Bankruptcy Exemptions

Posted on July 25, 2013 by Staff Writer

The Bankruptcy exemptions are unique to each state. They are normally the same exemptions used to apply to creditor collection lawsuits. The exemptions, when used in a bankruptcy filing, can be more complex than they appear. Some of the exemptions can be used twice, once for each spouse. Some of the exemptions can only be used under certain circumstances. Different trustees treat exemptions differently. Nobody will be coming to your house to count your forks to assure you have been specific and accurate with declaring you bankruptcy exemptions, but unless the numbers are within a certain range, the trustee will likely be alerted to some fraud.

Running afoul of the exemption declaration is easy, but it is also easy to avoid. Like most things, experience is invaluable. There is no reason to step in front of such harm and scrutiny as making a mistake on your bankruptcy exemptions. An experienced bankruptcy attorney will be able to guide you through the filing and give you peace of mind that you will not lose property that could have been declared exempt, or worse yet get fined or prosecuted if the trustee thinks you did it on purpose.

An experienced bankruptcy lawyer is your best friend in unfamiliar times. You can schedule a free appointment to talk to the bankruptcy attorney over the phone or in person. There are payment plans available and the consultation is free. A great bankruptcy lawyer can help you through this. GET FREE HELP NOW.

Will I Lose my Car if I file for Bankruptcy?

Posted on January 24, 2013 by Staff Writer

Will you lose your car if you file for bankruptcy? Generally no, however, there are some exceptions that you should be aware of. Section 362 of the U.S. Bankruptcy Code provides an “Automatic Stay” to protect consumers from their creditor’s collection activities during bankruptcy. Unless a creditor files a Motion to Lift the Automatic Stay they cannot repossess a vehicle during the bankruptcy. A Motion to Lift the Automatic Stay is nothing more than a creditor asking the bankruptcy court for permission to pursue its collection activities. A creditor must have a legitimate legal reason for why the Automatic Stay should be lifted otherwise their request will be denied. But the most common reason for allowing a creditor to pursue its collection activities is if the debtor is behind on payments. So in order to keep your car safe from the bank during the bankruptcy you need to be on time and stay on time with your payments.

Additionally, vehicles are protected from creditors and the bankruptcy court by law. A.R.S. § 33-1125(8) provides that Arizonians who are single can have up to $5,000 of equity in their vehicle. Married couples have a $10,000 exemption. The $10,000 can be used entirely on one vehicle or can be split equally between two cars. Also, people who have a handicap license plate receive a $10,000 exemption. So for example, if you are single and own a vehicle that is worth $4,999, the bankruptcy court cannot touch it. However, if you are single and own a vehicle that is worth $7,000 then you are over the exemption amount by $2,000 and the court is going to ask for $2,000 in order for you to keep it.

Bankruptcy laws and how they pertain to vehicles can be confusing however, during a free consultation you can speak with one of our skilled attorneys and see how your vehicle can be protected in bankruptcy.

Bankruptcy a Viable Option to Rid Yourself of Unwanted Debt:

Posted on January 19, 2013 by Staff Writer

If you are struggling to make minimum payments on your unsecured debts, do not use your savings, retirement funds, or obtain a home equity loan to pay off your creditor cards. Those assets are exempt (protected) and if you use those exempt assets to pay your creditors, you are possibly giving those assets to your creditors even though you could protect those assets in a bankruptcy case. Our exemption laws are made to make those assets exempt from the reach of your creditors. Sadly, I’ve seen people withdraw large amounts of money from their retirement accounts to pay down credit cards. Often these people still find themselves having to file bankruptcy, yet now they no longer have all of their retirement accounts. Also, avoid borrowing money from family members or friends to make credit card or car payments. Defaulting on loans from family or friends can unnecessarily strain relationships. It can also place undue strain on the borrower because you may feel morally obligated to repay those loans.

If you are: only making the minimum payments on your credit cards, using credit cards to purchase food or gas, repeatedly missing mortgage or car payments, or using “pay day” loans to pay basic living expenses you should sit down with a bankruptcy attorney for a free consultation. These are signs that bankruptcy may be your best option for freeing yourself from debt.

Bankruptcy is a legal, responsible and ethical way in which to address overwhelming debt and creditor harassment. Don’t continue to “rob Peter to pay Paul”.

Hiring the Right Bankruptcy Attorney is Critical!

Work with a compatible attorney. You will be working with your bankruptcy attorney over a several month period and so it is important for you to find an attorney you feel comfortable with and who has your best interests at heart. So don’t hire an attorney just because they claim to be the cheapest. Are they the cheapest for a reason? Will they take the time to listen to your situation? Will they return your phone calls? Will they return your emails? If you were shopping for a parachute would you shop for the cheapest one? Or, would you look for a parachute that was built by a reputable company? Would you be interested in the quality of the parachute? I think so; it’s the same with hiring the right bankruptcy attorney.

Unfortunately, some people are not concerned about the type of representation they get. I always tell people that they may save a few hundred dollars by going to the cheapest lawyer, but they always get what they pay for.

