Gathering all the Facts in Your Bankruptcy Case

May 17th, 2013

 

Before filing your bankruptcy case, it is important to decide if bankruptcy is your best option. Depending on the specifics of your financial problems, we will gather and discuss as many of the facts in your case. We will want to know all aspects of your financial situation and what your desired outcomes are. It may be difficult to discuss all the circumstances you are facing in bankruptcy. However, if you are to take full advantage of the protections offered you under the United States and Arizona bankruptcy laws, we must know everything, including who and what you owe, whether or not you are behind on your payments, and any other financial information.

 

One part of the bankruptcy process is the court will notify all of your creditors when you file. If you fail to tell us that you owe money on a car loan and that you are behind on your car payments, the company might repossess your car because it wasn’t notified of your bankruptcy. If you haven’t told us about a debt, it’s possible that you will still be responsible for the debt after you receive a discharge. Even if it was a loan that could have been discharged as part of your bankruptcy, you might still be responsible for paying it back.If you are owed a tax refund that you haven’t received, we can plan for how to best handle your bankruptcy. All of these are examples of critical information we need from you when we begin to work on your case.

 

One of the ways we ensure that we have all of the information we need to advise you on your best legal options is through our “free workbook” and “documents needed list” available here. http://www.trezzalaw.com/get-started/ When we sit down at our initial consultation we will want you to have thought about some issues. For example, what are the kinds of debt that are causing the most stress for you or your family? How much income do you have available that is not already set aside for required or unavoidable expenses? What are the biggest assets you have? How did you get debts and is there property that you used as collateral for any of your loans? How close are you to foreclosure or repossession of property?

 

By having you think about these things prior to our consultation, filling out the workbook and gathering the documents needed, we ensure that we, as your attorneys, have all possible information to best represent you in your bankruptcy case. Remember that we are relying on you to give as much information as you have so that we can discuss your options.

 

Claiming All of Your Property

Some of our clients will forget all the different kinds of property they own. Often financial stress is so overwhelming it can be difficult to remember everything. As you consider your bankruptcy, try to remember all the different kinds of property you own.

 

For example, if you needed to pawn some of your property before you came to meet with us, we will need to know this. Do you have old bank accounts that you haven’t used in some time? Do you have a tax refund coming? Do you normally receive tax credits such as the child tax credit? Do you have alimony or property settlements from your divorce that haven’t been paid? Has someone died recently and you will have some money coming from life insurance or an inheritance (no matter how small)? Did you pay a security deposit for the home or apartment you are renting? Do you own life insurance or credit insurance that can be cashed in at the time of your bankruptcy?

 

These are examples of the kinds of property that are often overlooked in the bankruptcy process that can cause headaches if we don’t know about them prior to filing your case.

 

Claiming all of Your Debts

It might seem obvious that you will want to make sure and tell us about all of your debt. However, it is common for clients to forget about some debts they owe. For example, you might have a lease on a house or other rental property. The amount you owe on the rest of the lease would be important for us to know about. Perhaps you are making installment payments on a piece of land and it will be important for us to know this in case we are able to modify the terms of the installment loan. If your lease terms seem to be unfair, we may be able to modify those terms as well.

 

If you owe money for child or spousal support or on a property settlement from your divorce, these are important debts we need to consider in your case. We will want to know if you recently make any large or multiple purchases on your credit cards. Have you co-signed on a loan that is being paid by someone else? If you’ve been sued by someone for unpaid debt, did you receive what is called a judgment lien? A judgment lien might be put on your property by the courts if you owed someone money and they sued you.

 

As we create a bankruptcy strategy for you, it is even important for us to know if you purchased any appliances or other personal property on credit. It is possible your creditors will claim an interest in that personal property and knowing all the facts surrounding those kinds of purchases will allow us to protect you when possible.

 

Sometimes our clients will want to pay off a particular debt or don’t want to disclose the debt. We often get asked whether or not they can leave it off the list of debts and creditors. Even if you owe money to family or friends, all of these debts must be listed on the bankruptcy paperwork (referred to as “schedules”). When you sign the schedules you are certifying to the court that the information you are providing is complete and accurate. We can discuss strategies and timing for filing bankruptcy no matter what your circumstances.

