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Written by Canterbury Law Group

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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Arizona Bankruptcy 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.

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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.

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. 480-744-7711.

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3 Steps When Filing Bankruptcy

At Canterbury Law Group, our Scottsdale bankruptcy attorneys are renowned industry experts. 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.

Here are three tips for those considering bankruptcy:

1. Gather financial documents. Start collecting financial documents that your attorney can use. Obtain a record of debt including credit card bills, unpaid medical bills, loan statements, etc. Also locate any documentation on assets you currently hold as well as your monthly income statements.

2. Find a qualified law team. Filing for bankruptcy is a complicated process and a simple mistake can be harmful to your case. Make sure you have a legal team that is experienced, understands your goals and can get the job done. Many law firms offer a complimentary first-time consultation. Call the Scottsdale bankruptcy lawyers at Canterbury Law Group today to schedule your appointment.

3. Improve upon your financial habits. You must improve your financial life after your file bankruptcy. Obtain a secured credit card or personal loan to start building up your credit but remember that you may have to wait some time before you can be approved for a secured credit card. Further educate yourself by reading books, reviewing financial websites and seeking out professional guidance.

As authorities in the legal industry, the bankruptcy team at Canterbury Law Group was uniquely formed to provide no-nonsense legal counsel for personal and business bankruptcy cases. The law group at Canterbury consists of a unified team of litigators and paralegals with the experience necessary to deliver high results. The team’s attention, experience and sophistication allows for innovative resolutions that have a positive client impact.

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

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3 Options in Business Bankruptcy

The Scottsdale bankruptcy attorneys at Canterbury Law Group work in business bankruptcy, which allows a company to efficiently sell assets or to liquidate in a controlled manner. Just like any other business strategy, bankruptcy should be considered early enough to be a viable strategy to preserve the business’s assets and help it continue as a going concern. Bankruptcy can also be an important tool for assisting in an orderly wind down and liquidation of a business and its assets. In addition to the some of the strategic benefits, liquidating through bankruptcy can provide numerous benefits over merely dissolving your entity.

There are three types of bankruptcy that your business may file for depending on its business form. Sole proprietorships are legal extensions of the owner; therefor the owner is responsible for all assets and liabilities of the firm. A sole proprietorship can take bankruptcy by filing for Chapter 7, Chapter 11 or Chapter 13. Corporations and partnerships are legal entities separate from their owners. As such, they can file for bankruptcy protection under Chapter 7 or Chapter 11.

1. Chapter 7 – The most common form of bankruptcy in the United States, Chapter 7 bankruptcy, provides individuals with a discharge of all debt which are “dischargeable” under the Bankruptcy Code. In a Chapter 7, all of the debtor’s non-exempt assets on the petition date are liquidated through the priorities set forth in the Bankruptcy Code. At the time of filing, the bankruptcy code establishes the creation of your “debtor’s estate” which includes all “non-exempt assets.” As a Debtor you have various duties and obligations, including significant duties of co-operation, which are owed to the Trustee. These obligations are designed to assist the Trustee in the administration of your bankruptcy estate.

2. Chapter 11 – More individuals, usually with a high net worth, are turning to Chapter 11 to solve their bankruptcy needs. The bankruptcy attorneys at Canterbury Law Group have significant experience with Chapter 11 filings, which tend to be more complex, and are capable of filing an individual case under Chapter 11 as mandated by the facts of each individual case.

3. Chapter 13 – This type of bankruptcy is not a per se liquidation but rather involves a restructuring of debt typically over a three or five-year period, pursuant to a plan which is filed with, and approved by, the Court. This plan allows a debtor to pay its creditors a percentage of the amounts owed to them. Like in a Chapter 7, in a case under Chapter 13, the court appoints a Trustee. Pursuant to the terms of your Chapter 13 plan, you make one single global monthly payment to the Trustee, who then pays the creditors their pro-rata share of what is owed.

Canterbury Law Group is uniquely qualified to represent clients in the sophisticated 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. 480-744-7711. www.canterburylawgroup.com

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Tips When Filing Chapter 7 Bankruptcy

The most common form of bankruptcy in the United States is Chapter 7. At Canterbury Law Group, we constantly work with clients to file Chapter 7, which allows individuals to extinguish all debts which are “dischargeable” under the Bankruptcy Code. In a Chapter 7, all of the debtor’s non-exempt assets on the petition date are liquidated through the priorities set forth in the bankruptcy code. At the time of filing, the bankruptcy code establishes the creation of your “debtor’s estate” which includes all “non-exempt assets.” As a Debtor you have various duties and obligations, including significant duties of co-operation, which are owed to the Bankruptcy Trustee. These obligations are designed to assist the Trustee in the administration of your bankruptcy estate.

