Can Filing Bankruptcy In Arizona Help After a Repossession?

How Can Bankruptcy Help You After a Vehicle Repossession

Our Chapter 7 bankruptcy attorneys and Chapter 13 bankruptcy attorneys take a look at repossession in Arizona. We also look at how a bankruptcy may be able to assist you when dealing with a repossession of a vehicle. Time is of the essence. Contact an experienced Arizona bankruptcy attorney right away. It may not be too late to save your vehicle from repossession.

After missing too many payments on your auto loan, you should be concerned about your lender repossessing your vehicle. This is a way for your creditor to recoup on an unpaid loan, selling your car at auction, likely for less than its full value. A repossession will have several types of negative effects on your life. First of all, you will need to figure out how you will get to work, school, and the rest of your responsibilities without your vehicle. You may have a co-signer on your loan who will now be liable for the balance of your loan. A repossession will also damage your credit, making it harder for you to get a replacement vehicle. Depending on your specific situation, bankruptcy may be able to help you after a vehicle repossession has already occurred.

How Can Bankruptcy Help You After a Vehicle Repossession In Mesa, AZ.

You May Still Have a Balance On Your Auto Loan

It may seem counterintuitive that you would still owe your loan if your lender takes back the vehicle, but this is common in repossessions and is referred to as a repossession deficiency. Whether you have a repossession deficiency will depend on the balance of your loan at the time of the repossession (as well as any additional charges or legal fees for the repossession), and the amount your car sells for at auction. If you still owe money on the vehicle after the sale, your lender will file a lawsuit to collect the balance. If you have a co-signer and are unable to pay the deficiency balance, your co-signer will be responsible for the repossession deficiency. Either way, the creditor will keep looking for ways to collect the deficiency judgment eventually. Oftentimes, your creditors will use a judgment to obtain a garnishment on your wages. This judgment is an unsecured debt that can be discharged in an Arizona Chapter 7 bankruptcy. Depending on your disposable monthly income, it can be paid or discharged in a Chapter 13 bankruptcy payment plan.

Is It Possible To Get My Repossessed Car Back With Bankruptcy?

Depending on when your car was repossessed, you may be able to use bankruptcy to get it back- but not Chapter 7. Instead, you will need to file Chapter 13 bankruptcy within 10 days of your vehicle being repossessed. Your lender will be legally required to wait that 10 days to sell your car at auction. Once the car has been sold, a bankruptcy filing can’t do anything to get it back.

Chapter 13 bankruptcy can be complex before adding a recent repossession to overturn as a complicating factor. Chapter 13 bankruptcy is a reorganization payment plan meant to help those with steady income and struggles with debt. It is often used by people who are facing an imminent repossession or foreclosure because it provides the opportunity to catch up on payments and save the asset in the long run. A Mesa Chapter 13 bankruptcy payment plan lasts 3 years for someone whose income falls below the state median income, and 5 years for someone who makes more than that amount. Debts will be paid in order of four categories: legal fees, secured debts, unsecured priority debts, and unsecured nonpriority debts. The vehicle in question will be in the second category- it is a secured debt because the vehicle is collateral for the loan. To keep a secured asset in Chapter 13 bankruptcy, you generally must pay the full balance of your loan in your payment plan. However, there is an exception for home mortgages. The debtor can typically pay their usual monthly mortgage into their plan if they are current on payments.

Unsecured priority debts must also be paid in full in your plan. The last category, unsecured nonpriority debts, are those typically dischargeable in Chapter 7 bankruptcy and will only be paid to the extent that you can afford in a Chapter 13 payment plan. Chapter 13 can be especially useful in a repossession situation because your past-due payments will be spread out over the course of 3-5 years. The amount you pay for ongoing payments could be reduced or increased based on your balance and current loan terms.

When you file Chapter 13 bankruptcy to get back a repossessed vehicle, you will also deal with your other debts and gain protection from your other creditors. Once your petition is filed, the Automatic Stay goes into effect. Not only does the Automatic Stay stop vehicle repossessions, but home foreclosures, bank levies, wage garnishments, utility shutoffs, lawsuits, and more. Any of your creditors that wish to proceed with these actions during your bankruptcy must petition the court for relief from the Automatic Stay. With limited exceptions, the Automatic Stay will remain in place until your payment plan is completed or your case is dismissed.

Emergency Bankruptcy- The Faster Way To Get Filed

Whether you’re hiding from the repo man or your car was just repossessed, you’ll need to be filed quickly if you want the Automatic Stay to protect your vehicle. A bankruptcy petition is usually 50-70 pages long, requires dozens of documents, and can take far longer than the 10 days you have to get a vehicle back after a repossession. You may find it useful to first file a skeleton petition, also known as an emergency bankruptcy filing.

When you file a skeleton petition, the list of documents you will need is far shorter than when you prepare your full petition. Besides some basic address and contact information, your attorney will only need six months’ worth of pay stubs and to take your online credit counseling course. The Automatic Stay will go into place when the skeleton petition is filed, which can get back your vehicle if you filed Chapter 13 within 10 days of the repossession. You will have two weeks to submit the rest of your bankruptcy petition.

