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Written by Canterbury Law Group

How Do Bankruptcy Exemptions Work

How Do Bankruptcy Exemptions Work

If you’re one among the millions of people who lost their jobs as a result of COVID-19, bankruptcy can help you clear your debts while keeping your retirement assets intact. You won’t lose your stimulus cash, though, because the new bankruptcy “recovery rebate” law preserves stimulus checks, tax credits, and child credits.

Exemptions from bankruptcy play an important role in both Chapter 7 and Chapter 13 bankruptcy. Exemptions are used in Chapter 7 bankruptcy to determine how much of your property you get to keep. Exemptions in Chapter 13 bankruptcy help you keep your plan payments modest. Learn more about bankruptcy exemptions and how they work by reading on.

What Are the Different Types of Bankruptcy Exemptions?

Exemptions allow you to keep a specific amount of assets, such as a cheap car, professional tools, clothing, and a retirement account, safe in bankruptcy. You don’t have to worry about the bankruptcy trustee appointed to your case taking an asset and selling it for the benefit of your creditors if you can exclude it.

Many exclusions cover specific property kinds up to a certain dollar value, such as a car or furnishings. An exemption can sometimes protect the asset’s total worth. Some exemptions, known as “wildcard exemptions,” can be used on any of your properties.

Is it okay if I keep my baseball cards? Jewelry? Pets?

The goal of bankruptcy is to give you a fresh start, not to take away all of your possessions. You’ll probably be able to protect other items as well, such as religious literature, a seat in a building of worship, or a burial plot, in addition to the fundamentals. Chickens and feed are even exempt in some states. However, you should not make the mistake of assuming that everything will be well.

  • Items of high value. There are no exemptions for boats, collections, pricey artwork, or holiday homes. Instead of filing for bankruptcy, owners with such valuable assets often sell the property and pay off their debts.
  • Jewelry. Many states provide protection for wedding rings up to a certain value. Don’t expect to preserve your Rolex, diamond necklace, or antique broach collection, though.
  • Pets. The dog or cat you rescued from the shelter is unlikely to fall into the trustee’s hands. Why? It’s not that you’ll have a specific exemption to protect it; rather, the trustee would have to pay more to sell it than it’s worth in most circumstances. However, if you own a valuable show dog or a racehorse with high breeding costs, you may be forced to sell it or pay for it in bankruptcy.

Exemptions: What Are They and How Do They Work?

Whether you’re filing a Chapter 7 or Chapter 13 bankruptcy, exemptions play a significant role.

Bankruptcy under Chapter 7

A liquidation bankruptcy is one in which the appointed trustee sells your nonexempt assets to satisfy your creditors. Because the bankruptcy trustee cannot sell exempt property, exemptions assist you protect your assets in Chapter 7 bankruptcy. If your state offers a $5,000 motor vehicle exemption and you only own one automobile worth $4,000, for example, you can keep it. See Exemptions in Chapter 7 Bankruptcy for more details.

Bankruptcy under Chapter 13

You can keep all of your property and rearrange your debts with a Chapter 13 bankruptcy (which can mean paying less on some of them). The amount you must pay specific creditors, however, is still determined by how much property you can exclude. Unsecured creditors who are not priority (such as credit card companies) must be paid an amount equal to your nonexempt assets. Exemptions assist keep your Chapter 13 bankruptcy plan payments modest by lowering the amount you must pay creditors. See Exemptions in Chapter 13 Bankruptcy for more details.

Bankruptcy Exemptions at the State and Federal Level

There are bankruptcy exemptions in each state. A series of exemptions is also provided by federal law. (See The Federal Bankruptcy Exemptions for further information.) Some states force you to use their exemptions, while others allow you to choose between their exemptions and the federal system (you cannot mix and match the two).

The state exemption rules you’ll be able to use will be determined by where you lived in the previous two years (called the “domicile requirements.”). Read Which Exemptions Can You Use In Bankruptcy? for more information on the distinctions between state and federal exemptions and domicile requirements.

