Chapter 5 Archives - Canterbury Law Group

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Written by Canterbury Law Group

27 December 2024

Medical Bankruptcy

You can file for bankruptcy on medical bills. Medical debt is considered an unsecured debt, which means it is not tied to any specific property or collateral (like a mortgage or car loan). As an unsecured debt, medical bills can be included in both Chapter 7 and Chapter 13 bankruptcy filings.

Filing for Bankruptcy on Medical Bills:

Chapter 7 Bankruptcy:
- Discharge of Medical Debt: In Chapter 7 bankruptcy, most unsecured debts, including medical bills, can be discharged (eliminated) after the bankruptcy process is complete. This means you will no longer be legally obligated to pay those bills.
- Eligibility: To qualify for Chapter 7, you must pass the means test, which examines your income, expenses, and family size to determine if you have the ability to pay back a significant portion of your debts. If you qualify, Chapter 7 can provide a quick way to discharge medical debt, often within 3 to 6 months.
- Impact on Property: Chapter 7 is a liquidation bankruptcy, meaning that non-exempt assets (property or valuable items) might be sold to pay creditors. However, if you don’t have significant assets or they are protected by exemptions, you may be able to keep your property while discharging your medical bills.
Chapter 13 Bankruptcy:
- Repayment Plan for Medical Bills: In Chapter 13 bankruptcy, instead of discharging your debts right away, you will propose a repayment plan to pay back part of your debts over 3 to 5 years. The amount you pay will depend on your income, expenses, and other debts. Medical bills are included in this repayment plan.
- Catch-Up on Medical Debt: If you are behind on medical payments or have accrued a significant amount of medical debt, Chapter 13 can help you catch up by consolidating your medical bills along with other debts into a single monthly payment.
- Protection from Creditors: Filing for Chapter 13 will stop collection efforts, including harassment, lawsuits, or wage garnishment related to your medical debt.

Benefits of Filing for Bankruptcy on Medical Bills:

Discharge of Debt: Bankruptcy allows you to eliminate medical bills that are overwhelming your finances, giving you a fresh start.
Protection from Creditors: Filing for bankruptcy triggers an automatic stay, which immediately halts collection actions like calls, letters, lawsuits, and wage garnishment.
No Tax Liability on Discharged Medical Debt: Unlike some other types of debt, discharged medical debt is generally not considered taxable income, so you don’t have to pay taxes on the amount forgiven.

When to File for Bankruptcy on Medical Bills:

You have a significant amount of medical debt that you cannot afford to pay, and it’s affecting your financial stability.
You’re unable to make payments on medical bills due to high interest or accumulating fees, and creditors are threatening or pursuing legal actions.
You have other debts (e.g., credit card bills, personal loans) in addition to medical debt that you can’t manage and would benefit from bankruptcy protection.

Considerations Before Filing for Bankruptcy:

Effect on Credit Score: Bankruptcy will significantly impact your credit score, and the bankruptcy will stay on your credit report for 7 to 10 years, depending on the type (Chapter 7 or Chapter 13). This can make it more challenging to secure loans or credit in the future.
Exemptions and Property: If you file for Chapter 7, you may lose non-exempt assets if they can be liquidated to pay creditors. In Chapter 13, you must have a steady income to afford the repayment plan.
Medical Debt Alone May Not Be Enough for Chapter 7: If you only have medical debt and no other financial hardship, you might need to demonstrate that you meet the income and asset criteria for Chapter 7.

Alternatives to Bankruptcy for Medical Bills:

If bankruptcy doesn’t seem like the best option for you, there are other potential solutions for managing medical debt:

Negotiating with Healthcare Providers: Some providers may be willing to settle your debt for a lower amount or allow you to pay in installments.
Debt Consolidation or Credit Counseling: A credit counselor may be able to help you consolidate your medical bills into one payment or find other ways to manage debt without resorting to bankruptcy.
Debt Settlement: This involves negotiating with creditors to reduce the amount owed, typically for a lump-sum payment less than the total debt.

Conclusion:

Yes, you can file for bankruptcy on medical bills. Whether you file for Chapter 7 (which discharges the debt) or Chapter 13 (which reorganizes the debt into a manageable repayment plan) depends on your specific financial situation. Both options can provide relief from overwhelming medical debt, though there are potential impacts on your credit and assets. Consulting with a bankruptcy attorney can help you determine the best approach based on your individual circumstances.

