015, a measure that, if enacted, would amend 11 U.S.C. 523(a). Student loans would then be on par with all other dischargeable unsecured debts, including credit cards, payday loans, medical bills, and signature loans.

According to a press release issued by his office, Congressman Delaney supported some similar measures in the previous Congress, such as expanding the Pell Grant program and restricting student loan interest rate increases. He also co-sponsored the Truth in Tuition Act, which would have required certain post-secondary institutions to be more forthcoming about their tuition and fees.

Nondischargeable Debt

Chapter 7 Bankruptcy automatically wipes out most unsecured debt, giving the filer a fresh financial start, but there are some exceptions including:

  • State and federal income taxes: These accountsfollow the 3/2/240 rule. The taxes must be at least three years old, the returns must have been filed at least two years prior to the bankruptcy, and the government must not have assessed the tax within the last 240 days. As a rule of thumb, if you have not received a collections notice in the last nine months, the tax has probably not been assessed in that period. Only income taxes fall into this category; payroll taxes and other debts are typically not dischargeable under any circumstances.
  • Fraud: The law presumes that any debt incurred within 90 day prior to the filing date is fraudulent, meaning that the debtor took out the loan with the intention to file bankruptcy and discharge the debt. The government must still prove actual fraud at a hearing.
  • Omitted Debts: If you do not list a debt on your schedules, it is not dischargeable, so it is very important to fully comply with the trustee’s demands and your lawyer’s requests.
  • Domestic Support Obligation: DSOs, including child support and spousal support, are only dischargeable if the obligation was assigned to a third party or if the divorce decree specifies that a debt payment is considered “non-alimony.”
  • Student Loans: Any education debt incurred by an individual is dischargeable only if repayment “would impose an undue hardship on the debtor and the debtor’s dependents.” Generally, courts require that the debtor suffer from a physical or mental disability.
  • DUI Damages: Personal injury obligations are dischargeable unless drugs or alcohol were involved.

Other exceptions include certain homeowners’ association dues and unpaid judgments related to fraudulent banking practices.

Almost seven in ten recent college graduates owe an average of $30,000 in student loans and many financial experts expect student loan debt to continue grow in the coming years. Combined with other obligations, the financial pressures can be overwhelming. If you are looking to eliminate most of your unsecured debt and get a fresh start, contact an experienced bankruptcy attorney in Phoenix today. We can help you understand all of the options available to you under the law.

How to Save Money While Paying off Debt

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When it comes to tackling high amounts of debt, one of the most pressing concerns is how payments will affect your ability to save money. Naturally, most debtors want to pay what they owe as soon as possible, and it is almost always best to exceed the minimum payments. Although it may seem like paying debt prevents you from putting money away for the future, it is possible to satisfy lenders while still saving money.

Know Where Your Money Is Going

As U.S. News & World Report suggests, few people stop to consider how much of their paycheck is not actually going to them. One of the first steps in managing finances is to know where your earnings are going. There are certain expenses, such as taxes, that most people cannot avoid. Others include basic necessities and living expenses. After taking care of these, paying debt should be the next priority.

Any other income can become savings. Setting aside even small amounts from each paycheck can lead to significant savings after a few months or years. To maximize your savings, be sure to spend within your means and to limit luxury expenses.

Tackle High-Interest Debt First

Many people try to save money by simply paying their minimum balances each month. While this might help you save money in the short-term, you will end up paying more in interest.

In addition to paying more than the minimum premium, focus on higher-interest debt first. Then, you can focus on low-interest debt. Over time, this strategy will ultimately reduce the amount you pay in interest.

Bankruptcy Law in Phoenix, Ariz.

If you would like to consult an experienced Phoenix bankruptcy attorney, contact Arizona Bankruptcy Lawyers today. We can help you decide if filing bankruptcy is the right option for your situation. Call us today at 602-468-3328 to schedule a free consultation.

Improve Your Credit Score and Financial Habits in 2015

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Within the first few months of a new calendar year, most Americans have broken their New Year’s resolutions. In fact, according to Forbes, less than 10 percent of those who set out to accomplish a resolution in the New Year succeed.

Fortunately, there are several steps people can take to increase the likelihood that they will stick with their goal. When it comes to improving credit and financial habits, preparation is key. Consider the following tips to help make 2015 a year of financial success.

