Bankruptcy – What is the Automatic Stay?

Bankruptcy – What is the Automatic Stay?

The automatic stay, is one of the most important functions of filing a bankruptcy case. The automatic stay is the protection that you receive from the US bankruptcy court from your creditors. The automatic stay, “stays” or “freezes” most creditor action when a bankruptcy case is filed.

For example. If your wages were about to be garnished, and you filed a bankruptcy case before the creditor had a chance to attach your pay, the filing of the bankruptcy case would stop the garnishment.  If you house was going into foreclosure, and you filed a bankruptcy case before the foreclosure date, the filing of the bankruptyc case would stop the foreclosure. Another example; assume your car payment was so far behind that it was about to get repossessed. If you file a bankruptcy case before the car is taken back by the creditor, the filing of the case would stop any repossession action by the creditor.

The automatic stay in bankruptcy is very powerful. Not only can creditors not take action such as foreclosure or repossession, but creditors cannot attempt to collect from you while there is a pending bankruptcy case. It is essential to bankruptcy and there are severe penalties for creditors who violate the automatic stay.

Like any rule, there are a few exceptions. For example with the automatic stay, sometimes it is not in effect if there are multiple bankruptcy filings within a certain amount of time.

At any rate, any one facing a foreclosure, repossession, wage garnishment, or even collection attempts, should consider contacting a qualified Arizona bankruptcy attorney for protection.

Another useful article on this topic can be found here: https://www.arizonabankruptcyadvocates.com/blog/what-is-a-motion-to-lift-the-automatic-stay

Call for your free consult: (480) 447-1554

I’m Filing Bankruptcy, Can I Keep a Credit Card?

I’m Filing Bankruptcy, Can I Keep a Credit Card?

Basically, no. When you file bankruptcy, no matter if it’s chapter 7, chapter 13, or chapter 11, you must list ALL debts. You cannot leave any debt off of your schedules. ALL DEBTS MUST BE LISTED. Even if you owe money to a family member or friend, technically they have to be listed. The bankruptcy code mandates that all creditors be treated equally (depending on the class of the debt), and when you sign your bankruptcy petition, you do so under penalty of perjury, and stating that ALL debt has been listed.

Many are tempted to leave off a credit card, or some other creditor when filing bankruptcy. Don’t do it. If you want to pay a certain creditor, there is nothing wrong with making arrangements with the creditor once your bankruptcy is over.

Contact a qualified bankruptcy attorney if you are considering bankruptcy.

Call for a free consultation: (480) 447-1554

Another useful article on this topic can be found here: https://www.bankruptcyattorneytempeaz.com/

Bankruptcy and Your Tax Return

Bankruptcy and Your Tax Return

It’s the most worderful time of the year. Tax season? Probably not. But it is the time of year that most of us are looking forward to filing returns and getting some money back for their hard work. If you’re considering bankruptcy, however, take a step back before you send the return to our Uncle Sam.

The beginning of the year is usually the toughest time for a lot of people. The holidays are over, and most have overspent. People in an already bad financial situation have usually made their situation worse during the holidays. A lot of times it’s the holidays that make people realize they should consider bankruptcy.

Here’s the conundrum, your tax return is at risk. Yes, you could lose your tax return if you hurry up and file bankruptcy at the beginning of the year. So what do you do if you need to file bankruptcy at the beginning of the year, and you’re getting a substantial tax return? Not to sound cliche, go see an experienced Arizona bankruptcy attorney. We’ve been dealing with this for years. Matter of fact, we deal with the same issue, every year, countless times. You don’t have to lose that return. There are several options for you.

Feel free to contact my office if you want to talk to a lawyer who has dealt with this issue more times than can be counted. Call 602-353-7713 to schedule a free consult with an experienced Ariozona bankruptcy attorney.

Call for a free consultation: (480) 447-1554

Another useful article on this topic can be found here: https://www.bankruptcyattorneytempeaz.com/

Arizona Bankruptcy Blog – Should I File for Bankruptcy Relief?