Regular Post

Written by Canterbury Law Group

27 December 2024

Should I File for Chapter 7 or Chapter 13 If I Want to Keep My Home?

Choosing between Chapter 7 and Chapter 13 bankruptcy depends on your financial situation and specific goals, including whether you want to keep your home. Each type of bankruptcy offers different benefits and consequences regarding property and debts.

Here’s a breakdown of both options to help you decide which might be better suited for you if your goal is to keep your home:

Chapter 7 Bankruptcy:

Liquidation bankruptcy: Chapter 7 is primarily a liquidation bankruptcy, where non-exempt assets may be sold to pay off creditors. It’s typically the faster of the two types of bankruptcy, often completing in about 3 to 6 months.
Eligibility: You must pass the means test to qualify for Chapter 7, which ensures your income is low enough to file for this type of bankruptcy.
How It Affects Your Home:
- Exemption: In Chapter 7, you can keep your home if you are current on your mortgage payments and if your home is exempt under your state’s homestead exemption laws.
- If your home has equity (the value of the home exceeds the amount owed on the mortgage), the bankruptcy trustee may sell it to pay creditors, unless the home equity is protected by the homestead exemption.
- If you’re behind on mortgage payments, the lender may still proceed with foreclosure unless you catch up on payments through other means.
Debt Discharge: Chapter 7 eliminates most unsecured debts like credit cards, medical bills, and personal loans. However, it does not discharge secured debts like mortgages or car loans, so you must continue making payments on your home if you want to keep it.

Chapter 13 Bankruptcy:

Reorganization bankruptcy: Chapter 13 involves reorganizing your debt and setting up a repayment plan to pay back a portion of your debt over 3 to 5 years, based on your income, assets, and debt.
Eligibility: You must have a regular income and your unsecured debts must be less than $419,275, and secured debts must be less than $1,257,850 (as of 2023).
How It Affects Your Home:
- Foreclosure Protection: Chapter 13 stops foreclosure proceedings and gives you an opportunity to catch up on past-due mortgage payments over time. You can keep your home if you can make the mortgage payments and any arrears as part of your repayment plan.
- Retention of Property: You can usually keep your home even if you’re behind on payments, as long as you can afford to repay the arrears over the life of the repayment plan.
- Revised Repayment Terms: If you owe a significant amount on your mortgage or other secured debts, you may be able to reduce the overall debt through the plan, although this can vary based on your specific situation.
- Debt Discharge: At the end of the plan, any remaining unsecured debt that has not been repaid is discharged.

When to Choose Chapter 7:

You are current on your mortgage payments and don’t have a significant amount of home equity.
You are looking to eliminate unsecured debts quickly and start fresh, while being able to keep your home.
You don’t have significant assets to protect and don’t mind the potential risks of liquidation if there’s home equity that isn’t fully protected by the homestead exemption.
You don’t mind losing your home if it’s at risk due to unpaid mortgage arrears or foreclosure.

When to Choose Chapter 13:

You are behind on mortgage payments and want to avoid foreclosure. Chapter 13 gives you a chance to catch up on missed payments over a 3-5 year period, making it a good option for those at risk of losing their home.
You have significant home equity that would not be protected by Chapter 7 exemptions, or if you own other valuable assets you want to keep.
You want to restructure your debts, including mortgage arrears, and create a manageable repayment plan that allows you to retain your property.
You have regular income and can afford a structured payment plan over time.

Key Takeaways:

If keeping your home is a primary concern and you’re behind on your mortgage, Chapter 13 is generally the better option, as it allows you to reorganize your debts and catch up on overdue payments while preventing foreclosure.
If you’re current on your mortgage and have minimal home equity or don’t mind potentially losing your home (due to non-exempt equity), Chapter 7 may be an option to quickly discharge unsecured debts and keep your home.

However, the best choice depends on the specifics of your financial situation, such as the amount of mortgage arrears, home equity, income, and other debts. Consulting with a bankruptcy attorney can help you evaluate your situation and determine the most appropriate course of action based on your goals of keeping your home.