Do I Need a Bankruptcy Attorney?

The success rate for attorney-represented bankruptcy filers is always higher than for self-represented bankruptcy filers. Those in a Chapter 7 bankruptcy fare better, but it’s almost impossible to get a Chapter 13 bankruptcy discharged without attorney representation. When you add in getting your vehicle back after a repossession to your case, and possibly an emergency filing, it’s highly recommended that you seek out an experienced Tucson bankruptcy attorney.

What exactly will a bankruptcy attorney do that makes your case so much more likely to be successful? First, you will discuss your situation in detail during a consultation. Your attorney will spot issues that could arise in your case and help you strategize your filing. Once you retain, your experienced bankruptcy attorney will take all creditor calls and assist you in gathering documents for your petition. Your attorney will prepare your petition, review and sign it with you, and file it in court for you. Your attorney will represent you at all hearings, address issues with the trustee and creditors, and keep you updated throughout the process. But you may be wondering how you could possibly afford a bankruptcy attorney retainer after a vehicle repossession. Also, the good news is that you can work your attorney’s fees for a Chapter 13 bankruptcy into your payment plan. To learn more, call or use our online form to schedule your free consultation with one of our dedicated Mesa bankruptcy attorneys today!


Mesa Bankruptcy Attorneys

1731 West Baseline Rd., Suite #101
Mesa, AZ 85202

Office: (480) 448-9800

10 Causes of Bankruptcy in Mesa

Bankruptcy is an option for many Mesa, Arizona residents with debt. Whatever the reason it accumulated, overwhelming debt affects an individual’s personal, professional, financial, and family life.  The attorneys at Mesa Bankruptcy Lawyers Law firm are dedicated to exceptional legal representation and helping Arizona residents eliminate or reduce debt. Is bankruptcy the right means to eliminate your specific debt / financial situation? Both Chapter 7 and Chapter 13 bankruptcies are viable options to many debt-related financial issues. Consult with an attorney to find out which filing is best for your unique debt case, and to get information on your rights as a debtor as well as debt-relief options.

10 leading causes of bankruptcy infographic

Sometimes debt is caused by an unplanned disaster, unforeseen medical expenses, or loss of a job. Other times debt happens because of poor financial planning or overspending. Despite best efforts to make monthly payments and stay ahead of debt, it sometimes becomes too overwhelming. Bankruptcy is an option when you need to take control of debt, and achieve a financial fresh start. Because of an automatic stay, when a bankruptcy petition is filed, it puts a stop to wage garnishments, repossessions, or a  foreclosure.

Steps To Filing Chapter 7 Bankruptcy In Arizona

Our Mesa Bankruptcy Attorneys Take You Step By Step Through The Process Of Filing a Chapter 7 Bankruptcy In Arizona

No matter how carefully you plan, debt is a problem that can happen to anyone in life. When it does, your creditors will eventually begin pursuing you for your debts. Your creditors may seek repayment through methods like wage garnishments, bank levies, vehicle repossessions, home foreclosures, and more. The good news is that bankruptcy can protect someone in this type of situation from their creditors, and address the underlying debt problem in the meantime. There are several types of bankruptcy, but the most common type of consumer bankruptcy in Arizona is Chapter 7. Read on to learn more about the steps to declare Chapter 7 bankruptcy and clear away debts. If you have additional questions, schedule your free consultation with our Mesa bankruptcy law firm.

Mesa Bankruptcy Attorneys Take You Step By Step Through The Process Of Filing a Chapter 7 Bankruptcy Petition In Arizona

Confirm That You Qualify For Chapter 7 Bankruptcy

Many people are unable to file Chapter 7 bankruptcy because their income is too high. The simplest way to qualify for Chapter 7 is by having less income than the median for your state. In Arizona, the median income for a family of 4 is currently $85,714. A family with a combined income of that amount or less automatically qualifies for Chapter 7. Otherwise, the debtor will need to qualify using the Means Test. This test shows the debtor can’t afford to pay off their debts after deducting mandatory expenses from their income. There are several other factors that could disqualify you from Chapter 7, or make filing it (as opposed to Chapter 13) inconvenient and burdensome. Consult with a Mesa bankruptcy attorney to confirm that chapters of bankruptcy for which you qualify.

Gather Your Documents & Information For Your Bankruptcy Petition

You will need several types of documents in order to draft your bankruptcy petition. These can range from bank account and credit card statements, to paystubs, to insurance policy statements, and more. If you retain a Mesa bankruptcy attorney, they will let you know which documents are necessary for your case. If not, determining which documents will be necessary- and then drafting your petition- will be your own responsibility.

Take Your First Credit Counseling Course

To discharge your debts through consumer bankruptcy, the Bankruptcy Code requires that you complete credit counseling courses. This is to help prevent bankruptcy filers from needing to file again in the future. You will need to complete one of these courses before your case is filed, and submit a course completion certificate with your petition. This course can be taken online, and can typically be completed in about an hour. You will also need to pay a nominal fee for credit counseling.

