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Written by Canterbury Law Group

How To Find A Bankruptcy Lawyer

How To Find A Bankruptcy Lawyer

Every profession has great, good, and poor practitioners and lawyers are no exception. We have all heard about lawyers who appeared to have no clue (as illustrated in popular culture by Lionel Hutz, Attorney at Law, in “The Simpsons”) but there are also lawyers who are hugely talented. It should go without saying they are the ones you should aim for. Read on to learn more.

Experience

Do years count? Not always! An attorney may have practiced bankruptcy law for a quarter of a century but never really mastered the intricacies of the law. Similarly, although they may have twenty plus years great experience in certain fields, bankruptcy may not be one of them and it is more doubtful they will have the skills you require. You need to seek out a lawyer who has ample experience in small business and consumer bankruptcy law – an attorney who has the respect of his fellow professionals, including judges.

Training

Once an attorney has graduated from law school and passes the state bar examination, it really can be said their learning is just commencing. In essence, that’s why its called the “practice of law” in that a lawyer is always learning.  Attorneys prime their established skills with educational seminars. Education is absolutely essential with the totally different bankruptcy laws. Older concepts just do not apply any longer. Even the most skilled attorney cannot master the subject simply bey reading up on it. There are organizations that conduct continuing education and seminars like the American Bankruptcy Institute (“ABI”), the  National Association of Consumer Bankruptcy Attorneys (“ NACBA”), and various bar associations.

Listening

You need an attorney who will listen to you before they tell you what you should be doing. A one-size-fits-all method is not suitable when it comes to the dispensing of legal advice and never more so than when it does not deal with the issues that need addressing. It is vital you find an attorney who is willing to listen to the facts of your situation and ask the questions they need too so they are fully able to comprehend the particular circumstances of your case. Above all, they must listen to what you have to say and then review the facts within the context of existing law. This is the only way they can give you the finest advice.

According to NerdWallet, one of the best ways to find a bankruptcy attorney is to “seek personal referrals from friends or family or your own attorney.”  With today’s technology, another good way to find one is through the internet and various online review sources.

Source: “How to Find a Good Bankruptcy Lawyer.” NACBA, 18 Aug. 2015, www.nacba.org/what-we-do/consumer-assistance/how-to-find-a-good-bankruptcy-lawyer/.

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business BankruptcyChapter 7 BankruptcyCreditor RepresentationChapter 5 ClaimsChapter 13 Bankruptcy, Business RestructuringChapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

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Written by Canterbury Law Group

How Much Does It Cost To File For Bankruptcy?

How Much Does It Cost To File For Bankruptcy

The average cost of bankruptcy is between $1,500 and $4,000 when combining fees both the court and the attorney. Read on to learn more.

The Cost Of Bankruptcy

There is not a simple answer. While the court fees are established set fees, the cost of an attorney can differ of many factors such as who you choose to hire, your location and whether your case is simple or complicated.

Filing Fees

Chapter 7 Total Filing Fees: $335

  • Filing fee: $245
  • Administrative fee: $75
  • Trustee Surcharge: $15
  • Re-opening a Chapter 7 filing: $260

This is not an actual quote. If you need an experienced bankruptcy lawyer contact Canterbury Law Group to start your initial consultation.

Chapter 13 Total Filing Fees: $310

  • Filing fee: $310
  • Administrative fee: $75
  • Re-opening a Chapter 7 filing: $235

Using data collected by the American Bankruptcy Institute between 2005 and 2009 shoed $1,072 to be the average price of a Chapter 7 bankruptcy with assets. Prices varied primarily by location. The high end was $1,530 in Arizona all the way down to just less than half ($781) in some states. The same study states that for a Chapter 12 bankruptcy the average cost was $2,564. North Dakota had the lowest costs at $1,560 all the way up to $4,950 in Maine.

With such price variance, let’s look at some of the reasons for this:

  • Some of your debts are  non-dischargeable debts such as unpaid taxes, alimony, child support and student loans
  • You have varied income sources
  • You exceed your state’s median income threshold for your household size
  • Trying to prevent a legal action such as a foreclosure filing against your property, a bank levy or loan that served as collateral for a current debt
  • A bankruptcy filing in the previous eight years
  • Having many individual creditors
  • Filing for both a personal and business bankruptcy
  • When you face accusations of fraud that may be proven correct.

In cases of Chapter 7 bankruptcy is standard practice for attorneys to insist on payment before services are rendered. Payment plans may be an option, but they will not go forward unless payment has been forthcoming. This means additional vulnerability to creditors as you try to obtain the money for the fees going to your attorney.

Attorney Costs In Your Area

It is very likely fees may have increased since the study we quoted. In Chapter 12 bankruptcy cases, the attorney’s fees will be reviewed by the judge unless they fall beneath what is a baseline in the state when the case is being foiled. You can meet with several attorneys and their fees are public record and can be accessed through the federal PACER website. There is a small charge for this service, but it may save you a great deal of money!

Generally, in larger cities and metropolitan areas the charges will be greater because the general cost of living will be higher in those communities. Also, lawyers with many years of experience in this field are far more likely to charge more than those with lesser experience. Also, think about how complicated your case is. If your case is a simple one, a less expensive lawyer may work out fine, however the more complex the issues are, the more experienced a lawyer you will want to have on your side. This would also apply if one major reason for your bankruptcy is medical debt.

