The Advantages of Declaring Bankruptcy After Summer Vacation Is Over

While summer is known for vacationing, it can be the busiest season of the year for parents of children of a certain age. When school is out of session, parents become responsible for keeping their children stimulated and entertained throughout the day, on top of the rest of their regular responsibilities. So while it can be sad to send them back to school and get less time with them, it also gives parents more time to take care of tasks that they wouldn't want to attend to with their children present. With the cost of living what it is, one of those tasks could be addressing debt that has gotten out of control. Informing a young child too much about financial issues can be an added stressor that impedes emotional development. So if you've already bought your child clothes and school supplies and figured out their schedules for the semester, it could be the perfect time to consider filing for bankruptcy. Our Phoenix bankruptcy lawyers have the knowledge and experience to make the most of your chapter 7 or chapter 13 filing. When you're ready to speak to a member of our team, call 602-509-0955 to learn more.

The Most Time-Consuming Parts of Bankruptcy

If you want to pull off a bankruptcy filing without your children finding out, you need to know which parts of bankruptcy are going to require the most time and focus. The good news is that many bankruptcy proceedings have not gone back to being in person since COVID. But a remote hearing still requires preparation and reserved time in a quiet and private space. Just like an in-person hearing, your children should not be present for a remote bankruptcy hearing. But since hearings always occur during court hours, which are similar to school hours, it is easier to schedule around your children not being home when school is back in session. Some of the requirements of bankruptcy that will take up the most of your time will include:

• Consulting with and selecting a bankruptcy attorney: You might be one and done with your bankruptcy consultations, but the time it takes to consult with multiple bankruptcy attorneys will add up quickly. Each consultation will take a minimum of 15 to 30 minutes, and more if you are driving to attend a consultation in person. The plus side is that you will be prepared for subsequent bankruptcy consultations after your first bankruptcy consultation.
• Gathering your documents: Your attorney will need copies of a wide array of documents to accurately complete the schedules for your bankruptcy petition. Some debtors already have these documents conveniently organized and accessible, while others need more time to track them down. You may need to request documents from your employer, government agencies, and other sources, which can make this process take even longer.
• Online bankruptcy courses: All bankruptcy debtors are required to complete two online courses to obtain a debt discharge. The first course must be completed before filing so that the course completion certificate can be attached to the bankruptcy petition. It can be taken up to 180 days in advance of filing. The second course must be completed after filing: in chapter 7, within 60 days of the 341 Meeting of Creditors, and in chapter 13, before the final plan payment. Both courses will take about 1 to 2 hours to complete. It's better to complete the courses early rather than wait until the last minute and miss the deadline due to technological issues and other problems.
• The 341 Meeting of Creditors: This hearing is mandatory for both chapter 7 bankruptcy and chapter 13 bankruptcy debtors. While this hearing is now typically held remotely, it's still important to have it blocked off in your schedule. Being late to or missing the 341 Meeting of Creditors can cause case delays or even dismissal. If the debtor's creditors don't attend the hearing, it should only take about 5 to 10 minutes to complete, but the debtor should set aside at least an hour of their time anyway.
• Plan Confirmation Hearing: This hearing is only required of chapter 13 debtors. It is a fairly short hearing like the 341 Meeting of Creditors, so the debtor should set aside 1 to 2 hours in their calendar to attend.
• Other hearings: Adversary proceedings and other hearings may become necessary throughout the bankruptcy process, but this varies on a case-by-case basis. You should set aside both time to prepare and time for the hearing if any of these ever do arise.

Who Needs to Know About Your Bankruptcy Filing?

Your children probably aren't the only people you'd prefer to stay unaware of your bankruptcy filing. Your debt is no one's business but your own, and maybe your creditors'. Most of our clients want to keep the news of their bankruptcy filing as quiet as possible. Many of them also come to us with misconceived notions about bankruptcy, including who is notified of a filing.

One of the most important parts of a bankruptcy petition is the creditor mailing matrix. This is a list of the names and mailing addresses of each of the debtor's creditors. Every entry on this list receives a notice when the petition for bankruptcy is filed. This will include your credit card companies, past-due medical providers, any lenders for personal and secured loans, and more. If you rent and you aren't behind on rent, your landlord may not need to be notified, but your attorney will confirm how your lease should be listed. No one else is specifically notified about your bankruptcy, although it is a matter of public record that can be accessed fairly easily in an online search.

You may also have concerns about the consequences you may face if someone finds out about your bankruptcy filing. The good news is that there are many protections in place for bankruptcy debtors in the United States. An emergency room can't turn away someone for filing for bankruptcy, although a medical provider can stop treatment if a patient discharges their bills in bankruptcy. An employer can't fire you for filing for bankruptcy, nor because your wages are garnished for a single debt. However, federal law doesn't protect you from being fired if your wages are garnished for two or more separate debts.

Learn More About Bankruptcy While Your Kids Are Back to Learning Today

Some types of matters simply aren't meant for children, and bankruptcy is one of them. But it can be difficult to consult with attorneys, gather your documents, and complete the rest of the tasks necessary for your bankruptcy filing while caring for children all day during the summer months. When school is back in session, there's more child-free time to take care of adult responsibilities, like achieving debt relief to secure a better financial future for your family. Before you know it, it will be the holiday season, then the new year, then tax season, and then summer break with the kids home all day once more. Now may be the perfect time to learn more about filing for chapter 7 or chapter 13 bankruptcy in Arizona. Our Phoenix bankruptcy team makes getting started easy with free consultations by phone and payment plan options starting at Zero Dollars Down. Schedule your free consultation by calling 602-509-0955.

Living paycheck-to-paycheck can feel like walking on a tightrope, with just one stumble or unexpected emergency having the potential for a dangerous crash. That is an unfortunate reality for approximately 7 in 10 American households. Most people would associate this type of financial situation with income in the low-to-middle range. But a new survey revealed that high-income families are feeling the strain as well, with 36% of those earning over $300,000 per year reporting living paycheck-to-paycheck. This is actually higher than the 23% of those earning $100,000 to $300,000 yearly who live paycheck-to-paycheck. Possible explanations include larger fixed expenses, like housing in high-cost cities, and lifestyle creep, or spending more as income rises. Still, higher earners who live paycheck-to-paycheck often have more options for resolving their financial issues than those who earn less than $100,000 per year. If you earn a good living but can't seem to shake your debts, chapter 13 bankruptcy could pave the way to a future without debt. Schedule your free phone consultation with Phoenix Bankruptcy Lawyers today by calling 602-509-0955.

The Median Income Comparison Test

The Median Income Comparison Test comes into play in both chapters of consumer bankruptcy. Chapter 7 debtors can use it to show income eligibility so they don't ever have to conduct the means test. In chapter 13 bankruptcy, it is used to determine whether the debtor's payment plan lasts 3 or 5 years. The test is fairly straightforward: take the debtor's average income from the past 6 months and compare it to the median income for a household the same size as theirs in their state. Arizona's median income levels for bankruptcy are updated periodically, and even for a household of four, they fall far below $300,000 per year. Each additional household member beyond four only raises the limit by a modest amount.

That means that someone earning $300K+ per year would theoretically need well over a dozen children to pass the median income comparison test. So someone earning $300K+ might qualify for chapter 7 bankruptcy through the means test, and can pretty much expect their chapter 13 bankruptcy case to last 5 years as opposed to 3 years.