 

As part of gathering complete information in your case, we may look to other sources such as your creditors, tax returns, credit reports, pay stubs, and bank statements. We might need prior year tax returns, past appraisals and title searches as well. Because the real estate market has declined significantly in Arizona, we might also look to get a current appraisal or use on-line websites to get a better picture of the value of your home. We can also do the same for your cars.

 

Because prior bankruptcy cases can affect your current case with us, we will want to have that information as well. Filing dates, whether or not the case was dismissed, and number of earlier cases, are all important facts for us to consider as we work together on your Arizona bankruptcy.

 

The Need for Accurate and Complete Information

Remember that when you hire us as your Arizona bankruptcy attorneys, we are working on your behalf. Because we have worked with thousands of clients over two decades, we have heard many of the concerns you may have about the bankruptcy process. We are your advocates and we can only do our job when you give us all of the information and facts. It can be difficult disclosing this information to us, but we provide the best legal representation when we work as a team, lawyer and client. To schedule your free consultation with us, contact our office in Tucson or Phoenix today.

 

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The Chapter 13 Bankruptcy Discharge

May 8th, 2013

When you have successfully completed your chapter 13 plan, you receive what is referred to as a discharge. When you receive a discharge, it means that all of the debt you included in your chapter 13 filing has been legally paid. After the discharge, creditors who were part of the process are not allowed to come after you to collect any additional payments.

 

In order to receive a discharge, you must meet certain requirements. If you are required to pay child support or spousal support, you must tell the court that you have kept up-to-date on all of your support payment. This is referred to as “certifying” to the court. If you missed any child or spousal support paymentsbefore you filed for bankruptcy, you must certify that you paid any past due amounts that were built into the payment plan.

 

You also must show the court that you have completed a financial management course offered by an agency approved by the court. As your attorneys we will provide you with a list of approved agencies. The course must be taken before your last payment is made under the plan or you file for a hardship discharge. You can choose to take the course earlier in your chapter 13 plan, as this may help you in your managing your finances during your payment period.

 

When you have satisfied all of the requirements of chapter 13, the discharge is final. There are only a few circumstances under which the court can revoke a discharge. In a chapter 13 bankruptcy, the discharge can only be revoked by the court if you were deliberately deceitful. That is, you committed fraud.

 

If someone claims to the court that you committed fraud, they are required to show that they discovered your fraud after the discharge was granted by the court. The reason the bankruptcy laws require that the person must prove they did not find out about the fraud before the discharge is to force individuals to object prior to the discharge being granted. The person who discovers the fraud must formally object to your discharge. That individual has one year from the date your discharge was granted to bring the issue to the court.

 

Reaffirming Debt in Chapter 13 Bankruptcy

Sometimes individuals will want to negotiate with a lender to reaffirm a debt. Reaffirming a debt with the lender means that after the bankruptcy you will still be legally responsible for paying back that debt. If you choose to do this without being represented by a lawyer, the court is required to hold a discharge hearing. The court can make a decision to discharge that debt, even if you want to reaffirm the debt. This happens when the documentation you submit for reaffirming the debt raises concerns that there are problems with the reaffirmation.

 

The reaffirmation of a debt cannot cause undue hardship for you or your family. Some creditors will push you to reaffirm your debt with them. Because there is concern about banks and creditors coercing individuals in bankruptcy to reaffirm their debts, the bankruptcy laws require that you get an in-depth explanation either at the hearing or from your attorney before the court will approve the request to reaffirm the debt. This is why the discharge hearing is required when you choose to reaffirm any debts.

 

If your debt is secured by property, the court must approve the reaffirmation of the debt in order for it to be valid. If you are represented by an attorney in negotiating the reaffirmation, your attorney will file a written document with the court stating the agreement you made with the creditor was not coerced and you were fully informed. Even in these cases, the reaffirmation must still be approved by court.

 

There have been cases where an individual wants to reaffirm a debt and there is not enough money in the person’s budget to make the payments. Even if you negotiated the reaffirmation with an attorney representing you, the court assumes that this will cause undue hardship to you and your family. The bottom line for the court approving your reaffirmation is that it must not cause undue hardship and it is in the best interests of you, the debtor.

 

What Debts Are Not Discharged in Chapter 13 Bankruptcy?

