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Written by Canterbury Law Group

What is Chapter 7 Debt Discharge?

What is Chapter 7 Debt Discharge?

Some or all of your previous debt may be dismissed under Chapters 7, 11, 12, and 13 of the United States Bankruptcy Code. A “discharge” is a term that refers to the act of “This means you are not personally responsible for the money and are not required to repay it. Once a debt is permanently dismissed, the creditor you owe, such as a hospital or credit card company, cannot contact you or initiate collection action against you.

Note: To get rid of credit card debt and get debt relief, most consumers will declare a Chapter 7 bankruptcy. If you’re unfamiliar with the Chapter 7 bankruptcy process, you can learn more about it and what to expect. If you file Chapter 13 bankruptcy, you will be required to repay the majority of your debts under a repayment plan. Some debts may be discharged in bankruptcy, but you may still be personally liable for others.

Chapter 7 bankruptcy frequently entails the liquidation (or sale) of assets in order to pay off previous debts. Only once you’ve finished this process will you be able to get your eligible debts forgiven. Federal and state bankruptcy exemptions shield some assets from liquidation. Many people who file for Chapter 7 bankruptcy can keep the majority of their assets. Your attorney and bankruptcy trustee will determine what you can keep, what creditor deals you can make, and what you must give up in your bankruptcy case.

The courts usually discharge debts as soon as assets are liquidated. This occurs around four months after you first apply for Chapter 7 bankruptcy. Keep in mind that you must attend debt management education classes between filing and receiving your discharge, or the judge may deny your debt discharge.

Debts that can’t be forgiven

There are numerous exceptions to the debts that can be discharged in Chapter 7 bankruptcy. For a thorough examination of your individual debts, you should speak with an experienced attorney.

The following are examples of debts that cannot generally be discharged:

  • Child support and alimony
  • Several tax debts
  • Loans for students
  • Debts related to education
  • Loans for individuals
  • Debts owing as a result of a personal injury case
  • Debts owed in connection with certain criminal restitution orders

According to state and federal law, these debts must be repaid.

Stop your creditors from seizing your property by using reaffirmation.

Even after a discharge, certain creditors may be able to preserve their claims on your property. This can happen in a number of ways, one of which is through a “lien.” A lien can be used by a creditor to obtain payment or reclaim property.

Let’s imagine you have some valuable secured property, such as your car. A lien may be used by your creditor to reaffirm the obligation. This “reaffirmation” is important “occurs if both you and the creditor agree:

This debt will remain your responsibility.

You will repay a debt in part or in whole.

Even if the debt would be discharged in bankruptcy, you continue to pay.

As long as you keep paying the loan, the creditor will not take your property.

Prior to the entry of a discharged debt order, reaffirmation is required. If you wish to keep a car or other property, you should talk to your creditor as soon as possible. Your attorney may take care of this for you and try to work out a reasonable payment plan.

Possessions that may be taken prior to a discharge

Bankruptcy is meant to help you get out of debt, so removing all of your assets would be counterproductive, as you’d have to repurchase a car or other stuff.

Property deemed vital for modern life may be excluded from creditors’ repossession. However, you may need to petition a judge to have them stopped.

The following are some instances of property that a creditor can try to reclaim:

  • A second car or a motor vehicle
  • A vacation home or a second residence
  • Expensive attire
  • Furniture for the home
  • Jewelry
  • Tools that you utilize at work
  • Instruments of music (unless you can prove you are a professional musician)
  • Cash, bank accounts, stocks, bonds, and other assets are all available options.
  • Pensions
  • A percentage of your home’s equity
  • A fraction of unpaid pay that has been earned.
  • Benefits from the government that have accrued in a bank account
  • Personal injury damages granted
  • Heirlooms from the family

While this list may appear frightening, keep in mind that creditors may attempt to seize these items, but they are unlikely to succeed. Because it is necessary for business or daily living, much of this property is covered under your state’s exemptions or wildcard exemptions.

A notice will be sent to your creditors stating that your debts have been dismissed. If they don’t agree with the discharge, they might try to reaffirm these items or sue you for debt.

Things are considered finished once the debt is discharged. You cannot be sued, have your property taken away, or be harassed by a creditor.

How to Get a Debt Forgiven

Bankruptcy is a difficult decision to make, but it is sometimes required. You might begin by inquiring with an attorney about what property is prohibited from a Chapter 7 bankruptcy and what may be included. They can inform you what a creditor might be looking for and how to stop them legally and effectively.

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

Pros and Cons of Filing Chapter 7 Bankruptcy

What is Chapter 7 Bankruptcy

In the United States, Chapter 7 bankruptcy is one of the most powerful debt relief options. It can assist customers in escaping poverty and giving them a fresh start. It allows you to start again by wiping your debts. However, bankruptcy is a personal choice, and you should carefully examine if it is the best option for you. The advantages and disadvantages of Chapter 7 bankruptcy are discussed in this article.

