Written by Canterbury Law Group

How to Cope with the Stress of Fighting a Bankruptcy Case

No one really wants to be in a situation where they have to file for bankruptcy. It can be immensely stressful to go through with the proceedings. If you have trouble managing stress while you are petitioning for bankruptcy, here are several tips to help you reduce the mental burden:

Don’t Hesitate to Ask Your Lawyer the Tough Questions

Bankruptcy cases can be particularly stressful because the law involved in these cases can be quite complicated. Don’t be confused and or angered about the issues raised. If you have questions, ask your bankruptcy attorney in Scottsdale. A good lawyer will be more than happy to help you with whatever questions you have. Your attorney is also the best person to explain how the law applies to your unique situation. You will feel much better after you have spoken to your attorney regarding the tough parts of your case.

Think About Positive Aspects of Bankruptcy

Yes, it may seem impossible to look on the bright side of filing for bankruptcy, but there really is one. Bankruptcy can actually be good for you. Think about all the good things happening. For starters, your creditors can no longer harass you with never-ending phone calls. You are no longer avoiding debt issues. Some of the debt you have, like credit card debt, can be dismissed by the court depending on under which chapter you file.

Chapter 7 bankruptcy is considered the “best plan for debt elimination” because the court discharges most types of unsecured debt under this law.  The court will order a credit plan to pay back whatever remaining debt you have. So when the court proceedings are done, you will mostly be debt free!

Sleep Properly

Do not stay up late worrying about your case; let your attorney handle that part. Try to get at least 7 hours of sleep each night when the case is proceeding. If you are sleep deprived, you will feel even more stressed out. A good night’s sleep can clear your head and prepare you mentally to navigate your case.

Educate Yourself about Issues Involved

Your attorney may not have time to explain every little thing about your case to you. In this situation, you can always go online and read about the basics of filing for bankruptcy litigation. If you don’t understand what Chapter 7 or Chapter 11 bankruptcy is, there are plenty of resources online (and also on this blog) that will help you understand the process involved. Don’t hesitate to do your research. When you are educated about the laws involved, the case will seem a lot less complicated to you. That should relieve most of your stress issues.

You can also read blogs about people who have overcome debt after filing for bankruptcy. Reading about the experiences of others will help you overcome yours better.

What’s more stressful than going through with a bankruptcy case? Crushing debt. Once the case is over, your debt will be largely be gone too. So think about the positives and don’t dwell on the negatives until your case concludes and you are fully discharged.  This too shall pass.  

Written by Canterbury Law Group

Consulting with a Bankruptcy Attorney

Before you file a bankruptcy petition, you must consult with a competent bankruptcy attorney. In fact, you should do this while even contemplating bankruptcy. The attorney would be able to tell you whether bankruptcy is the best option for your financial situation and the best timing to file. When you are consulting with a bankruptcy attorney, here is what you should ask and seek answers for:

Tell the Lawyer Briefly about Your Financial Situation

When you meet up with your bankruptcy lawyer in Scottsdale, be 100% honest with them regarding your financial situation. Do NOT withhold the truth for any reason.  If you haven’t hired the lawyer, you don’t have to give details of your debts. However, a brief overview will be necessary. Tell the lawyer what type of debt you have, your income situation, and why you think you are unable to repay your loans on time. The lawyer should be able to tell you then whether bankruptcy is the suitable next step for your financial situation.  If you lie to your lawyer, you could face criminal prosecution in your underlying bankruptcy case later because he or she would be defrauding the court.  The truth the truth and nothing but the truth, because your bankruptcy is filed under penalty of perjury.

Ask the Lawyer if He or She is willing to be a Negotiator

Before you file for bankruptcy, you can try negotiating with creditors. Bankruptcy is not the ideal scenario for either debtors or creditors. Some creditors may be willing to cut down the interest rate or extend the repayment plan. If you are worried about your credit score, negotiating is better than going to court. You can inquire about the pros and cons of bankruptcy from your attorney. It’s important to make sure it’s the best solution for your financial problems before proceeding.

Inquire about Different Types of Bankruptcy

The Bankruptcy Code allows for different types of bankruptcy petitions. You may have heard of some of these already, like Chapter 7. While Chapter 7 is the most common type of petition for individual debtors, it may not be the only one. If you belong to a higher income category, you may have to file for Chapter 13. If you have a family business in fishing or farming, you may be eligible for Chapter 12 bankruptcy. Ask your lawyer about which type of bankruptcy petition best suits your situation.

Check Your Eligibility to File a Petition

If you have filed for bankruptcy before, you may not be eligible to file again. For example, if you have declared Chapter 7 bankruptcy in the past, you will not be eligible for the same type of petition for about 6 to 8 years depending on what state you file in. There could be other factors, like income and alimony that make you ineligible to file for bankruptcy or at least the type of debt relief you seek. Therefore, you will need to ask the attorney to find out if you are eligible to file a petition and which chapter might get you the best debt relief.

Learn about Fees and the Process

Filing for bankruptcy is not expensive, but there will be court fees involved. Learn about these fees from the lawyer. Also, ask the lawyer to explain the general process of filing in your local jurisdiction. You will have to discuss representation fees and consultation fees as well. Bankruptcy attorneys are limited in how much they can charge as per Arizona law.  You typically get what you pay for.  The $99 down bankruptcy ads on TV are usually highly misleading.  Most bankruptcy filings, no matter who you hire, require several thousand dollars to file and complete.

If your consultation goes successfully, you will be able to proceed with your petition.  Consider contacting us to consult to discuss your needs.

Written by Canterbury Law Group

What Type of Bankruptcy Should You File in Arizona?

There are several different types of bankruptcy to consider if you are in serious debt you cannot pay back. First, you have to decide that bankruptcy is the best course of action to take. Once you have done that, you should decide under which “chapter” under which to file for bankruptcy.

The most common types of personal bankruptcy are Chapter 7 or Chapter 13. To decide between the two, you should seek legal advice from a local bankruptcy lawyer in Scottsdale, Phoenix or elsewhere. Let’s look at the types of bankruptcy available and which type may suit your needs the best:

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.