The Section 341 Meeting of Creditors Requirements in Bankruptcy

Posted on August 6, 2013 by Staff Writer

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.

Doctors Facing Bankruptcy

Posted on July 29, 2013 by Staff Writer

It’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.

New Program Aims to Lower Medical Care Costs

Posted on June 25, 2013 by Staff Writer

It’s no secret that healthcare will be one of America’s greatest challenges in the 21st century. Due to the rising costs of medicine and the growing percentage of an older population more at risk of expensive procedures, it’s no wonder that medical bills are one of the leading reasons for personal bankruptcy. In fact, according to a survey conducted by the Harvard Law School and Ohio University and reported by Reuters, more than 60 percent of personal bankruptcies in the U.S. every year are because of medical bills. “Unless you’re Warren Buffet,” Harvard’s Dr. David Himmelstein told Reuters, “your family is just one serious illness away from bankruptcy. For middle-class Americans, health insurance offers little protection.”

This can be terrifying for any family with older members who are now considering their options. According to National Public Radio, the annual average cost of a nursing home with a semi-private room is almost $80,000—not a small bill by any means. The average annual cost of having someone to work as a home health aide is just over $20,000, which is significant as well. But a new experimental nationwide program is aiming to “keep people healthy and out of the hospital,” which will hopefully help to lessen some of these cost burdens. The program “dispatches hospital-trained nurses to patients’ homes to do whatever is necessary—manage prescription drugs, take blood-sugar readings, teach healthy eating habits or even arrange delivery of a motorized wheelchair,” according to AZ Central.

The government is calling these new initiatives Accountable Care Organizations, and Banner Health, a Phoenix-based hospital system, is among 32 organizations in the country to adopt the experimental program, according to AZ Central. These are meant for people on government-issued health insurance, but “private insurers such as Cigna and Health Net are launching similar agreements with hospitals for patients who have private health insurance.” A spokesperson for Banner told AZ Central that during the first year that the program was in operation for 51,000 metro Phoenix residents, “it reduced Medicare spending by 2.5 percent per person.”

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

Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net

Bankruptcy and Employment

Posted on February 13, 2013 by Staff Writer

Many people who have to file bankruptcy have obvious and well-founded fears of losing employment after filing. Section 525 of the Bankruptcy Code, approved in 1943, ensures that no governmental unit can terminate employment or discriminate, with regards to employment, for a person having filed bankruptcy. And yet a U.S. Court of Appeals decision issued in 2011 set a precedent that could hinder this decades-old protective law. In Myers v. Toojay’s Management Corp., an appellate court in Florida decided that while government employers may not deny employment to an individual who has filed for bankruptcy, this does not apply to private employers. The Bankruptcy Code is murky, and other courts may not uphold this controversial decision. Yet anyone who files for bankruptcy should be aware of its implications.

Regardless of this new ruling, most bankruptcy attorneys agree that they’ve never heard of a private employer denying employment based solely on a prior bankruptcy filing. Losing employment after filing for bankruptcy but independent of the filing is another story, and most definitely one many would consider absolute worst-case scenario. If this happens to you, the most important first step is to contact the bankruptcy attorney who handled your bankruptcy filing. He or she will be able to help you explore options, especially if you filed a Chapter 13. You may be eligible to temporarily waive monthly payments while you seek other employment.

According to U.S. Bankruptcy Court statistics, there was a 22 percent drop in the number of bankruptcy filing in Arizona between 2011 and 2012. This figure includes both personal and corporate, but is good news regardless for Arizona residents. Despite the drop, many individuals are still dealing with bankruptcy, and could have subsequent employment concerns because of it. For this and any other reason, 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

Chapter 7 vs. Chapter 13 Bankruptcies in Arizona Filings

Posted on August 26, 2012 by Staff Writer

Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as “liquidation” (Chapter 7) or “reorganization” (Chapter 13). Under a Chapter 7 bankruptcy, you ask the bankruptcy court to wipe out (discharge) the debts you owe. Under a Chapter 13 bankruptcy, you file a plan with the bankruptcy court proposing how you will repay your creditors. You must repay some debts in full; others may be repaid only partially or not at all, depending on what you can afford.

When you file either kind of bankruptcy, a court order called an “automatic stay” goes into effect. The automatic stay prohibits most creditors from taking any action to collect the debts you owe them unless the bankruptcy court lifts the stay and lets the creditor proceed with collections.

Certain debts cannot be discharged in bankruptcy; you will continue to owe them just as if you had never filed for bankruptcy. These debts include back child support, alimony, and certain kinds of tax debts. Student loans will not be discharged unless you can show that repaying the debt would be an undue burden, which is a very tough standard to meet. And other types of debts might not be discharged if a creditor convinces the court that the debt should survive your bankruptcy.

If you are thinking of either Chapter 7 or Chapter 13 bankruptcy, there is no substitute for real legal advice from an experienced Arizona bankruptcy attorney. When filing for bankruptcy in Arizona, it is critical to seek guidance from an experienced and caring Arizona bankruptcy attorney who can guide you through the process and give personalized advice on your Arizona bankruptcy case.

