Category Archives: Arizona bankruptcy lawyer

Deficiency Judgement and Foreclosure

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KerryAccording to CoreLogic, there have been over 3 million homes foreclosed on since 2008. Many of those former homeowners are still struggling today, trying to recover from the financial disasters they faced. The majority were forced to leave homes that were then usually auctioned off by the mortgage holders.

Now, what could be a new financial disaster, many of these lenders are filing lawsuits against former homeowners for the balances of the mortgages. As the Washington Post reported, many people thought their home was the security for the mortgage. What they don’t realize is the lender can pursue legal action for a “deficiency judgment”.

For example, a property that with a $300,000 mortgage may have only been worth $100,000 during the housing crisis and the price the bank received during a foreclosure sale. However, the remaining $200,000 that is still owed on the original mortgage is referred to as a “deficiency balance” and that’s the amount that lenders are suing homeowners for.

Both Fannie Mae and Freddie Mac are two of the lenders who are pursing deficiency judgments against former homeowners. Fannie Mae has hired debt collectors to pursue people in thirty-eight states, and Freddie Mac has pursued debtors in seventeen states.

Not only are the lenders pursing the deficiency balance, they are also pursing interest on that money. The Post interviewed one former homeowner who is being sued. He owes $95,500 from a $375,200 mortgage, plus at least $21,000 in unpaid interest. He has been charged $19 per day (almost $600 per month) since the foreclosure. And that interest keeps growing.

Once a lender is awarded a deficiency judgment, there are numerous ways they can go about collecting those funds. Bank accounts can be seized, wages can be garnished and liens placed on properties.

If you have been involved in a past foreclosure, consider consulting with an experienced Arizona bankruptcy attorney to find out what steps you can take to protect yourself before the former lender files a deficiency judgment against you.

The Bankruptcy Automatic Stay – Good Dog

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So filing bankruptcy with a good bankruptcy lawyer is supposed to put a leash on your creditors, but when do they stop? What is there to make them stop calling, harassing, or garnishing? There is an injunction from a federal judge called the “automatic stay”. The judge essentially tells your creditors to stay, like a dog. When the judge speaks, they listen.

The automatic stay is a statutory injunction that is issued by the court immediately upon filing of a bankruptcy petition. Bankruptcy Code 362, and 101 (15). It is designed to protect the debtor and provide a break from collection efforts. Before the actual filing of the bankruptcy petition, you have to rely on your bankruptcy attorney to fend off your creditors by taking their calls and enforcing collection rules. This, in itself, is enough of a reason to retain a bankruptcy lawyer right away.

Once your bankruptcy attorney files your bankruptcy petition, the automatic stay goes into effect automatically, as the name would suggest. It is a very powerful tool and applies to nearly every entity involved in the bankruptcy. The automatic stay does not mean your debt is forgiven or discharged, it just calls off the creditors.

As long as your bankruptcy case is active, your bankruptcy attorney can enforce the automatic stay to protect your interests. Beware, once your bankruptcy is dismissed or goes away, so does the automatic stay. However, while it’s in place, most actions are prohibited. A creditor cannot start a new lawsuit or even continue any existing lawsuit to collect a pre-petition claim. Ellis V. Consolidated Diesel Electric Corp, 894 F.2nd 371 (10th Cir. 1990). Even if a creditor already has a judgment against you, the automatic stay will stop collection of that judgment through garnishment or execution on your property, immediately. The bankruptcy law even prohibits attempts to collect, especially harassing, bothering, or intimidating the debtor. B.C. 362 (a)(6)

The automatic stay is an amazing tool. There are reasons it might not be granted or might not apply to a specific debt. There are also a bunch of exceptions to the automatic stay where some courts and some creditors may still be able to pursue you. This is a very important part of a Chapter 7 or a Chapter 13 bankruptcy filing. It is one of the best and most immediate manifestations of bankruptcy relief. It is significant to execute and enforce the automatic stay. It is one of the main tools against a creditor. A qualified and affordable bankruptcy lawyer can help you through this. You can retain immediately to assuage the creditor calls and harassment. Payment plans are available, and the consultation is free. GET FREE HELP NOW.

