Category Archives: bankruptcy

The trustee plays a very important role in a consumer bankruptcy filing. The trustee could cause a bankruptcy case to face delays or dismissal, or can push it in the direction towards discharge. The trustee is different from a judge, who will also be assigned to every bankruptcy case. Creditors may also be heavily involved in a debtor’s bankruptcy. Making sure that the trustee’s requirements can guarantee a debtor the best possible results out of their bankruptcy case. Finding a skilled bankruptcy lawyer will simplify every step of the bankruptcy process, including fulfilling trustee requests. While many firms make it expensive to retain quality representation, our firm offers affordable payment options that allow you to file your case with no money down. To schedule your free phone consultation with My AZ Lawyers, call 480-833-8000.

The Essential Functions Of a Bankruptcy Trustee In Arizona

A bankruptcy trustee is an attorney appointed by the government to your bankruptcy case. However, the bankruptcy is not working as your attorney like a court-appointed attorney for a criminal case might. The trustee doesn’t work as the affected creditors’ attorney, either. Instead, the trustee works with the court to make sure that a bankruptcy case is executed in accordance with United States Bankruptcy Code. The trustee’s responsibilities vary based on the type of case that the debtor files- Chapter 7, Chapter 13, or Chapter 11.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is filed more than any other type of bankruptcy. Chapter 7 bankruptcy can be used by consumers, or individuals, and businesses alike. Chapter 7 is regarded as a liquidation bankruptcy because the debtor must surrender all of their non-exempt assets to pay off debts. The trustee will review the debtor’s petition, which should include a schedule of their assets. The trustee will review this schedule to make sure that the correct exemptions are applied to each asset, and that the assets are worth what the petitioner says they are. The trustee will also make sure that the petitioner hasn’t transferred any assets to friends or family in recent history. This is important because without this precaution, a bankruptcy debtor could theoretically transfer a valuable asset that wouldn’t be protected by an exemption to a relative. This would result in an unfair distribution of assets to the creditors and an unfair benefit to the debtor.

Another big concern for Chapter 7 bankruptcy cases is credit card debt. Credit card debt is unsecured and non-priority, making it among the debts that can be wiped away by a Chapter 7 bankruptcy filing. This also creates a huge potential for abuse of the bankruptcy system. An unscrupulous debtor who intends to file for bankruptcy could open up as many credit cards for which they could obtain approval and spend them to the limits. The debtor would have no true intention of paying back these debts knowing that Chapter 7 bankruptcy was on the horizon. Therefore, there are limits on credit card spending in the time period before declaring Chapter 7 bankruptcy. The debtor is limited to $800 on luxury purchases in the 90 days before bankruptcy. Additionally, the debtor can’t make cash advances in excess of $1,100 in the 70 days before bankruptcy. If the trustee finds credit card spending that exceeds either of these limits, those debts may be excluded from discharge. The trustee will use their discretion to determine what is luxury spending versus ordinary necessities. The creditor can also raise the issue at the debtor’s 341 Meeting of Creditors.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is called the wage earner’s bankruptcy because it uses the debtor’s income to formulate a plan that will reorganize and pay off debts. The trustee will need to review the debtor’s petition for unprotected assets like in a Chapter 7 bankruptcy. Chapter 13 bankruptcy lasts either 3 or 5 years, and the debtor will need approval from the trustee before acquiring or removing significant assets from the bankruptcy estate. The trustee will be at the debtor’s 341 Meeting of Creditors like in a Chapter 7 bankruptcy, but there is another hearing mandatory for Chapter 13 filers. During the plan confirmation hearing, the trustee will make sure that the debtor has sufficient disposable monthly income to pay the debts that must be paid off in Chapter 13 bankruptcy. Bankruptcy fees, secured debts, and priority debts usually must be paid in full in a Chapter 13 payment plan.
Unsecured non-priority debts may be discharged without full repayment if the debtor completes the rest of the plan as intended.

Besides reviewing the petition and all of the debtor’s available financial information, it will be the trustee’s job in a Chapter 13 to collect and distribute the debtor’s payments among the creditors. The trustee may find it necessary to change the plan throughout its 3-to-5-year- course.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy isn’t used regularly by consumers to discharge debts, but is available as an option. Chapter 11 bankruptcy allows business debtors to continue operating where a Chapter 7 bankruptcy would require shutting down operations. A key factor in Chapter 11 bankruptcy is that the debtor’s top creditors will join to form a committee that has authority on important decisions until the bankruptcy is complete. A trustee might not even be necessary in a Chapter 11 bankruptcy case. However, a trustee may be brought in to manage the debtor’s assets and affairs while the bankruptcy is pending. The trustee can also assist in the formation of the creditor committee.