Sign & File Your Bankruptcy Petition

If you retain a bankruptcy attorney, they will schedule your petition signing once your petition is complete. Your attorney will review your petition with you to make sure everything is correct, and answer any questions you may have about your 341 Meeting of Creditors. If you file self-represented, you will draft, sign, and file your own petition. You may be required to file your petition in person at the courthouse. The filing fee for a Chapter 7 bankruptcy is currently $338. There are fee waivers available to those under financial hardship, but these typically won’t be granted if the filer has retained an attorney.

Respond To Your Trustee Letter

Approximately 10-15 days after your petition is filed, you will receive a letter from your bankruptcy trustee. The trustee is a court-appointed attorney who will oversee your case. After reviewing your petition, your trustee may have additional questions. You may be required to submit additional documentation to support your petition. This letter should also contain the date for your 341 Meeting of Creditors.

Attend Your 341 Meeting Of Creditors

This hearing is mandatory for those who declare both Chapter 7 and Chapter 13 bankruptcy. Make sure you bring your driver’s license and social security card to this hearing. Your case- and discharge of your debts- could be delayed for a failure to bring proper identification to your 341 Meeting of Creditors. You can bring a passport or other official photo identification in place of your driver’s license. If you don’t have your social security card, you must bring an original W-2 to your hearing. It will be held approximately 30-45 days from when you file your petition.

Your trustee will be at the hearing, and as the name suggests, your creditors may also be in attendance. Both may ask questions about your petition and debts. If you retain a bankruptcy attorney, they will be there with you to help you with your trustee’s and creditors’ questions. Otherwise, you will need to represent yourself at this hearing. However, this hearing is relatively short and simple compared to other court procedures. There may be several other cases on the docket at the same time as yours. If so, you and your attorney will wait for your case to be called during that time frame.

Take Your Second Credit Counseling Course

After your 341 Meeting of Creditors, you must complete a second online credit counseling course. It will take about as long and cost about as much as your first credit counseling course. You (or your attorney) will need to file the second course completion certificate with the court. This must be completed within 60 days of your 341 Meeting of Creditors.

Wait For Debt Discharge, Start Rebuilding Your Credit

If all the previous steps have been completed correctly, you will now wait for the court to discharge your case. Your case is eligible for discharge 60 days after your 341 Meeting of Creditors. It could take a few days or weeks longer than that for the court to process your discharge, depending on how busy the court is.

After you have received your discharge letter from the court, you are no longer liable for the debts in your bankruptcy. Whether or not your credit score increased or decreased (or stayed the same) upon filing, now it’s time to start rebuilding your credit. You will most likely receive new credit line offers in the mail after your case is discharged, but you can also open a secured credit card through your bank. Financing new assets, such as a vehicle, can help improve your score. Other installment payment plans- including our Zero Down Bankruptcy Payment Plan – will help improve your score as well.

Contact Our Mesa Chapter 7 Bankruptcy Attorneys For a Free consult

If you couldn’t already tell, retaining a bankruptcy attorney as early on in the process as possible will make it easier for you. However, the burden of paying for an attorney up front is impossible for some. That’s why our experienced Mesa bankruptcy attorneys offer Zero Down Bankruptcy for qualified Chapter 7 bankruptcy clients. To learn more, call or use our online form to schedule your free consultation today.


Mesa Bankruptcy Attorneys

1731 West Baseline Rd., Suite #101
Mesa, AZ 85202

Office: (480) 448-9800

Arizona 2021 Bankruptcy Exemptions

Our Mesa Bankruptcy Lawyers Discuss The 2021 Exemptions For Bankruptcy Filings In Arizona

Be it, a chapter 7 bankruptcy or a chapter 13 bankruptcy, there are exemptions that are unique to each state. Read on to find out what Arizona’s exemptions are for 2021.

When you file Chapter 7 bankruptcy, any assets that aren’t protected by bankruptcy exemptions can be seized by your trustee and sold to pay your creditors. Bankruptcy exemptions, or the limits on how much equity you can have in certain types of assets, vary by state and are subject to change every year. If you are considering filing bankruptcy in Arizona in 2021, check your assets to make sure they are within the applicable exemption limits.

Some of your assets may have a clear numerical value. Others aren’t so easy to ascertain. Websites like Kelley Blue Book and Zillow may give you a general idea of your property’s value. You may need to hire an appraiser for valuable possessions with unclear values.

If your assets aren’t protected in Chapter 7, you may want to consider filing Chapter 13 instead of giving up bankruptcy altogether. These exemptions don’t apply in a Chapter 13 case because you will repay the value of financed assets in your bankruptcy payment plan. You also may be able to encumber your property with a lien to reduce your equity. You should contact a Mesa bankruptcy attorney if you are unsure whether your assets are protected, or if you want to know about your options with non-exempt assets.