What are the Benefits of Filing for Bankruptcy under Chapter 7?

An immediate sense of relief in the form of a much-needed breathing spell

You are protected from creditors as soon as your bankruptcy case is filed with the bankruptcy court. When you file for bankruptcy, all collection operations are automatically halted. All phone calls, garnishments, and collection letters must cease immediately. Repossessions, evictions, and foreclosures were all put on hold for the time being.

A bankruptcy discharge provides permanent debt relief.

Most sorts of debt, including credit card debt, medical bills, and personal loans, are erased when you file Chapter 7 bankruptcy. When the bankruptcy court grants you a bankruptcy discharge, you no longer have to pay these sorts of unsecured debts.

It’s almost certain that you’ll get your bankruptcy discharged.

You can achieve your bankruptcy discharge in as short as three months if you’ve never filed bankruptcy before, pass the means test, and act honestly with the bankruptcy court and the bankruptcy trustee. It’s virtually automatic if you make sure you meet all conditions before and after filing your bankruptcy petition.

You’ll almost certainly get to keep all you own.

More than 95 percent of people who file Chapter 7 bankruptcy in the United States keep everything they own. This is because certain property, known as exempt property, is protected from creditors under the law. If it’s covered by an exemption, you get to retain it, whether it’s your monthly social security check, your watch, or your kitchen table.

You can even keep your car after filing for bankruptcy if you want to.

You’ll still have to pay for it, but isn’t that just? If you don’t want to keep it, though, Chapter 7 bankruptcy permits you to walk away from both the car and the loan! Here’s all you need to know about preserving your car after declaring bankruptcy under Chapter 7.

Missed monthly payments and other negative entries on your credit report no longer affect your credit score after bankruptcy.

When your bankruptcy is discharged, you will be given a clean slate on which to rebuild your credit and raise your credit score. One year after filing Chapter 7, the majority of folks have a higher credit score than they did when they first started the bankruptcy process.

Improved Credit and Banking Access

You’ll get more credit card offers than you know what to do with shortly after you file for bankruptcy. This will not only assist you in rebuilding your credit and increasing your credit score, but it will also provide you with the security net that comes with owning a credit card in the event of an emergency.

What are the Disadvantages of Chapter 7 Bankruptcy?

Filing for bankruptcy under Chapter 7 is not for everyone. Even if it appears to be the best debt relief choice for you, once you consider some of the disadvantages of Chapter 7, it may not be.

If you earn too much money, you won’t be able to file Chapter 7.

If you earn less than the median income, you may be perplexed as to how this is even feasible. Don’t be concerned; this isn’t about you. This refers to people who have money left over after paying their basic living needs.

The means test determines whether or not you have disposable income. You won’t be able to simply walk away from your debt if you have too much disposable income. While you won’t be able to file for Chapter 7, you will be able to acquire a bankruptcy discharge if you complete a Chapter 13 repayment plan.

If you have good credit, it will almost certainly suffer a temporary setback.

Those who are able to make their monthly payments on time and maintain a high credit score before filing for bankruptcy will notice their score dip at first. However, a bankruptcy filing frequently benefits the filer’s credit score more than it hurts it. Plus, after their bankruptcy is discharged, they can immediately start working on improving their credit score.

It does not completely eliminate all unsecured debts.

Some unsecured debts, such as alimony and child support, are not dischargeable in bankruptcy. Other debts, such as tax debts and student loans, can be difficult to discharge in bankruptcy.

Certain forms of property can be lost.

The obligation to give up certain pricey objects is one of the trade-offs for achieving a bankruptcy discharge in a handful of months. Property that is not exempt from the bankruptcy trustee’s ability to sell to pay creditors in a Chapter 7 bankruptcy case is uncommon.

If you hold valuable property that you don’t want to lose, you should consult a bankruptcy attorney. Then you’ll know whether that’s a real possibility for you, and if it is, whether filing Chapter 13 is a better debt relief choice.

Others are not protected by your Chapter 7 bankruptcy filing.

Only your obligation to pay the debt is eliminated when you file for Chapter 7 bankruptcy. It does not relieve anyone else of their debt. The only sort of bankruptcy that can protect a co-signer is Chapter 13, but that only works if you pay off the debt under your repayment plan.

What are the advantages and disadvantages of filing for Chapter 13 bankruptcy?

For those in need of a fresh start, both Chapter 7 and Chapter 13 bankruptcy are viable possibilities. However, the benefits and drawbacks of Chapter 13 bankruptcy differ significantly from those of Chapter 7. Chapter 13 bankruptcy may be ideal for you if you have a lot of disposable income or non-exempt assets you want to protect. Learn more about the benefits and drawbacks of Chapter 13 bankruptcy in this article.

Bankruptcy is a costly process.