Education Courses

There is a 450 fee for the two credit counseling courses you must undertake if you are filing for either Chapter 7 or Chapter 13 bankruptcy. A nonprofit credit counseling agency must be the ones to hold the course and the Office of the U.S. Trustee sets the fees that top out at $50 and go all the way down to free, depending on your circumstances. The course may be taken online or in person.

Saving Money On Costs

Obviously, some cases of bankruptcy are more burned with debts that are unmanageable than others. Either way it is essential to fully document your entire financial situation before you approach a bankruptcy attorney. You may be able to obtain a fee reduction if you are elderly, disabled or a low-wage earner. An attorney can help on these areas as well as us there are other mitigating factors that are relevant, an attorney may be willing to discuss lowering their fees.

Remember in Chapter 7 bankruptcy cases, attorneys will want their fees paid upfront and in Chapter 13, they usually demand a set amount of the fee to start with and will obtain the rest through the bankruptcy plan the court orders.

Consider how long it takes to recover from bankruptcy. In the case of Chapter 7 bankruptcy, although it may be a success, it may be up to ten years before it disappears from your credit report. It is true that Chapter 13 bankruptcy may do less damage, but it involves sticking resolutely to a payment plan for a period of three to five years, even if the court does help by reducing the amount of your debts.

There is always the option of filing the bankruptcy yourself however there may be some considerable consequences for doing so. If you do run into trouble or forms are filled out incorrectly or in error, your case may be dismissed and that will generate additional expense as well as having to start over once more.

Paying For Bankruptcy

You will also need to consider how you are going to pay for your bankruptcy. Legal fees are often a headache to deal with, but you will also face court costs as well as the fee for the statutory credit counseling. You may be looking at a total bill of several thousands of dollars when all is said and done.

Other avenue for obtaining the needed money include:

  • You may wish to put a temporary hold on credit card repayments and sell off some household assets for cash to raise the fees.
  • If you earn less than 150% of the poverty income level for your state you may qualify for reduced or a pro bono legal assistance or help from the Legal Aid Society.
  • Find a bankruptcy lawyer who will work with you on a pro bono basis but some of the law firms they represent will insist on between ten and fifteen percent being on a pro bono basis.
  • File under Chapter 13 instead of Chapter 7. As lawyers can incorporate their fees into your repayment plan.

Source: “How Much Does It Cost to File Bankruptcy: Filing Fees and Attorney Fees.” Debt.org, 11 Feb. 2020, www.debt.org/bankruptcy/cost/.

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business BankruptcyChapter 7 BankruptcyCreditor RepresentationChapter 5 ClaimsChapter 13 Bankruptcy, Business RestructuringChapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

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Written by Canterbury Law Group

How To File For Bankruptcy

How To File For Bankruptcy

The path of Chapter 7 bankruptcy is well-established and should progress without unforeseen difficulties. Read on to learn more about what is involved with our overview of the procedures to follow.

Debt Analysis

Remember some debts cannot be discharged in Chapter 7 bankruptcy such as child support obligations, the majority of student loan balances, recent tax debt and child support obligations. If collateral has been pledged for a debt, if you are not current when you file for bankruptcy, the creditor may take the property, if you are not current following your case.

Property Exemptions Determinations

Every state has certain exemption laws statin the property types you can keep under Chapter 7 bankruptcy, For example, the majority of people can keep their retirement accounts, house furnishings, a reasonable car and some equity in a home. You will want to ensure what you can protect prior to filing.

Eligibility

The majority of people must take and pass a means test before they can qualify for a debt discharge in Chapter 7 bankruptcy (Some individuals include people whose debt is primarily from a business as well as some personnel from the military.) When your gross income is more than the median income for a family of your given size in the state where you reside – you may not qualify. If it is less, you will. Should you not qualify, toy will take the expenses allowed from the income to decide whether you will be permitted to utilize Chapter 7 bankruptcy.

Redeeming Or Reaffirming Secured Debts

If you want to keep a property you have pledged collateral on for a loan, you will need to keep paying the creditor if you wish to retain the property. When filing for bankruptcy you will decide if you want to redeem the property (by paying off the creditor is a lump sum payment) or reaffirm the property – usually meaning you agree to continue paying the creditor under the current terms. A third option can be to surrender the property, allowing the creditor to take it. If you live in certain areas, there may be other options available as rules do differ from state to state.

Filling Out Bankruptcy Forms

Although you will have to fill out forms that are several dozen pages in length – the yare important because they tell the court about your debts, property, expenses, incomes and previous transactions. You will also list your creditors as well as your property exemptions and make decisions regarding any secured debts you have. Lastly, you will disclose any property transactions occurring in the previous ten years prior to your bankruptcy case.

Credit Counseling Course

A credit counseling course is mandatory for individuals wanting to file for bankruptcy. Very occasionally it may be done, shortly after filing for bankruptcy.

Filing The Forms

Your case gets officially under way when you file your petition. The majority of people file all the forms at once, but if time is of the essence there is an option for emergency filing.

Filing Fees And Fee Waiver Requests

When you file the necessary forms, you will pay a fee for filing. You may request the court to split the payments into quarters if you cannot afford the filing fees up front. If you cannot pay at all, you will need to apply for a waiver of fees by filling out the fee waiver application and presenting it with your bankruptcy petition. A judge will then make a determination but the income or your household may not exceed 150 percent of the federal poverty guidelines.