Our Mesa Bankruptcy Lawyers Discuss The 2021 Exemptions For Bankruptcy Filings In Arizona

Arizona Homestead Exemption

The homestead exemption in Arizona for 2021 is $150,000. You can have up to $150,000 equity in your house, condo, townhouse, etc. Your equity is the value of the home minus the balance of your mortgage.

Prepaid Rent

Rent paid in advance, as well as security deposits fall into this category. In Arizona, the exemption value for this category is $2,000.

Arizona Vehicle Exemption

In Arizona, you can have up to $6,000 equity in one vehicle if you are unmarried. If you are married, this limit is raised to $12,000 for one vehicle, or the spouses can have two vehicles with up to $6,000 equity each. The exemption for someone with a disability that requires special vehicle equipment is increased to $25,000.

Bank Account & Cash On Hand

An inconvenient part of filing bankruptcy in Arizona is the low exemption for how much cash you can have in hand and in the bank on the day your petition is filed. This limit is $300 for an unmarried filer, and $600 for a married couple. This probably means you will need to time your bankruptcy filing around your payday. Make sure your Mesa bankruptcy attorney is aware of your pay dates, especially if you file an emergency bankruptcy petition. Arizona doesn’t allow federal exemptions and doesn’t offer a wildcard exemption to use on your bank accounts as an alternative.

Household Goods & Furnishings

This can be anything in your home from your sofa and chairs, to your microwave and refrigerator. The 2021 Arizona bankruptcy exemption for this category is $6,000. You should assess the value of your belongings as their resale or market value, not the price you originally paid.

Engagement &/Or Wedding Rings

The Arizona bankruptcy courts allow you to keep wedding jewelry worth up to $2,000 in a Chapter 7.

Pets & Livestock

This exemption applies both to domestic pets, like dogs and cats, and livestock, like horses and goats. While your purebred pet likely doesn’t have a high enough resale value to be cause for concern, it could become an issue if you breed your pet.


Arizona allows Chapter 7 bankruptcy filers to have a watch worth up to $150, so don’t wear a Rolex to your 341 Meeting of Creditors.


Arizona’s bankruptcy exemption for wearing apparel, regardless of family size, is $500. For the same reason you shouldn’t wear a Rolex in front of your trustee, don’t wear all designer clothing (even if they’re knockoffs) to your 341 Meeting of Creditors.

Food, Fuel, & Provisions

The bankruptcy trustee is highly unlikely to come to your house and raid your pantry and siphon your gas tank, but you can have up to 6 months worth of provisions when your Chapter 7 bankruptcy is filed.

Personal Library

The resale value of your book collection must not exceed $250 in a Chapter 7 bankruptcy. However, these books may be protected by other exemptions if they are used for school or work.

Tools & Other Equipment

This category encompasses many items from saws and drills, to instruments, website domains, and more. Anything the bankruptcy filer uses for their profession has an exemption value of $5,000.

Life Insurance Proceeds

If you receive insurance funds after the death of a spouse, child, or other relative, only $20,000 of this will be protected in Chapter 7 bankruptcy.

Wheelchair, Prosthetics, etc.

There is no limit to the value of these types of items in a Chapter 7 bankruptcy. If they are prescribed by a doctor, it isn’t up to the bankruptcy court to decide how much these can be worth. However, you should still apply the exemption to have your bases covered.

Musical Instruments

For someone who plays as a hobby, musical instruments have a bankruptcy exemption of $400. A career musician can use the tools of the trade exemption to protect their musical instruments, which is $5,000.

Computer, Bicycle, Firearm, Burial Plot, Family Bible

This exemption applies to an interesting range of belongings, and is capped at $1,000 in Arizona for 2021.

Domestic Support

Child support and alimony payments are exempt from Chapter 7 bankruptcy, and there is no limit for the domestic support exemption.

Benefits & Public Assistance

Like child and spousal support, these payments are fully exempt from bankruptcy. Unemployment benefits, disability, worker’s compensation, social security income, and more, are safe in Chapter 7 bankruptcy. Consult with a Mesa bankruptcy attorney if you want to make sure your source of income is exempt in Chapter 7 bankruptcy.

Contact Our Mesa Bankruptcy Attorneys

Exemptions are just one of the many parts of a bankruptcy petition that must be completed correctly, or risk negative consequences like losing your assets or your case being dismissed. That’s why you should trust your case with a skilled Mesa bankruptcy attorney. To learn more about how our dedicated staff and attorneys can assist you through the bankruptcy process, call today to schedule your free consultation. You may qualify for a post-filing payment plan starting as low as $0 down bankruptcy, and we have same day consultations available! Call (480) 833-8000 to get started.


Mesa Bankruptcy Attorneys

1731 West Baseline Rd., Suite #101
Mesa, AZ 85202

Office: (480) 448-9800

Arizona Bankruptcy:  Redemption in a Bankruptcy in AZ

Our Mesa Bankruptcy Lawyers discuss bankruptcy in Arizona. Moreover, we dive into redemptions in a bankruptcy. Our AZ BK Attorneys discuss the advantages and disadvantages of redemptions as well as the process of redemptions. Also, we will look at items that are financed for more than their value and how to get redemption on said items.