For Chapter 7 cases, the bankruptcy court imposes a $338 filing fee. You must pay this filing fee if your income exceeds 150 percent of the federal poverty level. If you can’t pay the amount all at once, you can file your case and pay the charge in up to four installments. However, if you do not pay it in full, the court will dismiss your lawsuit.

You’ll have to pay their attorney fees in addition to the court filing expenses if you employ a law firm or a bankruptcy lawyer to assist you. This normally amounts to around $1,500, which must be paid before your case can be filed. This is in addition to the filing fee and the cost of the required credit counseling classes.

Hiring the correct bankruptcy lawyer for your case might be a wonderful investment depending on your financial condition and the goals you want to achieve with your bankruptcy petition. However, many Chapter 7 cases are straightforward and can be finished without the assistance of a 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

What Not to Do Before Filing Bankruptcy

What Not to Do Before Filing Bankruptcy

Before you file for Chapter 7 or Chapter 13 bankruptcy, there are a few things you should avoid.

When you’re under financial strain, it’s tempting to do whatever it takes to get out of it. However, most people find that preparation ahead of time makes a bankruptcy case go more easily. You’ll learn why you shouldn’t perform the following things in this article:

  • File at an inopportune time
  • Unnecessarily use retirement funds
  • Carelessly or improperly fill out bankruptcy paperwork
  • Take out a credit card to buy luxury goods and services, or take out a cash advance.
  • Property should not be sold or transferred for less than it is worth.
  • Only pay your preferred creditors.
  • Before acquiring a significant asset, such as an inheritance, you should file a tax return.
  • If you don’t file your tax returns, you’ll be fined.
  • Finally, understand about the distinctions between Chapters 7 and 13 to prevent picking the wrong bankruptcy chapter.

Don’t Make Hasty Decisions About Bankruptcy

  • Bankruptcy is a good way to get rid of debt, but you’re only entitled to a bankruptcy discharge (the order that wipes away your debt) once in a while. As a result, it’s a good idea to consider whether now is the right time to file or if you’ll need to file later. You can get a Chapter 7 discharge if you meet the following criteria:
  • During the waiting period, you may find yourself in a worsening financial situation. For example, if you’re sick and racking up medical debt, you’ll probably want to wait until your health improves. Be aware of other frequent issues that may arise, such as unemployment, eviction, foreclosure, and vehicle repossession.
  • You won’t be able to declare another Chapter 7 bankruptcy if you’ve already done so. A creditor may garnish your wages (remove money from your paycheck), levy (confiscate) your bank account funds, or seize valuable property. Alternatives to Chapter 13 bankruptcy, which are less effective, would most likely be available. You may not be eligible for another discharge depending on how long it has been since you filed Chapter 7. Not only would you need enough income to qualify, but you’d also have to pay back all of your discretionary income (what’s left over after allowing for living expenditures) during a three- to five-year repayment period.
  • However, there are situations when it is in your best advantage to file for bankruptcy right away. If you have a wage garnishment in place, for example, the sooner you file, the more money you’ll have to pay your expenses.
  • When a creditor files a lawsuit against you, you’ll want to file as soon as possible. Your lawyer will look over the complaint to see if it contains a fraud accusation. If that’s the case, filing for bankruptcy before the matter gets to trial will almost certainly be the wisest option. If the case gets to trial, you won’t be able to discharge the debt in bankruptcy.
  • Furthermore, if a creditor receives a money judgment, the lien rights that come with it allow the creditor to garnish your earnings, attach your bank accounts, repossess your automobile, and foreclose on your home. In most circumstances, filing for bankruptcy before the creditor wins the case will put an end to the lawsuit and wipe out the debt.
  • Because bankruptcy only provides limited protection against liens, it’s best to file your case before the creditor receives a judgment and liens are placed on your property. If you’ve been served with a lawsuit, you should contact a bankruptcy lawyer as quickly as possible because this is a tricky field.
  • Most retirement funds are protected in bankruptcy. As a result, one of the most common financial blunders people make before filing for bankruptcy is taking money out of their retirement accounts to pay off debts that bankruptcy could eliminate.
  • Speak with an experienced bankruptcy attorney before paying off your bills this way. If you file for bankruptcy before emptying your savings, you’ll likely be in a considerably better financial situation.
  • You must submit complete and correct information about all of your assets, debts, income, expenses, and financial history on your bankruptcy application under penalty of perjury. Assume you willfully distort your information, for example, by omitting to disclose a financial asset. In that instance, you could face criminal penalties such as fines of up to $250,000, a sentence of up to twenty years in prison, or both.
  • If you don’t complete all of the documentation, the bankruptcy court may dismiss your case, or you may be required to file extra papers and pay additional fees to fix the paperwork. If you don’t include a creditor, the debt may not be discharged. In addition, if you forget to list an asset, the Chapter 7 trustee may discover it and seize it.
  • Because bankruptcy offenses are investigated by the Federal Bureau of Investigation (FBI), bankruptcy court is not the place to be less than honest. Most bankruptcy lawyers will be able to help you find a suitable solution to your predicament. Consult a bankruptcy professional if you’re unsure about the consequences of your conduct.
  • Be cautious if you accrued debt in the 70 to 90 days before filing bankruptcy (unless it was for life necessities, such as food, clothing, and utilities). The creditor may object to your discharge on the grounds that you took out the debt without intending to repay it (called fraud). If you took out a cash advance or used a credit card to buy a luxury item within 70 to 90 days of declaring bankruptcy, you’ve committed “presumptive fraud” and may not be eligible for a debt discharge.
  • While bankruptcy schedules require you to include all of the assets you own (or will own), some people may be tempted to sell, move for safekeeping, or hide assets before filing bankruptcy. It’s not a good idea. If you do, you may be denied a release and perhaps face criminal charges—and the danger is unlikely to be worth the perceived benefit.
  • Of course, you may have sold property before filing your bankruptcy to cover your expenses, such as rent, food, or utilities, and this isn’t necessarily a bad thing to do. Prepare to explain all of your transactions and offer supporting documents if needed.
  • This may be considered a “preferential transfer” if you repay loans to friends or relatives within one year of filing, or even other creditors within 90 days of filing. In bankruptcy, a preferred transfer might be “undone.”
  • The bankruptcy trustee may launch an adversary proceeding to recover the monies from the person or company you paid, and then distribute the funds to all of your creditors in equal shares. If you were paying a regular creditor, this might not be an issue. You might be concerned if the trustee sues your mother or sister to reclaim the funds.
  • If you are about to receive an inheritance (within one year), a big income tax refund, a litigation settlement, or payback of a loan you made to someone else, you should think again about filing bankruptcy. Why? Because you might not be bankrupt once you obtain the money—especially if you can use it to pay off creditors and get out of debt on your own. If you find yourself in this scenario, talk to a bankruptcy lawyer about your options.