Nonbankruptcy Exemptions in the United States

In addition to state and federal bankruptcy exemptions, there are a number of federal nonbankruptcy exemptions. These exemptions work in a similar way to bankruptcy exemptions in terms of preserving your assets. Nonbankruptcy exemptions from the federal government are only available if you use your state’s exemptions (you cannot combine the federal bankruptcy and nonbankruptcy exemptions). You can use nonbankruptcy exemptions in addition to state exemptions if you are using state exemptions. See The Federal Nonbankruptcy Exemptions for further details.

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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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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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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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What Happens When You Declare Bankruptcy

What Happens When You Declare Bankruptcy

Although bankruptcy can offer a fresh start and an opportunity to reorganize your finances, there are also drawbacks. For example, credit may be very difficult to obtain. Read on to learn more.

What Happens When Declaring Bankruptcy?

Bankruptcy can reduce the debt total you have to pay or in some cases have debt eliminated. An “Automatic stay” is put in place that forbids collectors from attempting to obtain repayment in any manner. This gives you the time to organize your finances with the bankruptcy court and your creditors.

Chapter 7

In this form of bankruptcy, it is probable you will have to liquidize some assets to pay a portion of what is owed. Some states have laws saying certain assets, such as a car, house or retirement account are not eligible for liquidation.

Chapter 13

This is a reorganization of existing debt so they can be paid off either in full or partially during a three to five year window. But if you do not maintain payment, creditors may try to liquidate your assets.

What Happens to My Credit if I Declare Bankruptcy?

Undoubtedly, your credit will be damaged by filing for bankruptcy. With Chapter 7 bankruptcy it may remain on your credit file for ten years. Chapter 13 is slightly more preferable from a credit standpoint as at least you will be paying some of your debt, however it will still stay on your credit report for up to seven years. Once your bankruptcy is complete and you no longer owe any debts, obtaining credit will be difficult. Certain lenders do work with people who have faced bankruptcy but usually at less favorable rates. 

Are Bankruptcy Filings Publicly Available?

Bankruptcies are considered a public record and copies can be obtained through the court system software known as PACER.

Will Bankruptcy Affect My Job or Future Employment?

Some employers, especially those in Government or financial sectors do run credit checks and it is conceivable your career may be negatively impacted by a poor credit report following bankruptcy. However, it will not show up when an employer does a regular criminal background search prior to your employment.

Source: https://www.experian.com/blogs/ask-experian/what-happens-when-you-file-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

Who Can File Chapter 7 Bankruptcy?

What is Chapter 7 Bankruptcy

Here are ways to discover if you can file for Chapter 7 bankruptcy.

How High Is Your Income?

If your income is less than or equal to the median income for your state, you are usually eligible for Chapter 7 bankruptcy.

Do You Have Enough Disposable Income to Repay Some Debts?

The means test indicates whether you have enough disposable income to repay some of your debts over five years. Unsecured debts are those debts not backed by collateral.

The bankruptcy trustee will look at Schedule I: Your Income and Schedule J: Your Expenses. If there is enough left over each month to make a notable payment to your creditors, the trustee will recommend Chapter 13 to the court.

You Previously Received a Bankruptcy Discharge

You can’t get another Chapter 7 bankruptcy discharge if you obtained a Chapter 7 Bankruptcy discharge within the last eight years, or a Chapter 13 case within the last six years.

You will not be able to proceed if the court has turned down your bankruptcy discharge in the last 180 days when: 

  • A court order has been violated
  • the court ruled that your filing was an abuse of the system or fraudulent
  • A creditor requested an automatic stay before you filed

You Defrauded Your Creditors

  • A bankruptcy court might dismiss the case if they suspect you concealed assets from your creditors.
  • The Filer Is a Corporation or LLC
  • A business can file for bankruptcy but Chapter 7 bankruptcy won’t clear the debt of a corporation or LLC. Instead, the trustee will liquidate the assets of the company and distribute the proceeds to creditors.

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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Do You Lose Your House in Chapter 7 Bankruptcy?

Do You Lose Your House in Chapter 7 Bankruptcy?

You won’t necessarily lose your home in Chapter 7 bankruptcy—especially if you don’t have much home equity and your mortgage is current. Whether you can keep your home after filing for Chapter 7 bankruptcy will depend on the following factors:

  • whether your mortgage is current
  • if you’ll be able to continue making the payments after bankruptcy
  • how much equity you can protect with a homestead exemption, and
  • the amount of equity in your home.