Carefully consider the advantages and disadvantages given above before discussing your bankruptcy with an attorney. For more email the firm at [email protected] or call 480-744-7711.

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Regular Post

Written by Canterbury Law Group

1 October 2024

Can You File Bankruptcy For Medical Bills

You can file for bankruptcy to discharge or manage medical bills. Medical debt is considered unsecured debt, meaning it’s not tied to any specific asset, and it can be included in bankruptcy filings. There are two primary types of bankruptcy that individuals often file in the U.S. to manage medical debt:

1. Chapter 7 Bankruptcy (Liquidation Bankruptcy):

How it works: In a Chapter 7 bankruptcy, non-exempt assets may be sold to pay off creditors, but most people who file do not have significant assets that can be liquidated. After the process, most unsecured debts, including medical bills, can be discharged (eliminated).
Impact on medical bills: Medical bills are typically fully discharged in Chapter 7, meaning you are no longer legally obligated to pay them.
Eligibility: To qualify for Chapter 7, you must pass a “means test,” which examines your income, expenses, and ability to pay back debts. If your income is below the median for your state, you likely qualify.

2. Chapter 13 Bankruptcy (Reorganization Bankruptcy):

How it works: In a Chapter 13 bankruptcy, you create a repayment plan to pay back some or all of your debts over a three to five-year period. Unsecured debts like medical bills are included in the repayment plan, but after the repayment period, any remaining unsecured debts may be discharged.
Impact on medical bills: Medical bills are part of the debts that can be reorganized and partially repaid under this plan. Any remaining amount after the plan period may be discharged.
Eligibility: Chapter 13 is an option for individuals who do not qualify for Chapter 7 or who want to keep certain assets (such as a home or car) that they might lose under Chapter 7. It also requires a regular income.

Considerations:

Credit score: Filing for bankruptcy will negatively impact your credit score for several years (up to 10 years for Chapter 7 and 7 years for Chapter 13).
Consult an attorney: Bankruptcy laws can be complex, and consulting with a bankruptcy attorney can help you determine which type of bankruptcy is best for your situation.

Overall, bankruptcy is a legal way to manage overwhelming medical debt and can provide relief for individuals facing financial hardship due to medical expenses.

Can You Negotiate Medical Bills?

Yes, you can file for bankruptcy to discharge or manage medical bills. Medical debt is considered unsecured debt, meaning it’s not tied to any specific asset, and it can be included in bankruptcy filings. There are two primary types of bankruptcy that individuals often file in the U.S. to manage medical debt:

1. Chapter 7 Bankruptcy (Liquidation Bankruptcy):

How it works: In a Chapter 7 bankruptcy, non-exempt assets may be sold to pay off creditors, but most people who file do not have significant assets that can be liquidated. After the process, most unsecured debts, including medical bills, can be discharged (eliminated).
Impact on medical bills: Medical bills are typically fully discharged in Chapter 7, meaning you are no longer legally obligated to pay them.
Eligibility: To qualify for Chapter 7, you must pass a “means test,” which examines your income, expenses, and ability to pay back debts. If your income is below the median for your state, you likely qualify.

2. Chapter 13 Bankruptcy (Reorganization Bankruptcy):

How it works: In a Chapter 13 bankruptcy, you create a repayment plan to pay back some or all of your debts over a three to five-year period. Unsecured debts like medical bills are included in the repayment plan, but after the repayment period, any remaining unsecured debts may be discharged.
Impact on medical bills: Medical bills are part of the debts that can be reorganized and partially repaid under this plan. Any remaining amount after the plan period may be discharged.
Eligibility: Chapter 13 is an option for individuals who do not qualify for Chapter 7 or who want to keep certain assets (such as a home or car) that they might lose under Chapter 7. It also requires a regular income.

Considerations:

Credit score: Filing for bankruptcy will negatively impact your credit score for several years (up to 10 years for Chapter 7 and 7 years for Chapter 13).
Consult an attorney: Bankruptcy laws can be complex, and consulting with a bankruptcy attorney can help you determine which type of bankruptcy is best for your situation.

Overall, bankruptcy is a legal way to manage overwhelming medical debt and can provide relief for individuals facing financial hardship due to medical expenses.