Under chapter 13 bankruptcy, you are able to discharge more debts than you would under chapter 7. But, there are still debts that are not discharged at the end of your payment period. One of the most common debts that isnot discharged is a long-term loan such as a home mortgage. One characteristic of a long-term debt is that your final payment for the loan is due after you completed the plan.

 

Certain tax debts are not discharged in your chapter 13 bankruptcy. If you incurred debts under false pretenses, these debts will not be discharged. If you failed to list any debts when you filed for bankruptcy, and the creditor did not know this, you may have still be legally responsible for that debt. Child support and spousal support payments are not discharged in a chapter 13 bankruptcy. The other requirement with child or spousal support before you receive the discharge is you must certify to the court that you are current on all support payments.

 

Most student loan debts are also not dischargeable under chapter 13bankruptcy. If you owe money because of a DUI, or owe restitution or need to pay fines because of a criminal sentence, these cannot be discharged. If you must pay restitution or damages from a civil lawsuit involving willful or malicious injury or death, these debts will not be discharged in chapter 13 bankruptcy.

 

Once you receive the discharge from the court, a notice is sent to the trustee and all of your creditors. You will receive a copy of this notice of this as well. Notice of your discharge completes activity in your case although it may not be officially closed until a later date.

 

The chapter 13 bankruptcy process is one that will last three to five years. You might be tempted to represent yourself in the bankruptcy process in order to avoid attorney’s fees. Because your circumstances can change over that time period, having legal representation could be important to be able to ensure you make the best decisions throughout your payment plan period. Before you make the decision to represent yourself, we encourage you to set up a free consultation with one of our experienced bankruptcy attorneys in Tucson or Phoenix. Call our office today to set up your appointment and learn first-hand what we can do to support your throughout your bankruptcy.

 

 

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The Chapter 13 Bankruptcy Confirmation Hearing

April 25th, 2013

 

You’ve filed your chapter 13 bankruptcy paperwork and submitted your schedules and payment plan. The meeting of creditors is completed and you’ve answered the trustee’s questions. The next step in the process is your confirmation hearing. In some courts, the confirmation hearing will happen on the same day as the meeting of creditors. In other cases, the confirmation hearing will occur within the next 45 days, depending on the circumstances and the practices of the particular court where your hearing is held.

 

At a minimum, the court must give at least 28 days notice of to everyone involved in your bankruptcy case. The hearing provides the court an opportunity to listen to any objectionsto your plan from your creditors or from the trustee. The court will also use the hearing to decide if the plan you’ve proposed is feasible. Sometimes there will be disputes as to the value of your property and these will be brought up at the hearing as well.

 

It is important to remember that when you hire us as your attorneys in your chapter 13 bankruptcy, our goal is to resolve any disputes prior to getting to the confirmation hearing. Because we have decades of experience handling bankruptcy cases in Arizona, we can anticipate areas of concern in your case before it goes to the confirmation hearing.

 

If for some reason your plan is not confirmed by the court, you will normally have the opportunity to modify the plan. Confirmation by the court creates a legally binding agreement between you and your creditors. You and your creditors must abide by the terms of the plan. If you remember from our earlier article, you must begin making payment plans within 30 days of filing for chapter 13 bankruptcy. Once your plan is confirmed, the trustee in your case will begin making payments to your creditors. Once you complete the plan successfully, you will receive a discharge.

 

Confirmation of your plan may or may not happen at the hearing. Much of that depends on your case and the schedule of the court that handles it. If there are issues that need to be settled after the hearing, then the judge may schedule another hearing.

 

Modifying Your Chapter 13 Plan

It is not unusual for individuals under chapter 13 to modify their plan. Emergencies, a change in income, or other circumstances might mean you need to make changes in the original plan your proposed when you filed.If you need to make changes in your plan before the plan is finalized and confirmed by the court, then you propose the changes to the trustee. Sometimes you may need to change the plan after it is confirmed. Unless your proposed changes will impact your creditors they cannot object to the changes. The modified plan must meet all of the requirements of a chapter 13 bankruptcy.

 

If you need to incur a debt or need credit during the plan period this may be possible as long as you receive permission from the trustee. Under most circumstances, you pay for it outside of the plan. For example, let’s say that your car breaks down and you need credit to pay for the car repairs. The company offering you credit must get permission from the trustee. It is possible for the debt to be paid through the plan, only if the plan provides for it, both you and the creditor agree to it, and you are able to make the payments. Remember that each case can present unique circumstances and we are offering general information here.

