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Credit Card Debt – Eliminating It Through Chapter 7 Bankruptcy

July 26, 2011 By Leave a Comment

By John Skiba -

Credit card debt is a big reason many people seek out bankruptcy. It is not uncommon for people to come visit with me who have $100,000 or more of credit card debt. After a job loss, reduction in pay, or unexpected medical expense many people turn to credit cards to compensate for increased expenses or decrease in income. The good news is that most credit card debt can be eliminated or “discharged” through the bankruptcy process.

Chapter 7 bankruptcy is great for eliminating unsecured debts. An unsecured debt is one in which there is no collateral securing the loan. The most typical forms of unsecured debt are credit cards and medical bills. In a chapter 7 bankruptcy these types of debts are discharged 100%. You will not have to pay the debt and the creditor is barred from ever trying to collect on that debt again. There are a couple of pitfalls that you need to be aware of before filing for bankruptcy as it relates to unsecured debts.

Luxury Item Purchases

First, certain card use prior to filing for bankruptcy can cause problems. If you use your credit card to purchase “luxury” items totaling more than $550 within 90 days prior to your bankruptcy filing the bankruptcy court may deem those specific charges “non-dischargeable,” meaning that they won’t go away in bankruptcy. While the bankruptcy code does not specifically define what a luxury item is, it does not include goods or services that are reasonably necessary for the support of your household.

Cash Advances

Next, if you take a cash advance on your card of more than $825 within the 70 days prior to your bankruptcy filing that debt can be deemed non-dischargeable as well. This one is more clear cut – if you took the cash advance, plan on paying it back.

One caveat to both of these exceptions is that while there is a presumption in the bankruptcy court that the purchase of luxury goods and cash advances are non-dischargeable, the creditor must make an appearance in your bankruptcy case and ask the bankruptcy court to make the determination that they will not be eliminated in your bankruptcy. So even if you have those types of charges on your card, if the credit card company does not come to the bankruptcy court and request that the debt be deemed non-dischargeable, it will still be eliminated in your bankruptcy case.

I offer a free bankruptcy consultation where we can discuss your specific case and determination what relief is most appropriate for your situation.
Arizona bankruptcy attorney John Skiba can be reached at (480) 428-4028 or via email at john@skibalaw.com.

John N. Skiba, Esq.
Skiba Law Group, PLC
http://www.skibalaw.com
(480) 420-4028

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Should You Declare Yourself Bankrupt?

June 1, 2011 By Leave a Comment

By Conrad Murphy -

Are you considering the possibility of throwing in the towel and filing for personal bankruptcy? Do you find that past efforts to quell your financial misery have been met with resistance or even outright failure? If so, then filing for bankruptcy may be a worthwhile option. It has been said by many astute financial professionals that bankruptcy is often the last hope for troubled debtors that have tried everything in their power to remedy their situations. Although bankruptcy can certainly free you from a portion of your debt obligations, making the decision to file is a serious matter that should be dealt with appropriately.

If you find yourself facing an impossible situation in regards to your ability to pay back your debts, then bankruptcy might be the perfect solution. After all, the process was created to help debtors recover from debts that would otherwise be impossible to repay. Most people can only take so many harassing calls from creditors and threatening late payment notices before they eventually crack under pressure. Fortunately, filing for bankruptcy will put an immediate stop to these tactics, allowing you to get on with your life and to begin the financial repair process.

While bankruptcy can provide great relief in terms of freeing your from certain financial obligations, filing does come with its own set of consequences, many of which are quite substantial. As such, the following consequences should be considered carefully before you file -

• Your valuable assets will be put at risk once you initiate the bankruptcy process. Before you can be qualified to file, you will be required to submit detailed information related to any assets that you own. There are several reasons why this information is collected, though one of the primary reasons is to provide your creditors with information that they can use to seek repayment. What this means is that your assets can be liquidated in order to pay back a portion of your debt.

• The process itself will last up to 8 years and will essentially destroy your credit during that time. Though rebuilding your credit during bankruptcy is possible to some extent and definitely possible afterward, doing so will be challenging. It will also be quite difficult to secure any form of desirable financing during the duration of your claim.

As you can see, there are many reasons why you should take the time to ensure that bankruptcy is the right decision for you. Even though it may seem as though you need to make an immediate decision regarding your troubled finances, it’s worth your while to take the time to properly evaluate your options.

Are you looking for more information on how to declare yourself bankrupt?

