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

House Judiciary leader wants to update Arizona bankruptcy laws

Posted on February 23, 2013 by Staff Writer

According to a recent article published by Verde Independent News, the head of the House Judiciary Committee would like to update Arizona’s dated bankruptcy laws.

Representative Eddie Farnsworth’s proposal does not include anything that would alter the process that allows individuals to seek protection from creditors, as those are set in federal law.

However, the same federal law that ensures protection does allow each state to decide what those declaring bankruptcy can keep. And according to Farnsworth, that list for the state of Arizona is long overdue for a revision. He believes it is far too specific.

Arizona’s current law allows debtors to keep one kitchen table and one dining room table with four chairs each. They can keep additional chairs if there are more than four in the house.

The list of items also includes three living room lamps, one radio alarm clock, one vacuum cleaner, and a choice of one television set, radio, or stereo….just to exemplify the specificity of the Arizona law. The total value of those items cannot exceed $4,000.

Farnsworth’s new bill would keep that $4,000 limit for household items. However, it does destroy the specifics of what can be included to give those in bankruptcy some individual choices; they can decide what’s important to them.

According to Farnsworth, “one person may have a hutch from their great grandmother that they want. Somebody else may have a clock that’s important, or two clocks that are family heirlooms. This just gives them flexibility within the already established cap on exempted property.”

Another part of the existing law gets specific when considering other kinds of items that are considered off-limits to creditors.

Individuals may keep all of their musical instruments- but only up to a market value of $200. Farnsworth’s revision would double that number. The same thing is true for engagement and wedding rings, with the new cap being raised to $2,000.

Farnsworth’s bill wants to modernize Arizona’s current law.

If you or somebody you know is considering declaring bankruptcy, it would be in your best interest to contact an experienced Arizona bankruptcy attorney to talk about your options.

Federal Tax Exemption for Mortgage Debt Forgiveness Extended Through 2013

Posted on January 26, 2013 by Staff Writer

According to an azcentral.com article, recent news coverage of worries over the “fiscal cliff” have included concerns about the Mortgage Forgiveness Debt Relief Act of 2007, which was set to expire on January 7, 2013. This law originally was passed in 2007 to provide relief to homeowners experiencing financial distress in mortgage foreclosure proceedings through the end of 2009. Under the Debt Relief Act, homeowners were exempt from federal income taxes on mortgage debt forgiven by lenders through foreclosures, short sales, or mortgage loan modifications. In 2008, the Debt Relief Act was extended to provide relief to homeowners for a six year-period rather than the original two-year period.

With the last-minute passage by Congress of the American Taxpayer Relief Act of 2012, which President Obama is expected to sign this week, relief in the form of this federal tax exemption is extended through the end of 2013. Fortunately for Arizona homeowners, however, they are already protected by the state’s “non-recourse” law. In Arizona, mortgage loans generally are designated non-recourse loans, which means that homeowners cannot be sued for remaining mortgage debt that is owed after a foreclosure action. Under federal tax law, the forgiveness of non-recourse loans results in no tax liability to homeowners. Nonetheless, it is debatable whether Arizona law extends similar protections to homeowners who sell their homes in short sales, so the American Taxpayer Relief Act of 2012 will provide protection for those homeowners, at least through the end of 2013.

Mortgage foreclosures, short sales, and loan modifications are all events that may occur when a homeowner can no longer afford to pay his or her mortgage payments. Depending on the income of the homeowner, the desire of the homeowner to remain in the home, and other facts and circumstances surrounding the particular situation, bankruptcy also may be a legitimate and useful option for dealing with an impending foreclosure. Whether the goal is to simply delay or ultimately prevent the loss of one’s home to foreclosure, Chapter 13 bankruptcy proceedings may be a way to cure any past-due mortgage payments and remain in the home. Contact your Arizona and Las Vegas bankruptcy attorneys today for additional information about how a Chapter 13 bankruptcy might benefit you and your family.

Arizona’s Homestead Exemption

Posted on September 15, 2012 by Staff Writer

Bankruptcy can be a confusing process, especially with the long list of exemptions that work in some states and don’t in others. Seeking specific information about the bankruptcy code in your state is an imperative part of the bankruptcy process, before, during, and after you’ve hired a bankruptcy lawyer.