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

Chapter 13 Bankruptcy Cost 2021

Chapter 13 Bankruptcy Cost 2021

If you’re attempting to get out from under a mountain of debt, you’re undoubtedly thinking if Chapter 7 or Chapter 13 bankruptcy can help. Your next queries are likely to be how much Chapter 13 will cost and whether it will work for you once you’ve decided it’s the best option for your financial position. We polled readers throughout the country about their recent bankruptcy experiences in order to acquire some real-life answers to these issues. What we gathered from people who filed for Chapter 13 is as follows.

What Are the Fees for Chapter 13 Lawyers?

The law of bankruptcy is complicated and perplexing. Cases involving Chapter 13 can be very complicated, and mistakes might lead to major financial troubles down the road. So it’s no surprise that almost all of our readers (97%) hired a lawyer to assist them with the Chapter 13 bankruptcy procedure. Their legal fees often ranged between $2,500 and $5,000. However, the majority of readers (63 percent) paid $3,000 or less. Nonetheless, the average cost of $3,000 was more than double what other readers spent their lawyers to handle Chapter 7 bankruptcy cases. Because Chapter 13 cases take longer and need more labor, attorneys charge more for them. However, Chapter 13 has a benefit in terms of how attorneys’ fees are normally calculated: While the great majority of bankruptcy lawyers charge a flat fee for their basic services, they usually only require a down payment before filing the Chapter 13 bankruptcy petition. (You’ll also have to pay the filing cost, which is $313 as of December 2020.) The remainder of the attorney’s fee is then included in your Chapter 13 monthly payments, which means it comes out of the money that would otherwise go to your creditors.

When a Chapter 13 Lawyer Might Cost You More or Less

The fees charged by bankruptcy lawyers are determined by numerous factors, including their level of experience and location of practice. Attorneys’ fees, like other expenses, tend to be higher in large urban centers on the coasts. However, in Chapter 13 bankruptcy situations, there is another crucial issue to consider: The amount you pay your attorney must be approved by the court. Many courts set fee standards that they will automatically consider reasonable in order to make the approval process easier (known as “presumptive” or “no look” fees). The rules may also include a list of fundamental services that should be covered, as well as additional costs for business cases and additional services that may be required (such as filing plan modifications or motions). These assumed costs differ from one state to the next, as well as between districts within bigger ones. In a few populated states, examples of the range of presumed costs for essential services include:

  • $3,300 to $5,000 in California
  • $3,000 to $3,825 in Texas
  • $3,500 to $4,500 in Florida
  • $2,600 to $3,650 in Michigan
  • $4,000 to $5,100 in Virginia

Our findings backed up the conventional assumption that most lawyers will charge that amount or less for basic services in regions where the courts have set guidelines. However, if your case necessitates additional labor, such as when:

  • You own a firm as a solo owner.
  • Your home is worth less than what you owe, and you want to get rid of your mortgage obligation (or “discharge” it).
  • you wish to get rid of your college loans, or
  • When you declare for bankruptcy, you become a defendant in a lawsuit.