Document Submission

The bankruptcy trustee will require documents that show evidence of the information you supplied in the bankruptcy filing forms. Expect to send along paycheck stubs, tax returns, bank statements, profit and loss statements,

Meeting Time

Usually you will only need to attend a single meeting at the court with a trustee. The trustee will verify your identification and will ask the standard questions that are needed to be answered by all debtors as well as specific questions relevant to your case. It is possible a creditor or two or more, may appear but this is not usually the case.

Filing of Objections And/Or Motions

If you want to dispute acclaim from a creditor or you are seeking the elimination of certain liens – you will need to tackle these matters before the closure of your bankruptcy case. However, if you overlook a lien, the majority of courts will allow you to revisit the case at a later time.

Winding Up Secured Debts

In your bankruptcy forms you explained how you would handle debts that have been secured. These matters will have to be addressed before your case can be closed. For example, if you promised to return a car to your lender you have to make sure said car is available.

Debtor Education Course

Once paperwork has been filed you will need to complete a debtor education course before your discharge can be obtained. You will not get a discharge if you fail to file the certification showing you have completed this course. This may become a major expense as you will likely have to a file another motion as well as an additional filing fee so the case can be reopened.

Discharge

When a successful bankruptcy has been completed the court will issue an order that will discharge all of your debts that qualify. Once this happens, you no longer are under a legal obligation to pay the debt and the there is no legal approaches the creditor can make to obtain payment.

Source: O’Neill, Cara. “Filing a Chapter 7 Bankruptcy: Basic Steps.” Www.nolo.com, Nolo, 12 Nov. 2014, www.nolo.com/legal-encyclopedia/chapter-7-bankruptcy-29454.html.

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business BankruptcyChapter 7 BankruptcyCreditor RepresentationChapter 5 ClaimsChapter 13 Bankruptcy, Business RestructuringChapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

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Written by Canterbury Law Group

What Is Bankruptcy?

What Is Bankruptcy?

The purpose of bankruptcy is to find a way forward with people who have large amount of debt while treating their creditors in a fair and equitable manner. The debtor often sees this process as a “fresh start” without the specter of looming bills.

Chapter 7 Bankruptcy

When you agree a trustee can take and sell some assets and/or property to pay back debt in exchange for wiping away the debt that qualifies for Chapter 7 Bankruptcy. You can also maintain property that is exempt and protected by state law.

This “fresh start” wipes out debts such as medical bills, personal loans and credit card balances taking a streamlined approach without the demands of a monthly plan for repayment. For this to happen the debtor must agree the person appointed as the bankruptcy trustee can sell what is known as non-exempt property. The proceeds are then sent to the creditors according to a system to rank their priority.

It is not needed for the debtor to relinquish all their assets. What you need to maintain your home and continue working, with a reasonable vehicle. Often the debtor may keep all of their personal property but what can be kept does differ from state to state.

The following is considered non-dischargeable debt under Chapter 7 Bankruptcy:

  • Student loan debt unless I can be demonstrated it would be incorrect to repay
  • Awards originating from wrongful death or injury from being intoxicated while operating a vehicle
  • Unpaid income taxes accrued over the last three years (and in some cases longer)
  • Child support, spousal support and obligations for domestic support

Both individuals and businesses can utilize Chapter 7 Bankruptcy and the process usually takes between four to six months to complete.

Eligibility

You will not be able to file a Chapter 7 Bankruptcy is most of your debt is consumer debt and you have sufficient income to finance a Chapter 13 plan for repayment. You can also only do this once every eight years.

Property

As we said above you can keep what you need to maintain your home and continue working, with a reasonable vehicle. Often the debtor may keep all of their personal property but what can be kept does differ from state to state.

Secured Debt

You will have the option of allowing the creditor to repossess a secured debt or to maintain ownership of the property as well as maintaining the payments as per the sales contract.

Non-dischargeable Business Debt

Business debt is not wiped out in Chapter 7 Bankruptcy. Other than sole proprietors it is seldom a business will even file for this kind of bankruptcy as there are easier ways to wind down a business enterprise. When assets need to be sold in a manner that is transparent it may be a good option, however.

Chapter 13 Bankruptcy

This form of bankruptcy helps high-income earning individuals reorganize their debt. With this form of bankruptcy. Although you can retain your property, creditors must be repaid as part of a three to five-year Chapter 13 Bankruptcy plan as well as any income that is discretionary going towards the total owed as defined by the rules of bankruptcy.

Repayment

You will have to propose a plan for repayment detailing your debts for the last three to five years and how you intend to pay them. The minimum amount for this is based on how much you earn, how much you have to repay as well as how much is owed and the value of your property that is non-exempt.

Debt Limitation

The maximum limit for secured debt is $1,257,850 and no more than $419,275 in debt that is not secured.

Mortgage And Car Payment Arrears

Chapter 13 Bankruptcy can also be used to pay car and house payments that have fallen in arrears to avoid both repossession and foreclosure.

Other Bankruptcy Reorganization Options

There are two other options known as Chapter 11 Bankruptcy and Chapter 12 Bankruptcy. Chapter 11 bankruptcy is normally used by businesses to reorganize their financial affairs when they are struggling to survive. Individuals whose total debt exceeds the amount offered by Chapter 13 Bankruptcy can also file for Chapter 11 Bankruptcy. Chapter 12 bankruptcy has similar qualities but a minimum of 80% of your debts must be from running a family owned fishery or farm. To pursue this form of bankruptcy, speaking to a lawyer is essential.