Arizona Bankruptcy Blog – Should I file for Bankruptcy Relief?
It’s a question many have asked, and if you’re asking whether or not you should file for bankruptcy protection, you’re not alone. Many factors can contribute to an individual considering bankruptcy relief. Most common, credit cards, auto loans, student loans and mortgages have gotten out of control. Many times we have good financial times and over-barrow thinking that there will be no problem paying a creditor back.
The answer to the question, “should I file for bankruptcy?” depends on multiple factors. But what all of those factors boil down to is the question; “with my current income, will I be able to pay back my creditors on my own?” If the answer to that is no, then you need to take a step back and make some considerations. For example, is it reasonable that you will make more money in the near future and be able to pay your creditors, or are you just hoping that something changes? Are you sacrificing basic living necessities in order to pay your creditors? Are you digging into your 401k, or some other retirement fund in hopes of having a windfall or better financial times?
People frequently ask me if they should file for bankruptcy or not. My response is always an inquiry into the individual’s amount of debt, and current income and then ask them the question; “based on this income, how do you expect to pay your creditors?” The reaction is common. There generally is not a plan, and just the hope of better financial times. If this is you, perhaps bankruptcy should be considered. If there is an actual plan that works out mathematically, then maybe you can avoid bankruptcy.
If considering bankruptcy, be sure to contact an attorney who has experience in bankruptcy court. Bankruptcy is considered a niche area of law and it requires specialized knowledge of the bankruptcy code.

Other helpful bankruptcy articles can be found here: https://www.grattorneys.com/

Series: Arizona Bankruptcy Exemptions Explained – Arizona Bankruptcy Homestead Exemption

The Arizona bankruptcy exemption states that a bankruptcy debtor(s) may exempt:

“Interest in real property upon which debtor’s house

 

sits, condominium or cooperative, mobile home, or

 

mobile home in which debtor resides plus the land

 

upon which the mobile home is located in the amount

 

of $150,000. May not be doubled by husband and

 

wife.”

This means that you may have $150,000 equity in your residence when you file bankruptcy, without having to turn any funds over to creditors.

Examples of how this works in the real world:

Example 1 – Chapter 7 and the Arizona Homestead Exemption.

Assume you own a home. Assume that home’s fair market value is $200,000.00 and you owe $150,000.00 to the bank on a first mortgage. This gives you exactly $50,000.00 in equity. In this example, if you file for chapter 7 bankruptcy protection in Arizona, you could claim the Arizona Homestead bankruptcy exemption for your home, and protect your $50,000.00 of equity.

Example 2 – Chapter 7 and the Arizona Homestead Exemption.

Assume everything in the example above, however, assume you own your home free and clear, with no mortgage. In this scenario, you would still claim your Arizona homestead exemption, and you would still be able to protect $150,000.00 equity. $50,000.00 would be left unprotected and available to creditors. The Result; either you would have to sell the house, keep $150,000.00 from the sale, and turn over $50,000.00 to creditors, or come up with some sort of acceptable payment arrangement of the $50,000.00 to your creditors.

Example 3 – Chapter 13 and the Arizona Homestead Exemption.

Assume everything in the above example. In this scenario, you would still protect the $150,000 you have. In this example, you would have 3 or 5 years to pay at a minimum, $50,000.00 in your Chapter 13 bankruptcy plan.

The Arizona bankruptcy homestead exemption is widely considered fair and perhaps generous compared to other jurisdictions. Bankruptcy being a theory of equity, the exemption is rooted in the policy that debtors should be able to maintain a standard living environment when facing harsh economic conditions.

Bankruptcy and Inherited IRAs

Bankruptcy and Inherited IRAs

In a recent US Supreme Court decision, the Court held that inherited IRAs will not be considered “retirement funds” and therefore exempt under federal bankruptcy exemptions.

The theory is that it is the policy of the court to protect individual retirement funds. Once these funds are transferred from the retiree the retiree’s beneficiary, they are no longer considered retirement funds.

It is still unclear whether or not such funds would be considered exempt if the beneficiary were the retiree’s spouse.

At any rate, those facing bankruptcy who have an inherited IRA or any other type of inherited retirement funds, should be very cautious when facing bankruptcy. Bankruptcy is a very specialized area of law, and therefore potential debtors should seek the advice of only experienced bankruptcy attorneys in their state.

Call for a free consultation: (480) 447-1554