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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

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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How Long Does Chapter 7 Bankruptcy Stay On Your Credit Report?

Chapter 7 Bankruptcy

Chapter 7 bankruptcy will remain on your credit report for ten years although bankruptcy filing takes only three to six months. Financial hardship from unforeseen circumstances is the leading reason people give for declaring bankruptcy. Chapter 7 bankruptcy will have a negative impact on your credit and may lower your credit score for years to come. Read on to learn more.

In Chapter 7 bankruptcy – those who file will no longer have to pay debt that is unsecured such as medical expenses, credit card of personal loans but settling secured loans will require the sale of their assets.

Credit Score Impact

The impact the bankruptcy has on your credit score will lesson as the years go by. So, expect a large drop at the beginning but for it to lessen over time. If you miss a credit card payment when you have a high score can take away more points than having a lower score – the same applies with bankruptcy. It also similarly applies if there is only a small number of accounts on your bankruptcy filing, the impact will be less on your credit score.

Some online sources suggest a score of around 780 will have between 200 and 240 points taken off their credit score but someone with a score of 680 will only lose between 130 and 150 points. Clearly it must be considered only when it is the final option on the table.

Source: https://www.cnbc.com/select/how-long-do-bankruptcies-stay-on-credit-report/

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 Does a Lawyer Charge For Chapter 7 Bankruptcy?

How Much Does a Lawyer Charge For Chapter 7 Bankruptcy

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 2020. 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.

Source: https://www.thebankruptcysite.org/resources/typical-attorney-fees-chapter-7-bankruptcy.htm

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 is Chapter 7 Bankruptcy?

What is Chapter 7 Bankruptcy

A liquidation or straight bankruptcy is also called a Chapter 7 bankruptcy. This bankruptcy type is one that can remove unsecured debts. If you have quite a few bills and are not able to afford all of the monthly payments as well as living expenses, then filing for Chapter 7 bankruptcy could be one way that you can reset all of your finances. However, you could end up losing some of your possessions, and it can negatively impact your creditworthiness.

How Chapter 7 Bankruptcy Works

Whenever you file for a chapter 7 bankruptcy, the court will put a stay on all of your current debts. What this does is stop any creditors from garnishing your wages, turning off your utilities, evicting you, repossessing your property, foreclosing on your home, and stops them from collecting wages.

The job of the trustee is to review your assets and finances while overseeing your bankruptcy. The trustee will sell certain things that bankruptcy will not let you keep, which is called nonexempt property. The money from this gets used to repay your creditors. Trustees also deal with meetings between you and any creditors where you show up to a courthouse and answer questions about filing.

The property that you do not have to turn over to creditors or items you do not have to sell, which is called exempt property and the value of what you can claim as exempt, will vary based on the state where you are residing. Some states allow you to choose between federal exemptions and the state exemption list. However, Chapter 7 usually is a no-asset case, which means that either all of the property is exempt or there are valid liens on the property.

During the end of this process, around six months after you file for bankruptcy, the court will then discharge remaining debts, which means that you no longer need to pay them. Although, there are some types of debts that cannot get discharged during bankruptcy like student loans, tax debts, court fees, alimony, and child support.

The Differences Between Chapter 13 and Chapter 7 Bankruptcy

Chapter 13 and Chapter 7 are the most common types of bankruptcy, which affects a person. Either can help when you do not have the means to pay off your bills, but there are some significant differences between these types of bankruptcies.

Chapter 13 bankruptcy will allow you to keep all of your items and get a much more affordable repayment plan with all of your creditors. You will need to have enough income for you to afford to make the payments and be below the maximum total limits of your debts, which is $1 million or more for secured debts and $400,000 for unsecured debts.

The court will then approve a repayment plan for Chapter 13 bankruptcy. It is a payment plan that will last up for five years, and a trustee collects your money and distributes it to your creditors. Once the plan gets completed, the remaining unsecured debt will get paid off.