What To Do When You Receive a Letter From The Trustee

Debtors who file for bankruptcy in Arizona will receive a letter from the trustee assigned to their cases shortly after filing. The trustee should provide the debtor with the date and time of their 341 Meeting of Creditors. The 341 Meeting of Creditors is generally held about 30-45 days after the petition is filed. If the hearing is remote, the debtor should make sure their software is up-to-date and they have a clean, quiet area to conduct the hearing before it begins. If the hearing is in person, the debtor should make sure they know how to get to the courthouse and where to park in advance.

The trustee may have issues they want the debtor to clear up before the 341 Meeting of Creditors. The trustee might request that the debtor provide financial documentation such as their most recent tax returns or pay stubs. If the debtor is unable to mail the trustee copies of these documents before the 341 Meeting of Creditors, they should be brought to the hearing. If you have additional questions about what to do when you receive a letter from your bankruptcy trustee, you should review the letter with your bankruptcy attorney.

Curious About Bankruptcy? Learn More From Our Experienced Arizona Bankruptcy Team

Bankruptcy could be a great way to get your finances back on track, or there may be a more effective method of debt relief available. There are many moving parts to a bankruptcy, and complying with trustee requests is just one of them. You have the right to hire a knowledgeable bankruptcy attorney who will simplify the process and make sure your debts are discharged efficiently. To schedule your free consultation with an experienced member of our bankruptcy team, contact us today at Mesa Bankruptcy Lawyers or call 480-833-8000.

Mesa Bankruptcy Attorneys

1731 West Baseline Rd., Suite #101
Mesa, AZ 85202
Office: (480) 448-9800

Additional Information at:

Phoenix Bankruptcy Lawyer

Mesa Bankruptcy Lawyers

Phoenix DUI Lawyer

Chandler Bankruptcy Lawyer

Tempe Bankruptcy Lawyers

Vegas Zero Down Bankruptcy Attorney

Gilbert Bankruptcy Lawyers

Tucson Bankruptcy Lawyer

Arizona Zero Down DUI

Las Vegas Bankruptcy Lawyers

AZ Bankruptcy Lawyer

Why You Should Spend Money Before Declaring Chapter 7 Bankruptcy

Our Mesa Chapter 7 bankruptcy attorneys take a look at the proper things that you should spend your money on when preparing to file for chapter 7 bankruptcy protection in Arizona. Frequently, mistakes are made by people in Arizona who are preparing to file for bankruptcy. These mistakes can be costly. Seek the assistance of an experienced debt relief attorney who can easily guide you with your bankruptcy preparing.

Maybe you just received your tax refund, an inheritance, settlement, or otherwise have money in your bank account that won’t be exempt in a Chapter 7 bankruptcy. Often, this puts you in a unique position where you actually need to spend a significant amount of money before filing your bankruptcy petition. Otherwise, it could be taken by your bankruptcy trustee to pay your creditors. But that doesn’t mean that you can, or should, spend these funds on luxury vacations and designer clothes. If you’re looking to deplete your bank account before declaring Chapter 7 bankruptcy.

 Some Reasonable Expenditures That Won’t Cause Issues With Your Bankruptcy Trustee

• Clothing and school supplies for your children: If you have kids, you know how easy it can be to spend a tax refund or other payment while shopping for them. Purchases like notebooks, school uniforms, etc. are almost always deemed reasonable in a bankruptcy court. Keep your receipts for these kinds of items in case your trustee has questions about purchases at stores that also sell discretionary items.
• Funeral and burial expenses: Arizona has an exemption of $1,000 that can be used for a burial plot. While thinking about your own death can be morbid, it can reduce the amount your children have to spend when you pass away.
• Household goods: Almost everyone can go through their kitchen, laundry, or garage and find items that need to be purchased, repaired, or replaced. The exemption for this category of possessions in Arizona is $6,000. If you’ve been wanting to replace an old mattress, stock up on cleaning supplies, or buy any other reasonable household expense, now is your opportunity. Be careful with gift cards, as these can be treated as cash by the bankruptcy trustee. You should keep receipts for these kinds of purchases, so the trustee can make sure funds at certain stores weren’t spent on anything trivial.
• Dental and health care: If you’ve been putting off dental work or health care when juggling debt payments, now may be the time to finally get it done. Regular checkups are also a reasonable expenditure before bankruptcy. So if you’ve been putting off a root canal, septoplasty, or any other reasonably necessary medical or dental procedure, this could be a good opportunity to finally get this work done. However, the bankruptcy trustee won’t approve of elective or cosmetic procedures.
• Prepaid rent: If you rent your residence, it’s probably one of your largest recurring expenses. Unfortunately, Arizona’s bankruptcy exemptions haven’t quite kept up with Arizona’s skyrocketing rental prices, reducing how many months’ rent you can prepay as bankruptcy spending. The exemption for prepaid rent in Arizona is currently $2,000.
• Car maintenance and repairs: If you’ve got a chunk of change you need to spend before filing bankruptcy, the mechanic can be a good place to spend it. You might just need an oil change and to replace your filters, or there could be more serious- and more expensive- issues with your vehicle. Bankruptcy trustees understand that having access to a vehicle can be crucial for employment and childcare, so car repairs before bankruptcy will usually be interpreted as reasonable spending. However, the trustee is less likely to approve of cosmetic car work like rims or a new stereo system.
• Bankruptcy attorney’s fees: While it seems counterintuitive, filing for bankruptcy comes with significant costs. If you’ve got cash to spend before bankruptcy, you should consult with bankruptcy attorneys to learn about their payment options before spending it. A big factor will be whether you are going to file Chapter 7 bankruptcy or Chapter 13 bankruptcy. The total attorney’s fees for a Chapter 7 bankruptcy are typically lower than a Chapter 13 bankruptcy, but Chapter 7 attorneys will typically require more payment up front. This is because attorney’s fees can be worked into a Chapter 13 payment plan, allowing bankruptcy attorneys to charge a reasonable retainer and receive full payment as the case proceeds. Attorney’s fees are an unsecured debt, meaning they are wiped out in a Chapter 7 bankruptcy filing. That’s why most Chapter 7 bankruptcy attorneys require full payment before your case can be filed.