The Means Test

The Means Test is the alternative method of income qualification for chapter 7 bankruptcy, and determines how much a debtor pays each month in chapter 13 bankruptcy. It is conducted by finding the average monthly income and subtracting mandatory monthly expenses like rent or mortgage, monthly insurance payments, child support, utilities, and more. If the figure calculated is negative or too small to realistically pay off debts, that person is considered eligible for chapter 7 bankruptcy. However, the trustee will follow certain guidelines when reviewing means test calculations to make sure that all of the debtor's lifestyle choices are reasonable. Arizona's local standards for housing and utilities are quite low. The allowance for a one-person household in Maricopa County is less than the average rent for a one-bedroom apartment in Maricopa County, meaning the debtor would need a lower-end apartment, a studio, or roommates to meet this local standard. Even for a household of five, the allowance only rises modestly. So if a high mortgage payment is the reason someone making $300K+ is living paycheck-to-paycheck, they may still struggle to pass the means test and qualify for chapter 7 bankruptcy.

Chapter 13 Bankruptcy for High-Income Households

As shown above, it's highly difficult for a debtor to qualify for chapter 7 bankruptcy if their income exceeds $300,000 per year. But having a high income actually makes it easier to qualify for chapter 13 bankruptcy. This is because chapter 13 bankruptcy requires that the debtor be able to pay off bankruptcy costs, secured debts, and priority debts within the lifespan of their payment plan, here likely 5 years. But there are significant benefits to choosing chapter 13 bankruptcy over chapter 7 bankruptcy.

Chapter 7 bankruptcy only clears unsecured debts. This can be beneficial if the debtor only has debts like medical bills and unpaid credit cards. But if the debtor is facing repossession of a secured asset, like a home foreclosure, they will only have the three to six months that a chapter 7 case lasts to resolve those arrearages outside of bankruptcy, or the creditor can proceed with collection after the case has been discharged. Additionally, the debtor could have priority debts, and the wage garnishments stemming from some of those won't be stopped by a chapter 7 filing. Unsecured debts, or those that can be cleared in chapter 7 bankruptcy, are only repaid to the extent that the debtor can afford to in chapter 13 bankruptcy. If a chapter 13 debtor's case works out just perfectly, they may receive a discharge without paying back a single cent towards unsecured debts.

Lien Stripping in Chapter 13 Bankruptcy

Another benefit unique to chapter 13 bankruptcy is the possibility of lien stripping. This option is only available if the debtor owns a home with more than one mortgage, and the balance on the first mortgage is more than the home's market value. When these conditions are met, it can be a highly advantageous factor leading a debtor to choose chapter 13 bankruptcy for debt relief.

Surrendering Assets in Bankruptcy

One reason a person earning more than $300,000 per year can barely keep up with their bills is because they have secured loans on assets they can no longer afford. High-value assets cost more to insure, maintain, and replace, and those costs can add up quickly. Under these circumstances, paying off a secured asset may feel more like throwing money into a pit, especially if the asset has been damaged, leading to a decrease in value. The good news is that bankruptcy debtors can surrender secured assets without the typical associated financial penalties, even if they otherwise would be allowed to keep that asset in bankruptcy. So if a debtor wants to switch out a sports car or luxury vehicle for something more practical, or get out of an expensive lease, this would typically cost thousands of dollars. But a debtor can simply surrender an asset or cancel an executory contract under the protection of bankruptcy while their case is still active. This can help them create a healthier budget for life after bankruptcy discharge.

Have a High Income but Still Can't Get Out from Under Debt? Learn More About Your Debt Relief Options Today

In this day and age, earning a respectable salary is no guarantee that a household will be immune to financial troubles. And those with high income despite debt issues may struggle to show their income eligibility for bankruptcy. While it's possible for someone earning $300K or more to qualify for chapter 7, the odds are much higher that they will instead be eligible for chapter 13 bankruptcy. Chapter 13 is a lengthy and high-commitment endeavor, most likely lasting 5 years for households earning $300,000 or more. A bankruptcy attorney can help you estimate what your payments would be and determine if bankruptcy will interrupt any of your upcoming life plans. Schedule your free phone consultation with Phoenix Bankruptcy Lawyers today by calling 602-509-0955.

Summer has come to an end, although it never is truly too cold for a boat ride on one of Arizona's beautiful lakes. However, owning a boat can quickly become an expensive hassle. It's often said that the happiest day of a boat owner's life is when they sell it. But in this economy, there are fewer buyers on the market with disposable income for a watercraft. If your overall situation feels like a sinking ship, bankruptcy might be able to help. Chapter 7 and chapter 13 bankruptcy provide different avenues to debt relief in Phoenix, Arizona. You can minimize the drawbacks and maximize the benefits of filing by retaining a quality bankruptcy attorney for your case. At Phoenix Bankruptcy Lawyers, your initial consultation is free, and most of our clients are eligible to file for Zero Dollars Down. Your debt relief journey begins today when you call 602-509-0955 for your free phone consultation with an experienced member of our team.

Boat Ownership in Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most popular form of consumer bankruptcy because it clears limitless amounts of unsecured debts in a matter of just a few months. Getting rid of burdensome unpaid medical bills, credit card debt, and more could be life-changing for many households, especially if they live paycheck-to-paycheck. But what a boat owner plans to do with their boat will impact how effective a chapter 7 filing will be for their situation.

A boat owner who wants to get rid of their boat with a remaining loan could benefit greatly from chapter 7 bankruptcy. In bankruptcy, debtors can surrender a secured asset so they are no longer liable for the debt attached to that asset. Depending on the equity in the boat, its current market value, available buyers, and other factors, it may be faster to simply surrender a boat in bankruptcy than sell it. With all the costs that come with boat ownership, this may still end up saving that person money as opposed to selling. It will also clear the rest of their unsecured debts to get their finances in order.

Keeping a boat becomes more complicated in chapter 7 bankruptcy, whether or not there is a remaining loan balance. Chapter 7 bankruptcy debtors are only allowed to keep assets with exemptions applied to protect them. Assuming the boat in question has a motor, the only exemption available under Arizona law is the motor vehicle exemption. Arizona does not have a specific boat exemption or a wildcard exemption for the debtor to use on any asset of their choosing. And if the debtor has a car and a boat, using the motor vehicle exemption on the boat will put their car at risk, which they probably use more frequently than their boat.

Boat Ownership in Chapter 13 Bankruptcy

There are income restrictions in chapter 7 bankruptcy that only leave chapter 13 as an option for some debtors. There are also unique benefits that lead some debtors to opt for chapter 13 bankruptcy over chapter 7.

Bankruptcy exemptions work differently in chapter 13 than chapter 7. They can affect how much a debtor has to pay each month for their payment plan, but that doesn't mean that the debtor can't keep those assets. So if a debtor doesn't want to choose between keeping their car and keeping their boat, chapter 13 could be a preferable option over chapter 7. It also could be their only option if their income is too high for chapter 7.

Chapter 13 bankruptcy could also be helpful to a boat owner who has fallen behind on payments but doesn't want to lose their boat to repossession. If a boat owner under these circumstances filed for chapter 7 bankruptcy in an attempt to save their boat, they would only potentially have 3 to 5 months, or the lifespan of a chapter 7 case, to catch up to current. In chapter 13 bankruptcy, the amount in arrears is spread out over the course of 3 or 5 years. But creditor protection ends if the debtor misses their bankruptcy plan payments and the case is dismissed. That would give the lender an opportunity to repossess the boat, whether or not the case is eventually reinstated.