The importance of hiring a competent, experienced attorney to represent you in a bankruptcy case cannot be overemphasized. People file for bankruptcy because they are in dire circumstances and need help, and hiring the wrong attorney can make the bankruptcy process unnecessarily stressful and difficult. How can you make sure you hire the right attorney? Go with the law firm that specializes in bankruptcy. We have a commitment of doing things the right way.

5 Common Bankruptcy Myths Debunked:

Posted on January 18, 2013 by Staff Writer

Myth #1: The Bankruptcy Court Will Take Everything You Own. The bankruptcy code provides exemptions which protect most of your property in a bankruptcy proceeding. Exemptions are laws which protect a specific piece of property. For example, most states have a “homestead exemption”. Homestead exemptions protect your primary residence from becoming part of the bankruptcy estate. Most states even provide exemptions for household goods, clothing, retirement accounts, wedding rings, guns, and even burial plots. Most people who file for chapter 7 bankruptcy do not own un-exempt property. However, if you own a yacht in the Bahamas we may need to talk…

Myth #2: Your Employer, Neighbors, and Friends Will Know that you Have Filed for Bankruptcy. A bankruptcy proceeding is a public record and so someone who specifically searches for your bankruptcy will probably find it, otherwise, it is unlikely any of your friends or family will know you filed for bankruptcy. Unless you are currently being garnished your employer will not be notified of your Chapter 7 bankruptcy. Also, the court will not notify your neighbors of the bankruptcy. The court does not come and plant a big sign in your yard letting everyone know that you’ve recently filed for bankruptcy, nor does the bankruptcy court post flyers in the local park. Additionally, unless you are some type of a celebrity it is highly improbable that any newspapers or other media outlets will publish anything about your bankruptcy.

Myth #3: New Laws Make it Impossible to File Bankruptcy. While it is true that in late 2005, the U.S. Congress enacted the Bankruptcy Abuse Prevention & Consumer Protection Act (BAPCPA) which made dramatic changes to our bankruptcy laws most people do not have a problem qualifying for bankruptcy. Unfortunately, the effect of these laws is to make the filing a bankruptcy case much more complex, lengthy, and expensive. Additionally, Congress added steps to the bankruptcy process that simply did not exist before. For instance, all filers are required to complete a means-test and pre-approved educational courses.

Myth #4: Bankruptcy Permanently Ruins Your Credit. You can begin rebuilding your credit almost immediately after filing for bankruptcy. People who file bankruptcy are often surprised by how quickly they’ll start getting credit offers in the mail again. Offers for secured credit cards (which require a deposit to the bank) with a low limit can arrive within a few months of filing. Usually after regular, on-time payments people are able to boost their credit scores high enough to get a regular unsecured credit card. Additionally, car dealerships often mail offers to sell people new or used cars. We’ve even seen people qualify for a mortgage within two or three years of a bankruptcy.

After the debts are discharged, it’s also smart to check your credit report for errors and omissions. Also, check and make sure that everything that was discharged in the bankruptcy is properly marked on your credit report. So work hard to improve your credit score and you’ll be surprised by how quickly your credit score returns to its former glory.

Myth #5: People Who File for Bankruptcy are Financially Irresponsible. Actually, most people who file for bankruptcy run into very serious personal problems and aren’t forced into bankruptcy because of reckless behavior. Often these financial problems stem from: job loss, divorce, serious illness, or a failed business. Long periods of unemployment, loss of income through garnishments, the legal fees associated with divorce, the cost of running two households following a divorce, or the high cost of medical care have all driven well-intentioned Arizonians into bankruptcy. Most people who file for bankruptcy are honest hard working people who’ve run into hard times.

Rental Properties During Bankruptcy

Posted on January 11, 2013 by Staff Writer

While bankruptcy is a good last option for many Americans battling financial insolvency, there are several reasons to seek professional assistance when considering filing for either Chapter 7 or Chapter 13. Knowing how to hold on to what you can after bankruptcy is one such reason. Many people believe that filing for bankruptcy automatically means that any rental or secondary property must be sold. While this is sometimes the case, whether or not the property has to be sold depends on what type of bankruptcy you’re filing, the outstanding loan on the property, and how much income is generated if the property is being rented out.

When filing a Chapter 13—a debt reorganization—bankruptcy, it generally allows for property to be kept and debts to be paid over time, usually three to five years, according to the Federal Bankruptcy Court. Foreclosure proceedings can be stopped during a Chapter 13, but individuals are still expected to pay all mortgage payments on both the primary and secondary residencies. After the 2008 housing crash, which hit Arizona especially hard, many rental property mortgages were underwater, meaning that people owed more on the mortgage than the property was worth. This can be adjusted by a bankruptcy judge during a Chapter 13.

You’re more likely to have to sell a rental property under a Chapter 7—liquidation—bankruptcy. Anyone filing a Chapter 7 bankruptcy gets an exemption for the equity in the primary residence. In Arizona, according to the Arizona bankruptcy code, the homestead exemption is $150,000. This will most likely only be able to be applied to the primary residence, and would not apply to a secondary or rental property. Whether you’re able to keep secondary property also depends on whether it’s in you or your spouse’s name.