Source: https://www.nolo.com/legal-encyclopedia/chapter-13-bankruptcy-what-will-it-cost-and-will-it-work.html

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Written by Canterbury Law Group

How Much Does Chapter 7 Bankruptcy Cost?

What is Chapter 7 Bankruptcy

Read on to learn more about the costs of Chapter 7 bankruptcy in 2021.

How Much Does a Lawyer Charge for Chapter 7 Bankruptcy?

The first thing you probably want to know about bankruptcy is how much it will cost. Everyone who files for Chapter 7 has to pay for:

  • the filing fee ($338 in 2022, unless your income is low enough to qualify for a waiver), and
  • two required bankruptcy counseling courses (about $60 or less each).

The average cost a lawyer charges for Chapter 7 bankruptcy is $1,350 with costs varying from $1,200 to $1,500 for the US in 2021 That said, the charges can vary and be greater than this depending on your location, the complications associated with the case and the experience your lawyer has. For example, you may find it costs as little as $4,500 but sometimes can be upwards of $2,200.

Factors Affecting Fees

  • If you live in certain states, Attorneys will charge more for the same services. The cheapest state in the US to file bankruptcy is North Dakota while the most expensive states are Nevada, Maine and New Hampshire, often up to three times as much.
  • Chapter 11 bankruptcies for businesses wishing to continue operations are far more costly and complicated than a Chapter 7 bankruptcy, hence the lower cost of Chapter 7 bankruptcy filing. Chapter 13 bankruptcy is usually somewhere between the price of Chapter 7 and Chapter 11 cases.
  • A simple case where you have just one [profession, simple credit card debt and only basic assets will probably cost less than when you have a spouse, six children, winnings from betting on horses, tax debt, a mortgage, a vacation home in Florida and a wide range of physical assets.
  • An experienced attorney will cost more than an inexperienced one but if your case is complex, it may be worthwhile to have the experienced attorney.

Excessive Fees

Courts do not want people paying too much in attorney fees when they file for bankrupt. An attorney has to disclose the fees charges on a special form called “Disclosure of Compensation.” The appointed trustee reviews this and if they consider excessive fees to have been charged, a motion can be filed requesting the judge to return part of the fee or cancel the fee. The person filing for bankruptcy can also file that charge.

Bankruptcy Discharge: Different Results for Different Debts

In Chapter 7 bankruptcy, you can usually wipe out almost all qualifying debts: those that aren’t “secured” (meaning you haven’t promised to give back property like a house or car if you don’t make the payments; more on that below) or “priority” (like unpaid child or spousal support). Our readers had great results getting their qualifying debts wiped out, mixed results on some debts with special rules (back taxes), and poor results with student loan debt.

Qualifying Debts

More than nine out of ten readers had balances on their credit cards when they filed for bankruptcy—the most common kind of debt they reported by far. Almost all of them (98%) got those debts completely wiped out in their Chapter 7 cases. Also, nearly half of our readers had unpaid medical bills, and they were nearly as successful in getting relief for those debts (95% received a full discharge, while another 4% received a partial discharge). In general, readers also had high discharge rates for other types of qualifying debts, including:

  • Lawsuit judgments (after creditors sued and received a judgment against you in court)
  • Business debts for which you’re personally liable, and
  • Utility and phone bills.
  • Back Taxes
  • It’s difficult—but not impossible—to discharge some older debts for unpaid income taxes 
  • Usually, you can’t wipe out student loan debt in bankruptcy. But there is an exception if you file a separate lawsuit (known as an adversary proceeding) and prove that it would be an “undue hardship” for you to repay the loans.

Chapter 7 Bankruptcy Exemptions in Arizona

Chapter 7 Bankruptcy Exemptions In Arizon

The Bankruptcy Code is governed by federal law, which means that many aspects of bankruptcy such as the “automatic stay” apply similarly regardless of the state the petitioner lives and files in. However, it’s important to know that Arizona has legally opted out of many federal bankruptcy exemptions under the code. So people who file for bankruptcy in the state can obtain exemptions only according to state laws. This particularly pertains to property exemptions. State bankruptcy exemptions work similarly for both Chapter 7 and Chapter 13 bankruptcy in the state. If you are filing for a Chapter 7 bankruptcy, read below to find out which exemptions you may qualify for in the state:

Residential Property and Homestead Assets

Arizona’s homestead exemption allows debtors to exempt up to $150,000 equity value from any real property considered a home. Other real property may also qualify if it falls within Arizona’s homestead laws. The exemption is the same for single as well as married couples. You will have to contact a lawyer regarding which of your real properties can be exempted under the homestead exemption clause in the state.