Can I Protect Proceeds from a Boat Sale?

A boat owner struggling with debt might be deciding between bankruptcy and selling their boat to pay back their creditors, but what if they didn't have to choose? In other words, what if a boat owner could sell the boat and keep the proceeds while also clearing their debt through bankruptcy? While this would be ideal for many, it isn't a reality for Arizona boat owner bankruptcy debtors. The motor vehicle exemption can only be used on a boat or a car, and most debtors need their car more than their boat. And while proceeds from a home sale can be protected with the homestead exemption, the same concept doesn't apply to motor vehicles in bankruptcy. Those funds would need to be protected with the cash and bank accounts exemption because Arizona does not have a wildcard exemption to protect proceeds from a boat sale. Unfortunately, Arizona's cash and bank accounts exemption only protects a limited amount, enough to cover some basic essentials. So if a boat owner wishes to sell their boat before filing for bankruptcy, they will also need to spend those funds on reasonable expenditures to avoid leaving unprotected funds at risk of seizure by the bankruptcy trustee.

Here, it is important that the debtor is careful with how they spend their boat sale proceeds, or that purchase could end up seized and sold by the bankruptcy trustee as well. Retirement savings can seem like a safe investment, but the trustee may take issue with large retirement contributions made in the months shortly before bankruptcy. However, the debtor can continue making retirement contributions at their regular rate. Some other ideas for reasonable pre-bankruptcy expenditures include:

• Stocking up on non-perishable foods and household items
• Routine vehicle maintenance, tires, and necessary repairs
• Dental work and other medical care
• Clothes and school supplies for your kids
• Bankruptcy attorney's fees
• Stocking up on contact lenses or a new pair of glasses
• Repairing or replacing broken appliances and furniture

Struggling to Stay Afloat? Learn More About Bankruptcy as a Boat Owner in Arizona Today

If you're drowning in debt, bankruptcy could provide a lifeline both by clearing liabilities and giving you a chance to surrender a boat that costs you more than it benefits you. But mistakes in your bankruptcy petition could make your case more of a hassle than owning a boat ever was. Chapter 7 and chapter 13 bankruptcy can be complicated and stressful for someone inexperienced in such matters, simply starting with the decision between the two. You don't have to incur any cost or risk by taking the first step towards debt relief with a bankruptcy consultation by phone. Our Phoenix Bankruptcy Lawyers offer free consultations to get started and payment plan options starting as low as Zero Dollars Down. To speak with a member of our team about your potential case, call 602-509-0955.

Bankruptcy petitions are detailed legal documents that are often well over 50 pages long, so drafting and filing one is no easy task. At the same time, there are several other steps that must be completed before a debtor can confidently file a bankruptcy petition that will result in a successful case. When a bankruptcy case is filed incorrectly, it could be dismissed, assets could be seized, debts could be excluded from discharge, and more. Don’t risk any of those outcomes- retain a qualified attorney to handle your Arizona bankruptcy case. Before declaring bankruptcy in Phoenix, read this final checklist and confirm that you are ready to file. To schedule your free consultation with a skilled bankruptcy professional from our Zero Down law firm, call 602-509-0955. 

Prior Bankruptcy Filings?

This step is only relevant if you have filed for bankruptcy in the past. Bankruptcy law limits how frequently a debtor can discharge their obligations with either chapter 7 or chapter 13. Make sure you have satisfied the applicable waiting period if you are seeking to file for bankruptcy a second time. Chapter 7 debtors must wait eight years to file another chapter 7 case, or four years to file a chapter 13 bankruptcy. Chapter 13 debtors must wait two years to file another chapter 13 case, or six years to file a chapter 7 bankruptcy. 

Are Your Assets Protected? 

Especially in chapter 7 bankruptcy, protecting assets with exemptions is a huge concern for debtors. In chapter 7 bankruptcy, the trustee can take and sell non-exempt assets to pay off debts and receive payment. In chapter 13 bankruptcy, non-exempt assets could increase how much a debtor must pay into their plan. In Arizona, there are exemptions for common assets like the homestead exemption, motor vehicle exemption, and household goods and furnishings provision. But Arizona does not allow debtors to use federal bankruptcy exemptions, nor does it offer a wildcard exemption for the debtor to use on any asset of their choosing. Don’t forget to review savings and investment accounts and other intangible assets when reviewing your assets for bankruptcy purposes. 

Credit Card Spending Within Limits?

Most debtors who file for bankruptcy have at least some credit card debt to discharge. But bankruptcy’s ability to clear credit card debt isn’t infinite. There are limits to both luxury spending and cash advances on credit cards in the months leading up to a bankruptcy petition filing. Exceeding these limits may result in those debts being excluded from the bankruptcy process and remaining after other debts have been cleared. 

Do You Have Your ID’s Ready?

It would be concerning if verifying your identity with valid forms of government ID weren’t a part of the bankruptcy process. You need two to obtain a bankruptcy discharge- a photo ID and a SSN ID. Examples of photo ID’s include a driver’s license, state identification card, or passport. The most common SSN ID is a Social Security card, but you can also use a W-2 if you don’t have that form of ID available. It isn’t uncommon to lose an ID, and it can take a while to get a replacement if you have to request one, so take care of this now rather than later if you plan to declare bankruptcy in the near future. 

Have You Taken the Credit Counseling Course?

Whether you file for chapter 7 bankruptcy or chapter 13 bankruptcy, you must take an online credit counseling class before filing your petition if you wish to achieve a debt discharge. This course doesn’t cost much to enroll in or take long to complete, but failure to do so will result in your case being dismissed. This class must be taken before filing. You (or your attorney) will be provided with a completion certificate that should included with the petition at filing. Keep in mind that you will have to complete a chat with a counselor about your financial situation, which many people find uncomfortable. You will need to complete a second course as part of the bankruptcy process, but this doesn’t come until after the 341 Meeting of Creditors. Your course completion certificate is valid for up to 6 months before your petition is filed. 

Have You Confirmed Your Income Eligibility?

Proving income eligibility for bankruptcy is easier in some cases than others. If you have variable income or are right on the border of qualifying, it’s best to conduct these calculations with guidance from an experienced attorney. There are two ways to qualify for chapter 7 bankruptcy; the means test and by comparing household income to the state median. Using the household income comparison is simpler if you can use it to prove your eligibility- just compare your average monthly income from the past 6 months to the applicable amount in this table. The means test is a bit more complicated, but it is a necessary step to qualifying and filing for chapter 13 bankruptcy. A debtor with a negative or small figure reached in the means test may also qualify for chapter 7 bankruptcy. To complete the means test, a debtor should deduct each of their mandatory expenses from their average monthly income. That number must be enough to pay off certain types of debts in either 3 or 5 years to qualify for chapter 13 bankruptcy. 

Are Your Bank Account Levels Low?

An annoying aspect of filing for bankruptcy is the low exemption to protect cash on hand or funds in a bank account. If the trustee reviews your bank account statements and finds that you had non-exempt funds in your account on the day you filed for bankruptcy, it could cause issues, e.g., being required to pay that amount towards your bankruptcy estate. The exemption is only $300 for an individual and $600 for a married couple in Arizona. Therefore, we recommend avoiding filing on payday if possible. 