Regular Post

Written by Canterbury Law Group

30 September 2024

Chapter 7 Bankruptcy—Who Can’t File

Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” allows individuals and businesses to discharge most of their unsecured debts, providing a fresh financial start. However, not everyone is eligible to file for Chapter 7 bankruptcy. Here’s a detailed overview of who cannot file for Chapter 7 bankruptcy:

1. High Income Individuals (Means Test)

Means Test Requirement: Individuals whose income exceeds a certain threshold based on the state median income may not qualify for Chapter 7 bankruptcy. The means test evaluates income, expenses, and family size to determine if the individual can afford to repay some debts.
Excessive Income: If your average monthly income over the six months preceding the bankruptcy filing is higher than the median income for your household size in your state, you may not qualify for Chapter 7.

2. Prior Bankruptcy Filers

Recent Filings: If you have filed for Chapter 7 bankruptcy in the past eight years, you are ineligible to file again for Chapter 7.
Chapter 13 Bankruptcy: If you have filed for Chapter 13 bankruptcy and received a discharge in the last six years, you cannot file for Chapter 7 unless you have successfully completed the Chapter 13 plan and obtained a discharge.

3. Fraudulent Filers

Fraudulent Behavior: Individuals who have committed bankruptcy fraud, such as providing false information or failing to disclose assets, may be denied the ability to file for Chapter 7.
Concealment of Assets: If you have hidden assets or income with the intent to defraud creditors or the bankruptcy court, your filing may be dismissed.

4. Undisclosed Debts

Failure to Disclose All Debts: If you do not list all your debts when filing for bankruptcy, the court may deny your request for Chapter 7 protection. Full disclosure of all debts is mandatory.

5. Recent Debt Incurrence

Recent Credit Card Purchases: If you incurred significant debt shortly before filing for bankruptcy, especially on luxury items or cash advances, the court may scrutinize your case. This can result in a denial of discharge for those debts, if deemed fraudulent.

6. Current Bankruptcy Cases

If you are currently in a bankruptcy case (either Chapter 7 or Chapter 13) that has not been discharged, you cannot file for another Chapter 7 bankruptcy until the first case is resolved.

7. Certain Legal Entities

Business Entities: Generally, Chapter 7 is designed for individuals and certain types of partnerships. Corporations and limited liability companies (LLCs) file for bankruptcy under different chapters, such as Chapter 11 or Chapter 13.

8. Certain Taxes and Debts

Non-Dischargeable Debts: Even if you qualify for Chapter 7, some debts cannot be discharged in bankruptcy. This includes certain taxes, student loans, child support, and alimony.

Conclusion

While Chapter 7 bankruptcy can provide a fresh start for many individuals, several restrictions exist regarding eligibility. Individuals with high incomes, prior bankruptcy filings, fraudulent behavior, or certain legal obligations may find themselves unable to file for Chapter 7. Consulting with a bankruptcy attorney is advisable to navigate the complexities of bankruptcy laws and assess your eligibility based on your unique financial situation.

Carefully consider the advantages and disadvantages given above before discussing your bankruptcy with an attorney. For more email the firm at [email protected] or call 480-744-7711.

bankruptcy, bankruptcy attorneys, Chapter 11, Chapter 11 Bankruptcy, Chapter 13, Chapter 13 Bankruptcy, Chapter 5, Chapter 5 claims, Chapter 7, Chapter 7 Bankruptcy

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Regular Post

Written by Canterbury Law Group

9 July 2024

Federal and State Bankruptcy Exemptions

What are Bankruptcy Exemptions?

Bankruptcy exemptions are laws that allow debtors to protect certain property from being taken by creditors during the bankruptcy process. These exemptions help ensure that individuals can maintain a basic standard of living while resolving their debts. The specific exemptions available can vary by state, but they generally fall into two categories: federal exemptions and state exemptions.

