A Primer for Arizona Residents Consider Bankruptcy

Posted on May 8, 2012 by Staff Writer

Bankruptcy can be a difficult choice to make, but if you’ve exhausted all of your other options and are still facing foreclosure or overwhelming credit card debt, it may be your best option. Bankruptcy can provide a fresh start, but first you need to know how to go through with it.

As an individual (not a corporation), you have two main options for bankruptcy: Chapter 7 bankruptcy and Chapter 13 bankruptcy. Both options will relieve you of your debt; the difference is whether you are able to pay back a portion of your debts, or unable to pay anything at all.

Chapter 7, the most common type of bankruptcy that individuals file for, is when the debtor has few or no assets to repay his or her creditors; debts are dismissed. In order to file for Chapter 7 bankruptcy, one must qualify based on income and a legal “means test”. If it is determined that the debtor is able to repay even a portion of his or her debt, Chapter 13 must be used instead.

It is important to remember that when filing for Chapter 7 bankruptcy, any nonexempt property may be sold to pay your creditors. Property that is exempt varies between districts; the Arizona district has its own list of exempt property which is protected from creditors.

Chapter 7 bankruptcies can be applied to most credit card debt, as well as medical bills. In most cases, after filing for Chapter 7, there are no debts left to pay. However, it is important to speak with an experienced professional in order to protect your assets and eliminate your debt. An Arizona bankruptcy lawyer can help advise you on what kind of bankruptcy is best for you, as well as helping you through the process of bankruptcy.

The other main type of debt for an individual is Chapter 13 bankruptcy, which reorganizes debts. If you are able to repay any portion of your debts, Chapter 13 may be your only option when filing for bankruptcy. Chapter 13 bankruptcy can allow you to retain property that is not exempt from Chapter 7 bankruptcy; you may be able to pay off your debts without selling property.

Chapter 13 is beneficial to both creditors and debtors; the creditor is relieved from some debt and the creditors receive some payment.

When filing for bankruptcy in Arizona, it is critical to seek guidance from an experienced and caring Mesa, Arizona bankruptcy attorney who can guide you through the process and give personalized advice on your Arizona bankruptcy case.

How Often Can You File For Bankruptcy in Arizona?

Posted on April 11, 2012 by Staff Writer

Due to unforeseen economic difficulties arising from sudden unemployment, excessive medical bills, an expensive divorce or other hardships, Arizona residents often find it necessary to file for bankruptcy. Most people only need to file bankruptcy once in their life. But when additional, financially devastating events occur following the completion of one bankruptcy, the necessity to file another one may be inevitable.

As a resident of Arizona, you are legally permitted to file for Chapter 7 bankruptcy every six years following the filing date of the last bankruptcy. Chapter 7 allows discharge of most debts owed by someone filing for this bankruptcy, with the exception of child support, student loans, tax debts and alimony. Usually, a person files Chapter 7 when they have amassed large credit card debts burdened by high interest rates or incurred astronomical medical bills.

Chapter 13 bankruptcy can be filed at any time under bankruptcy law. This law allows Arizona residents an opportunity to prevent home foreclosures by rescheduling debts in order to make lower payments. By avoiding debt discharge with a Chapter 13, credit scores are not as negatively affected as they are in a Chapter 7 bankruptcy. Because it is similar to debt consolidation and permits debtors to work with the creditors they owe, a Chapter 13 bankruptcy can be filed when income availability changes due to health reasons or unemployment.

Although filing more than one Chapter 13 is not unusual, repeated filings of Chapter 7 may be unsuccessful due to judges frowning upon people who engage in abusing bankruptcy laws by repeatedly filing for bankruptcy. However, when someone suddenly becomes buried under unexpected medical expenses, filing another Chapter 7 bankruptcy may be the only way out of such a catastrophic financial situation.

If you are experiencing a situation where bankruptcy seems like the only hope, don’t hesitate to contact a caring and professional Tucson, Arizona bankruptcy attorney who can offer expert advice and assist you in overcoming your financial burdens.

How Much Does it Cost to File Bankruptcy?

Posted on April 8, 2012 by Staff Writer

The Bankruptcy Court is a Federal Court that must follow Federal law and Federal Bankruptcy procedural rules. The court filing fees are set by Federal law and are uniform in every Bankruptcy Court in the country.

The two most common chapters of bankruptcy filed by individuals are Chapter 7 and Chapter 13. A debtor must pay a $306 fee to file a Chapter 7 bankruptcy or a $281 fee to file a Chapter 13 bankruptcy.

Every person filing a Chapter 7 or a Chapter 13 bankruptcy will pay the same filing fee; however, attorneys’ fees may vary to extreme degrees. An attorney’s fees can differ from state to state or from city to city. Additionally, an attorney’s price quote will often reflect the expected difficulty of the case.