Can You Pay Your Filing Fee?

To file for chapter 7 bankruptcy, the filing fee is $338, and it is $313 for chapter 13 bankruptcy. You should request a filing fee installment plan or waiver if you believe that paying it will be an issue for you. Failure to pay filing fee installments is a major reason that bankruptcy cases end up dismissed. You may need to start saving up now for your filing fee if funds are tight, like they are for most bankruptcy debtors. 

Review Your Potential Bankruptcy Case in Depth with an Experienced Arizona Bankruptcy Professional

Filing for bankruptcy with an attorney means having someone who is knowledgeable about the process to guide you through each step of the way. This makes it more likely for your case to successfully end via discharge, and for you to get the absolute most out of your filing. When you file with Phoenix Bankruptcy Attorneys, you file with a team you can trust with rates and payment options that you can afford. If you’re feeling overwhelmed by all that is required to file for chapter 7 or chapter 13 bankruptcy in Arizona, you don’t have to approach this challenge alone. We make getting started easy with free case evaluations by phone. Schedule yours today at 602-509-0955 for more information.

While there are some behaviors that make medical problems more likely, no one can plan to break a bone, tear an important muscle, develop an illness, etc. Health insurance only goes so far, and out-of-pocket expenses can be overwhelming, even for patients with health insurance coverage. A medical patient could also be accruing debt from other sources during their treatment, especially if they can’t work while recovering. It’s no wonder that medical debt is the leading cause of bankruptcy in our country. But bankruptcy can help an individual or family struggling with medical debt to clear their burdens, as well as other debts that may be holding them back in life. Our dedicated bankruptcy lawyers offer free consultations by phone and flexible payment plan options starting at Zero Dollars Down. Get started today by calling 602-509-0955. 

Some Of Arizona’s Most Common Medical Expenses

• Dental care: If you have dental insurance coverage, it is probably a nearly unnoticeable amount deducted from your paychecks. But actually going to the dentist and following through on recommended treatments can become a more expensive process. A basic cleaning and checkup costs Arizona residents, on average, $150. A patient may be required to attend these appointments more than every 6 months if they experience a more serious dental issue, which will also be more expensive to fix. A molar root canal costs about $1,222, and a complete upper denture will put the patient back around $1,833. 
• Appendix removal: Most people don’t know what an appendix does, but some people eventually must have theirs removed. Failure to remove it once the surgery becomes necessary can result in more serious health issues. The average price to have one’s appendix removed in Arizona is $8,112. 
• Tonsil and adenoid removal: A tonsil removal is another surgery that some people will eventually need and some people won’t. The cost of tonsil and adenoid removal varies by state and whether the patient has the procedure performed in a hospital or a surgery center. In Arizona, a tonsil removal at a surgery center costs about $3,853. The estimated cost for a tonsil removal in a hospital in Arizona is $7,108. 
• Hammertoe correction: When someone has a hammertoe, the middle joint of their toe bends upwards rather than lying flat. This condition can be unsightly can result in discomfort and difficulty walking. A podiatrist can operate on the toe to improve the patient’s quality of life. The average price for a hammertoe correction surgery in Arizona is $10,012. 
• Sleep study: Sleeping for about 8 hours per night isn’t just about getting beauty rest. Sleep is essential to human function, and a lack of it can make a person more vulnerable to other illnesses and injuries. If someone is having trouble sleeping, they can request a sleep study to observe if they have a condition such as sleep apnea. In Arizona, a sleep study costs around $853 to $1,352. 
• Cochlear implant: A cochlear implant is a device that can help someone with deafness with sound perception. The ability to hear can cost a patient dearly, as the average price for this surgery in Arizona is $72,654. 
• Colonoscopy. A colonoscopy is one of the most dreaded medical appointments. In Arizona, the average price for this procedure is $1,605. However, this price doesn’t include anesthesia, which can make the experience less unpleasant. 
• Physical therapy: Physical therapy can be used to treat certain injuries as a less invasive alternative to surgery. It can also be a precursor to surgery, or a part of the patient’s recovery plan. The average price for a physical therapy visit in Arizona is $112, which is a deal compared to the national average of $162. However, a patient may be required to attend physical therapy appointments for several weeks or months, increasing the total cost of treatment. 
• Hip replacement: Some people’s joints will eventually need replacement through surgical intervention. Joint replacements are complex surgeries that can cost far more than other medical treatments. The average price for a hip replacement surgery in the Phoenix area is $23,223. 
• Septoplasty: Septoplasty is a surgery to treat a deviated septum. Because it is focused on straightening the inner passageways to improve breathing rather than the nose’s shape to improve appearance, this is not considered plastic surgery- although there are cosmetic ENTs who can perform both procedures during the same surgery. The average price for a standard septoplasty in Arizona is $9,165, and the cost for a cosmetic ENT is higher. 
• Bariatric surgery: Obesity can damage a person’s overall health, but diet and exercise isn’t always enough to ward off this medical condition. Semaglutide injections are increasing in popularity as a way to curb cravings and help patients lose weight. For cases needing serious intervention, bariatric surgery can help, but costs, on average in Arizona, $37,008. The price varies depending on which type of surgery the patient receives, such as a gastric bypass, lap band, gastric sleeve, etc. 
• Defibrillator: A defibrillator is a device that is implanted to help patients treat cardiac arrhythmias. It delivers electric waves to the heart, which can alleviate ventricular fibrillation and non-perfusing ventricular tachycardia. The price of this surgery might make your heart skip a beat, as the average cost in Arizona is $103,936. 

How Bankruptcy Can Help If You’re Drowning In Medical Debt

Medical debt can be a multi-layered issue if the condition is serious or the patient is their household’s breadwinner. Many medical treatments require that the patient rest and take time away from work during recovery. That could mean they are using credit cards, personal loans, and other lines of credit to keep the lights on until they can return to work. These creditors will be less restricted than medical creditors when pursuing the debtor for repayment. The medical patient could also fall behind on monthly payments for secured loans and run the risk of repossession in arizona. Some creditors will be more lenient with others when the debtor is dealing with uncontrollable life circumstances like a medical issue. But others might not be so forgiving- when this is the case, bankruptcy may be able to help. 

If you’re an individual considering bankruptcy, your needs would likely be served best by either chapter 7 or chapter 13. Debtors who file for chapter 7 bankruptcy can wipe out medical debts in one fell swoop. These cases generally only last about 3 to 6 months from filing to discharge. But the debtor must prove eligibility on multiple factors, and any assets they own that aren’t protected by state bankruptcy exemptions could be seized and sold to pay debts. In chapter 13 bankruptcy, the debtor pays off debts over the course of 3 or 5 years. Medical debts are the last category of debts paid in chapter 13 payment plans, and can be cleared if the debtor pays off their mandatory debts and has otherwise completed the plan. Want to see if you qualify, and learn more about how Arizona bankruptcy applies to your unique situation? Our experienced attorneys offer skillful representation with affordable and flexible payment plan options. Schedule your free consultation today at 602-509-0955.

Most people caused at least a little bit of trouble when they were in high school. But this trouble usually only results in embarrassing memories and funny stories after a few years. But when a high schooler causes serious and permanent physical injury, there may be consequences long after graduation. 