The Scottsdale bankruptcy lawyers at Canterbury Law Group will counsel you regarding these duties, which if followed, will make your case run smoothly. Unfortunately, many debtors who are not fully informed of these obligations run the risk of not receiving a full discharge of some or all or their debt. If you’re thinking of filing Chapter 7, here are some recommendations from our lawyers:

1. Complete the Mandatory Credit Counseling – Before you can file chapter 7 bankruptcy, it is essential to complete credit counseling. It is a mandatory step before you can file and often requires paying a fee. Otherwise, your filing will not be allowed to continue.

2. File All Chapter 7 Paperwork – Complete and file all necessary paperwork in court. Make sure all of your paperwork is accurate. Determine any fees associated with your filing.

3. Meet With Your Creditors – Approximately one month after filing the petition, you will need to meet with your creditors, an arrangement made by the court. During this important meeting, your creditors will question you regarding your finances and property. Typically this meeting involves only a few people connected with the credit card companies to whom you owe your debt. Your lawyer can certainly be present to aid you through this process.

4. Attend the Personal Financial Management Instruction Course – In addition to your credit counseling course, a personal financial management course generally costs about $30 and is necessary for completing your filing of chapter 7. If you skip the money management course, you risk dismissal of your case.

Having a trusted legal team on your side is critical during bankruptcy. Call Canterbury Law Group today to schedule your consultation. 480-744-7711.

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Three Tips for After Bankruptcy

The personal bankruptcy attorneys at Canterbury Law Group help clients begin a fresh financial future. Not only can the law team at Canterbury help you successfully navigate through bankruptcy, they can also assist with creating a sound financial afterlife.

Here are three tips for those who are ready to improve their financial status:

Regroup – Once your bankruptcy case has been discharged, reflect on your past financial journey. Ask yourself questions that will help you create a better financial afterlife in the wake of bankruptcy, including:

  • How did I get here?
  • What could I have done differently?
  • And what have I learned from all of this?

Create a Realistic Budget and Pay Bills on Time – After bankruptcy, you must become vigilant about your finances. Even if you haven’t created a budget in the past, now is the time to get serious about doing so. Your budget will act as your spending plan, helping you to manage cash flow and preventing you from creating unnecessary debt. Make it a priority to pay all your current bills in a timely manner. Set up automatic bill payments, and remember to pay your rent on time since rent payments are now being tracked by the credit bureaus.

Pick a Credit Card That Will Help You Rebuild Credit – A key strategy to rebuilding your credit rating after bankruptcy is to obtain a secured credit card. With a secured card, you deposit a given amount of money, such as $500, into a bank account and that $500 becomes your credit limit. By charging small amounts each month and repaying your debts as agreed, you can gradually rebuild your credit.

If you have questions about your finances and / or bankruptcy, call Canterbury Law Group today to schedule a consultation. 480-744-7711.

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Illegal Practices Commonly Associated with Debt Buying

“Debt buying” affects millions of Americans and takes place when large companies buy and sell billions of dollars of debt. Credit card companies, hospitals, personal loan companies, banks and other lenders regularly sell and resell debt – and this may include debt that you owe.

For example, if you open a Visa account with a local bank and eventually stop repaying on your loan, the credit card company terminates your account and starts sending collection letters. The credit card company may decide to sell your debt for cash. Depending on how delinquent the debt is, a debt buyer may pay only 4 or 5 cents on the dollar. Your debt will then be packaged along with other similar debt and sold in bulk to a debt buyer at this discounted rate. The debt buyer will then attempt to collect the debt by calling you or the buyer may retain a lawyer and sue you.

Debt buying is legitimate as long as the debt buyer follows the rules. Debt buyers also realize that most consumers do not know the rules so the debt buyers often take advantage of a consumer’s limited knowledge.