Certain Types of Personal Property

The courts allow debtors to get exemptions for various items that can be considered “personal property.” Your personal property includes items you own like clothes, computers, guns, furniture, books, pet animals, musical instruments, health aids, and wrongful death awards among others. The state allocates a specific amount of each personal property as exemptions. For example, Chapter 7 petitioners can exempt up to $2,000 for a wedding ring. You should refer to Ariz. Rev. Stat. §§ 33–1123, 33–1125 and 33–1127 for more information, or ask an experienced bankruptcy lawyer.

Deposits

A debtor filing for bankruptcy can exempt up to $300 from deposits in one bank account. If you have multiple bank accounts, contact a bankruptcy attorney in Scottsdale to find out how you can obtain exemptions.

Motor Vehicles

Arizona has very specific exemptions for motor vehicles for Chapter 7 bankruptcy. The courts allow debtors to exempt up to $6,000 equity for each vehicle owned. Elderly petitioners or their elderly or disabled spouses can exempt up to $12,000.  Again, consultation with your legal counsel is essential.

Retirement Benefits and Pension Funds

Under federal rules, qualified retirement plans such as 401ks and IRAs, which have tax-exempt status, are also exempt in bankruptcy proceedings. Arizona upholds this rule. In addition, debtors who benefit from any type of state employee pension plan can obtain exemptions. Amounts will vary depending on the type of plan you have.  So let’s say you have $200,000 in retirement assets, you can still file and procure a bankruptcy discharge and still own your $200,000 in retirement accounts post-discharge.

Life Insurance Benefits

Up to $20,000 in life insurance that could be paid to a child or a living spouse can be exempted when filing for Chapter 7 bankruptcy. Cash surrender value will be considered for exemptions. Similar exemptions can be obtained for insurance plans that cover ill health, accidents or disability. Insurance claims for damages or destruction to property that is exempt will also be exempted from proceedings. There are many insurance exemptions, but there are also exceptions. It’s important to ask a highly qualified lawyer whether your insurance benefits can be exempted under Chapter 7 bankruptcy proceedings.

Child Support

Arizona exempts all child support or alimony payments from discharge when filing for bankruptcy. So filing for bankruptcy is not a valid reason to not pay court ordered alimony or child support.  You are your estate (after you die) will owe child support and alimony for life—and even then, your estate will be compelled to pay.

Fraternal Benefit Society Benefits

If you claim benefits from the Fraternal Benefit Society, they will all be exempted under Arizona law.

How Long Does it Take to File for Chapter 7 Bankruptcy?

Usually, the entire Chapter 7 bankruptcy process starting from the first consultation of your credit to the court’s discharge of the remaining debts, is something that can take up to six months to finish.

However, your case may take longer, for example, when the trustee asks you to submit other documents, or whether they must sell your property to pay creditors. Or maybe you want to try to get your student loan discharged in bankruptcy. That is possible, but challenging, and may require a lengthy trial.

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 Bankruptcy Cost?

How Much Does It Cost To File For Bankruptcy

How much does it cost to file bankruptcy? Although the answers can have many variables, here are some examples of fees. Read on to learn more.

Chapter 7 Total Filing Fees: $338

  • Filing fee: $245
  • Administrative fee: $78
  • Trustee Surcharge: $15

Re-opening a Chapter 7 filing: $260

  • Chapter 13 Total Filing Fees: $310
  • Filing fee: $235
  • Administrative fee: $78

Re-opening a Chapter 13 filing: $235

Average Attorney Fee for Chapter 7 Bankruptcy: $1,450

A 2016 study revealed that the average national average cost was $1,450 for Chapter 7 cases. The cost depends on where the case is filed. Chapter 7 fees generally range from a low of $1,000 to high of $1,750. Of course every case is different, and a number of factors can affect the cost of your case.

Average Attorney Fee for Chapter 13 Bankruptcy: $3,000

The same study showed an average of $3,000 for Chapter 13 cases, with ranges from from $2,500 to $5,000. Chapter 13 fees are often governed by the bankruptcy court in the particular district so fees vary widely from district to district.

Factors that can add to fees include:

  • Filing for a business bankruptcy as well as a personal one
  • Whether you are filing jointly with your spouse or filing bankruptcy without your spouse
  • You have multiple sources of income
  • You have non-exempt assets
  • You have numerous assets or unusual assets
  • You earn more than your state’s median income for the size of your household
  • Having an extensive number of creditors
  • Having filed for bankruptcy before in the past eight years
  • Trying to stop another legal action such as a foreclosure filing against your property, an eviction, a bank levy or a repossession of property that served as loan collateral
  • Accusations that you committed fraud, or the likelihood that such accusations might be made
  • You have non-dischargeable debts such as student loans, child support, alimony or past-due taxes

Attorneys almost always demand payment before service in Chapter 7 cases. They will often offer payment plans, but they won’t proceed with your case until your fees are paid. 