Determining what you’re able to hold to after bankruptcy is only one step of the complicated bankruptcy process. If you or someone you know is considering bankruptcy, don’t go through it alone. Contact a dedicated Arizona bankruptcy attorney today.

Image courtesy of FreeDigitalPhotos.net

New Bankruptcy Exemption in Arizona

Posted on December 2, 2012 by Staff Writer

Many people in Arizona have found that bankruptcy is the only option left to save their financial future. The silver lining about bankruptcy in Arizona is that there are exemptions in place to protect the debtors and their possessions. Typical exemptions include a person’s car (to a value of $5,000) and homestead property (to a value of $150,000). Recently, the Ninth Circuit Court of Appeals had to examine an exemption concerning the cash value of life insurance policies.

Arizona has a current exemption concerning the cash surrender value of life insurance policies. The statute states that these policies are only exempt if “named as beneficiary the debtor’s surviving spouse, child, parent, brother or sister, or any other dependent family member”. The case which helped change this decision was concerning an adult non-dependent daughter who was named as a beneficiary.

The dependency issue was a huge tipping point for this case. The trustee of the bankruptcy was trying to reverse the exemption due to the non-dependent status of the daughter. Since the daughter is grown, this particular case fell outside of the statute. Ultimately, the appellate court found that the exemption should include independent children who are listed as beneficiaries.

As you can see the bankruptcy laws of Arizona are complex and also being updated constantly. That is why it is absolutely imperative to have the best legal counsel available. If you are serious about the possibility of a bankruptcy, then you should definitely contact an experienced bankruptcy attorney in Phoenix to start discussing if bankruptcy is your best option.

Retaining Assets During Bankruptcy in Arizona

Posted on October 17, 2012 by Staff Writer

For many Arizona residents, bankruptcy is the only option to escape the crippling burden of debt or foreclosure. Chapter 13 is commonly called the “wage earner’s bankruptcy,” as workers can continue to keep a portion of income that they earn during bankruptcy to help get their feet back on the ground. Filing a Chapter 13 bankruptcy is a bit more complicated than the straightforward Chapter 7. According to the U.S. Federal Bankruptcy Courts, a Chapter 7 provides for “liquidation,” which means “the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.”

In Arizona, according to the Arizona state bankruptcy courts, a Chapter 7 bankruptcy provides for a Homestead Exemption, of up to $150,000 for either a home (including mobile homes), plus the land upon which the home is situated. Personal property exemptions can be up to $4,000 and money, benefits, and proceeds up to $20,000. There are a few other property exemptions—making Arizona one of the best states in which to file a Chapter 7 bankruptcy—but if you’re interested in retaining the majority of your assets, including money earned while in the throes of bankruptcy, filing a Chapter 13 might be better for you.

The biggest advantage of a Chapter 13 over a Chapter 7 filing, according to the U.S. Bankruptcy Code, is that “Chapter 13 offers individuals an opportunity to save their homes from foreclosure.” If a person files for Chapter 13, he can “stop foreclosure proceedings and may cure delinquent mortgage payments over time.” In a state such as Arizona, which was hit particularly hard by foreclosures and the imploding of the housing market, a Chapter 13 filing might be a better option for cash-strapped residents.

If you or someone you know is considering bankruptcy, don’t go through it alone. Contact a dedicated Arizona state bankruptcy attorney today.

Image courtesy of FreeDigitalPhotos.net

Arizona Exemption Info

Posted on October 5, 2012 by Staff Writer

It is good to have some idea of the legal intricacies you might be dealing with when filing for bankruptcy, so we will go through some of the exemptions in Arizona bankruptcies. Bear in mind, however, that having the basic knowledge is not the same as having an experienced bankruptcy attorney on your side. As it is said in the United States Bankruptcy Court District of Arizona’s information release: “This pamphlet is not intended to give you legal advice, and it is not a substitute for the legal advice specific to your situation that you should obtain from a qualified attorney.”

Bankruptcy exemptions are a way to let you keep some of your property in case of a bankruptcy. We recently discussed the homestead exemption in our blog, so it makes sense to discuss the personal property exemption next.

The Arizona Personal Property Exemption allows husband and wife to double personal property exemptions, and here are a few assets that are listed under this exemption with the main guideline of “Household furniture, furnishings and appliances personally used by debtor in an amount not to exceed $4000 (fair market value)” :

– one kitchen and one dining room table with four chairs each, plus one chair per each dependent resident after the total exceeds four

– one living room couch

– two beds, plus one additional bed for each dependent of the debtor who resides in the household

– one bed-table, dresser and lamp for each bed allowed above

– bedding for each bed allowed above

– one television set or radio or stereo

– one stove

– one refrigerator

– one washing machine

– one clothes dryer

– one vacuum cleaner

The full list can be found in the exemption information release, but a knowledgeable bankruptcy lawyer will know exactly what you are entitled to when you are going through your bankruptcy proceedings. Basic information can help you understand what you are dealing with, but nothing can replace the help of a skilled bankruptcy attorney. Contact our bankruptcy attorneys today.