Arizona debt relief blogIf you are considering bankruptcy or some other form of Mesa debt relief, please give out Mesa Debt Relief team a call. Our consultations are free of charge and 100% confidential.

If you are considering bankruptcy, you might be wondering what effect filing will have on personal property you have financed. You may be making monthly payments, on your vehicle, furniture, appliances, and even your cell phone. If you declare Chapter 7 bankruptcy, you will be presented with two options of how to keep these assets: redemption and reaffirmation. Otherwise, you will have the option to surrender them as part of your bankruptcy.

What is the Redemption Option in a Chapter 7 Bankruptcy in Arizona?

If you owe more on your financed property than it is worth, you may want to consider redeeming it in Chapter 7 bankruptcy. In Chapter 7 bankruptcy, redemption allows you to pay the current value for your financed property, as opposed to what you owe on the loan.

You will have redemption available as an option for items financed for more than they’re worth if they meet the following criteria:

(1) The property is secured to a debt as collateral;

(2) It is tangible personal property, not real estate;

(3) Your trustee abandons it;

(4) It is a consumer debt, not business;

(5) You can pay the amount in one lump sum. 

The Advantages and Disadvantages of Redemption in a Bankruptcy in Mesa, Arizona

The most obvious benefit of redemption is that you will get to keep your property, and pay its actual value instead of your inflated loan amount. If you are able to take advantage of this option, you could potentially save thousands of dollars. If you are able to come up with the funds, the creditor may not object to your redemption. You may be able to find a lender to finance your redemption. However, there are limitations to the benefits of redemption. You can’t redeem real estate or business property. Redemption may not be available as an option for you, or the trustee may choose not to abandon it. You also may not be able to make the lump sum payment, or find redemption financing without an astronomical interest rate.

What is the difference between Redemption and Reaffirmation in a bankruptcy?

In a redemption, you will pay the financed asset’s actual market value in one lump sum payment, while in a reaffirmation, you will retain the debt through your bankruptcy and continue your usual monthly payments for the term of the loan.

You will likely need to sign a reaffirmation agreement with your lender to retain your loan through bankruptcy. Your lender may allow you to simply continue your payments as usual after your bankruptcy, without an official reaffirmation agreement. However, your lender can opt to repossess the vehicle, and will act more quickly if you are late on payments than before your bankruptcy. The bankruptcy court will also need to approve your reaffirmation, which will be addressed in a hearing that is separate from your 341 Meeting of Creditors.

How to Keep your Car while Lowering Your Payments in a Bankruptcy

Most reaffirmation agreements keep all the same terms of the original agreement, but you may be able to negotiate a new lower interest rate or principal balance. The bankruptcy court likely won’t sign off on an obviously unfair agreement, so it may be in your lender’s best interests to cut you a small break from your original agreement so that the court will approve the reaffirmation. Having a bankruptcy attorney as your representative may help you be more successful in negotiating a favorable reaffirmation agreement.

Reaffirmations are most likely to be approved when you owe less or close to the actual market value of the asset. Since courts are unlikely to reaffirm an agreement where the debtor will pay far more than the asset’s value over time, you should pursue redemption if your loan amount exceeds your asset’s value.

Just because you want to seek the advantages of a redemption through bankruptcy doesn’t mean you won’t be able to pay your vehicle or other financed asset off in monthly installments as opposed to a lump sum payment. You may be fortunate enough to have friends or relatives who can pay off your lump sum payment for you and accept monthly installments after your bankruptcy. Otherwise, some financial institutions specialize in offering loans to bankruptcy filers. These lenders pay the full balance of your vehicle or other property, and you pay back that lender in monthly installments instead of your original lender. Because you will file a motion with the court to proceed with the redemption, this debt won’t be discharged along with your other debts in your bankruptcy.

How to Redeem Your Property in a Bankruptcy in Mesa, Arizona

The first step to redeeming your property in bankruptcy is determining the asset’s correct value. The courts will generally approve a value that is somewhere between its purchase price and its market value. Some items may have a generally approved appraisal method, such as Kelley Blue Book for motor vehicles.

Next, you or your attorney should stipulate this value with your redemption lender. The lender may not agree with your initial proposal, so you may need to negotiate for a different term, principal balance, or interest rate.

Then, you or your attorney will need to file a motion in the bankruptcy court. The filing fees for this motion may be included in your redemption loan. You will then continue payments per your agreement until the balance is paid.

Contact Us to Keep Your Car through a Redemption

If you are struggling with debts but want to keep your financed vehicle, or any other financed asset, our dedicated bankruptcy staff and attorneys are here to assist you. Whether you  need help navigating a reaffirmation or a redemption, our bankruptcy lawyers are well-versed in applicable laws, best bankruptcy practices, trustee preferences, and lender negotiation tactics. The best part is that hiring a bankruptcy attorney is probably far more affordable than you think.

My AZ Lawyers Mesa bankruptcy attorneys offer competitive rates and Zero Down payment plans for qualified Chapter 7 bankruptcy clients. Get started towards your financial clean slate, while keeping your car- possibly with lower payments! Our bankruptcy lawyers are standing by and offer free initial consultations.