 

Because modifications can be complex and it is common for circumstances to change over the course of the three to five year chapter 13 bankruptcy plan, we recommend that you hire knowledgeable attorneys to handle your case. With our decades of experience doing bankruptcy in Tucson and Phoenix, we know the specific procedures used by bankruptcy courts in Arizona.

 

If your income changes during the plan period, a creditor can ask the court to modify your plan. This will happen most often if your income increases and you are able to make larger payments than your original plan proposed. If this occurs, it would be important to work with us to object to the modification. Objecting to the modification will help to ensure that the court holds a hearing where we can represent your interests to the judge.

 

What If You Are Unable to Complete Your Chapter 13 Plan?

There are times when job loss or some other unavoidable circumstances will mean you cannot complete your chapter 13 plan. You may not feel there are any options when that happens, but in working closely with us, as your attorneys, we can help you choose the best option when you are faced with these difficulties. The bankruptcy laws allow for four possible choices when you cannot complete your chapter 13 plan. They are dismissal, conversion to a chapter 7 bankruptcy, modifying the plan, or requesting a hardship discharge. Let’s start with the hardship discharge, as often this is the most desirable outcome when you cannot complete the plan.

 

Hardship Discharge

The hardship discharge is an option when there are circumstances beyond your control. Bankruptcy laws refer to these as circumstances for which you are not “justly accountable.” The hardship discharge may be requested anytime after your plan is finalized by the court. One requirement for the court to grant the hardship discharge is that your unsecured creditors (such as credit companies, doctors, or hospitals) must have been already paid as much as they would have been paid if you had filed a chapter 7 bankruptcy.So the hardship discharge may depend on how long you have been paying into the plan. The hardship discharge will only be granted if modification is not possible.

 

Modifying the Plan

Although we discuss this in more detail in another article, it is possible to modify your plan to deal with unexpected circumstances that come up during the three to five year payment period in your chapter 13 bankruptcy.

 

Conversion to Chapter 7

You always have the right to convert your chapter 13 to a chapter 7 bankruptcy. You do not have to show hardship to convert to chapter 7. When you convert, you must submit some new paperwork (schedules) and you must also submit a statement indicating what you plan to do with property that was used to secure a loan.

 

Dismissal

In some circumstances, dismissing your chapter 13 bankruptcy may be the best choice. Just as you always have the right to convert to chapter 7 bankruptcy, you may request a dismissal unless the chapter 13 was converted from another bankruptcy chapter. When you request a dismissal, it is referred to as a voluntary dismissal. It is possible for the court to order a dismissal of your bankruptcy as well. This would be an involuntary dismissal.

 

Remember that our office offers a free consultation to discuss your financial situation and determine whether bankruptcy is the right option for you. We will walk you through the differences between chapter 7 and chapter 13 and we make sure you understand all of your rights and responsibilities in the bankruptcy process. Our offices in Phoenix and Tucson are staffed with experienced bankruptcy attorneys. To set up your free consultation, contact us today.

 

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What Happens After You File a Chapter 13 Bankruptcy?

April 18th, 2013

As soon as you file, your chapter 13 bankruptcy case has officially started. Your case will be assigned to the trustee who serves your county in Arizona. If you filed paperwork to pay your filing fee in installments the court will “enter” the order, meaning the order is signed and filed with the clerk of the court.

 

The Automatic Stay

If you have banks and other creditors calling or sending you letters about late payments, filing bankruptcy will immediately put into effect what is referred to as an “automatic stay.If your bank is threatening or moving to foreclose on your house, as soon as you file bankruptcy, the bank must stop any foreclosure proceedings. This also applies to credit card or collection agencies that may be harassing you with phone calls or letters. Even though the stay automatically comes into effect when you file, a bank or collection agency can ask the court to lift the stay.

 

If a creditor asked for the stay to be lifted and you then decided to ask the court to dismiss your case (called a voluntary dismissal) you can’t file a new Chapter 13 bankruptcy case with 180 days of the voluntary dismissal. The purpose of this eligibility requirement is to keep people from abusing the automatic stay that is granted as soon as you file a bankruptcy case.