Bankruptcy Education Courses: $50

One small fee that you mustn’t forget covers credit counseling. Completion of two credit counseling courses is required for petitioners in both Chapter 7 and Chapter 13 cases. You must consult a nonprofit credit counseling agency to arrange to take the course. 

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 Bankruptcy In Arizona

How Much Debt to File Chapter 7 Bankruptcy

As filing for bankruptcy in Arizona follows federal guidelines, read on learn more about your options.

Chapter 7

Chapter 7 bankruptcy is sometimes referred to as “liquidation bankruptcy.” It’s quite common because it allows the court to discharge many types of unsecured debts. For example, massive amounts of credit card debt or personal loan debt can be completely discharged by a judge under this law. If there are nonexempt properties or debts, the court would appoint a Trustee to oversee your finances until remaining creditors are paid off.

This type of bankruptcy is only available to debtors with medium to low-income. The process to file for Chapter 7 bankruptcy can take up to 4 months, and sometimes involves significant paperwork.

Chapter 11

This type of bankruptcy is similar to Chapter 13 in that it is also a type of “reorganization” bankruptcy. It is typically used by large corporations or companies but individuals can use it too. Personal bankruptcy is rarely filed under Chapter 11 however.

Chapter 12

Chapter 12 bankruptcy is exclusively for fishermen and farmers. It involved submitting a repayment plan to court like in Chapter 13. However, unlike Chapter 13, these plans are allowed to be more flexible. Chapter 12 offers more flexibility with cramdowns and lien shipping for unsecured aspects of secured loans. Chapter 12 requires higher debt limits to get a favorable ruling.

Chapter 13

Chapter 13 bankruptcy is called the “wage earners” bankruptcy. It’s usually the last resort for those who don’t qualify for Chapter 7 bankruptcy. This route allows debtors to pay back their creditor in full or part via a court-approved payment plan. Paying the debts off can take up to 5 years depending on the petitioner’s income. Once the payment plan is approved, the court may discharge some unsecured debts. Chapter 13 bankruptcy can prevent a home foreclosure and allow debtors to keep much their property.  Discussing these issues with experienced bankruptcy legal counsel is critical.

Under Chapter 13 bankruptcy law in Arizona, only unsecured debt below a certain fixed debt amount (e.g. $394k) will be discharged by a court. Submitting a payment plan for this type of bankruptcy can be complicated so a bankruptcy attorney is almost always needed to successfully procure court approval of your 3 or 5 years Chapter 13 discharge plan.

To decide which type of bankruptcy is best for you, look at two things: assets and income. Income matters because filing under Chapter 7 is only possible for people in a certainly limited income bracket. You must also choose the right type of bankruptcy to protect assets that could be considered nonexempt. Speaking in general terms, if you are unemployed or earn a low income with few available assets, Chapter 7 may be the best option. If you earn a significantly high income and have many assets, Chapter 13 could be the best option.  Under either Chapter, counsel with experienced and seasoned bankruptcy legal counsel is the critical first step in the process.

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 Debt to File Chapter 7 Bankruptcy

How Much Debt to File Chapter 7 Bankruptcy

In order to determine if bankruptcy is the best solution to your current situation you must first determine if you are qualified to file a Chapter 7 case.

Are you eligible to file a Chapter 7?

This is determined by seeing if you qualify under the means test. You will qualify if your current monthly income is below your current state median limit. If your CMI is more that your state median income you can go through the means test calculation to see if you qualify.

Are your debts dischargeable?

Even if you do qualify to file a Chapter 7 case you want to make certain it will give you the relief you are seeking, a true fresh start. To determine this it is important to look at the type of debts that you are seeking to discharge. Most debts (including both secured and unsecured) are fully dischargeable, although discharging a secured debt likely means surrendering the collateral.

Have you considered the costs?

Filing a Chapter 7 bankruptcy does come with certain costs. There are the monetary costs, such as the filing fees and costs of credit counseling and attorney fees, if you hire a private attorney. There are also non-monetary costs to consider.

Is this the right time to file a bankruptcy?

If you file a Chapter 7 case that is successfully discharged you are unable to file another Chapter 7 and receive a discharge for 8 years. While it is impossible to predict upcoming unexpected financial difficulty, you should still think about your current level of debt as you try to decide if filing a case now is worthwhile.

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

Considering Bankruptcy

What Is Bankruptcy Fraud?

Here are some things to think about before you decide to file for Chapter 7 or Chapter 13 bankruptcy.

Should You Choose Chapter 7 or Chapter 13 Bankruptcy?

Chapter 7 bankruptcy works well for people who can protect all of their property with exemptions, whose income is low enough to meet qualification requirements, and whose debt is the type that bankruptcy will discharge.

By contrast, Chapter 13 bankruptcy works best for people:

  • whose income is too high to qualify for Chapter 7 bankruptcy
  • who would like to save a house from foreclosure or a car from repossession, or
  • who want to pay back nondischargeable debt, such as back child support or income tax debt, through a three- to five-year repayment plan.