Make an Effort to Pay Bills on Time

Paying bills on time is one of the most important aspects of financial responsibility. Although it seems obvious, this is a big step for some. Making payments on time is critical for building a credit score and also helps people develop a realistic budget to help keep them out of debt.

Aim to Pay More than the Minimum Payment—Especially for Credit Cards

Abusing credit cards is one of the main reasons why people fall into debt. It is all too easy to make minimum payments, only to have an unexpected circumstance threaten your finances. Those who make more than the minimum payment on purchases are less likely to fall into debt—and their credit score may improve.

Consider Opening a Savings Account

Opening a savings account, especially for younger people, can be a great way to start preparing for the future. One part of opening a savings account is reviewing one’s finances to see how much an account holder can profit from the interest rate. This motivates an account holder to assess his or her spending habits and improve them.

Consult a Phoenix Bankruptcy Lawyer

Most Americans have some form of debt, and unfortunately, many are unable to make payments. In some cases, bankruptcy can help debtors take control of their finances. To learn if bankruptcy could help your situation, please contact a Phoenix bankruptcy lawyer. Call 602-468-3328 today.

Consequences of Lying to Bankruptcy Court

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Most bankruptcy attorneys realize that filing for bankruptcy is often a very difficult decision for clients to make. Typically, a client has been struggling for some time with overwhelming debt, fending off collection calls, late notices, and maybe even foreclosure notices.

Therefore, one of the most critical steps you need to take when you file for bankruptcy is to be completely upfront and honest with your bankruptcy attorney. If you are not, you are essentially hindering your attorney from doing the best job he or she can in representing you during the bankruptcy process.

As part of the process, whether you are filing for Chapter 7 or Chapter 13 bankruptcy, you will be required to disclose all of your assets and liabilities to the bankruptcy court. Your attorney will fill out and file these forms for you, but you are the one who will be supplying that information to them.

Documents that you are required to provide to the court include your last two year’s tax returns, your last six months of pay-stubs, and last two years of W-2’s, property deeds and proof of insurance, proof of current property values, mortgage statements, and all bank and retirement savings accounts.

There are people who attempt to hide income—whether from businesses, real estate property income, or other means—from the bankruptcy court. Doing so can have serious consequences. At the very least, your bankruptcy petition will be denied. However, in many cases, criminal charges of bankruptcy fraud will be filed and if found guilty, there is often a prison sentence and hefty fine involved in the punishment.

If you are struggling with debt and are considering filing for bankruptcy, please contact an experienced Arizona bankruptcy attorney to discuss your legal options. Contact our office today at 602-468-3328 for a free consultation. We are here to help you.

Critical Tips for Debt Management

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To say debt is common in America would be a dramatic understatement. According to USA Today, most Americans carry some form of debt, and more than 30 percent are delinquent on payments.

Most Americans understand how challenging debt can be. Financial hardship is stressful, and making ends meet often requires sacrifices. In many cases, debt is not the result of financial irresponsibility; it is a consequence of unemployment, high medical expenses, or other unpredictable and uncontrollable circumstances. With smart debt strategies, though, many Americans can start on a path toward freedom from crippling debt.

Before making radical choices, such as filing for bankruptcy, consider speaking with an experienced lawyer to discuss your options. Also, keep the following three tips in mind when drafting a plan to manage your debt:

Cut Credit Expenses

While some may be lucky enough not to have maxed-out credit cards, those struggling with immense debt will do well to refrain from making unnecessary purchases with credit. While credit can provide a helpful crutch, do not use it to buy luxuries. The first step in debt management is to stop adding to the overall debt.

Speak with a Credit Advisor or Bankruptcy Attorney about Combatting Debt

Everyone’s situation is unique. This makes it difficult, at times, to issue broad pieces of advice. There are differing opinions as to whether or not one should take money out of savings to pay outstanding debt. The answer largely depends on one’s own finances. A financial advisor can help you in making this decision.

Draft a Budget that Complements Your Current Financial Situation

After cutting expenses, it is time to draft a budget. This budget must incorporate available income, liquid assets, and savings accounts.