If you’re behind on your payment, in foreclosure, or have more equity than you can protect, you’ll have a better chance of keeping your home in Chapter 13 bankruptcy. Filers faced with those circumstances should learn more about choosing between Chapter 7 or Chapter 13 when keeping a home.

Your Home and the Chapter 7 Bankruptcy Trustee

Chapters 7 and 13 work very differently, so it’s important to understand what to expect—especially if you want to keep valuable property in Chapter 7. Here’s how it works.

After filing for Chapter 7, your property will go into a bankruptcy estate held by the Chapter 7 bankruptcy trustee appointed to your case. However, you don’t lose everything because you can remove (exempt) property reasonably necessary to maintain a home and employment. The trustee will sell any remaining assets and distribute the sales proceeds to your creditors.

Here’s the tricky part—if you make a mistake, it’s unlikely that the bankruptcy judge will allow you to dismiss the case, and you could lose the house. So you must follow the rules carefully.

Are Your House Payments Current?

You’ll likely lose your home if you’re behind on the mortgage payment when you file for Chapter 7. Although the automatic stay will temporarily stop a foreclosure, the best thing you can hope for is delaying the process for a few months.

  • Why filing won’t cure a default. Chapter 7 bankruptcy doesn’t provide a way for you to catch up on the overdue payments. This presents a problem because a mortgage is a secured debt, and you can’t wipe out the lien in Chapter 7 bankruptcy. The lender can foreclose after the automatic stay lifts, and you’ll lose the house.
  • What will happen if you file. The lender will either ask the court to lift the automatic stay to allow foreclosure proceedings to continue (which the court will likely grant if the trustee doesn’t plan to sell the home) or wait until the bankruptcy ends, proceed with foreclosure, and then sell the house at auction.
  • Chapter 13 bankruptcy can help. If you’re behind and want to keep your home, the better option is to file a Chapter 13 case. Unlike a Chapter 7 bankruptcy, it has a provision that allows you to catch up on mortgage arrearages over the course of a three- to five-year repayment plan. Also, if you have more equity than you can protect with a homestead exemption (more below), you can pay your creditors the value of the nonexempt equity in the plan, as well.

Can You Continue Making House Payments After Chapter 7 Bankruptcy?

It’s also important to be sure you can afford to continue paying the mortgage payment after a Chapter 7 bankruptcy. Losing the house after your case might put you in a worse financial position. Why? If the lender couldn’t sell the home for the amount you owe, you’d be stuck with a deficiency balance depending on the laws of the state you live in.

How Much Equity Is in Your Home?

If your mortgage payment is up-to-date, your next step will be determining how much equity exists. You’ll start by valuing your home. Then you’ll subtract any outstanding mortgage balance from the home value. The equity would be the amount you’d have in your pocket if you were to sell the house.

If you don’t have any equity, you’re in good shape—trustees don’t sell houses without equity. Otherwise, you’ll need to be able to protect your equity with a bankruptcy exemption to avoid losing the home in Chapter 7 bankruptcy.

Can You Protect Your Home Equity With Bankruptcy Exemptions?

State exemption statutes list the property its residents can protect in bankruptcy. Some states allow residents to choose between either the state exemption list or the federal bankruptcy exemption scheme. Either way, almost all states allow residents to protect some home equity with a homestead exemption. You might be able to exempt even more with a wildcard exemption.

If your exemptions adequately cover your equity, the trustee won’t sell your home in a Chapter 7 bankruptcy. However, if your exemptions protect only a portion of it, the trustee will sell the house, pay off the mortgage, give you the amount you’re entitled to exempt, and use the remainder of the sales proceeds to pay creditors.

Keep in mind that the trustee will take into account the costs to sell the home. If, after deducting sales costs, the amount remaining isn’t enough to make a meaningful payment to creditors, the trustee will abandon the property (and you’ll get to keep it).

Learn more about your home in Chapter 7 bankruptcy.

Source: https://www.nolo.com/legal-encyclopedia/lose-home-file-chapter-7-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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