Federal Bankruptcy Exemptions

The federal bankruptcy code provides a set of exemptions that apply in every state. Debtors can choose to use these exemptions instead of state exemptions if the state allows it. Some common federal exemptions include:

Homestead Exemption: Protects a certain amount of equity in the debtor’s primary residence. In 2024, the federal homestead exemption is $27,900.
Motor Vehicle Exemption: Protects up to $4,450 in equity in one motor vehicle.
Personal Property Exemptions: Protects specific amounts of equity in personal property, such as:
- Household goods and furnishings (up to $700 per item, with a total limit of $14,875).
- Jewelry (up to $1,875).
- Tools of the trade (up to $2,800).
Wildcard Exemption: Allows debtors to protect any property up to a certain amount. In 2024, the federal wildcard exemption is $1,475, plus up to $13,950 of any unused portion of the homestead exemption.
Retirement Accounts: Protects most tax-exempt retirement accounts, such as 401(k)s and IRAs, up to a certain limit (IRAs are capped at $1,512,350).
Public Benefits: Protects Social Security, unemployment, and disability benefits.
Life Insurance: Protects life insurance policies with a loan value up to $14,875.

State Bankruptcy Exemptions

Each state has its own set of bankruptcy exemptions, and some states allow debtors to choose between the state and federal exemptions. States that do not allow the use of federal exemptions require debtors to use state exemptions. Some examples of state exemptions include:

Homestead Exemption: Varies widely by state. Some states, like Florida and Texas, offer unlimited homestead exemptions, while others have specific dollar limits.
Motor Vehicle Exemption: Amounts vary by state. For example, California allows up to $3,325 in equity in one motor vehicle.
Personal Property Exemptions: Protect specific types and amounts of personal property, such as:
- Clothing, furniture, and appliances.
- Tools of the trade.
Wages: Many states protect a portion of the debtor’s wages from garnishment.
Retirement Accounts: Most states offer exemptions for retirement accounts similar to federal protections.
Public Benefits: Protects various public benefits, such as Social Security, unemployment, and disability benefits.
Wildcard Exemptions: Some states offer a wildcard exemption that can be applied to any property.

Choosing Exemptions

Debtors must choose either the federal or state exemptions, depending on their state of residence. In some cases, the choice of exemptions can significantly impact the outcome of the bankruptcy case. Consulting with a bankruptcy attorney can help debtors understand which set of exemptions is more beneficial for their situation.

Arizona Exemptions

At Canterbury Law Group, our Scottsdale attorneys are renowned bankruptcy technicians. We represent clients through the entire bankruptcy process and, although all cases are unique, the end goal of bankruptcy is always a new beginning and fresh financial start.

We help clients determine eligible exemptions for their bankruptcy case. Here are some of the most common exemptions available under Arizona law (meaning that they will emerge from bankruptcy):

Alimony and Child Support – Alimony and child support, up to the amount needed for support. 33-1126.
Bank Deposit – A debtor may exempt $300 in a single bank account. Ariz. Rev. Stat. Ann. § 33–1126(8).
Homestead or Residential Property – Under Arizona law, debtors may exempt up to $150,000 (per debtor or married couple) of their home or other real property covered by the homestead exemption. Ariz. Rev. Stat. Ann. §§ 33–1101, 33–1103 and 33–1104.
Insurance Benefits – Life insurance benefits that are payable or received by a surviving spouse or child, up to $20,000.
Claims for the destruction of, or damage to, exempt property – Cash surrender value of life insurance policies, subject to length of ownership requirements and other exceptions.
Motor Vehicles – A debtor may exempt up to $6,000 in one or more motor vehicles. An elderly or disabled debtor, or an elderly or disabled spouse or dependent of the debtor, may exempt up to $12,000.
Pension and Retirement Benefits – Benefits from various employee pension systems are exempt. Ariz. Rev. Stat. Ann. §§ 33–1126 and 38–792.
Personal Property – A debtor may exempt the following personal property:
- up to $6,000 in household furniture and appliances not covered by other exemptions
- up to $1,000 total in bible, bicycle, sewing machine, typewriter, computer, burial plot, rifle, pistol or shotgun
- up to $500 in clothing
- up to $400 in musical instruments
- up to $800 in animals
- up to $2,000 in engagement and wedding rings
- up to $250 in books
- up to $150 in watch
- wrongful death awards
- prepaid rent or security deposit to $2,000 or 1.5 times your rent, whichever is less, in lieu of using homestead exemption.
- all teaching materials for youth, and
- certain professionally prescribed health aids.