Chuck E. Cheese on the Brink of Bankruptcy

Chuck E. Cheese on the Brink of Bankruptcy

Chuck E. Cheese on the brink of bankruptcy blogFor years, Chuck E. Cheese has been a favorite for children, especially for birthday parties. The chain features pizza and other kid-friendly fare, along with video games, prizes, and play equipment. Unfortunately, like many restaurants and other businesses, COVID-19 has decimated profits for the past few months and for the unforeseeable future. The Kid’s Birthday Party/Restaurant may have to file for bankruptcy protection.

Company Information

Chuck E. Cheese was founded in 1977 in California, but currently runs out of Texas. There are 615 Chuck E. Cheese locations worldwide, with 610 of those being in 47 of the United States. The chain is owned by the brand CEC Entertainment.

Struggles Due to the Coronavirus Pandemic

Although many restaurants have been able to continue serving takeout and delivery, Chuck E. Cheese quickly realized its clientele patronized them for their atmosphere and activities, not the pizza itself. Public video games and play equipment aren’t acceptable during the pandemic, as it would prevent an easy opportunity for the virus to spread. The chain reports that profits are down 21.9% from this time last year, and it has had to lay off 17,000 employees since March. The company also included that it was considering bankruptcy in this report. Despite all of these problems the chain announced it would be giving bonuses to three top executives to guarantee they stay with the company. If Chuck E. Cheese files bankruptcy due to the coronavirus pandemic, it will be joining the likes of big names like JC Penney, Neiman Marcus, and Pier 1 Imports. 

In an effort to recoup some losses and avoid laying off and furloughing all of its employees, the company took a unique approach to sales during the pandemic. Eagle-eyed pizza eaters on delivery services noticed that a chain called “Pasqually’s Pizza and Wings” had the same exact addresses as Chuck E. Cheese. The chain created a pseudonym based on one of mascot’s band members to sell to those too embarrassed to be seen eating Chuck E. Cheese pizza. 

Chuck E. Cheese and Chapter 11 Bankruptcy

If the chain files bankruptcy, it will more than likely utilize Chapter 11. Chapter 11 can be used by individuals and by businesses, usually those with significant assets and debts that will be particularly complicated to reorganize. Chuck E. Cheese specified that it would be a Chapter 11 filing if the company does end up filing bankruptcy.

In Chapter 11, the filer’s top creditors will form a panel to assist in reorganizing the bankruptcy debts. Along with the bankruptcy trustee assigned to the case, the panel will make sure that the reorganization is fair for the company and all of its creditors. The company can remain operating and maintain basic management decisions, big business decisions have to be approved by the panel. Alternative debt repayment methods, like ownership and stock options, may be available in a Chapter 11. 

When filing bankruptcy, most companies choose between Chapter 11 and Chapter 7 bankruptcy. Chapter 7 liquidates unsecured non-priority debts. It also provides the option to surrender financed assets that are no longer a good investment. Only the trustee will oversee the case, and creditors can appear at the 341 Meeting of Creditors but not form a panel for the case. The drawback is that the company will be forced to cease operations. All of the company’s remaining assets must be surrendered and will be sold to be distributed amongst the company’s creditors. 

Personal Bankruptcy Chapter 13 and Chapter 7

Personal bankruptcy filers also have the option to file Chapter 7 bankruptcy, along with Chapter 13. Filers will have their financial slate cleared of debts like credit cards and medical bills, but the benefits are not available to everyone. Assets must have not more equity in them than each state’s applicable exemption value. The filer must either make less than the state’s median monthly income for their number of family members, or prove their disposable monthly income is low enough through the Means Test. There are also waiting periods in between filing most chapters of bankruptcy. Those who don’t qualify for Chapter 7 will usually qualify for Chapter 13 bankruptcy.

Chapter 13 bankruptcy reorganizes debts into a payment plan that lasts 3-5 years, depending on the filer’s income relative to the state median. Some debts, like the balance on a car loan, or arrearages on child support, will be paid in full in the plan. Some unsecured debts may only receive a portion of the debt they are owed. Filers must prove they have enough income to feasibly make minimum monthly payments. There are also limits on how much debt they can have: $419,275 in unsecured debt and $1,257,850 in secured debts. 

The spread of coronavirus has impacted businesses and individuals alike. If you are struggling, you should consider how bankruptcy may be able to help you. Our Mesa Bankruptcy Office offers free consultations to help you do just that. Call today to schedule a free consultation to speak to one of our experienced bankruptcy attorneys. We offer free consultations either in office or by phone. We look forward to assisting you. 

4 Things that Chapter 7 Bankruptcy Will Not Discharge

What debts cannot be wiped out in bankruptcy? blogBankruptcy is a very helpful solution for challenging financial problems. For instance, several individuals have a big charge card debts that become very tough to be worthwhile. These individuals may simply have to create a fresh break with a painful fiscal past and start things over fresh.