Source: O’Neill, Cara. “What Is Bankruptcy?” Www.nolo.com, Nolo, 23 Nov. 2016, www.nolo.com/legal-encyclopedia/chapter-7-13-bankruptcy-basics-29829.html.

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business BankruptcyChapter 7 BankruptcyCreditor RepresentationChapter 5 ClaimsChapter 13 Bankruptcy, Business RestructuringChapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

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Written by Canterbury Law Group

Who Pays For Bankruptcies?

Who Pays For Bankruptcies

People often ask us things like “Who Pays for Bankruptcies” or “Can I afford Bankruptcy.”  The Fact is, if you are asking yourself those questions, you probably should consider one more question: “Can you afford not to file Bankruptcy?”.

Financial relief can be obtained by people who find themselves with a lot of debt through bankruptcy protection. A fresh start can help get your life on the rails again by filing Chapter 7 bankruptcy. But there are costs involved. The actual cost of a Bankruptcy can be minimal when compared to the savings in debt that can be eliminated.

Bankruptcy Fees And Payments

When filing bankruptcy, there are three main components to the total you will pay:  (i) Debtor’s Education Courses;  (ii) Court Filing Fees;  and (iii) Lawyer’s Fees.

  • Debtor’s Education Courses – There are two courses.  The First must be taken prior to filing Bankruptcy.  The Second one comes after the 341 Meeting with the Trustee.  Fees usually range from $10 to $50. If this is not affordable, it many be possible to get those fees waived;
  • Court Filing Fees – The actual fee varies with the type of filing.  Currently $335 is the cost to file for Chapter 7 Bankruptcy, and $310 to file for Chapter 13 Bankruptcy;
  • Lawyer’s Fees – Lawyers obviously charge for their time, but the majority of consumer Bankruptcies are based on a flat fee basis. Therefore, you will know the cost to pay at the start of the proceedings.

Paying For Bankruptcies

Normally the person who is filing for bankruptcy is responsible for the payment of Court Fees but people who earn less than 150% of the federal guidelines for poverty can request to have the fee waived. In those circumstances, the Bankruptcy Court absorbs all the related expenses so a person can be in a position to be successful in their Bankruptcy Case. Obviously, this places a financial burden on courts, they only grant fee waivers when it is obvious the person cannot afford the filing fees including when the case has been filed and the debt no longer has to be attended too.

If you are fortunate enough to have the court filing fee waived, it is likely you also will be able to obtain waivers for Debtor’s Education Courses. Likewise, if you fall under the poverty guidelines level, you likely will be able to find voulenteer or “Pro Bono” legal representation for free or a reduced cost.

Source: “Does The Government Pay for Bankruptcies?” Upsolve, 30 Aug. 2019, upsolve.org/learn/who-pays-for-bankruptcy/.

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business BankruptcyChapter 7 BankruptcyCreditor RepresentationChapter 5 ClaimsChapter 13 Bankruptcy, Business RestructuringChapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

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Written by Canterbury Law Group

Should I File For Bankruptcy?

Should I File For Bankruptcy

People often think bankruptcy is where you turn too when no other options are on the table. Some see it as a second chance to rebuild finances within the confines of certain laws, while others see a stigma to bankruptcy that will haunt you as a failure, forever. The purpose of bankruptcy laws is not to be punitive but to help people obtain a restart to their finances. Whatever you choose, read on to learn more.

Reasons For Considering Bankruptcy

Medical debt and job loss are often quoted as the most frequent factors in driving bankruptcy but others include:

  • A divorce
  • Creditors who are suing because of unpaid debts
  • Your home is in danger of being foreclosed
  • Your only spending is with a credit card
  • One credit card is utilized to pay the balance of another
  • Looking at a 401K withdrawal to cover bills

Things To Consider

If you have enough resources bankruptcy can be avoided. Think about the following:

  • Non-profit credit counseling agencies can help with a gratis service examining your finances and weighing up the possibility of a debt management program, maybe even a debt settlement or consolidation loan
  • Making a monthly budget and living within it may be a great help as would obtaining a second job or selling some possessions to meet bills
  • Is it possible to negotiate the debt?
  • Is the current financial situation permanent or are things shortly to improve or worsen?

One last thing to consider: you may want to hold off committing money to a large bill or series of large bills that are upcoming until you have make a determination as to whether bankruptcy is the way forward, as it is possible, some of those bills may be dismissed.

Qualifying For Bankruptcy

There are two primary forms of bankruptcy for individuals:

Chapter 7 bankruptcy suits individuals who earn less than the median income for a family of your size in the state you reside in. If your income is too high, you may try and qualify for a ”means test.” In this situation a court trustee looks at your income and expenses to make a determination as whether these bills can be paid or do you really require the relief offered by a Chapter 7 bankruptcy.

Chapter 13 bankruptcy requires you have a steady and established income source as well as unsecured debts totaling less than $394,725 and secured debts totaling less than $1,184,200.

In Chapter 7 bankruptcy debts that can be wiped out include:

  • Medical bills
  • Credit card debt
  • Lawsuit judgments
  • Personal loans
  • Obligations from contracts and/or leases

Chapter 13 bankruptcy includes the above as well as:

  • Debts for loans from a retirement account
  • Debts from divorce with the exception of support payments.