Tools of the Trade – A debtor may exempt up to $5,000 in trade implements, which includes farming tools if the debtor’s primary income is from farming. All arms and uniforms that a debtor is legally required to keep are exempt. Library and teaching aids of a teacher.
Unemployment Compensation – Unemployment compensation is exempt as long it is not commingled with other funds and except for the enforcement of child support orders. Ariz. Rev. Stat. Ann. § 23–783.
Wages – A debtor may exempt the lesser of the following wages, per week:
- 25% of his or her disposable earnings, or
- earnings in excess of 30 times the federal minimum wage
- Workers’ Compensation – A debtor may exempt up to $6,000 in one or more motor vehicles. An elderly or disabled debtor, or an elderly or disabled spouse or dependent of the debtor, may exempt up to $12,000.

Our legal team is ready to represent you in your Scottsdale business or personal bankruptcy case. Call us today to schedule your consultation. Our track record speaks for itself! 480-744-7711.

Regular Post

Written by Canterbury Law Group

2 May 2017

Advantages and Disadvantages of Filing for Chapter 7 or 13 Bankruptcy in Arizona

If you have decided to file for bankruptcy, you may be wondering whether you should file for Chapter 7 or Chapter 13. Chapter 7 bankruptcy is not suitable for all situations. Also, Chapter 13 bankruptcy is usually the more common option for petitioners who are behind on mortgage payments but still want to keep their property. Chapter 13 bankruptcy allows the borrower to agree to pay back overdue charges and settle back on the original mortgage contract. Chapter 7 bankruptcy is the most commonly used option for those who are severely indebted and simply wish to start over.

You can always consult with a local bankruptcy attorney in Scottsdale or your area to decide which option is best for you. Otherwise, take a look at advantages and disadvantages of both Chapter 7 and Chapter 13 forms of bankruptcy to decide which option is the best for you:

Chapter 7 Bankruptcy in Arizona

Most Arizonans who are in heavy debt choose this option to solve their financial situation. Under Chapter 7 filings, a court will most likely discharge unsecured debts like credit card debt or personal loans. The petitioners will only have to pay back debts secured with assets once the parties have agreed on a “Reaffirmed Agreement.”

Chapter 7 bankruptcy is particularly attractive to many because it offers protection against debt collection efforts like constant calls and holding back wages. If you earn any wages on a property you have bought, the money will belong to you, not the creditor, following the Chapter 7 bankruptcy filing date.

There is also no minimum debt amount needed to file for Chapter 7 bankruptcy. You can expect the proceedings to end within 3 to 6 months from the filing date.

As attractive as it may be, Chapter 7 bankruptcy is not without its setbacks. Mainly, the law does not cover assets given up as collateral for a loan, such as a property or a vehicle. The petitioners could lose non-exempt property, which would later be sold by a court-appointed Trustee. Chapter 7 bankruptcy is not typically suitable if your home is undergoing foreclosure. Filing for bankruptcy will only temporarily halt the proceedings. Co-signers will also be contractually bound unless they separately file for bankruptcy.

Chapter 13 Bankruptcy in Arizona

This option allows petitioners to keep all property, whether exempt or nonexempt, under a court-approved payment plan. If you have many secured loans, then Chapter 13 bankruptcy is the best option for you. Some debts will not be canceled under Chapter 7, but a judge can reduce them. Like with Chapter 7, Chapter 13 filings afford protections against collection calls and similar efforts by the creditor. When pursuing Chapter 13, you’re most likely going to need experienced legal counsel by your side.

If you agree on a full payment, co-signers will be protected from creditor’s collection efforts. You can also obtain protection against foreclosure of your home if you completely follow the new payment agreement. You can also get more time to pay off debts under this proceeding, especially ones that are not discharged, like child support or taxes. You can also repeatedly file for Chapter 13 bankruptcy.

The disadvantage is that the payment plan you agree to will be based on your income earned after the filing date. You will have to be frugal until the debts are paid back as per the agreement. These plans can last from 3 to 5 years. As a result, the proceedings can last up to 5 years. Attorney fees for Chapter 13 bankruptcy also tend to be higher. Some professions, like stockbrokers, cannot file for Chapter 13 bankruptcy in Arizona.