Colorado safety Shilo Sanders just happens to be the son of head coach Deion Sanders. In 2015, Shilo was a high school student at Focus Academies charter school, where his father happened to work as the CEO. He was escorted to in-school suspension for violating the school’s no phone policy by security guard John Darjean. Shilo then called his mother, Pilar Sanders, who had divorced Deion 2 years prior. An assistant coach came to assist with the situation with Deion on the phone, who instructed Darjean to confiscate the phone from his son after learning that his mother was on the other end. Shilo then allegedly elbowed Darjean, causing him to fall over, and continued striking him as he was on the ground. He sustained injuries including a broken neck, cervical spine damage, permanent neurological injuries, and irreversible incontinence. In 2022, a court found Shilo liable for the assault and awarded Darjean $11.89 million. 

Paying such a high lawsuit judgment at such a young age is nearly impossible for anyone, even those from an affluent family like the Sanders. In October 2023, Shilo Sanders declared bankruptcy. The football player told the court he didn’t have the funds available to pay the judgment, citing assets of $320,477, which was down from $477,881 in his initial filing. He claimed to only have a Mercedes vehicle and a Robin Hood investment account. However, Shilo maintains a glamorous social media presence, giving more than one million followers a look into his life. He also has partnerships with major companies like TurboTax, Oikos, and KFC. The income from these collaborations was not listed in his bankruptcy petition. He also has shown his followers expensive personal possessions that weren’t in his petition, like a $50,000 Louis Vuitton shopping spree video on YouTube. Darjean’s attorneys have raised these objections with the bankruptcy trustee assigned to the case.

What to Avoid Posting on Social Media During Bankruptcy

If you publicly post about your life while going through a legal matter such as a bankruptcy, it creates the risk that anything you post may be used as evidence against you. When the trustee decides to look further into your case, it can create extra responsibilities for you, delay your case discharge, and inconvenience you in other ways. 

• Expensive cars, boats & other motor vehicles: While it may be tempting to let everyone know when you get to ride in a fancy car, boat, ATV, jet ski, etc., it can be risky business if you are considering filing for bankruptcy. This can especially create issues if the social media posts conflict with what was listed in the bankruptcy petition. For example, if the bankruptcy debtor claims to own a used Honda in their petition but posts updates about their daily commute from a Mercedes, this could give the trustee cause to investigate the debtor’s finances. 
• Designer goods & apparel: Don’t follow in Shilo Sanders’ footsteps by posting a video of yourself going on a Louis Vuitton shopping spree in the wake of a bankruptcy filing. Luxury spending is discouraged in the months before a bankruptcy filing, and credit card debts from pre-bankruptcy luxury items can be excluded from discharge. Your bankruptcy trustee could even decide that any of the designer items you post would be worth selling at auction to contribute funds to your bankruptcy estate. 
• Meals & drinks from restaurants: With the cost of living higher than ever, treats like dinner at a nice restaurant and daily Starbucks runs are no longer considered reasonable expenses. If you do decide to treat yourself before or during a bankruptcy case, avoid posting about it on your social media. 
• Paying expenses for others: You may have seen videos of stars like the Rock paying off his mother’s mortgage and seen the positive response they receive. But if you want to emulate this behavior yourself, do it on a smaller scale and without an internet audience. 
• Sponsored content: All income needs to be reported on a bankruptcy petition, including revenue from creating sponsored content on your social media. If you are upfront about any income you receive through social media collaborations, you can continue making these posts throughout your bankruptcy. But in Shilo Sanders’ case, failure to report social media income can create suspicion of fraud and cause further investigation into your bankruptcy petition. 

Bankruptcy to Clear Lawsuit Judgments

Once a creditor has secured a judgment against a debtor through a lawsuit, it opens up their options in pursuing the debtor for repayment. A creditor can use a judgment to place a lien on the debtor’s property, making it impossible to sell or transfer the asset until the debt is repaid. A creditor can also use a lawsuit judgment to execute a wage garnishment. Here, the creditor will automatically receive a portion- usually 15% to 25%- of the debtor’s paychecks. A defendant in a lawsuit may be able to clear a judgment through bankruptcy, but filing for bankruptcy while the lawsuit is still pending will put the lawsuit on hold thanks to the automatic stay. 

Some types of lawsuit judgments won’t be cleared by a bankruptcy filing. For example, any restitution ordered as part of a criminal conviction can’t be wiped out by a bankruptcy petition. Child support isn’t dischargeable in bankruptcy, and only a fully-paid chapter 13 bankruptcy can stop a child support wage garnishment. If you were convicted of causing injury or death to another person while driving under the influence, this type of judgment can’t be erased by bankruptcy. Even if a judgment isn’t classified as non-dischargeable, a creditor can ask the court to make it be. Bankruptcy judges are most likely to rule in the creditor’s favor when the judgment is based off the debtor’s fraudulent, deceptive, or willfully malicious actions. Crimes like embezzlement and assault are common roots of lawsuit judgments that aren’t cleared by filing for bankruptcy. If the creditor fails to raise an objection, these types of judgments can be discharged. However, this seems unlikely in Shilo Sanders’ situation as Darjean’s attorneys have already taken issue with his extravagant social media presence. 

Facing Lawsuits & Judgments by Your Creditors? Learn More About Bankruptcy Can Help. 

Whether you have a $12 million judgment from an assault committed during high school or a $12 thousand judgment from an unexpected medical event, bankruptcy can at a minimum give you time to find a solution, or even clear the judgment altogether. But before filing bankruptcy, you should make sure that your judgment will be eligible for discharge through bankruptcy, and that you qualify for the chapter you wish to file. Making mistakes like these during the bankruptcy preparation stage can create issues in your case later down the line, which could delay your case, interrupt your bankruptcy protections, etc. Ready to learn more about how the bankruptcy process works in Phoenix, Arizona? Contact us at Phoenix Bankruptcy Lawyers for your free consultation with an experienced bankruptcy professional- call 480-470-1504 to get started today. 

Phoenix Bankruptcy Lawyers

668 N. 44th St. Set 320
Phoenix, Arizona 85008
Phone: (602) 509-0955

It’s no secret that brick-and-mortar fashion retail is currently a tough market. More and more people turn to online shopping for the convenience and expanded variety. For many brands, store locations have become little more than places for online shoppers to return and exchange their purchases. With the declining popularity of the mall, it probably won’t surprise you to learn that yet another fashion store has filed its chapter 11 bankruptcy petition. Read on to learn more about the bankruptcy process, as well as similar bankruptcy cases that have been filed in the past. If you’re thinking about filing for bankruptcy in Arizona, our lawyers offer free consultations and flexible payment plans to fit your budget. To get started with your free consultation today, call 602-509-0955. 

Rue 21’s Chapter 11 Bankruptcy Case

Rue 21 is a popular fashion retailer geared towards younger shoppers. It has 543 store locations, including 7 in Arizona, which will all shut down for good as part of the bankruptcy process. This means that its 4,900 employees will need to find new jobs. Its website is currently non-operational, and they issued a statement that it is going out of business and everything must go from its stores. The company was not able to find a buyer and has $194.4 million in debt. This is Rue 21’s third bankruptcy case. Its first filing came in 2003. The second was in 2017- at the time, it had 1,000 locations, but was forced to close 400 of them in exchange for unloading $700 million in debt. Rue 21’s lenders invested an additional $25 million in the company in 2022, and currently own 80% of the company. 