Debts that cannot be wiped out in either Chapter 7 or Chapter 13 bankruptcy include:

  • Alimony
  • Child support
  • Student loans
  • Debts for personal injuries causes when you were driving intoxicated
  • Any outstanding court fines or penalties
  • Debts owed to governmental agencies

How Bankruptcy Can Impact You

Make no mistake, bankruptcy will have a considerable impact to your life. Here are some of the ways it will change the status quo.

Private Life

Your name will go public and may appear in the legal notices section of your local newspaper or if they are read out by a local media operation. Anyone who has an account known as Public Access to Court Electronic records) will also be able to see this and the meeting (which is mandatory) with creditors happens in a public forum and will also be marked on your credit report.

Credit Score

You can expect a drop of anywhere between 100 to 200 points from your credit score and Chapter 7 bankruptcy will remain on your credit report for ten years, and seven years in the case of Chapter 13 bankruptcy.

Co-Signers

A co-signer on a loan will stay be responsible for the payment of aid loan even when the bankruptcy has been successful. However, Chapter 13 bankruptcy extends to co-signers as long as regular payments are made on your Chapter 13 agreement.

Bankruptcy And Your Home

It is essential to maintain payments on your home should you not want to lose it. A fresh start is a lot easier to capitalize upon when you are not homeless. But if you cannot afford your house it is very likely you will lose it. If you are in Chapter 7 bankruptcy you may be able to file for Chapter 13 bankruptcy, hence allowing greater time for you to catch up on house payments or the inevitable result is foreclosure. In Chapter 13 bankruptcy, you would return to your previously default status so your creditors can once again pursue you for payment.

Will Bankruptcy Help?

Although we cannot tell give you a yes or no answer to that questions we would ask you to consider the following: If in the next five years it will be impossible to get out of debt and you have diligently and thoughtfully researched the opportunities you may and may not have – then bankruptcy may be of benefit to you. One other thing to consider, we no longer have debtors prisons, you cannot go to prison for owing someone money.

Source: Should I File For Bankruptcy? – Do You Qualify & What Will Be The Impact https://www.debt.org/bankruptcy/should-i-file/

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced bankruptcy lawyers will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business BankruptcyChapter 7 BankruptcyCreditor Representation, Chapter 5 ClaimsChapter 13 Bankruptcy, Business RestructuringChapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

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Written by Canterbury Law Group

Types Of Bankruptcy

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If you are looking for information about the different types of bankruptcy, this post should help

Understanding Chapter 7 Bankruptcy

In Chapter 7 bankruptcy you will do the following:

  • Pay your secured debts or relinquish proeprty to be liquidized and the proceeds go to pay your secured debts.
  • Non-exempt proeprty is surrendered so as much of your debt can be satisfied as possible.
  • You keep possession of other exempt property and are released from the accrued obligations from the remaining debt that is dischargeable.

In Chapter 7 bankruptcy is a good option if you do not have the income or the assets to pay off at least part of your debts. A formula is used and if your income exceeds a certain level, you will need to file Chapter 13 Bankruptcy.

Learn more about Chapter 7 Bankruptcy

Understanding Chapter 13 Bankruptcy

In Chapter 13 Bankruptcy you will do one (or maybe a combination of) the following:

  • Rid yourself of multiple debts so payments can be managed.
  • Taking into account your income, restructure existing debt payments to make them more manageable for your personal circumstances.

The two most important considerations the judge and the Trustee will take into account when they make a decision to accept your proposed bankruptcy plan are:

  • Will each creditor receive at the very least as much revenue if you  had filed a Chapter 7 bankruptcy?
  • Whether all creditors are being treated with a degree of fairness?

In Chapter 13 bankruptcy, the goal is usually to get your creditors to agree with a plan of action. They may try to get their money faster or obtain more money from you. Creditors do not have to agree with your plan but it will influence the judge and Trustee more favorable if they will agree. Regardless of whether they agree or not, the judge may approve the plan so long as the judge determines the creditors are being treated equally and they will obtain at a minimum, the same amount as they would have been paid under Chapter 7 bankruptcy.

Learn more about Chapter 13 Bankruptcy

Deciding The Correct Type Of Bankruptcy

Ultimately your bankruptcy filing will come down to just two things, income and assets.

Your income may prevent you from going through Chapter 7 bankruptcy, not to mention the high risk of losing most of your assets in this form of bankruptcy – however, assets that can be protected in Chapter 13 bankruptcy.

Let’s look at some scenarios where Chapter 7 or Chapter 13 bankruptcy are the best options.

Chapter 7 Bankruptcy – An Unemployed Debtor With Few Assets

In a situation where the debtor has no current income aside from unemployment benefits and has a single car with a loan against it and does not own a home or any other property – Chapter 7 bankruptcy is by far the quickest and efficient means of eliminating debt. This case is so common it is frequently known as a “no asset bankruptcy.”

Chapter 7 Bankruptcy – An Unemployed Homeowner With An Upsidedown Mortgage

If you are a homeowner and the value of your property is now below the value of the loan on the property, Chapter 7 bankruptcy may still be the best option. As the lien will have greater value than the property, the homeowner has zero equity in the estate of the bankruptcy – the house is protected from the risks of liquidation.

Chapter 7 Or Chapter 13 Bankruptcy – An Unemployed Homeowner With Significant Equity

Chapter 7 bankruptcy may not be best for an unemployed homeowner who has large amounts of equity in their property. In chapter 7 bankruptcy, the homeowner may lose their home. But if they keep up the mortgage payments, the homeowner can maintain their home in a Chapter 13 bankruptcy. However, the petitioning household must demonstrate they have enough income to fund a debt payment plan.