Carefully consider the advantages and disadvantages given above before discussing your bankruptcy with an attorney. For more email the firm at [email protected] or call 480-744-7711.

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Regular Post

Written by Canterbury Law Group

24 August 2016

Important Factors on Bankruptcy Help in Scottsdale

If your financial struggles are becoming overwhelming and the future looks bleak, there are a few things you need to know before filing for bankruptcy.

1. There is No Shame in Filing – If you are considering bankruptcy but your feelings about what type of person you would be to file are stopping you, it’s time to get over it! These days, people from all walks of life file for bankruptcy. You should feel no shame in wanting to solve your financial struggles and get your life back in order. The stigma is in avoiding the problems, hiding from creditors, and not facing the facts – it’s time to fix your finances and turn a new corner.

2. You May Be Able to Keep Your Home – Arizona has well known homestead exemptions that allow you to keep your primary residence. Being forced out of your home is not a reason to avoid filing bankruptcy. The likelihood of losing your home is much greater if you do not file. A Scottsdale bankruptcy attorney can help you make bankruptcy choices that in most cases may permit you to maintain ownership of your home even after your bankruptcy concludes. And in this day and age when so many homeowners are underwater on their mortgage, the likelihood of your home not being included in your bankruptcy is even greater.

3. Bankruptcy is an Investment – If you feel as if you are sinking financially, now is the time to contact a Scottsdale bankruptcy attorney. He or she can help you assess your current situation and get a handle on where you are headed. This will give you some time to save up the money you need to file for bankruptcy before it is too late.

Canterbury Law Group is uniquely qualified to represent clients in the most sophisticated personal and business bankruptcy cases. The range of services we provide depends on an individual’s or a company’s unique situation. Call us today to schedule a consultation. 480-240-0400 or [email protected]

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Written by Canterbury Law Group

17 August 2016

Does Bankruptcy Affect Students Financial Aid?

As back to school season is here, many parents are wondering if a previous bankruptcy can affect eligibility for education loans. Although it may affect some loans, it does not affect eligibility for certain forms of financial aid.

The Bankruptcy Reform Act of 1994 (P.L. 103-394) amended the US Bankruptcy Code at 11 USC 525(c) to prohibit denial of government student grants and loans based solely on the student’s or borrower’s past or present filing of a bankruptcy petition. The only exception is the Federal PLUS loan.

A child is eligible for federal student loans, such as the Stafford loan, regardless of the parent’s history of bankruptcy. Also, the Stafford loan does not depend on the borrower’s credit history in any way.

A parent’s history of bankruptcy also does not affect the child’s eligibility for federal grants, state grants, scholarships and money from the college, nor student employment programs like Federal Work-Study. The parent may also be eligible for tuition installment plans because these plans are usually structured as a qualified education loans to make them difficult to discharge in bankruptcy.

However, parents are ineligible to borrow from the PLUS loan program for five years from the date of the bankruptcy discharge. By law, PLUS loan borrowers must not have an adverse credit history. The regulations define an adverse credit history as having had a bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment or default determination in the last five years or a current delinquency on any debt of 90 or more days.

If a child’s parent is denied a PLUS loan because of an adverse credit history, the child becomes eligible for increased unsubsidized Stafford loan limits. Parents with a recent bankruptcy will be ineligible to serve as the borrower or co-signer on most private student loans. The provisions of the Bankruptcy Reform Act of 1994 apply only to federal student loans, not private student loans. Most lenders of private student loans ask about bankruptcy filings in the last 7 or 10 years. It really doesn’t matter whether the filing was under chapter 7, 11 or 13, as the lenders will be wary of lending money to anybody with a recent bankruptcy filing.

The bankruptcy lawyers at Canterbury law Group work attentively with bankruptcy clients to secure their fresh financial freedom. Whether filing as an individual or for your business, the bankruptcy attorneys at Canterbury Law Group are experienced experts in all areas of bankruptcy cases in the Phoenix area. Please call us today to schedule your consultation.