Getting a Mortgage after Bankruptcy

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At one time, going through bankruptcy had a stigma that was hard to shake when trying to move on with your financial life. However, according to SFGate Home Guides, not only is the stigma around bankruptcy lessening, but it is also very possible to get a new home in as little as a couple of years after the discharge of your bankruptcy. Here are a few things that you can do to get there.

Check for Accuracy

Once your bankruptcy has been discharged, check your credit report to ensure that everything that was included in the bankruptcy has been closed and discharged. You want to make sure that you do not have any inaccuracies there to bring down your credit score.

Open New Trade Lines

If you have any debt that was not included in the bankruptcy, such as student loans, make sure that you make timely payments on them. Remember, the point is to show that you are now creditworthy and financially responsible. Now that your bankruptcy is discharged, you will be getting offers for credit cards. Find the one with the lowest interest rate and fees. Once you acquire your new credit card, never use more than 30 percent of your credit line, and pay the balance every month.

Take Out a Larger Loan

About a year after your discharge, take out a larger loan such as a car note. You need to be able to show that you can handle a larger debt. Make sure that you have zero late payments while you are in the process of rebuilding your credit profile. You have to show your creditworthiness.

If you have questions regarding what you can include in your bankruptcy or about the discharge of your bankruptcy, a qualified and experienced Arizona bankruptcy attorney can assist you.

The Section 341 Meeting of Creditors Requirements in Bankruptcy

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One of the many obligations of a debtor after filing a bankruptcy petition is to attend the section 341 meeting of the creditors. This is a make or break moment for most bankruptcy cases. If your bankruptcy lawyer has properly prepared your bankruptcy petition, including the schedules, disclosures, and fees, it may be a very short inquisition. However, if your bankruptcy petition is deficient, or if all of the schedules and disclosures have not been filed, the section 341 creditors meeting is not the most discrete or appropriate place to find this out. In fact, if all of the proper information has not been provided to conduct the examination, the U.S. Trustee may continue your hearing, at best, and may even move to dismiss your case.

The U.S. Trustee is not one to be trifled with. The section 341 creditors meeting is not a judicial hearing, thus, the United States Trustee is to preside over the meeting. The judge is even prohibited from attending the 341 creditors meeting having to defer to the U.S. Trustee. B.C. §341, Bankruptcy Rule 2003 (b). Therefore, it is of utmost importance to be sure all documents and disclosures have been filed and are acceptable to the U .S. Trustee.

The section 341 meeting of creditors will be held between 20 and 50 days from the filing of the bankruptcy petition. It will be held at the courthouse or at a place assigned by the U.S. Trustee. The Clerk of the Court will provide at least 20 days notice, usually more, of the 341 meeting of creditors to the debtor, debtor’s bankruptcy attorney, the trustee, all secured and unsecured creditors, and other interested parties. The notice of 341 creditors meeting is comprehensive. It will include notice of the order for relief, B.C. 342, notice of the automatic stay, B.C. 362(a), and notice of the final dates for claims, complaints, and objections to discharge to be filed.

Essentially, every interested party gets to ask questions of the debtor. It is the purpose of the 341 creditors meeting to provide opportunity for creditors, the trustee, or other appointed or interested parties to examine the debtor under oath. Bankruptcy Code section 343. Normal questions can be about location and existence of property, exemptions, facts related to secured or non-dischargeable debt, debtors reasons for filing, and goals of reorganization.

There are many things that can go wrong at a 341 meeting of creditors, and even more that can happen to complicate a bankruptcy case. It is essential to file and prepare properly. There is no reason to attempt to understand the nuances of the 341 meeting of creditors and bankruptcy law. A qualified bankruptcy lawyer is affordable and invaluable. Payment plans are available and the consultation is free. GET FREE HELP NOW from a quality, experienced bankruptcy attorney.

The Bankruptcy Trustee Can Avoid Fraudulent Transfers

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It is a common misconception that bankruptcy is as easy as transferring all of your property to your friend while you discharge your debts and get your property back later. Like any other illegal act, you might get away with it, but if you get caught it will go very wrong. There is no reason to expose yourself to this kind of liability. The right bankruptcy lawyer can show you many ways to keep your assets and still discharge your debt legally. A quality bankruptcy attorney is very affordable and worth every penny. You can schedule a free consultation now, but let’s talk about fraudulent transfers.