Chapter 13 – Homeowners Confronting Foreclosure or Mortgage Delinquency

Chapter 13 bankruptcy gives homeowners who are behind on their mortgages a method of catching up mortgage payments that are past due and at the same time ridding themselves of part of their dischargeable debt. This way it is possible to ensure their home is safe from foreclosure and get rid of medical debt, 2nd or 3rd mortgages and credit card debt. There is not a way to make up mortgage arrears in Chapter 7 bankruptcy.

Chapter 11 – Wealthy Pensioners With A Large Accumulation of Debt

It is very often the case wealthy debtors have to file under Chapter 11 bankruptcy simply because there are limits to the income and debt levels in Chapter 13 and Chapter 7 bankruptcies.

Sources

  1. “Types of Bankruptcy.” Legalzoom.com, 30 Sept. 2015, www.legalzoom.com/knowledge/bankruptcy/topic/types-of-bankruptcy.
  2. Nolo. “Which Type of Bankruptcy Should You File? Chapter 7 vs. 13.” Www.alllaw.com, Nolo, 12 Mar. 2019, www.alllaw.com/articles/nolo/bankruptcy/which-type-chapter-7-chapter-13.html.

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome. You can on the firm to represent you well so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business BankruptcyChapter 7 BankruptcyCreditor Representation, Chapter 5 ClaimsChapter 13 Bankruptcy, Business RestructuringChapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

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Written by Canterbury Law Group

How Bankruptcies Work

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Wondering how bankruptcy works? This post should help. The legal process known as bankruptcy is overseen at the federal level by United States bankruptcy courts. The purpose of bankruptcy is to help businesses and individuals reduce or eliminate a portion of or their debt enabling them to at least pay back some of the money they owe, and to reduce debt burdens to allow future growth.

Although bankruptcy may help you obtain some relief from your outstanding debts, it will have negative impacts in other areas of your life. For example, it will reduce your chances of successfully opening credit card accounts as well as getting favorable rates on loans, and your credit report will show your bankruptcy for seven to ten years.

The Basics Of Bankruptcy

Bankruptcy is not something you want to endure alone. A good bankruptcy attorney can make sure the process runs as directly as it can and will ensure compliance with all the applicable regulations.

Certain requirements have to be met before you can start bankruptcy filing. You will have to do the following:

  • Go through a complete credit counseling course using a credit counselor who is government approved – they will complete an assessment of your personal finances and discuss bankruptcy alternatives. They will also assist you in creating a personalized budget.
  • Decide whether to file Chapter 7 or Chapter 11 or 13 bankruptcy. Although all bankruptcies can assist in eliminating the debt that is unsecured, halt repossession or foreclosure, terminate garnishment of wages, debt collection actions and utility shutoffs – you will be expected to cover the court costs and attorney’s fees. It is important though to understand how Chapter 7 and Chapter 13 resolve debt issues.

How Chapter 7 Bankruptcy Works

Commonly known as “Straight bankruptcy” – a United States Trustee directly supervises the sale of any assets that are not exempt from the bankruptcy (basic house furnishings, cars, and work-related tools may be exemptions). Oversight by the Trustee is a mandatory procedure, and the proceeds from any asset sales go toward paying off your creditors. The balance of what you owe is then eliminated once the discharge of the bankruptcy has occurred. There are some debts Chapter 7 bankruptcy is unable to discharge at any time. Examples would include unpaid taxes, student loans, child support, and alimony also known as spousal maintenance. Consider the consequences of Chapter 7 bankruptcy. It is very likely you will lose most of the property you own, and a notice of the procedure will remain on your credit report for up to ten years following the filing date. Plus, you will not be able to file Chapter 7 bankruptcy for another eight years should you accumulate debts again.

Learn more about Chapter 7 Bankruptcy

How Chapter 13 Bankruptcy Works

In return for completely paying or paying a portion of your outstanding debt, Chapter 13 allows you to keep most of your property. A repayment plan of three to five years will be negotiated through your attorney and the bankruptcy court Trustee assigned to your case. When you have paid the money owing under the plan, the balance of the debt is discharged even if you have only repaid some of the money you originally owed. Chapter 13 bankruptcy will still hurt your credit but less so than Chapter 7. As you repay some, maybe all, of your outstanding debts, you will have some assets retained. Further, Chapter 13 bankruptcy will only show on your credit report for seven years, and if needed, you can refile Chapter 13 in just two years.  People within a Chapter 13 plan send just a single check to the U.S. Trustee each month, who then routes those monies proportionally to the various creditors owed.