 

Co-Signers or Co-Debtors

The automatic stay is specifically for any debts you incurred before you filed bankruptcy. If there are other individuals who were co-signers (or co-debtors) on any of your loans, for the most part these individuals are also protected from any actions being taken by banks and other companies that loaned you money. Your creditors need to ask the court for permission to take any actions once you’ve filed for chapter 13 bankruptcy.

 

The court may allow creditors to take actions against co-debtors on your loans if that person was the main individual who received the benefit for the loan. For example, if you were the co-signer on a car loan, but the car was for the other person (who is not a spouse and did not co-file bankruptcy with you) the court may give the company permission to take action against the other person.

 

The other two circumstances under which the court might give a creditor permission to take action against a co-debtor would be if you indicate in your repayment plan that you do not intend to pay on the loan or if the creditor would be harmed irreparably. “Irreparably harmed” means that once the harm happens, things cannot be put back to the way they were before the harm or money will not repair the harm.

 

Making Plan Payments

You must begin making payments on your proposed plan within 30 days after you file a chapter 13 bankruptcy. Even though the court has not confirmed or approved your plan, asking you to begin making payments gives the court evidence that you have the ability to pay. It also allows your creditors to get paid back as quickly as possible. Depending on the circumstances in your case, you can request that your payments be made through a wage deduction. Sometimes this is required, again, depending on your circumstances. As experienced Arizona bankruptcy attorneys, we can guide you through this process.

 

Your payments are sent to the trustee while your chapter 13 bankruptcy case is in process. If your plan is not confirmed then the payments are returned to you minus any administrative costs. If you do not start making payments within 30 days, the court may dismiss your bankruptcy case. If you have loans that are secured by personal property that is losing value, you will need to make what is referred to “adequate protection” payments.

 

You are also required to file any unfiled tax returns for the past four years. If you don’t file the returns, the meeting of creditors could be delayed and your case could be dismissed.

 

Shortly after you file, the court clerk will send notice of the meeting of creditors. The notice will include information about the automatic stay and deadlines for creditors to file their claims and/or object to any property exemptions. This notice also includes the date set for the confirmation hearing and the deadline for anyone to object to the confirmation of your payment plan.

 

Meeting of Creditors

Anywhere from three weeks to fifty days after you file your bankruptcy paperwork, there will be a meeting of creditors. Sometimes this is referred to as the 341(a) meeting of creditors from the section of the bankruptcy code that requires the meeting. Seven days before the meeting you will be required to give to the trustee copies of your federal income tax return for the previous tax year. If you were not required to file taxes, you provide a statement saying so.

 

At the meeting you must bring a government-issued picture identification (or other identifying documents), some proof of your social security number, paperwork proving your current income, as well as bank and investment account statements. You also provide any documentation of your monthly income. If you don’t have any documentation of your monthly income, then you must bring statement saying that.

 

At the meeting, the trustee will ask routine questions about information that you’ve provided to her or him as part of the bankruptcy process. Bankruptcy judges are not allowed to attend the meeting of creditors. The trustee needs to gain an understanding of your case and make a decision about objecting to any of the claims brought by your creditors. It is unlikely any of your creditors will attend the meeting.

 

You can also dispute (or object) to any of the claims made by your creditors. If there are objections, these issues are then decided by the bankruptcy judge. This is why the judge doesn’t attend the meeting of creditors. Sometimes the judge will decide on objections to claims at the hearing set up to confirm or deny your payment plan.

Filing a Claim for One of Your Creditors

If one of your creditors does not file a claim, you can choose to file a claim on behalf of that person or company. For example, if you owe child support and your ex-spouse does not file a claim, you would file a claim to ensure the ex-spouse gets paid during the payment plan period. Since unpaid child support cannot be discharged by the court, you would end up having unpaid debts after the repayment period. Or, if you own a car that has an outstanding loan balance and the loan company doesn’t file a claim, you might choose to file the claim to ensure that the trustee makes payments to the company so that your car loan does not become delinquent.

 

As attorneys with extensive experience with Tucson and Phoenix, Arizona bankruptcy cases, we can properly guide you through the maze of forms, documents, and requirements of your chapter 13 bankruptcy. Don’t leave you financial future to chance and hope for a good outcome. We can provide you with the best legal representation possible in your bankruptcy. Call our office today to set up your free consultation.

 

 

 

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