Purchases To Spend Money On To Avoid Before Filing Bankruptcy

While it’s best to stick to the list above when spending before bankruptcy, your case probably won’t be dismissed for a night out to dinner or a new pair of shoes. However, there are some expenditures that will immediately get your bankruptcy trustee’s attention.

Let’s say your parents loaned you a few hundred dollars for a repair or other expenses around the house. You also have significant credit card debts, and a few other miscellaneous unsecured debts. You secure the funds to repay your parents, and a few weeks later, declare bankruptcy. This is an example of a preferential payment. Here, you would be giving preference to your parents over your credit card companies and other creditors. The bankruptcy trustee will most likely ask your parents to return the funds so that they can be distributed more fairly among your creditors. Or, the trustee may require that you repay the funds yourself to the bankruptcy estate before your case can proceed.

While it probably sounds obvious, you should avoid spending on luxury items while preparing to file bankruptcy. You can’t game the system by maxing out your credit cards just to discharge them with a bankruptcy filing. The trustee will review your credit card transactions to make sure you aren’t abusing the bankruptcy system. You may not spend more than $725 on luxury purchases on your credit cards in the 90 days before your filing. You also may not use your credit cards for cash advances of more than $1,000 in the 70 days before you file.

Call Today To See If You Qualify For Our Zero Down Chapter 7 Payment Plan

Let’s face it- paying for a bankruptcy attorney up front isn’t ideal, even if you have money you need to spend before you can file. For example, if you’ve got the money for car maintenance or your attorney’s fees, you could be put in a bad position later on if your car breaks down after paying for your Arizona Chapter 7 attorney up front. Our bankruptcy attorneys have several years of experience and know just what our clients need. That’s why we implemented our Zero Down Chapter 7 bankruptcy payment plan program.

Eligible clients can use our zero down program to set up a payment plan that can last up to 12 months after your date of filing. Your payment plan includes a zero percent interest rate and credit reporting, which can help improve your credit score after your bankruptcy discharge. We make this possible by filing a skeleton petition before your full petition. Work completed before the skeleton petition is pro bono, and you can begin accruing debt again after the skeleton petition is filed. The work completed on your case after that point will be financed into an affordable payment plan.

Find Out The Difference Our Mesa Zero Down Bankruptcy Firm Can Make

See the difference our affordable, experienced Arizona bankruptcy attorneys offer for yourself by calling 602-609-7000 or filing out our online form to schedule your free consultation. Our AZ Bankruptcy Attorneys offer a Zero Down Bankruptcy option. If you have the need for an emergency bankruptcy filing, our Mesa Bankruptcy Lawyers can file your case in the same day, if necessary. As one of Arizona’s top bankruptcy filers, our bankruptcy team is very seasoned. Contact us today for a free consultation and debt evaluation with one of our experienced Phoenix bankruptcy attorneys.

Mesa Bankruptcy Attorneys

1731 West Baseline Rd., Suite #101
Mesa, AZ 85202
Office: (480) 448-9800

Additional Information at:

Phoenix Bankruptcy Lawyer

Mesa Bankruptcy Lawyers

Phoenix DUI Lawyer

Chandler Bankruptcy Lawyer

Tempe Bankruptcy Lawyers

Vegas Zero Down Bankruptcy Attorney

Gilbert Bankruptcy Lawyers

Tucson Bankruptcy Lawyer

Arizona Zero Down DUI

Las Vegas Bankruptcy Lawyers

AZ Bankruptcy Lawyer

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.

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