Learn more about Chapter 13 Bankruptcy

Definitions of Common Bankruptcy Terms

  • Unsecured Debt: Credit cards are an excellent example of unsecured debt. Basically, the creditor does not hold any tangible assets or collateral to secure the debt.
  • Secured Debt: This is where the creditor holds tangible assets or collateral to secure the debt. An auto loan or mortgage on a home are two examples. If the loan defaults, the creditor can seize the vehicle or home.
  • Reaffirmed Account: This is when you make an agreement to continue the payment of a debt that may be discharged in Chapter 7 bankruptcy proceedings. The reaffirmation of the account and your agreement to pay the debt is usually done with the purpose of allowing the debtor to maintain a piece of collateral, a vehicle, for example – that may otherwise be seized as a standard part of the bankruptcy process.
  • Means Test: Under Chapter 7 Bankruptcy a means test is mandatory to demonstrate to the bankruptcy courts a debtor has no means to repay their debts. The means test assesses things like assets, income, unsecured debt and expenses. When a debtor fails the means test, the Chapter 7 bankruptcy may be dismissed, or they may choose to start proceedings for Chapter 13 bankruptcy.
  • Liquidation: When the non-exempt property of a debtor is sold – the proceeds are then paid to their creditors via the U.S. Trustee’s office.
  • Lien: A legal procedure where a creditor can take, hold and/or sell real estate previously belonging to the debtor as security for debt repayment.
  • Discharged Bankruptcy: Discharged refers to when the bankruptcy procedures have been completed and certain debts are literally extinguished forever.   In Chapter 7 bankruptcy this is once your assets have been sold and all of your creditors paid. With Chapter 13 bankruptcy it is completed when the repayment plan of the debtor has been completed, usually over a 3 to 5 year period.
  • Credit Counseling: it is mandatory to meet with a government-approved credit counselor before you can commence bankruptcy proceedings. You will also have to complete a course in personal finance management prior to the bankruptcy being successfully discharged.
  • Bankruptcy Trustee: A person (or in some cases a corporation) to act on behalf of the creditors. They are appointed by the bankruptcy court. In Chapter 7 Bankruptcy they will review the petition of the debtor, liquidate assets and be responsible for the distribution of those funds to the creditors. In filings for Chapter 13 bankruptcy, the Trustee will also oversee the repayment plan agreed by the court and the debtors’ attorney. They will also receive the monthly payments from the debtor and distribute the monies to the creditors.

Types of Unforgivable Debt

Bankruptcy potentially eliminates a great deal of debt; however, the following debt types cannot be removed in either Chapter 7 or Chapter 13 bankruptcy.

  • Reaffirmed Debt
  • Debt from student loans
  • Government taxes, penalties or fines
  • Child Support
  • Alimony
  • Court penalties or fines
  • Federal tax lien owed to the US Government

Bankruptcy Consequences

Loss of property is probably the consequence of bankruptcy most people are familiar with. Both Chapter 7 bankruptcy and Chapter 13 bankruptcy require you to forgo assets and possessions so creditors can be repaid some of the money they are owed. Sometimes, bankruptcy may mean losing possessions, for example, jewelry, vehicles, antique furniture, and real estate. It may also hurt others if you had a co-signer on some of your debt. Bankruptcies take a toll on your credit and will cloud the way future lenders see you. They may decide not to offer you credit or burden you with higher interest rates if they do grant credit. A bankruptcy on a credit report undoubtedly causes harm to your credit score.

Obtaining A Loan Or Credit Card Following Bankruptcy

Once a bankruptcy is discharged, it will probably be very tough to get a loan or a credit card until the bankruptcy comes off your credit report. To start rebuilding your credit potential, you will need to make sure you succeed by paying all your bills regularly and on time. This may make lenders look more favorably; however, expect high rates of interest and terms that are less than favorable should you get approved.

Obtaining A Mortgage Following Bankruptcy

Many of the same problems with obtaining a credit card or loan will apply to a mortgage – plus you can expect to pay a far more significant down payment and interest rates. A good tactic is to reaffirm your home mortgage during bankruptcy proceedings. This will allow you to stay in your home and continue the payments on the mortgage you already have.

Alternatives To Bankruptcy

  • Use a debt consolidation loan: These loan types take higher interest loans and combine them into a single loan at a lower interest rate to help you manage your debt.
  • Credit Counseling: Credit counseling from a credit counselor who is government approved can help you with a feasible plan to repay what is owed to your creditors. They can also help with budgeting.
  • Approaching Creditors to Negotiate a Short Pay: See if your creditors are willing to negotiate a different payment plan. Creditors do not want to have to handle defaults so they may be willing to work with you so a repayment plan that will be successful can be arranged.

Final Thoughts On Debt Relief

Your credit will take a negative hit every time you do not pay a debt in the manner you originally agreed. Before you declare bankruptcy, you should research all of your options, obtain advice from a counselor who is qualified and has a thorough understanding of credit issues so you can understand the full impact your decisions will have to your financial status. Remember you can always make real headway by:

  • Utilizing credit in small amounts and paying the total balances when they are due.
  • Keeping an eye on your credit report for its accuracy.
  • The creation and keeping to a personalized budget.
  • Not taking on additional debt.

Source

Bankruptcy: How It Works, Types & Consequences.” Experian, 11 Jan. 2018, www.experian.com/blogs/ask-experian/credit-education/bankruptcy-how-it-works-types-and-consequences/

Speak With Our Bankruptcy Lawyers In Phoenix & Scottsdale

The Canterbury Law Group should be your first choice for any bankruptcy evaluation. Our experienced professionals will work with you to obtain the best possible outcome in your situation. You can trust us to represent you fully so you can move on with your life. Call today for an initial consultation. We can assist with all types of bankruptcies including Business Bankruptcy, Chapter 7 Bankruptcy, Creditor Representation, Chapter 5 Claims, Chapter 13 Bankruptcy, Business Restructuring, Chapter 11 Bankruptcy, and more.

*This information is not intended to be legal advice. Please contact Canterbury Law Group today to learn more about your personal legal needs.