Who is Eligible for Chapter 7 bankruptcy?

If you want to apply for Chapter 7 bankruptcy, some conditions need to get met:

  • The average monthly income for the first six months will need to be under the median income of a family of the same size in your state, or you must pass a means test to decide whether your disposable income can cover partial payments to creditors. If you fail the means test, you can still apply for Chapter 13 bankruptcy protection.
  • In the past six years, you have not been able to apply for Chapter 13 bankruptcy protection.
  • If you try to file a Chapter 7 or Chapter 13 bankruptcy petition and your case is dismissed, you must wait at least 181 days before you can try again.
  • Generally, you must complete an individual or group credit counseling course from an approved credit counseling agency within 180 days before applying.
  • You may be eligible to file a lawsuit, but if the court decides that you are trying to defraud creditors, the court may dismiss your case. For example, if you take out a loan or use a credit card, then declare bankruptcy to avoid repaying the debt.
  • In the past eight years, you have not been able to apply for Chapter 7 bankruptcy protection.

What Debts Get Gorgiven in Chapter 7 Bankruptcy?

Chapter 7 bankruptcy usually releases your unsecured debts, such as credit card debt, medical expenses, and unsecured personal loans. At the end of the lawsuit, the court will usually clear these debts within four to six months after you start the lawsuit.

Certain types of unsecured debts do not usually get discharged through Chapter 7 bankruptcy, including:

  • Unsecured debts that you intentionally did not mention during the filing
  • Personal injury debts owed because of an accident caused by your intoxication
  • Court penalties and fees
  • Homeowners association fees
  • Tax debts
  • Student loans
  • Alimony
  • Child support

Your creditors can also object to and prevent specific debt relief. For example, a credit card company may object to the recent purchase of luxury goods or prepaid cash debts, and the court may decide that you still need to repay the credit card balance.

Besides, Chapter 7 bankruptcy may discharge your debts owed to the secured loan. A secured loan is secured by a mortgage, as in a home loan or the creditor has a property lien. However, even if the debt gets paid off, the creditor still has the right to cancel or recover your property.

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.

How Long Does Chapter 7 Bankruptcy Remain in your Credit Report?

Chapter 7 bankruptcy is a significant derogatory sign, and it may damage your credibility. From the filing date, Chapter 7 bankruptcy records can get retained on your credit report for up to 10 years, and from the filing date, a complete Chapter 13 bankruptcy can get retained on your credit report for seven years.

The accounts included in the bankruptcy may be deleted from your credit report earlier, as most negative signs will get deleted after seven years.

Life After Bankruptcy

Filing for bankruptcy can consume much energy financially, physically, and emotionally. However, this may be your best choice when bills continue to pile up, and you are unable to pay your creditors. You can also recover from bankruptcy and rebuild your finances and credit, but it will take time.

Source: https://www.experian.com/blogs/ask-experian/what-is-chapter-7-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

My Workplace is Going Bankrupt – What Do I Do?

When a business goes bankrupt it, it isn’t the management and owner who tends to get hit the hardest. Instead, it is the on the ground workers who are more likely to feel the hit the hardest.

Higher paid employees like management who would know more about the bankruptcy likely have enough money saved up that they can get by. For entry-level employees and those not in management, however, chances are they won’t be as well off.

If you fall into this category and your business is going bankrupt, it can be a scary time. You are likely wondering what will happen to you. Will you still have a job? Are the bills going to pile up and will you have to file for bankruptcy yourself?

We want to provide you with the best bankruptcy help in Scottsdale. So, if your company is going bankrupt, as an employee, here is what you should know.

It depends on the Type of Bankruptcy

There are two types of bankruptcy claims that a business can go through. Depending on which one is being processed, will determine what happens to you as the employee.