All of Rue 21’s merchandise is marked down 30-50%. They must clear all of their inventory as the company’s permanent shutdown is inevitable. The 7 Rue 21 locations in Arizona are as follows:

• Glendale: 6800 N. 95th Ave. 
• Goodyear: 1400 N. Litchfield Rd. 
• Mesa: 6555 E. Southern Ave. 
• Phoenix: 7611 W. Thomas Rd. 
• Prescott: 5613 E. State Rte. 69
• Surprise: 13375 W. Grand Ave. 
• Tempe: 5000 S. Arizona Mills Circle

Other Fashion Retailer Bankruptcy Cases

Rue 21 isn’t the first fashion retailer to file for bankruptcy, and many of the names that have are still in business today. 

• Forever 21: A staple in malls across America, this fashion chain declared chapter 11 bankruptcy in 2019. One thing that makes Forever 21’s bankruptcy stand out from the rest is that it occurred before the COVID-19 pandemic, which made it difficult for so many retailers to stay in business. It was facing increased competition from rival brands like H&M and Zara while at the same time burdened by giant stores, with some as large as 100,000 square feet. Another part of its bankruptcy plan was to reduce focus on less successful markets in Asia and Europe. With plenty of Forever 21 locations still open today, this case is considered an example of a successful bankruptcy filing in the fashion industry. 
• Brooks Brothers: This men’s fashion chain is known for having provided suits to dozens of presidents throughout our country’s history. However, it was forced to declare chapter 11 bankruptcy after 202 years in business. The company blamed the pandemic for the filing and sought additional financing to keep the business running during the restructuring period. 
• JC Penney: JC Penney is another fashion retailer that was ultimately pushed into bankruptcy by the pandemic. It was purchased for $1.75 billion through its chapter 11 case, which allowed 60,000 employees to keep their jobs. The company, which had been in business for more than 100 years, had about $4 billion in debt upon filing its bankruptcy petition. Its original bankruptcy plan was to close 153 locations over the course of 2 years to leave a total of about 600 locations. 
• Lucky Brand: This jeans company is yet another fashion retailer that fell victim to COVID-19. It had more than 175 locations at the time, but is also known for being for sale in larger department stores. It was purchased by Simon Property Group and Authentic Brands Group for $140.1 million through its chapter 11 bankruptcy case. 
• Neiman Marcus: This luxury department store was able to clear $4 billion in debt through its 2020 chapter 11 bankruptcy filing. It needed $750 million in exit financing to successfully execute the bankruptcy. 
• David’s Bridal: This wedding retailer chain filed for bankruptcy a second time in 2023. Its previous bankruptcy filing came in 2018. It sought a buyer through its filing as it had been overwhelmed by the struggles to stay afloat in a post-pandemic market. 

Chapter 11 Bankruptcy For Corporations

Chapter 11 bankruptcy can be used by both individuals and corporations. When an individual files for chapter 11 bankruptcy, they usually have considerable assets but also staggering debts- examples often include celebrities like Rudy Giuliani and 50 Cent. It is a popular choice among business debtors because it gives businesses a chance to stay open, restructure, and come out of the matter as a profitable company once more. When a debtor declares chapter 11 bankruptcy, its primary creditors are appointed to form a committee. The committee can approve or deny decisions that affect the business going forward, but the business will retain control of its daily operations. 

Many businesses can skip the creditor committee process by filing a small business or subchapter V bankruptcy case. However, the business must have less than $7.5 million in debt to qualify for either of these provisions. Unfortunately, with several million dollars in debt, Rue 21 will not be eligible for the small business provisions of chapter 11 bankruptcy that allow debtors to bypass creating a creditor committee. 

As previously stated, a business doesn’t have to close down when it files chapter 11 bankruptcy. There are several different options a business can use to emerge from a chapter 11 bankruptcy filing. One of the most common ways is to find financing to bridge the gap while the company implements new strategies. Some companies need to downsize, while others need to focus their efforts. An example of this would be a brick-and-mortar business that needs to go digital. A chapter 11 business can find a buyer for the entire company as a way to get out of bankruptcy. But a chapter 11 case doesn’t proceed in as set of a fashion as chapter 7 or chapter 13 bankruptcy, which are the two most popular forms of consumer bankruptcy. Chapter 7 bankruptcy liquidates debts, eliminating the debtor’s obligation to repay unsecured debts like credit cards, medical bills, certain back taxes, and more. Chapter 13 reorganizes debts into a payment plan that allows debtors to save secured assets from their creditors. For more information about qualifying for either form of consumer bankruptcy in Phoenix or Tucson, Arizona, call 602-509-0955 for your free consultation with our firm.

Are You Considering Your Own Bankruptcy Filing In Tucson Or Phoenix, Arizona? 

Filing for bankruptcy can be a difficult and stressful ordeal, but it doesn’t have to be. A skilled bankruptcy attorney provides knowledge and security at each step in the bankruptcy process. Our experienced bankruptcy professionals can help you determine if chapter 7 or chapter 13 is a fit for your situation, if you qualify for our Zero Down post-filing payment plan option, and more. To get started today with your free consultation, call 602-509-0955. Contact us at Phoenix Bankruptcy Lawyers today!

Phoenix Bankruptcy Lawyers

668 N. 44th St. Set 320
Phoenix, Arizona 85008
Phone: (602) 509-0955

If you like seafood and eat at chain restaurants, there’s a good chance that you’ve been to a Red Lobster at least once in your life. You might even take your man to Red Lobster on special occasions, but only if you have hot sauce in your bag. Eating cheddar bay biscuits and choosing your dinner from a fish tank are commonly-shared experiences across the United States. But the restaurant industry has faced a number of challenges since the pandemic that make it more difficult for businesses, including household names, to stay open. When businesses struggle with their finances, they oftentimes turn to bankruptcy. Businesses can declare chapter 7 bankruptcy, which compels a business to close, or chapter 11 bankruptcy, which allows a business to close or stay running. Red Lobster is the latest company to contemplate bankruptcy as a means to address debt and guard assets from creditors. 

Restaurants that focus on a dine-in experience were the hardest hit by the pandemic- most people don’t think of running to Red Lobster when they want a quick takeout dinner for their family. Although pandemic quarantine measures were eventually lifted, these restaurants continue to feel the effects to this day. Inflation has increased the price of ingredients, which translates to higher prices on the menu, which results in fewer people going out to dinner at seafood restaurants. Paying for labor has been another issue for Red Lobster. As the cost of living skyrockets out of control, restaurant employees need higher pay just to survive. Many states are increasing the minimum wage, which undoubtedly impacts staffing costs at restaurants like Red Lobster. 

Red Lobster has tried to navigate post-pandemic difficulties with a variety of methods and leaders. One former president, Edna Morris, was released from her position after introducing all-you-can-eat crab meals for $22.99, which ended up costing Red Lobster millions of dollars. The current owner of Red Lobster, Thai Union Group, attempted a similar marketing strategy by offering all-you-can-eat shrimp meals for $20. While also unsuccessful, this meal is still being served but at $25 per customer. Red Lobster’s CEO, Horace Dawson, is retiring, leading the restaurant to replace him with Jonathan Tibus, who is the managing director of a management consultant firm. Tibus is known for assisting other restaurants like Kona Grill and Krystal with chapter 11 bankruptcy filings. 