Contact an Bankruptcy Attorney

If you are currently struggling to pay substantial amounts of debt and are considering bankruptcy as an option, consider speaking with an experienced Phoenix bankruptcy attorney. After reviewing your current financial status and overall debt, we can help you determine if filing bankruptcy is an appropriate decision. Contact us today at 602- 468-3328 for a free consultation.

Will I Lose My Security Clearance if I File Bankruptcy?

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Financial trouble may adversely affect your security clearance. The theory is that people who are under financial duress are more likely to accept bribes and make poor decisions. However, filing a voluntary petition does not automatically revoke your security clearance or prohibit you from obtaining one. In fact, in many ways, bankruptcy cannot even be considered “financially irresponsible.”

Those who want or need a security clearance must undergo scrutiny in a variety of areas, including:

  • Ties to foreign countries or entities;
  • Loyalty to the United States;
  • Personal conduct;
  • Sexual behavior;
  • Drug or alcohol use;
  • Financial responsibility;
  • Criminal conduct;
  • Psychological disorders; and
  • Use of information technology

The government will look past some negativity. People may drink beer on the weekends, have relatives who live outside the United States, cheat on their spouses, and/or have a criminal record. However, they still maintain a security clearance. So, when it comes to money matters, what exactly is the government looking at?

‘Conditions that Could Mitigate Security Concerns’

The applicable rule is Guideline F in Department of Defense Directive 5220.6, and it lists the following mitigating circumstances:

  • Time Gap: “Time heals all wounds,” or at least the majority of them. As the months and years pass, your bankruptcy filing takes on less and less significance in the eyes of everyone.
  • Pattern of Behavior: Some Chapter 7 debtors exhibit poor spending habits, but many more experienced a one-time financial setback, like a job loss or sudden illness, that had drastic ripple effects on the remainder of their finances.
  • Amount of Control: Guideline F specifically lists “loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation.” Most bankruptcy filings are due, at least in part, to one or more of these incidents.
  • Counseling: Debt counseling is a mandatory component of a Chapter 7 or Chapter 13 case, and most debtors have sought counseling beyond the legal requirement.
  • Effort to Resolve Debt: Note that the phrase is not limited to paying debt. If you lack the funds to repay your debts in full, bankruptcy is the most responsible option.

The fact of the matter is that if you are considering bankruptcy, you are most likely under financial duress. As far as the DoD is concerned, a voluntary petition can only make the situation better. Take the first step toward a fresh financial start by contacting an experienced Phoenix bankruptcy attorney today.

2015 Bankruptcy Forecast

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According to AZEconomy.org, the 2015 forecast for Arizona bankruptcy appears better than in years past. Bankruptcy filings in the Phoenix metropolitan area were down 20 percent in November since the previous year, and down 14 percent overall in the state. This is despite an increase in jobless claims, which were slightly higher during the second week of November 2014. However, that calculation was not consistent with the overall growth of employment in the state of Arizona throughout 2014.

One major reason bankruptcy remains a serious issue for the Arizona economy is due to foreclosures and an unstable housing market—all remnants of the 2008 crisis. Arizona was among the states hit hardest by the housing bubble, with Phoenix at the helm of the crisis nationwide. Yet the forecast for housing, and a decrease in foreclosures, is sunny.

Additionally, AZEconomy.org notes that reporting numbers from the Federal Housing Finance Agency, the FHFA House Price Index found that the appreciation for the cost of housing in Arizona was up 6.57 percent. This is significantly higher than the national average of an increase of 4.55 percent. Phoenix and Prescott were the Arizona cities with the highest cost of house increase. This is good news for any homeowner who is looking to sell—though many Arizonans still have underwater mortgages as a result of the 2008 bubble. In fact, KTAR News reports that 18 percent of Arizona homeowners still hold underwater mortgages. The national average, 15 percent, is not much better. And considering how much harder hit Arizona was than the nation as a whole, it is reassuring—especially considering that Phoenix is not among the cities with the highest rates. Moreover, Arizona is not the state with the highest rate of underwater mortgages, either. Nevada leads the country with the most underwater mortgages at 31 percent.

Despite the positive numbers, foreclosure and bankruptcy may still affect Arizonans in 2015. Knowing how to proceed is the most important step. It can save you money and time in the long run. If you are considering bankruptcy and fear foreclosure, do not go through it alone. Contact an experienced Arizona bankruptcy attorney today.