According to the Bankruptcy Code section 548, the trustee can avoid a fraudulent transfer or obligation of the debtor within one year prior to the filing of a bankruptcy petition, or much longer according to the fraud statutes of the state. A “transfer” can be disposition of property or the granting of a mortgage or lien. B.C. 101 (54). It can be done voluntarily or by foreclosure or suit. Essentially, any transaction that looks like it could be trying to hide assets can be fraudulent. The court has identified five warning signs. They call them badges of fraud, and they come from In re Kaiser , 722 F.2d 1574 (2d Cir. 1983). The court will assume you intended to defraud if any of these are present.

The most obvious is if there was inadequate consideration received for the transfer. Did you give the property away without getting anything in return? The court will assume you were fraudulent instead of benevolent.

Another equally obvious indicator is if the transferee was a close friend or relative. If you trust the person receiving the property enough to give it back, the court will assume that is what is happening.

If you continue to enjoy the use of the property after the transfer, the court will assume it was not a real transfer. For example, if you transfer the Jet Ski for no consideration ($) but still get to use it whenever you like. Similarly, if you transfer to a corporation you own or control, it has the same effect.

The court will also consider the timing of the transfer. If it happened after your financial problems started, that would seem to be motivation.

If you receive less than full value and you were insolvent at the time of the transfer, that’s fraud. B.C. 548. The trustee could get your stuff back and still not allow a discharge, ever. Worse than that, you could go to prison for the fraud.

Don’t do this yourself. An affordable, quality bankruptcy lawyer can show you how to legally discharge your debt, and still likely keep most or all of your assets. GET FREE HELP TODAY. Payment plans are available and the fees are affordable. The best part, the consultation, is free! Call Now.

Planning your Holiday Shopping Wisely

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Even though there are well over 100 shopping days until Christmas, it is never too early to start planning your financial strategy so that you do not go into debt this holiday season. Holiday shopping is one of the largest catalysts for overspending and maxing out credit cards. Here are a few things that you can do this year to keep away the January blues when those statements start coming in.

Join the Club

Theresa

The Christmas club accounts were popular among many banks and credit unions however, many of them do not have those kinds of short-term goal accounts anymore. If they are still available at your bank, go ahead and get started, if not there should be something similar. At the very least, you can do something creative like loading your holiday savings onto a prepaid card.

Curb the Wish List

Many kids are notorious for having huge wish lists of gifts that they would like to see wrapped under the tree. However, if you were to take an inventory, many of those toys either are broken by now or are no longer in use. Depending on the age of the child, ask them to shorten the list to their top three choices. An older child can easily choose one gift that they would like to receive.

Shop Early

Shop smart and look for deals during different parts of the year. Shopping is all about supply and demand. There are a few things that you may want to wait until later to purchase such as some electronic items however take advantage of off-season deals. You will end up spending a lot more money when trying to shop at the last minute. Last minute shopping also leads to more impulse buys.

If your spending habits or circumstances beyond your control have led you to an overwhelming amount of debt, an experienced Arizona bankruptcy attorney can assist you with your case.

Do I Need a Chapter 11 – Small Business Bankruptcy?

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A Chapter 11 bankruptcy filing is used to reorganize a business that you may want to continue to operate after the U.S bankruptcy court is finished. Chapter 11 may or may not be the best resolution for your business.

If you are running a small business and considering chapter 11 Business Bankruptcy, your business is likely organized as either an LLC (Limited Liability Company) or an S-corporation. There is a reason for these designations. It means there is not supposed to be any personal liability to you, above what you have already invested in the business. If somebody sues the business, and you have followed organizational and corporate rules, your personal assets should not be at risk. Think of it this way. If you own stock in IBM and somebody sues IBM, they don’t get to take your personal assets, just the value of your stock.

The same laws that protect IBM, also protect you from liabilities of your LLC or corporation. As long as you have not signed a personal guarantee and have followed the corporate or organizational rules, a creditor should not be able to sue you personally. Over the years the courts have established some exceptions to this rule making it easier to pierce the corporate veil. If you think you might have personal liability from your s-corp. or LLC, you should schedule a free consultation with an experienced bankruptcy attorney here.

If you are confident you do not have personal liability, it is important for you to delineate personal form corporate debt. If the debt belongs exclusively to your LLC or S-Corp. and there are no corporate assets to satisfy it, the creditor has no right to execute on your personal assets. The creditor is simply out. This is why we pay interest to borrow money. Sometimes the debt cannot be repaid and the lender is left holding the bag.