Chapter seven bankruptcy, likewise referred to as a “straight bankruptcy” or a “liquidation bankruptcy”, allows qualifying individuals to discharge the debts of theirs. With Chapter seven bankruptcy, you might be ready to eliminate your most important debts. These debts are able to include: medical bills, certain loans, credit cards, and court judgments.  Basically, all unsecured debts are discharged in a Chapter 7 Bankruptcy.

Nevertheless, in case you are one of the numerous individuals considering bankruptcy in Arizona, you must know that there are particular debts chapter seven will not eliminate. Below are some of those debts.  This is not all of the things that are not able to be discharged by declaring bankruptcy.

The following are 4 kinds of debt that Chapter Seven Bankruptcy will not discharge:

Spousal Maintenance or Alimony: If you are filing for bankruptcy after you have actually been divorced, you will have to continue making pre established payments to your ex spouse.

Child Support: Similar to alimony, you should continue paying some kid support.

Student Loans: Lots of people seek out bankruptcy since the student loans of theirs are too high. Unfortunately, chapter seven bankruptcy won’t eliminate any debt you built up as an outcome of pupil loans.

Penalties and Fines: When you broke the law, you still need to spend some court imposed financial penalties. This consists of fines from infractions, felonies, misdemeanors, and much more.

This article shouldn’t be considered as legal advice. When you are contemplating bankruptcy or maybe another form of debt relief, you have to talk to an Arizona bankruptcy legal professional for guidance. If you are in Pinal, Pima, or Maricopa County in Arizona and also seeking legal assistance, our Arizona debt relief staff is happy to assist.

My Arizona Lawyers, PLLC is focused on assisting families find help out of the concern of debt along with other financial problems. With thousands of successful Arizona bankruptcies filed, our AZ bankruptcy lawyers have furnished good direction on all debt help to customers throughout Arizona.

An Influx of Business Bankruptcies in Arizona is on the Horizon

An Influx of Business Bankruptcies in Arizona is on the Horizon

For most of 2020 so far, coronavirus has spread like wildfire. What originally was only a blip on the United States’ radar resulted in most states enacting quarantine and stay-at-home orders to slow the spread of the virus and “flatten the curve.” While stay-at-home orders are starting to expire or be loosened, business won’t be returning to normal any time soon. The coronavirus pandemic has caused production and supply chain issues. Some venues that do reopen will be forced to operate at limited capacity that will increase gradually as quarantine measures loosen. For example, gyms and restaurants will have to remove equipment and tables to maintain a 6 feet distance. Companies will also have to consider clients’ reluctance to come in immediately after quarantine is lifted, and employees’ similar reluctance and scheduling issues due to lack of childcare.

Mesa Business Owner Closing Her Company Due To COVID-19

Although many businesses are receiving government relief, it won’t be enough to save some. If the economy doesn’t pick back up soon, businesses will have to consider bankruptcy as a method of dealing with mounting debts.

Business owners consider bankruptcy will have to decide between two chapters: Chapter 7 and Chapter 11. Chapter 7 is typically utilized by smaller businesses that intend to close and remain closed. It is especially useful for businesses where the company owner is personally liable for business debts. A Chapter 7 bankruptcy discharges most unsecured nonpriority debts. This means that the business owner will also be able to discharge personal debts, such as credit cards and medical bills, in the bankruptcy. There are income and asset value limits to file a Chapter 7 bankruptcy, but small business owners will likely qualify if their business is operating in the negative.

For larger businesses and those that wish to remain operating, Chapter 11 may be available to them. A Chapter 11 bankruptcy reorganizes a business’s debts so that paying them off is more feasible. In a Chapter 11 bankruptcy, the business owner will remain in control of day-to-day operations but larger decisions will have to be approved by the court. If you are a small business owner whose interest is piqued by a Chapter 11, proceed with caution.

The court filing fee for a Chapter 11 bankruptcy is $1,717 compared to only $335 in a Chapter 7. While it is almost always preferable to file with an attorney, it isn’t inconceivable to successfully discharge a Chapter 7 bankruptcy pro se, or without an attorney. Filing Chapter 11 without an attorney is nearly impossible, and the attorney’s fees will be much higher than in a Chapter 7. Unlike a Chapter 13 bankruptcy, which lasts 3-5 years, there is no set time frame for a Chapter 11 bankruptcy. A Chapter 7 bankruptcy typically lasts 3-5 months.

If you own a business that is struggling due to the pandemic, you don’t need to wait for quarantine orders to be lifted to get help. Our office is available for phone consultations that are free of charge. Our experienced attorneys can discuss your options, guide you through the bankruptcy process, and offer affordable payment plan options. Call today!

Coronavirus Pandemic May Force Movie Theater Giant AMC to File Bankruptcy

Coronavirus Pandemic May Force AMC Theaters to File Bankruptcy

Mesa Bankruptcy Lawyers and Staff on 4/13/2020 write: 

Life is changing rapidly for people and businesses across the country as the spread of coronavirus has forced government officials to issue stay-at-home orders. Gatherings of 10 or more are banned almost everywhere, causing businesses that naturally create gatherings- such as movie theaters- to close.  AMC theaters nationwide, including all of the AMC theaters in Mesa and throughout Arizona are at the mercy COVID-19.  This is possibly making AMC Theaters to file bankruptcy.