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Written by Canterbury Law Group

Debt’s Emotional and Mental Toll

Debt – it is a word that can quickly cause anxiety for many Americans. Credit card debt continues to rise, reaching up to $420 billion in 2018. The average household has almost $7,000 in balances carried over to the next month. Credit card debt comes with high-interest rates, which makes it even harder to pay off.

Debt plays a serious role in the a person’s emotional and mental well being. The more debt an individual accumulates, the more likely they’ll deal with stress and anxiety of having to pay it off. Too much debt can take over your life.

If debt becomes too overwhelming, bankruptcy tends to be the last option. There is bankruptcy help in Scottsdale, but that might add a whole new level of stress and anxiety. So, if you’re going through debt right now, consider how it is affecting you emotionally and mentally.

Anxiety and Depression

A study done by Dr. John Gathergood of the University of Nottingham found that those in debt were twice as likely to undergo mental health problems, anxiety and depression included. If this becomes an issue, feelings of worry and hopelessness could arise, making the situation that much more difficult to get a grasp on.

Embarrassment

Admitting that you’re in debt can be embarrassing for some, especially if they’re in so much debt that bankruptcy is a realistic option. In society, money tends to be linked to our success. If you have it, you must be successful in life. If you don’t have it, then you’re not as successful.

With this mentality, many struggling with debt will hide it and act like they are okay financially. The issue is that this could lead to even more debt. They may say yes to expenses that they shouldn’t be in their situation. Plus, they could be avoiding the much-needed help friends and family could offer.

Frustration and Anger

Debt is frustrating. For some, it can be so frustrating that it makes them angry, especially if the debt is out of their control. Anger may arise if the debt was a result of losing a job, an unexpected expense, identity theft, or a serious illness or accident. Frustration tends to come when the debt is from previous years that you wish you wouldn’t have done. Either way though, this mentality won’t help your situation.  You may need to seriously consider your bankruptcy options.

Fear

When you live in debt, fear tends to be a common emotion that many feel. It’s the fear of wondering if you’ll be able to make your payments, pay for your mortgage or rent, put food on the table, ensure there is hot water and electricity in your home, or falling into bankruptcy.

Debt brings up many worries and the deeper in you go, the more the fear becomes apparent. Other fears can arise like the fear of wondering what you’ll do next, how you’ll get out of it, what people will think of you, and if you’ll be able to survive your debt.

If you’re struggling with debt, it’s essential that you watch how it is affecting your emotional and mental well being. The stress of debt can quickly take over your life. However, if you can avoid that from happening, you’ll be able to tackle your debt with a clear mind.  Bankruptcy can often clear the decks of almost all debt and give you a fresh start in life, and with your life’s well being.

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Written by Canterbury Law Group

Your 2019 Financial Resolutions to Get On Top of Your Debts

Making New Year’s resolutions can be challenging. Where do you start and what should it be about? Some popular resolutions revolve around finances – make more money, pay off the credit card, get out of debt, and another similar turn the corner ideas.

If you are struggling financially and worried about filing for bankruptcy, consider making a New Year’s resolution to help you take control of your debt.

Although when in doubt, there is your top bankruptcy attorney in Scottsdale, the lawyers do not always intend to file for bankruptcy for every client. Consider making some of the following financial resolutions to help you get on top of your debt.

Learn More About Finances

Make a New Year’s resolution to improve your financial literacy. The more you understand finances and how money, budgeting, investing, and debt work, the better off you can become.

The internet has tons of blogs that seek to help you take control of your finances. Browse through some that offer information to teach you about finances, rather than provide band-aid solutions to a single problem.

Start a Budget

If you are struggling with debt, you have likely heard the word budget from time to time. That is because a budget is one of the best ways to give you a snapshot of your actual financial situation. A budget shows you how much money you bring in each month and where you are spending it all each month.

To start a budget, write down your total monthly income after taxes. Then, begin to create expense categories. First, write out your fixed expenses (rent or mortgage, insurances, utility bills, and anything else that stays the same or similar each month), then move to your variable expenses (the ones that change month to month like entertainment or dining out). Be specific and honest with your categories.  Keep track of the spending on your phone or on a small notebook in your car.  Every dollar.

Increase Your Monthly Income

Another good resolution to help with debt is to aim at increasing your monthly income. It could be as little as $100 a month or up to $1,000. No matter what the number is though, make sure it’s realistic for you.

There are many side gigs you can do on top of your full-time job. You can get into some freelance work, teach students on the side (for example, guitar or piano lessons), or if you have a hobby in which you create things, you could start selling them.  You can drive for Uber or Lyft a few nights a week, for example.

Set Up a Savings or Emergency Account

Even though if you are in debt and you want to retire it quickly; it’s important that you have an emergency fund. That money is not there for whenever you want it. It’s there for when you absolutely need it.

Ask yourself if you could afford a $500 unexpected expense right now. Would you be okay, or would it push you even farther into debt? Either way, it’s in your best interest to start setting aside small amounts of money each month into an emergency account.

Target a Certain Debt

If you have multiple debts, one of your resolutions could be to target a particular debt. Instead of making the minimum payments on each debt every month, bump up the amount you pay for one debt that has the highest interest rate.

Take the debt with the highest interest rate and make that your primary target first. With the other debt, keep up with the minimum payments. Once you pay off the debt with the largest interest rate, that money can go towards the next debt, and so on. It will turn into a snowball effect until you have everything paid off.  It might take years to get there, but at least you will be on the path to paying everything off and avoiding bankruptcy.

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