Some debt buyers practice illegal tactics including:

  • Repeated collection calls that violate the Fair Debt Collection Practices Act ban on harassment and after hours calls
  • Misleading consumer into consenting to autodialed calls
  • Failure to respond to consumer disputes of debt
  • Farming debt to law firms for litigation without appropriate documentation
  • Threatening consumers with lawsuits for debts where the statute of limitations has run
  • Collecting on debt where the debt buyer has no documentation

The Consumer Financial Protection Bureau is starting to go after debt buyers who pursue illegal practices. For example, the CFPB recently imposed a $79 million penalty against to large debt buyers – Encore Capital Group and Portfolio Recovery Associates.

The bankruptcy attorneys at Canterbury Law Group are uniquely qualified to represent you in your debt related litigation. If you’re experiencing actions from debt buyers that may be illegal, call us today to schedule your consultation. 480-744-7711

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5 Steps to Becoming Debt Free

Canterbury Law Group is uniquely qualified to represent debtors, creditors, trustees and committees in both personal and commercial bankruptcies. The range of services we provide depends on an individual’s or a company’s unique situation but may include business bankruptcy, Chapter 7, adversary proceedings, restructuring, Chapter 11, creditor representation, Chapter 5 claims and Chapter 13.

If you’re debt is overwhelming your life, bankruptcy may be the right choice for you. However, if you’d prefer working towards eliminating some of your debt, we can also help. And, if you’ve already filed bankruptcy, the attorneys at Canterbury Law Group in Scottsdale want to make sure you stay on track and have a flourishing financial future.

The path to becoming debt-free can be a difficult and arduous one. But following these basic steps will help you and your finances.

  • Create a financial strategy. If one of your financial goals for the year is to get a better handle on debt, put together a debt payoff strategy that complements your budget and won’t overextend you financially. Keep track of future financial needs and contribute to a savings plan.
  • Pay off the most expensive debt first. Look at the interest rates of all of the credit cards you use to make purchases and sort them from highest to lowest. By paying off the balance with the highest interest first, you increase your payment on the credit card with the highest annual percentage rate while continuing to make the minimum payment on the rest of your credit cards.
  • Lower your interest rate. You can often lower your credit card interest rates by doing a balance transfer. Shop around and try to get the lowest interest rate for the longest duration (preferably until the debt is paid off completely).
  • Eliminate new debt. As you start to pay down your debt, stop using credit cards until you have your finances under control.
  • Pay more than the minimum. Break the habit of paying only the minimum required each month on your credit card statement. Paying the minimum – usually 2 to 3 percent of the outstanding balance – only prolongs a debt payoff strategy.

Our bankruptcy legal team is ready to represent you in your Scottsdale business bankruptcy case. Call us today to schedule your consultation. 480-744-7711.

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Filing Chapter 7 Bankruptcy in Scottsdale

Chapter 7 bankruptcy is one of the most common types of bankruptcy. Filing bankruptcy in Scottsdale can be a very intricate and overwhelming process, so the dedicated law team at Canterbury Law strives to help clients every step of the way.

A Chapter 7 bankruptcy filing provides immediate relief for those who are struggling with unsecured debt such as medical bills, credit card debt and certain tax debt. It is a valid means of resetting your financial life and getting back on track with your finances. Chapter 7 provides individuals with a discharge of all debts that are “dischargeable” under the Bankruptcy Code. Notably, some debt, like child support obligations and student loans are, for the most part, non-dischargeable.

It is wise to work with experienced legal counsel when trying to negotiate the complex process of filing for Chapter 7. The law team at Canterbury Law in Scottsdale has experience with the most intricate bankruptcy cases.

Stopping Collections Actions – After filing for Chapter 7, all collections activities from creditors will go through an automatic stay, or stop. Approximately four months after your filing, you will receive a Chapter 7 discharge, which will release you from personal liability on most debts and prevent creditors from contacting you regarding these discharged debts.

Qualifying for Chapter 7 Protection – A means test is needed to qualify for Scottsdale Chapter 7 bankruptcy protection. If your current monthly income is below the adjusted median income in Arizona, you automatically pass the test. If you do not meet these initial requirements, you must pass a secondary means test that deducts expenses to determine if you qualify.

It is important to have an experienced Scottsdale bankruptcy lawyer to help guide you through this filing bankruptcy. The bankruptcy lawyers at Canterbury Law will counsel you to help settle your debt and start fresh with your finances.

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