The housing market was hit especially hard in Arizona during the 2008 economic downturn, and the rate of foreclosures in Arizona was exceptionally high. At the end of 2011, according to RealtyTrac, there were 8,217 properties in Arizona that were being foreclosed—1 in every 346 housing units. In fact, Arizona was in the top three states for rate of foreclosure, alongside California and Nevada.

Because of this, Arizona residents who are currently facing financial insolvency are more concerned with keeping their home than ever before. Luckily, Arizona state bankruptcy code includes a Homestead Exemption. According to a report issued by the Arizona state government, a homestead is a “dwelling with its land and buildings occupies by the owner as a home.” Arizona bankruptcy law, according to the report, “does not recognize federal property exemptions, but establishes exemptions specific to Arizona residents.”

The Arizona Homestead Exemption protect up to “$150,000 of a person’s equity in the person’s dwelling from attachment, execution, or forced sale.” Married couples may only claim one homestead exemption in a bankruptcy case. It’s easy to claim this exemption: it’s automatic, which means that no written claim is required.

If, for whatever reason, such as if a debtor has more than one property that could qualify for the exemption, the person filing bankruptcy must waive the exemption and “record the waiver in the office of the county recorder.”

There are a couple of federal regulations to state homestead exemption laws, such as that “a person cannot exempt any amount of interest, which is acquired within 1,215 days prior to filing for bankruptcy and that exceeds $125,000 in value.” These and other such stipulations are part of what makes filing for bankruptcy such a confusing process. Don’t go through it alone. Contact an experienced Arizona bankruptcy attorney today.

Image courtesy of FreeDigitalPhotos.net

Bankrupt Arizonans may be able to keep specific assets

Posted on September 12, 2012 by Staff Writer

According to the AZ Business Gazette, Arizonans may have found a clever way to legally shield their assets from creditors during the bankruptcy process.

The 9^th U.S. Circuit Court of Appeals banned the argument of trustees regarding people that have recently declared bankruptcy. The argument stated these individuals did not have to surrender the values of their life insurance annuities and policies if the beneficiaries were minors. This was based on a unanimous decision.

According to the judge– “That’s just how the law reads in Arizona.” The question of policies and annuities may not apply to all individuals looking for protection from creditors. Arizona laws allow exemptions that differ from others but these can be critical.

A perfect example of these exemptions involves the cash surrender value of a 2 year old life insurance policy. The policy states that he beneficiary must be immediate family, for example:

Spouse
Parent
Child
Sibling
&/or any other dependent family member

There were arguments from the trustees that these exemptions shouldn’t apply because children weren’t dependents.

Smith, a man who wrote for the unanimous appellate panel, stated the arguments were simply a “misreading of the law”. He explained that the “other” in the documents is referring to diversity. The judge stated “A beneficiary will fit into two different categories, either as previously stated or another dependent member of the family”.

The judge commented that “If the legislature wanted the exempt members to only be dependents, the legislature should have exempted ‘these dependents’, opposed to listing specific family members.

Smith followed up by saying “if the courts adopted the trustees’ understanding, the wording of the law would not make sense because the exempted members that were on the list, would be inapplicable.

He continued to say that even if the term “other” meant obscure, something the courts aren’t acknowledging is that it still wouldn’t support the arguments of the trustees. The impression that certain items were sold off or exempt from liquidation is not exclusive to these insurance policies and annuities.

The list of allowable exemptions is pretty systematic. This list includes:

Musical instruments with values below $250, used solely for personal use. This limit would also apply to manuals, books, and other published documents.

Individuals declaring bankruptcy can keep specific items, which includes:

Bibles
Firearms

The law permits one bible and one gun, as long as the weapon isn’t valued higher than $500.

If you are considering a bankruptcy, consult with an Arizona bankruptcy lawyer first and they will be able to advise you on the best way to handle your situation. A knowledgeable bankruptcy attorney in Arizona will be able to help you determine which of your assets you will be able to hold on to when you file for bankruptcy.