If your company is filing for Chapter 11, the business is asking help from the courts to repay creditors and sell off assets. There is a chance you could get laid off as they go through cost-cutting measures. On the other side, the employer may retain all positions, but written employment contracts may be up for renegotiation that could not end well in your favor.

If your company is filing for Chapter 7 though, this is the liquidation of the entire business, meaning the company’s existence comes to an end. Most likely all employees will be out of a job after the end of the liquidation and the bankruptcy concludes.

Unpaid Wages Will Get Paid Out

If you get laid off due to the bankruptcy liquidation, any wages you’ve earned that has not been paid will be treated as a debt owed from the employer. There is a cap for wages, and salary earned up to 180 days before bankruptcy.

You cannot guarantee payment, however. In the Fair Labor Standards Act, unpaid wages are not covered. This means if there are not enough assets to pay for all of the unpaid wages, you may not receive anything at all.

You May Lose Your Pension

Most likely your employee pension plan will get terminated in the event of a liquidation. There was, though, the Pension Benefit Guaranty Corporation (PBGC) put in place to protect private sector workers. So, if your employer cannot pay your benefits, the PBGC will help out to fill the gap in pension assets. 

Vacation Pay

If you have accrued vacation days, they will fall into unpaid wages. This means you are likely to get compensated for them. However, once again, you cannot guarantee that you will receive your payout. The labor laws differ from state to state.

These are a few of the things to look out for if your company is filing for bankruptcy. If handled well, you could still be compensated for any unpaid wages, pensions, benefits, and vacation days after discharge. However, there is always the risk that you will receive nothing if the company cannot come up with enough money to pay their debts and your owed wages.

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How Many Times Can I File for Bankruptcy?

If you have filed for bankruptcy under Chapter 7 or Chapter 13 before, can you do the same again? Can a debtor in Arizona file for bankruptcy multiple times? It’s not uncommon for Arizonians to fall into hard times and become severely indebted once or twice. Technically, it is possible to file for bankruptcy more than once under Arizona law and the applicable federal laws. However, the law specifies certain circumstances under which a debtor can actually do that.

BAPCPA and Multiple Bankruptcy Filings

In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) went into to effect. The law made it less easy for debtors to file for Chapter 7 bankruptcy. The idea is to prevent unwarranted practices by higher income individuals who file for Chapter 7 bankruptcy to take advantage of its debt discharge clauses. BAPCPA aimed to force rich debtors to file for Chapter 13 instead and to pay back what they owe under a court-mandated payment plan.

As a result of BAPCPA, there are now several significant limitations for multiple Chapter 7 or Chapter 13 bankruptcy filings in Arizona.

What are the Limits on Multiple Bankruptcy Filings?

Here is a list of the most significant limitations to multiple bankruptcies that debtors should be aware of:

  • Debtors must wait for at least 8 years before filing for another Chapter 7 bankruptcy. The days are counted from the day the debtor filed the first Chapter 7 bankruptcy case. From then on, the debtor must wait exactly 8 years before filing for bankruptcy under the same chapter once again.
  • Debt discharges during the second bankruptcy could be more impaired based on discharges offered during the earlier bankruptcy filings. For example, if you are filing for a Chapter 13 bankruptcy, you cannot obtain a debt discharge if you were granted an earlier Chapter 13 debt discharge in the previous two years. If you have obtained a debt discharge under Chapter 7 in the previous 4 years, then you can’t get a Chapter 13 discharge for a new case. However, this doesn’t prevent you from being able to file for a Chapter 13 bankruptcy.
  • You can file for Chapter 13 bankruptcy regardless of how many bankruptcies you have filed before. There are certain circumstances, such as owning too much mortgage debt, that allow debtors to do this. Chapter 13 filings are accepted even for issues like needing a payment plan to pay off taxes owed.
  • Filing for Chapter 13 bankruptcy, regardless of precious bankruptcy history, enables automatic stay on a current debt between three to five years. However, the court must be specifically requested to enforce the automatic stay if you have had a bankruptcy dismissed by the court during the previous 12 months.