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Written by Canterbury Law Group

13 July 2016

Arizona Bankruptcy Exemptions

We help clients determine eligible exemptions for their bankruptcy case. Here are some of the most common exemptions available under Arizona law (meaning that they will emerge from bankruptcy):

Alimony and Child Support – Alimony and child support, up to the amount needed for support. 33-1126.
Bank Deposit – A debtor may exempt $300 in a single bank account. Ariz. Rev. Stat. Ann. § 33–1126(8).
Homestead or Residential Property – Under Arizona law, debtors may exempt up to $150,000 (per debtor or married couple) of their home or other real property covered by the homestead exemption. Ariz. Rev. Stat. Ann. §§ 33–1101, 33–1103 and 33–1104.
Insurance Benefits – Life insurance benefits that are payable or received by a surviving spouse or child, up to $20,000.
Claims for the destruction of, or damage to, exempt property – Cash surrender value of life insurance policies, subject to length of ownership requirements and other exceptions.
Motor Vehicles – A debtor may exempt up to $6,000 in one or more motor vehicles. An elderly or disabled debtor, or an elderly or disabled spouse or dependent of the debtor, may exempt up to $12,000.
Pension and Retirement Benefits – Benefits from various employee pension systems are exempt. Ariz. Rev. Stat. Ann. §§ 33–1126 and 38–792.
Personal Property – A debtor may exempt the following personal property:
- up to $6,000 in household furniture and appliances not covered by other exemptions
- up to $1,000 total in bible, bicycle, sewing machine, typewriter, computer, burial plot, rifle, pistol or shotgun
- up to $500 in clothing
- up to $400 in musical instruments
- up to $800 in animals
- up to $2,000 in engagement and wedding rings
- up to $250 in books
- up to $150 in watch
- wrongful death awards
- prepaid rent or security deposit to $2,000 or 1.5 times your rent, whichever is less, in lieu of using homestead exemption.
- all teaching materials for youth, and
- certain professionally prescribed health aids.

Tools of the Trade – A debtor may exempt up to $5,000 in trade implements, which includes farming tools if the debtor’s primary income is from farming. All arms and uniforms that a debtor is legally required to keep are exempt. Library and teaching aids of a teacher.
Unemployment Compensation – Unemployment compensation is exempt as long it is not commingled with other funds and except for the enforcement of child support orders. Ariz. Rev. Stat. Ann. § 23–783.
Wages – A debtor may exempt the lesser of the following wages, per week:
- 25% of his or her disposable earnings, or
- earnings in excess of 30 times the federal minimum wage
- Workers’ Compensation – A debtor may exempt up to $6,000 in one or more motor vehicles. An elderly or disabled debtor, or an elderly or disabled spouse or dependent of the debtor, may exempt up to $12,000.

Our legal team is ready to represent you in your Scottsdale business or personal bankruptcy case. Call us today to schedule your consultation. Our track record speaks for itself! 480-744-7711.

Regular Post

Written by Canterbury Law Group

8 June 2016

How Celebs end up in Bankruptcy

American society always seems surprised when learning about the newest A-lister or celebrity who has filed for bankruptcy. Having a celebrity status and earning millions doesn’t necessarily deter bankruptcy. How is it possible that so many millionaires find themselves in bankruptcy court, clamoring to protect what little assets they have left? With all the celebrity millionaires (and billionaires) who have gone broke, we may be able to learn from their mistakes.

1. No Financial Education – Often, when you go from having nothing to having everything, a financial education is not part of the package. Learning how to save, budget, and invest can take years, and if you’ve never had substantial money before, you may never have learned these essential financial management skills. When handed huge checks to cash, many celebs go out and buy the biggest house and fastest car they can find, rather than learning how to properly handle their money.

2. Lack of Trustworthy People – Many celebrities surround themselves with attorneys, accountants and insurance professionals to help them with proper estate, tax and insurance planning. However, in doing so, they often do not bother double-checking the work that is being done on their behalf, nor do they properly vet the financial professionals they hire. Not surprisingly, many fall prey to unscrupulous advisors. Worse yet, some celebrities are taken advantage of by friends and family who they hire to manage their affairs.

3. Unrealistic Career Expectations – It might be easy to expect a successful Hollywood or professional sports career to continue indefinitely. But sadly, most careers don’t last very long. Unfortunately, not every actor picks up another well-paying gig immediately after their show is cancelled.

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