Bringing on an expert in chapter 11 bankruptcy has done nothing to stop the rumors of Red Lobster’s imminent filing. Thai Union Group announced its intentions to sell the Red Lobster brand due to negative financial contributions to its portfolio. It expects the sale to be a loss and has taken a $527 million writedown. So what does this mean for the future of Red Lobster? The chain, which was started in 1968, currently has more than 800 locations nationwide. It has 14 locations just in Arizona, with restaurants in Chandler, East Mesa, Flagstaff, Gilbert, Goodyear, Mesa, Oro Valley, Peoria, Phoenix, Prescott, Scottsdale, Surprise, Tucson, and Yuma. This translates to hundreds of jobs that could be at risk if the bankruptcy filing leads to a shutdown. 

How Red Lobster’s Potential Bankruptcy Would Differ From The Average Filing

A typical consumer’s bankruptcy case will look much different from a large corporation’s like Red Lobster. Most people will have nowhere near as much debt as a restaurant chain with 800 locations that has been struggling for four years since a pandemic. Most people also don’t have as many assets. While an individual could file for chapter 11 bankruptcy as is expected of Red Lobster, a typical person’s needs are usually best suited by chapter 7 or chapter 13. 

The standout feature of chapter 11 bankruptcy is that creditors are highly involved, forming a committee that will vote on issues relevant to the case. Small businesses can use special types of chapter 11 filings to bypass this requirement, but the debtor must be a business and fall under certain debt limits. Using a small business or subchapter V filing can speed up the chapter 11 bankruptcy process as well as bring down the cost. But even with a simplified filing, chapter 7 and chapter 13 can be much simpler. For most of these cases, the only interaction the debtor will have with their creditors is at their 341 hearing. This hearing, also known as the 341 Meeting of Creditors, also serves to verify the debtor’s identity and information provided in the petition. Debtors in chapter 7 and chapter 13 cases will need to complete one credit counseling course before filing and a second course within 60 days of the 341 hearing. The rest of the debtor’s responsibilities will depend on which chapter they file. 

There are several reasons that chapter 7 is the most popular form of consumer bankruptcy. It is relatively inexpensive to file and fast to discharge- a typical case will last 3 to 6 months. All of the debtor’s unsecured nonpriority debts will be discharged by a successful chapter 7. Chapter 7 is simpler and less expensive to file than other types of bankruptcy. A debtor can also retain any assets that are protected by bankruptcy exemptions, such as their 401(k) or any equity in their home within the homestead exemption. However, unprotected assets could be at risk of being sold at bankruptcy auction, and the debtor must also show that they qualify based on income. If you want to see if you qualify for chapter 7 bankruptcy in the state of Arizona, call for your free consultation at 602-509-0955.  

Chapter 13 bankruptcy is sometimes a backup option for those who don’t qualify for chapter 7, and sometimes the first choice because of its unique benefits. Chapter 13 is a payment plan that lasts 3 or 5 years, based on the debtor’s income level. This can help a debtor save a home from foreclosure or pay off a car to save it from repossession. It also offers options that aren’t available in chapter 7, such as discharging secondary mortgages on a home with a loan balance higher than its market value. To determine what your Arizona chapter 13 payment plan would look like, call 602-509-0955 for your free consultation with our firm. 

Let Our Experienced Professionals Guide You Through Your Bankruptcy Options

Chapter 11 may be on the table for Red Lobster, but it isn’t the best option for everybody. But chapter 7 and chapter 13 bankruptcy each have their own restrictions and qualifications. Determining if you are eligible under Arizona law can be complicated without the proper legal experience. Our lawyers offer free consultations so you can figure out if bankruptcy would be an effective option for you, and which chapter you should file. If you are seeking high-quality bankruptcy representation in Phoenix or Tucson, we will provide you with a competitive quote for our services. Most of our clients qualify for our post-filing payment plan options starting as low as Phoenix Bankruptcy Lawyers. Don’t leave any aspect of your filing up to chance. Our skilled bankruptcy team will help make the process faster and easier. To get started today with your free consultation, contact us or call 602-509-0955. 

Phoenix Bankruptcy Lawyers

668 N. 44th St. Set 320
Phoenix, Arizona 85008
Phone: (602) 509-0955

There are so many factors and potential issues that can affect the best course of action in a bankruptcy case. A bankruptcy petition must be filed correctly so that the debtor can enjoy all of the benefits that bankruptcy has to offer. There are also certain actions that a debtor should engage in and avoid before filing a bankruptcy petition with the court. If you are preparing a bankruptcy filing, you should even be aware of which expenses you are paying. You can save money by stopping payment on some of your expenses, but it can create problems if you stop paying other bills. Read on to learn more tips about which bills to continue paying while you prepare to file for bankruptcy. If you have more questions or are seeking quality representation from a Phoenix bankruptcy attorney, call 602-509-0955 for your free consultation with our firm.

Mortgage

Filing for bankruptcy doesn’t erase secured debts. If you are still paying off the mortgage on your home, your mortgage is a secured debt and the house is a secured asset. Keep making your payments or your creditor will proceed with a foreclosure once your case is complete. Your creditors can also request permission from the court to proceed with a collection effort, such as a home foreclosure, while the case is still active through a Motion for Relief from the Automatic Stay.

Second Mortgage

Depending on your circumstances, continuing to pay a second mortgage may only be a drain on your resources. If you owe more on your home than it’s worth and have a second mortgage, Chapter 13 bankruptcy provides an opportunity to discharge that secondary home mortgage. If you are unsure about your home’s value compared to your mortgage balances or which chapter of bankruptcy you will file, you can discuss your situation for free with one of our Arizona bankruptcy lawyers by calling 602-509-0955.

Rent

Most renters prefer that their landlords never find out about their bankruptcy filings. This is possible because there is an option on bankruptcy petitions to exclude landlords from the debtor’s mailing list of creditors. But if a bankruptcy debtor wants to use their filing to cancel their rental lease, clearly the landlord will need to be notified. This option can be used when the debtor can no longer afford their rent and has a more affordable option available- the typical fees associated with breaking a lease will be wiped away with bankruptcy. Otherwise, failure to pay your rent during your bankruptcy can give your landlord cause to evict you once the bankruptcy- and the protections provided to you by the automatic stay- are complete. Back rent from a prior eviction is a debt that can be cleared by a bankruptcy filing.

Utilities

Unpaid utility bills can be discharged by a bankruptcy filing, but your utility providers don’t have to keep providing you with services if you discharge their bills in bankruptcy. For some bills, finding a new provider can be simple enough- for example, if you discharge your Verizon cell phone bill in your bankruptcy filing, you can switch to T. Mobile, AT&T, or another one of their competitors. But you won’t always have a choice in provider for every type of utility. If you move to a new home, you may only have one choice for utilities like electricity and home internet. Here, you may have to repay the balance owed to your utility provider to renew services despite your legal obligation to pay the debt already being cleared.

Insurance Coverage

Filing for bankruptcy won’t affect your health insurance, auto insurance, etc. Keep paying these monthly expenses so that your coverage doesn’t lapse- this will end up costing you more than staying current with your bills.