AMC theatre in Mesa facing bankruptcy, AMC Mesa Grand

AMC Mesa Grand 14, 1645 S Stapley Drive, Mesa, AZ 85204

AMC has 634 locations in the US and Canada and more than 1,000 worldwide. There are currently 12 AMC theaters in Arizona. Like many businesses, AMC was forced to close March 16, 2020. More than 600 of AMC’s corporate employees, including the CEO, have been furloughed. It is estimated that AMC is currently running at a $155 million loss per month. The company likely only has enough liquidity to last until June or July. AMC already had $4.9 billion in debt before Coronavirus pandemic started.

Massive debts that will continue to grow combined with AMC’s decision to stop paying its landlords starting in April mean that the closure of your Local AMC Theater (AMC Mesa Grand) may be permanent. Since many Americans are experiencing reduced income, even when movie theaters can reopen, they won’t have the budget for discretionary entertainment purchases such as movie tickets. Those who do have money to go to the movies when the pandemic has passed will probably spend their money elsewhere since they’ve spent the last few months indoors watching movies.

AMC Theaters is not Alone with Financial Woes 

AMC Theaters is not the only entertainment company facing financial woes due to the coronavirus pandemic. Disneyland and Broadway are shut down, along with Arizona’s busiest movie theater chain, Harkins Theaters.  Actually, every movie theater in Arizona is closed for showing films.  A few of the “Dine In Theaters” in Arizona are still serving food to go, with mixed success.

Additionally, the first name in acrobatic entertainment, Cirque du Soleil, is also on the brink of bankruptcy. Major studios are delaying the release of big-budget films, like Pixar’s Soul and Disney’s Mulan. Sony has delayed the release of all of its summer films until late 2020/early 2021. This means the movie production industry will be slowing down. If you know anyone who works on movies, you know these are the type of people who insist on seeing every movie in theaters and refuse to sneak in snacks.

During the recession of 2008, the U.S. saw a 33% increase in bankruptcy filings. It is reasonable to expect a similar increase in bankruptcy filings due to the spread of coronavirus. Businesses aren’t immune to this, and those that don’t receive forms of government bailout will be particularly susceptible. Only time will tell which businesses will survive the pandemic, but bankruptcy isn’t a death sentence. Kodak, Jack in the Box, and Best Buy are examples of businesses who successfully recovered after a bankruptcy.

If you are like AMC Theaters and are feeling the impact of COVID-19 on your financial life, give our Mesa Bankruptcy Lawyers a call.  We offer Free Consultations, Bankruptcy by Phone (Coronavirus Safe), Zero Down Arizona Bankruptcy, File Now,.. Pay Later Bankruptcy,  and experienced attorneys and staff to help you with your debt relief needs.

Can I Keep One of my Credit Cards When Filing Bankruptcy?

This is one of the questions that our Arizona bankruptcy lawyers often are asked.  Many people who need to declare bankruptcy have a favorite credit card that they want to keep even after they have filed for bankruptcy protection.  

Keeping a credit card while filing bankruptcy

Unfortunately, you can not pick and choose which debts you are wanting to include in your bankruptcy.  Thus, in a word “No”  you can not keep one of your cards when filing for bankruptcy in Arizona.  We understand that it makes no sense, if you want to pay back some of your debt, it just isn’t fair to your other creditors.
An example of how this might work is:  You have a balance that you want to Discharge on your Mastercard but want to continue to pay the personal loan that you borrowed from your work’s credit union.  That is not something that you can do.  Picking and choosing debts to include in bankruptcy is not allowed.
Credit Cards with Zero Balance in Bankruptcy

Often, people will tell our experienced bankruptcy attorneys that they chose not to include a creditor on their bankruptcy because the card had a zero balance.  Just because they don’t owe money on a card does not make it a card that they can choose not to include.
In fairness, usually they are wanting to hang on to that credit card because it is $0 balance and they hope it will help them re-establish their credit after filing bankruptcy.  Unfortunately, the lenders (issuers of the credit card) don’t look at this the same way.  Most often, the lenders subscribe to services that follow and update current bankruptcies that are filed.  Thus, the lenders compare bankruptcy filings to their own database.  Any active account that the lender might have (Even with a $0 Balance) that matches up to a bankruptcy case will lose borrowing privileges.  Your credit card will be canceled, even sans a balance.
Can I Exclude a Credit Card when Declaring Bankruptcy?  It’s an Important Card.
So, what if I just exclude a card and don’t tell anyone about it?  Will that allow me to keep a credit card when declaring bankruptcy?  Once again, no matter how important the credit or department store card might be, excluding the account and/or the card is simply not an option.  We feel that you should use one of the federal debt relief programs:  Chapter 7 or Chapter 13 in order to start a new debt freeChapter of your life.