As we all have struggled through this Great Recession the biggest change for a lot people is the loss of a job or a significant change in their job resulting in a reduction of income. Many employers had to either reduce their overhead by reducing pay or simply letting people go. These type of changes often lead people to my office to discuss the possibility of bankruptcy. Despite appearances it is my experience that most are living pay-check to pay-check and the loss of a job or something like a [...]
One of the first questions I get when I meet with people is if they will qualify for a chapter 7 bankruptcy. If you have been researching bankruptcy you have likely learned that in order to file for chapter 7 bankruptcy you have to meet certain income requirements. Specifically, you cannot make more than the median income for a household of your size. For example, in Arizona if you have a household size of 4 your gross income (before taxes) can not be more than $61,267 a year or $5,106 [...]
Losing your home is one of the great fears for those going through bankruptcy. At least it used to be. Before the Great Recession hit home prices in Arizona were skyrocketing. Do you remember lining up on Saturday mornings in hopes of getting a ticket so that you could enter a lottery to win the privilege of buying your McMansion? I do. It was not a matter of ‘do you have equity’ in your home, but how much did the value of your house increase this week? During those times [...]
Garnishments are a pain. Maybe the only thing that pushes people into bankruptcy more quickly than garnishment is a foreclosure. In Arizona, a creditor can garnish up to 25% of each pay check. If you are living payday to payday this can completely devastate your finances. Before I get into how bankruptcy can stop a garnishment, there are a lot of misconceptions when it comes to people understanding when their wages can be garnished that need to be debunked. First, your wages cannot be garnished until your creditor files a [...]
In the bankruptcy world (yes, there is such a place!) the term “fresh start“ is mentioned so often that it can become cliche. However, when you can get past the initial feelings you may have about bankruptcy, the end result truly is a “fresh start” or at least a new opportunity or beginning. Yesterday as I was reading the first newspaper of the New Year there were several articles on Arizona’s economy and some projections as to what our future holds. While there seems to be a general consensus that Arizona will [...]
Equity. It is usually your friend. If you are in bankruptcy, it can be an issue. Simply put, equity is what you actually “own” in your property. For instance, if you have a car that is worth $10,000 and you still owe $6,000 on the loan, then you have $4,000 in equity. Same goes for your house. So how does this cause problems in bankruptcy? Equity in Your Car If you file for bankruptcy any non-exempt equity you have in your car is part of your bankruptcy estate. This means [...]
Debt free. Can you even imagine it? I would dare say that when most people come in to inquire about filing for bankruptcy they aren’t really thinking about the end result of being debt free, but are more focused on stopping the immediate pain of debt collectors. But the end result of a successful bankruptcy is that you will have no debt with the following exceptions: Debts that Don’t Go Away Home Loans If you have a mortgage loan and are in bankruptcy and you want to keep your house [...]
This one is pretty basic but you may be surprised as to how many people aren’t quite sure what the difference between a creditor and a debtor is. In the bankruptcy world if you are filing for bankruptcy you will now be known as the Debtor. Owing debts = Debtor. If you are owed money, you are the creditor. While anyone that is owed money is a creditor, in bankruptcy not all creditors are created equally. Whether a creditor gets paid or not or is discharged/eliminated or not in your [...]
It is finally here. The day retailers everywhere and my younger sister look forward to every year! Black Friday. It seems to be starting earlier ever year. Last night after Thanksgiving dinner I ventured out with my wife and some other family members to see if we could score some good deals. I have never gone out on these Black Friday shopping trips in the past, and now I know why I will likely never go again. We dropped by the local Walmart at about 10:00 p.m. and it was insane. [...]
Second only to the discharge of debt, the protections of the automatic stay are a large reason why residents of Arizona file for bankruptcy. So what is it? The automatic stay is an Order issued by the Arizona Bankruptcy Court when you file your bankruptcy case. It is issued automatically pursuant to the bankruptcy code, thus the “automatic” part, and it “stays” or stops all collection efforts against you and your stuff. If your wages are being garnished, the automatic stay stops that. Immediately. If your house is set to be foreclosed [...]