The above limitations are not too restrictive when it comes to filing for another bankruptcy. If your case is complicated, you must consult with an experienced Arizona bankruptcy attorney. Keep in mind that you may not be able to keep filing for Chapter 7 bankruptcy in rapid succession as per the recently amended rules and regulations.

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Written by Canterbury Law Group

The Benefits of Filing for Bankruptcy

Most people perceive bankruptcy as a dreadful thing, like a complete end to financial stability and future prospects. This is a rather misguided notion of bankruptcy. Filing for personal bankruptcy does have its benefits other than reaching a legal solution to overwhelming debt. Don’t believe it? Read below to find out:

Stop the Never-Ending Collection Calls

One of the major positive aspects that follow declaring personal bankruptcy is the definitive end to collection calls. In Arizona, creditors are legally obligated to stop attempting to collect the debt when a debtor has filed for personal bankruptcy. Your creditor won’t be able to call you, try to foreclose your home, notify your employers, or do anything else to attempt to collect your prior debt. If the creditor harassment continues, you will have a good case for your bankruptcy proceedings. You should contact a bankruptcy lawyer in Scottsdale to find out what your options are if credit harassment continues.

Keep Your Home

Arizona law allows exemptions for homesteads or the primary residence owned by a debtor. The court will not make you homeless and take away your shelter when you file for personal bankruptcy. So it’s a sensible way to try to save your home from debtors. This exemption has a dollar and equity limits and certain exceptions that you should clarify with a lawyer. But filing for bankruptcy will stop a creditor from foreclosing your home.

Protect Personal Assets

The Arizona bankruptcy law allows many personal property exemptions when filing for bankruptcy. That means you would be able to keep valuable assets like books, furniture, cheap motor vehicles, various electronic gadgets, family antiques, clothing, pets and so on in your possession. Creditors will not be able to claim these as collateral.  They are prohibited from taking your things.

Stay in Control of Business

Chapter 11 bankruptcy allows business owners control of their company even after filing for business bankruptcy. So it’s a good way to keep a business afloat when the debts threaten to run your company to the ground. The Chapter 11 bankruptcy also facilitates business owners to reduce debt gradually over time.  Chapter 11 can also aid in getting rid of high-stakes litigation by discharging the pending litigation claims that were previously being waged against your company.

Retain Your Pension Fund and Retirement Assets

You can retain your considerable IRA or other types of qualified retirement plans or pensions when you file for bankruptcy. It’s one another valuable personal asset that will be kept away from the debtors. Put another way, you will exit bankruptcy with virtually identical retirement assets as when you went into bankruptcy.

Start Improving Your Financial Status

When you file for bankruptcy, your credit score would hit rock bottom. But afterward, it will start to climb up again, sometimes rapidly. Filing for bankruptcy is sort of the last step towards regaining financial footing and security. After that, it only gets better. When you start to make debt payments, your credit score would start rising again.  Many creditors are attracted to persons coming out of bankruptcy and offer them credit because they know that the person cannot file another bankruptcy for many many years.

Have a Trustee Oversee Your Monetary Affairs

During your bankruptcy, the court appoints a Trustee between you and the creditors to oversee how the discharge on your bankruptcy filing is being carried out. This spells only good things for your future financial dealings. If pursuing a chapter 11 or 13, you will get a handcrafted debt repayment plan to get back on your feet after the declaring.   If pursuing Chapter 7, most if not all of your debts will be canceled.

Above all, you will feel less stressed. Your money matters will be taken care of, and the creditors will finally go away.  Consider speaking with competent bankruptcy legal counsel today.

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Written by Canterbury Law Group

Chapter 7 Bankruptcy Exemptions in Arizona

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. To find out more about exemptions you can get when filing for Chapter 7 bankruptcy, contact an experienced bankruptcy lawyer or call Canterbury Law Group at 480-744-7711.

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