Credit Cards

What happens with your credit cards in bankruptcy will depend on the chapter that you file. They are wiped out by Chapter 7, but a Chapter 13 bankruptcy debtor may end up paying off some or all of their credit card debts in their payment plan. So if you plan to file for Chapter 13 bankruptcy and have a while to wait before filing but need an available balance on your credit card, you might want to make a payment. Otherwise, it usually isn’t strategic to continue paying off a credit card when you know that you will be discharging it in bankruptcy shortly. That isn’t to say that you should max out all of your credit cards- there are limits on spending before filing meant to prevent this type of abuse of the bankruptcy system. Don’t spend over $800 on luxury items in the 90 days before your bankruptcy filing. You should also avoid cash advances on your credit cards over $1,100 in the 70 days before your bankruptcy filing. If your credit card companies suspect you of fraud, you could be subject to one or more adversary proceedings during your bankruptcy case. For more assistance with your questions and concerns about your credit cards before filing for bankruptcy, call 602-509-0955 for your free phone consultation with our firm.

Personal Loans

Personal loans are unsecured debts that can be erased by bankruptcy. Some personal loans are through financial institutions, but they can also be from friends and family. Discharging your financial obligation to repay someone you know probably won’t discharge your moral obligation to pay back someone that you know. But it isn’t recommended to pay back your friends and family while preparing for a bankruptcy filing. This is considered a preferential payment because you would be paying back “insiders” in favor of your other creditors. If the trustee finds evidence of preferential payments in your bankruptcy petition, it can have disastrous consequences. The trustee can utilize a “clawback,” where the trustee would demand the return of any funds paid to insider creditors. This can create delays and extra costs in your case.

Child Support

Child support is not discharged by bankruptcy and is one of the only debts that is immune to the Automatic Stay. Only a Chapter 13 bankruptcy that fully pays back child support can stop a child support wage garnishment. Failure to pay child support doesn’t just create debt- it can have negative repercussions such as a driver’s license suspension or even criminal penalties. The expenses that should be paid in favor of child support are few and far between.

Have a Monthly Expense Not Described Here? Contact Our Firm for a Free Consultation.

Paying some bills when you anticipate a bankruptcy filing soon might be a waste. Your bankruptcy lawyer can help you strategize where to direct your funds while preparing for bankruptcy so that your case can proceed smoothly. Proper planning can help you get the most out of your bankruptcy. At Phoenix Bankruptcy Lawyers, we have represented countless clients in situations like yours to clear debts and move forward with a clean slate. When you’re ready to get started with your free consultation with one of our experienced Phoenix and Tucson bankruptcy lawyers, you can call 602-509-0955.

 

Phoenix Bankruptcy Lawyers

668 N. 44th St. Set 320
Phoenix, Arizona 85008
Phone: (602) 509-0955

Blog by Phoenix Bankruptcy Lawyer, Alison C. Briggs

Chapter 7 bankruptcy is a legal process that provides individuals and businesses with a fresh financial start by eliminating most of their unsecured debts. While it offers significant relief to those struggling with overwhelming debt, it’s essential to understand that not everyone benefits equally from a Chapter 7 bankruptcy filing. In this blog, we will define Chapter 7 bankruptcy, discuss the individuals and entities impacted by such a filing, and suggest why it’s wise to hire a Phoenix Bankruptcy Lawyer, specifically from My AZ Lawyers, one of the leading debt relief firms in Phoenix.

Defining Chapter 7 Bankruptcy in Phoenix

Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” is a legal process that allows individuals and businesses to discharge or eliminate their unsecured debts, such as credit card debt, medical bills, and personal loans. In a Chapter 7 bankruptcy, a bankruptcy trustee is appointed to sell non-exempt assets, if any, and distribute the proceeds to creditors, with the remaining eligible debts discharged.

It’s important to note that not all debts can be discharged in a Chapter 7 bankruptcy. Certain obligations, like child support, alimony, student loans, and some tax debts, are generally not eligible for discharge.

People Impacted by a Phoenix Chapter 7 Bankruptcy Filing

• Debtor: The debtor, or the person or entity filing for Chapter 7 bankruptcy, is the most directly impacted party. They stand to benefit from the elimination of unsecured debts but may lose non-exempt assets in the process. Exempt assets, which vary by state, are protected from liquidation in a Chapter 7 bankruptcy.
• Creditors: Creditors are individuals or entities to whom the debtor owes money. In a Chapter 7 bankruptcy, creditors may lose money as their unsecured debts are discharged, and they may receive only a fraction of what they are owed from the liquidation of non-exempt assets. Secured creditors, who have collateral securing their loans, may not lose as much as unsecured creditors.
• Bankruptcy Trustee: The bankruptcy trustee is appointed by the court to oversee the bankruptcy process, including the sale of non-exempt assets and the distribution of proceeds to creditors. The trustee’s role is to maximize the amount of money that can be distributed to creditors.
• Co-signers and Guarantors: If someone has co-signed a loan or acted as a guarantor for the debtor, they may be held responsible for the debt if the debtor’s obligation is discharged in Chapter 7 bankruptcy. This can lead to financial losses for co-signers and guarantors.
• Spouse and Family Members: If the debtor is married and files for Chapter 7 bankruptcy individually, it may still impact the non-filing spouse to some extent, as joint debts and shared property could be affected. However, the non-filing spouse’s separate assets and credit are generally protected.
• Employees and Business Partners: In cases where a business entity files for Chapter 7 bankruptcy, employees may lose their jobs, and business partners may face financial losses if the business assets are liquidated to pay off creditors.

Why Hire a Phoenix Bankruptcy Lawyer from My AZ Lawyers

Filing for Chapter 7 bankruptcy is a significant legal and financial decision that can have far-reaching consequences. Here’s why it’s advisable to hire a Phoenix Bankruptcy Lawyer from My AZ Lawyers:

• Expertise: Attorneys at My AZ Lawyers specialize in bankruptcy law and have extensive knowledge and experience in guiding individuals and businesses through the Chapter 7 bankruptcy process. Their expertise ensures that you receive the best legal advice and representation.
• Customized Solutions: Each bankruptcy case is unique, and a skilled attorney can assess your specific financial situation to determine the most suitable approach for debt relief. They will help you understand your options and create a tailored strategy to protect your assets and discharge eligible debts.
• Asset Protection: Bankruptcy lawyers understand the exemptions available under Arizona law to protect your assets from liquidation. They can help you make informed decisions about which assets you can retain during bankruptcy.
• Legal Advocacy: When you hire a bankruptcy attorney, you have an advocate who will represent your interests throughout the bankruptcy process. They will communicate with creditors, the bankruptcy trustee, and the court on your behalf, relieving you of the stress of handling complex legal matters.
• Avoid Mistakes: Filing for Chapter 7 bankruptcy without legal guidance can lead to costly mistakes and potential loss of assets. Bankruptcy attorneys ensure that you adhere to all legal requirements, helping you achieve the best possible outcome.

Chapter 7 Bankruptcy in Phoenix

Chapter 7 bankruptcy can provide much-needed financial relief for individuals and businesses drowning in unsecured debts. However, it’s crucial to recognize that not everyone benefits equally from a Chapter 7 bankruptcy filing, as creditors, co-signers, and others may incur losses.

To navigate the complexities of Chapter 7 bankruptcy in Phoenix effectively and protect your interests, it’s highly recommended to hire a Phoenix Bankruptcy Lawyer from My AZ Lawyers, a reputable debt relief firm in Phoenix. Their legal expertise and personalized guidance can make a significant difference in achieving a successful bankruptcy outcome while minimizing potential financial losses. Remember that seeking professional legal counsel is a crucial step toward securing your financial future.

 

Phoenix Bankruptcy Lawyers

668 N. 44th St. Set 320
Phoenix, Arizona 85008
Phone: (602) 509-0955