Lawsuit Demands Caused San Bernardino Bankruptcy Filing

Posted on August 23, 2012 by Staff Writer

San Bernardino’s attorney says the city was pushed into early bankruptcy by a lawyer’s demand to pay settlements over police killings.

The city, which is facing a nearly $46 million budget gap, filed for Chapter 9 protection last Wednesday – two weeks earlier than planned.

City Attorney James Penman tells the San Bernardino Sun that the city wanted to avoid having assets seized after an attorney tried to collect $1.4 million. The money was promised to settle three lawsuits claiming police used excessive force.

Penman says the city wouldn’t have made its next payroll if a judge had forced it to pay now.

Attorney Dale Galipo says he’s disappointed and will keep trying to collect for his clients.

San Bernardino became the third California city to seek bankruptcy protection in the last month, and experts say it might not be the last.

“There are likely to be more in the future, but it’s hard to know, since a lot of struggling cities may manage to work things out,” said Michael Coleman, a fiscal policy adviser for the California League of Cities. “Some cities may not go into a bankruptcy, but they may dissolve. They may cease to exist.”

Once rare, turning to bankruptcy has become a painful but enticing option for cities whose labor costs and municipal debt far outpace anemic tax revenue. The Bay Area city of Vallejo began the current trend in May 2008, filing for Chapter 9 bankruptcy protection because, city leaders said, salaries and benefits for its public safety workers were eating up too much of the general fund.

It is possible that some struggling cities in Arizona will not be far behind.

But if bankruptcy is the right option for you it is imperative to choose the right professional bankruptcy firm that can guide you through the complex nuances of bankruptcy filing. Schedule a free consultation with an experienced bankruptcy attorney in Glendale to see when you should file. Keep the assets you need to start over, don’t use them to pay creditors when you don’t have to. Contact a Glendale, Arizona Bankruptcy Attorney Today!

Trend of Falling Bankruptcies in Arizona Continues for 18 Straight Months

Posted on August 20, 2012 by Staff Writer

An ongoing trend toward fewer bankruptcies remained firmly entrenched in July, with filings dropping 14 percent around the Phoenix metro area.

The 1,847 bankruptcies started in July were down from 2,153 in July 2011, reported the U.S. Bankruptcy Court in Phoenix. The latest figures marked the 18th consecutive month in which filings fell on a year-over-year basis.

For all of Arizona, filings also have dropped for 18 straight months, including a decline of 14 percent in July.

The improvement in the bankruptcy situation doesn’t mean consumers are flourishing, but it’s the latest of several encouraging signs. For example, the W.P. Carey School of Business at Arizona State University reported Thursday that median home prices around Maricopa and Pinal counties were up 29 percent in June over a year earlier.

Also, credit-researcher TransUnion reported that mortgage delinquencies in Arizona fell 21.1 percent over the past year, the second-best showing of any state in the nation. The average amount of mortgage debt in Arizona, $193,169, was down 3.1 percent from one year earlier, also the second-best improvement nationally. It may not always sound like the most appealing option, but bankruptcy can help your financial situation if you’re struggling. An experienced bankruptcy attorney in Arizona can help you determine the best choice for you.

“The economy has not grown at a robust rate, but it does continue to slowly improve, and we believe the improvement in mortgage delinquencies will follow a similar pattern,” said Tim Martin, a group vice president in TransUnion’s financial-services business unit. “With steadying home prices and mortgage interest rates remaining at extremely low levels, it appears that market conditions are set up to allow for further declines in the mortgage delinquency rate.”

Nationally, consumer bankruptcy filings fell 12 percent in July compared with a year earlier, according to the American Bankruptcy Institute and Epiq Systems.

“The July filings continue to reflect the effects of sustained low interest rates and weak consumer spending,” said the institute’s executive director, Samuel Gerdano. “We are still on pace for perhaps the lowest total new bankruptcies since before the financial crisis in 2008.”

Across the U.S., there were roughly 4.1 bankruptcy filings per 1,000 Americans over the first half of the year.

If bankruptcy is the right option for you it is imperative to choose the right Professional Bankruptcy Firm that can guide you through the complex nuances of bankruptcy filing. Schedule a free consultation with an experienced bankruptcy attorney in Prescott, Arizona to see when you should file. Keep the assets you need to start over, don’t use them to pay creditors when you don’t have to. Contact a Prescott, AZ Bankruptcy Attorney Today!

Baseball Star’s Company Filing For Bankruptcy

Posted on August 11, 2012 by Staff Writer

The New York Times recently reported a story about former baseball star Curt Schilling‘s company filing for bankruptcy. Schilling ran a video game studio called 38 Studios in Rhode Island, but the company had to file for bankruptcy because of their debts. Rhode Island and federal officials have begun to investigate the operations of the company, which had extensive financial support from the state.

According to bankruptcy documents, Schilling’s company with three subsidiaries owe over $150 million to creditors, while their assets only account for €50 million. Schilling’s company said in a statement: “After ongoing negotiations with the State of Rhode Island and potential investors and other interested parties, the company has been unable to find a solution to the current stalemate.”