Will Bankruptcy Wipe Out Your Debt?

Before you file your case, you’ll want to think about the goals because a bankruptcy discharge doesn’t eliminate certain types of debt (called priority obligations). For instance, you can wipe out most credit card obligations, medical bills, and personal loans. But you can’t discharge domestic support obligations (such as child and spousal support), newer tax debt, student loans (unless you can prove undue hardship), and more.

Is Your Lender About to Foreclose on or Repossess Your Property?

If you have debts secured by your property (such as a mortgage or car loan), your lender can foreclose on the home or repossess the car if you default on your obligation (or take any other property that serves as collateral for the debt). Your lender has this right because of the lien you agreed to when you took out the loan.

However, bankruptcy’s automatic stay can stop or delay the foreclosure and repossession process. The relief afforded by the stay in Chapter 7 bankruptcy is usually temporary. But filing for Chapter 13 bankruptcy might allow you to:

  • keep the property and catch up on your missed payments
  • reduce the balance of your loan if you qualify for a cramdown, and
  • eliminate wholly unsecured junior liens from your house through a process called lien stripping.

Source: https://www.nolo.com/legal-encyclopedia/considering-bankruptcy.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 Fraud?

What Is Bankruptcy Fraud?

Committing fraud before or during bankruptcy can result in serious consequences, including a denial of discharge, a fine, or even a criminal conviction. Read on to learn more.

Filing for bankruptcy is a great way to get a fresh start. But you must play by the rules. Any dishonest dealings before or during the bankruptcy process could rise to the level of bankruptcy fraud, so avoid needless trouble by following these tips:

  • accept that you might not be able to keep all of your property
  • don’t use bankruptcy to wipe out shady business dealings
  • complete your bankruptcy paperwork truthfully, and
  • learn the consequences of civil and criminal bankruptcy fraud.

Exchanging Property With Creditors for Debt Relief in Bankruptcy

While the powerful relief afforded by bankruptcy frees you from overwhelming debt, it comes at a cost to your creditors. Bankruptcy law attempts to mitigate this loss by giving your creditors a share of your nonessential assets in exchange for wiping out your debt. You’ll disclose all property you currently own (and asset transfers) and keep the things you can exempt—generally property needed to maintain a job and home.

Fraud That Starts Before Bankruptcy

Fraud doesn’t always play out within the bankruptcy itself—it can occur before the bankruptcy filing. Here are some examples: 

  • obtaining credit under false pretenses, such as misrepresenting income or assets on a credit or loan application
  • falsifying financial documents used to support a credit request (misrepresenting the debtor’s worth)
  • purchasing items on existing credit with no intention of repaying the debt (proven by showing the lack of an ability to pay at the time of purchase)
  • charging expensive luxury items or taking out substantial cash advances shortly before filing for bankruptcy (often called “presumptive fraud”)
  • knowingly writing a bad check, or
  • engaging in deceptive business practices.

Fraud Committed During Bankruptcy

Example of fraud committed during bankruptcy include:

  • failing to list an asset on the appropriate bankruptcy schedule to prevent it from being sold for the benefit of creditors
  • concealing a property transfer that occurred before the bankruptcy (for example, failing to disclose gifting a car to a friend)
  • providing a false document to the bankruptcy court or trustee
  • destroying or withholding documents
  • knowingly making a false statement in the bankruptcy paperwork or to the bankruptcy trustee at the 341 meeting of creditors, or
  • paying someone to help hide property from the court.

Criminal Bankruptcy Fraud

A significant scheme to deprive multiple creditors would be more likely to rise to the level of criminal bankruptcy fraud. Under federal law, cases of criminal fraud are investigated by the Federal Bureau of Investigation (F.B.I.) and aggressively prosecuted by the U.S. Department of Justice (D.O.J.). Although the bulk of the crimes apply to debtor activities (the person who files the case), creditors, bankruptcy trustees, court personnel, and third parties can also be convicted of bankruptcy crimes.

Also, many types of dishonesty are often involved in criminal bankruptcy fraud, some of which are also crimes. You’ll find most bankruptcy crimes in federal criminal statutes. (18 U.S.C. §§ 152, 157.) Here are some examples.

Concealing Assets

  • failing to disclose a property transfer that took place before filing the case
  • failing to disclose assets in the bankruptcy paperwork, and
  • enlisting someone’s help to hide property.

Concealing and Falsifying Information

  • filing a false or incomplete bankruptcy form, and
  • destroying or hiding records.

Identity Issues and Unauthorized Filings

  • filing a bankruptcy case using false identity information
  • filing multiple bankruptcies in different jurisdictions, with or with property identification, and
  • filing a bankruptcy case on another’s behalf without authorization.

Bribery and Embezzlement

  • bribing a trustee or court official, and
  • embezzling funds from a bankruptcy estate.

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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