If a creditor is unable to collect against an LLC or an S-Corp, there may not be a need for a formal chapter 11 declaration that the LLC or S-Corp is not paying the debt. It may be as easy as not paying. However, there are many things that will need to be done to make sure you are not exposed to personal liability. It may also be the case that you need a personal bankruptcy to disclose the corporate debt and protect your personal assets. It is better to be safe than sorry. GET FREE HELP TODAY, by scheduling a free consultation with a great bankruptcy lawyer.

Bankruptcy can Raise Your Credit Score

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We have all heard the horror stories about what bankruptcy can do to your credit rating. Unfortunately, your credit rating is probably suffering from things much more negative than a bankruptcy. If done right, bankruptcy could actually raise your credit score.

Whether your credit rating will qualify for credit with a specific company or a certain utility is very difficult to determine. It will be subjective and completely determined by the underwriting guidelines of the creditor. This is why a straight answer to the question is so hard to find. It may not exist.

From my personal experiences, I know that secured credit, to buy things like cars and houses, is available but it will cost more and likely come from an unconventional source like Lending Tree and not from a bank. Unsecured credit, like credit cards, is available from places like Orchard Bank, but expensive and low limits. It will take some time to develop good terms with credit card companies.

No matter what kind of credit you apply for, someone will have to read your credit report and make a determination if you qualify. Right now, your credit report probably shows some negative references . Each one of these negative marks will count against you. There is also a section of the report dealing with public documents and filings. This is where judgments and bankruptcy show up. These will really count against you because there is less of a chance they are a mistake. However, bankruptcy has a redeeming quality.

When bankruptcy is reported on your credit report, it will count against you. However, you are then able to re-classify all of the other negative reports to “Discharged in Bankruptcy” instead of “Delinquent” or other negative terms. This might take a few letters to the credit bureau, but it will be worth it. You will also be able to classify other judgments the same way. Now you only have one thing counting against you instead of several.

Another way bankruptcy can help is that it will dramatically change the amount of outstanding debt as well as available debt. Too much of either of these is normally a bad thing.

Really good bankruptcy attorneys will offer packages to rebuild your credit. They can explain it and help rebuilt it. Schedule a FREE CONSULTATION with a really good bankruptcy attorney now.

Doctors Facing Bankruptcy

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Doctors Facing Bankruptcy IMAGEIt’s not just the unemployed or underemployed that are still dealing with the ripple effects of the financial crisis. According to CNN Money Magazine, “as many doctors struggle to keep their practices financially sound, some are buckling under money woes and being pushed into bankruptcy.” The American Bankruptcy Institute’s health care committee, chaired by Bobby Guy, has recently noted a spike in bankruptcy filings by physician practices. Guy told CNN Money that there was a period in early 2013 when there were eight filings in a row, which before would have been considered unusual.

But it’s not doctors working in large hospitals or practices that are necessarily facing financial insolvency. Chapter 11 bankruptcy for physicians is more common when the doctor has a small private practice. Guy told CNN Money that “the weak economy has taken a toll on doctors’ revenue as consumers cut back on office visits and lucrative elective procedures.” There is also the issue of “shrinking insurance reimbursements, changing regulations, and the rising costs of malpractice insurance, drugs, and other business necessities” for a doctor’s practice, according to CNN Money.

It’s not only doctors who are affected by their practices closing—Chapter 11 does, of course, affect the filer first and foremost, but in areas where there’s only one small doctor’s practice, its closing can severely affect the community. “Having a cancer practice closer,” for example, “can be debilitating to a community,” according to CNN Money. An oncologist in Connecticut, who had had a successful solo practice for years, told CNN that his revenues began to fall when “reimbursements for treatment and drugs” starting shrinking. While he referred his patients to larger area hospitals, his practice closing likely had a severe affect on them as well. And it’s not just specialists facing bankruptcy. Primary care doctors “face similar challenges,” according to CNN Money. Fewer patients able to afford care means less profits for doctors.

If you or someone you know is a doctor who is facing financial insolvency, bankruptcy may be the best option. Don’t go through it alone. Contact a dedicated Arizona bankruptcy attorney today.