The state of Rhode Island is the biggest creditor for 38 Studios, with $115.9 million. The company used to be Massachusetts-based, until in 2010, Rhode Island lured it in with a promise of $75 million in loan guarantees. The company missed a $1.1 million payment to the state and had laid off all its employees later in the same month. The Rhode Island Police have confirmed opening an inquiry into the company, and the F.B.I. and the United States attorney’s office are also investigating 38 Studios.

Many things might be different between sports stars and us regular people, but bankruptcy proceedings work the same for everyone. Only a qualified Arizona bankruptcy lawyer can provide legal advice for you during your bankruptcy proceedings. Star or not, do not go through your bankruptcy alone, but get the help of a qualified professional to ensure the best possible outcome for your case. Contact an experienced Arizona bankruptcy attorney today.

Can my Vehicle Loan be Reduced in Bankruptcy?

Posted on August 10, 2012 by Staff Writer

Bankruptcy provides many options relating to vehicle loans. But to back up a bit, please remember that you should have little to no problem retaining a vehicle in your bankruptcy, as this is a commonly asked question too; bankruptcy laws do not force debtors to surrender their vehicle(s). There may be situations where surrendering a vehicle will be a positive option, but it is never required.

If a debtor chooses to file a chapter 7 liquidation bankruptcy, then the debtor can choose to either reaffirm or redeem his or her vehicle loan. Bankruptcy laws are specific that a debtor’s vehicle loan must be either reaffirmed or redeemed in order for the debtor to be able to retain the vehicle after the bankruptcy. A reaffirmation is a written agreement, with the lender, thereby pledging to continue paying the note even though and after the bankruptcy is concluded. Vehicle lender’s may or may not agree to modify the terms of the loan through the reaffirmation process. Generally, lenders will not agree to change the terms if the vehicle is fairly new with relatively low mileage. However, if the car is older with high miles, then the lender will be receptive to lowering the principal and/or the interest rate through a reaffirmation agreement.

The second option a debtor has is to redeem the vehicle. The redemption process is a little bit more complicated than reaffirmations. By redeeming a vehicle, the debtor is able to purchase the vehicle for the actual value of the vehicle, rather than what is still owed on the vehicle loan. For example, if you own a vehicle with a $10,000 balance left on the loan, but the car is only worth $5,000, you would have the opportunity of buying it directly for $5,000. Now, most debtors do not have the ability of paying for the car outright, but there are several companies that will refinance the redemption amount (but please keep in mind that these companies generally charge a very high interest rate (up to 25%)). So you will need to make sure that the redemption, if financed, is worthwhile for you as compared to simply just reaffirming the vehicle loan.

The last option available to reducing a vehicle loan in a bankruptcy, involves what is commonly called a “cram down” in a ch. 13 filing. As opposed to a ch. 7, a ch. 13 involves making monthly payments to your creditors from 3 to 5 years. But one of the benefits of filing a ch. 13, is the ability to cram down certain secured debts to the actual value of the collateral (very similar to a redemption in a ch. 7.) However, the debtor must have owned/financed the vehicle for at least 910 days prior to the filing of the bankruptcy in order to be eligible to cram down the vehicle loan. The benefit of the cram down vs. the redemption is that the interest rate is significantly better through the cram down (generally around 5.25%, as opposed to the 25% in a redemption). Further, the debtor has the ability to refinance the vehicle directly through his or her chapter 13 bankruptcy plan, rather than refinancing it with another finance company.

The relationship between student loan debt and credit card debt

Posted on August 8, 2012 by Staff Writer

The most common debt plaguing bankruptcy filers is consumer debt such as credit cards. As obtaining a college degree becomes more common, so does the accumulation of student loan debt. More and more people are finding themselves burdened by this type of debt, but the treatment of student loans in bankruptcy is different than credit card debt. Student loan debt typically cannot be discharged in bankruptcy.

Student loan debt is an unavoidable burden for many who attend college. More than 80% of college students will take out a loan to help cover their expenses. College tuition costs an average of $15,000 a year, which does not even include books and living expenses. The average college graduate will exit college with $30,000 in student loan debt.

Unfortunately, a college diploma does not necessarily guarantee a job to help repay the loans. The troubled economy has half of college graduates struggling to find employment. Even those with jobs may not earn enough to repay their loans. Many graduates default on their student loans because they are unable to afford the payments.

If the average person has $15,000 in credit card debt, then the average college graduate could have up to $45,000 in combined credit card and student loan debt. Due to the nature of student loans, bankruptcy will not provide any relief for a majority of their unsecured debt. Student loans must be repaid. Failure to do so may result in garnishment, levied bank accounts, and the withholding of government benefits like social security.

This is a grim picture for college grads, but bankruptcy may still provide desirable relief from an overwhelming financial burden. Although it is likely that the student loans are not dischargeable and must be repaid, the discharge of other consumer debt may provide some breathing room. By discharging certain debts in bankruptcy, income may be reallocated to repay student loan debt.

A person burdened by debt should consult a reputable and competent attorney to determine what options are available for dealing with her debt. Contact our Phoenix, Arizona bankruptcy lawyers today!