One individual may own a minimal amount of assets and have a limited number of creditors to deal with. Another individual may have an abundance of assets and numbers of secured and unsecured creditors. The “no-asset” case will require less time from the attorney and will likely be less expensive than the latter case. A Chapter 7 Bankruptcy in Arizona may range from $1,000 to $3,000 in attorney’s fees, depending on the type of case and/or other factors mentioned above.

A Chapter 13 Bankruptcy generally costs more than a Chapter 7 Bankruptcy because the cases are often more difficult and the bankruptcy may last three to five years. A Chapter 13 Bankruptcy in Arizona may range from $2,000 to $5,000 depending upon the type of case and previously mentioned factors.

The fees in a Chapter 13 Bankruptcy may be broken up in the bankruptcy. Attorneys will often charge an upfront fee for the initial preparation and filing of the case. The remaining attorney’s fees can then be paid by the client through the Chapter 13 Bankruptcy plan. A Chapter 13 Bankruptcy is basically a repayment plan supported by the debtor’s monthly payments to the Bankruptcy Court. Creditors receive a pro rata share of the funds available to repay debts. The attorney’s remaining fees are paid through the Chapter 13 like the debts of other creditors. If you have questions regarding the costs of bankruptcy, contact and Arizona Bankruptcy Attorney today.

The price of a bankruptcy is not necessarily indicative of the quality of the service or the accuracy of the bankruptcy petition. A larger law firm may charge more because of the staff involved in the process and the amount of care shown its clients. A single attorney may have lower fees due to less overhead costs and may neglect her clients. The quality and care of the provided services could also be reversed, where the large firm neglects its clients and the lone attorney offers the care her clients need.

Since price alone does not indicate the quality of service, a potential filer should shop around and meet with different attorneys. The attorney’s credentials, staff (could be a positive or a negative), office, location, and personality could all play a factor in whether a potential client would hire the attorney.

Could you discharge all your consumer debts via personal bankruptcy?

Posted on March 23, 2012 by Staff Writer

Could you discharge all your consumer debts via personal bankruptcy?

In this current era of economic downturn, debt problems are quite common. Federal Reserve report says, consumer debt in the U.S. went up by over $6 billion, which is the seventh straight month in which U.S. consumer debt rose high. If you are knee deep in debt and your funds are scarce, you must consider debt settlement to come out of your debt maze. Despite the negative stigma, you can consider bankruptcy as a viable solution to your debt problems. Though it has adverse effect on your credit, but it can give you a financial fresh start and provides you complete relief from your consumer debt. Consumer debts like credit card debt, car loans and home mortgages could be discharged through the bankruptcy courts. Read on to know how consumer debt could be liberated through personal bankruptcy like chapter 7 and chapter 13.

Chapter 7 bankruptcy

Chapter 7 Bankruptcy or better known as straight bankruptcy is the most common choice of average consumers struggling with unsecured debt. Under a chapter 7 bankruptcy all your non exempt assets are liquidated to pay off your debt amount. However, that does not mean it’s mandatory to liquidate all your assets. Each state protects its residents from liquidating a certain amount of property. Under chapter 7bankruptcy you can not eliminate your secured debts like a mortgage or automobile loan, but it does allow you to return the collateral and remove all deficiency balance. It usually takes six months to accomplish a chapter 7 plan and usually requires one visit to the courthouse. Once you file a bankruptcy petition explaining the debtor’s background, property and finances, it will automatically put a stop to all collection activities. The creditors will be barred from taking any action like wage garnishment, foreclosure, or any other action against you. Its known as the automatic stay. During this time debtors usually settle the secured loans like mortgages and automobile loans and decide whether he likes to sacrifice the secured property. Chapter 7 bankruptcy discharges all your unsecured debts and holds you responsible to pay for only priority debts and secured loans. However if you fail to make the payments on secured loans after bankruptcy, the creditor has every legal right to seize the secured property.

Chapter 13

However if you like to keep your non-exempt property in tact, chapter 13 bankruptcy can be a more suitable option for you. Under chapter 13 bankruptcy, consumers follow a court approved repayment plan and pay off the debts more conveniently without facing any liquidation. Chapter13 is usually for those with a steady income flow. Under chapter 13 the payment schedule varies between 36 months to 60 months. During chapter13 you work under the strict supervision of a court-appointed trustee. You make the payment to the trustee every month, who further disburse the payments among the creditors. The best part here is there is no property exemptions involved in a Chapter 13 bankruptcy, as all of your assets are automatically protected. After the successful accomplishment of chapter 13 all your debts are automatically discharged.

Last but not the least; keep in mind a number of debts are there, which couldn’t be discharged through bankruptcy. For example, State and federal taxes borrowed within the last two years prior to filing bankruptcy, alimony or child support, money, property, services, or credit obtained via fraud or misrepresentation, property taxes, penalties charges to local, state, or federal government and so on.

This is a guest post by Christina Jones, a writer & editor associated with Oak View Law Group ( http://www.ovlg.com/debt-reduction.html ). She has also been contributing to many personal finance blogs as a guest columnist.