If so, please click here: http://claimingbankruptcy.net

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Arizona State Exemption Laws

March 29, 2011 By Leave a Comment

By Jonathan Burgoyne -

Often when people are faced with the prospect of having to file for bankruptcy, they are worried they will be stripped of their house and all earthly possessions, that it will be sold to the highest bidder and paid off to their creditors. Thankfully, this is not the case and you do not have to start a new life after bankruptcy with absolutely nothing to your name. This is due to state bankruptcy exemption laws. This means that there are certain properties that are exempt from creditors. Exemption laws vary by state, and some are more generous than others. Arizona has considerably generous exemption laws, especially since the revisions made as of 2004.

So what properties are exempt in Arizona? There are many items listed in the code, ranging from funeral deposits to type writers. Here we will discuss what I consider to be the most important necessities.

Homestead – One homestead may be claimed as exempt and can be valued at up to 150,000 dollars. The homestead exemption is automatic and no written claim is required. Only applicable to primary residence. Before the revisions of 2004, the value of the house could only be up to 100,000 dollars.

Vehicles – A single person is allowed to keep one vehicle with value up to 5,000 dollars, or 10,000 if debtor is maimed or crippled. A married couple is allowed to keep one vehicle each of value up to 5,000 dollars, or one vehicle for the two with a value of 10,000 dollars. Before the revisions of 2004, the limit was a value of 1,500 dollars, so the revision greatly increased the maximum value for a vehicle exemption.

Household goods – These include beds, tables, couches, TV etc. of up to 4,000 dollars value for a single person, and 8,000 dollars for a married couple.

Wedding rings – Wedding rings are exempt up to 1,000 dollars each. Though this may sound low, this is an appraisal value. For an idea how much your ring would be worth, take it down to a pawn shop to see how much you could get. You may be slightly disappointed, but at the same time you will be glad you get to keep it!

Cash – On the day that you file for bankruptcy, you can have no more than 150 dollars in the bank for a single person, 300 for a married couple. Any more than this will be seized and given to creditors.

Make sure that you file for bankruptcy with the aid of a Phoenix AZ bankruptcy attorney so that you know what is exempt, and know how to properly file for these exemptions so that you are not taken advantage of by the trustee.

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Filing Personal Bankruptcy – What is the Process?

February 6, 2010 By Leave a Comment

By Christine Wilton –

Once you’ve decided that filing personal bankruptcy is the right path toward financial freedom from your debts, you need to know: what is the process? How long does the process last? Do filers have to go to court? Who needs to be informed of the bankruptcy filing?

The process of filing bankruptcy requires that you complete a bankruptcy petition and disclose all of your debts and assets to the bankruptcy court. Before you file for bankruptcy with the court, you will be required to complete a pre-filing credit counseling course and your certificate of completion of that course must be filed with your bankruptcy petition.

After you’ve filed your petition with the bankruptcy court, you must attend a meeting of the creditors as required by 11 U.S.C. 341(a); otherwise known as a 341(a) hearing. This meeting takes place before your court appointed trustee. The trustee’s job is to verify your identity by viewing your government issued identification card [usually a driver's license] and social security card; and the trustee will ask you some basic questions about your petition. You must also complete a financial management debtor education course in order to be considered for a discharge of your debts.

For chapter 7 liquidation cases, the process usually lasts approximately six months with a mandatory meeting of the creditors before the trustees. Chapter 7 debtors will not see the bankruptcy judge, unless they need a reaffirmation hearing. Chapter 13 individual debt adjustment cases where a debtor repays a portion of their debts over time, requires considerably more time and expense. The process for a chapter 13 case lasts between three and five years depending upon the household income and the debtor’s ability to repay their debts.

The fact that you’ve filed for bankruptcy will appear on your credit report for 10 years if you filed Chapter 7 or Chapter 11 and will appear on your credit report for 7 years if you filed Chapter 13. Bankruptcy may also affect your ability to lease rental property and find employment; and filing bankruptcy will impact your ability to file again in the future.

Experiencing extreme financial hardship has emotional costs as well. That’s why it’s best to talk to a bankruptcy lawyer so that you can make a well informed decision and lead your family to financial freedom from your debts with a trusted advisor who will inform you of all of your legal rights and remedies available through the bankruptcy process.

The Law Office of Christine A. Wilton is a Federal Debt Relief Agency. We help people file for bankruptcy under the Bankruptcy Code. Our practice is limited to bankruptcy practice, Chapter 13 and Chapter 7 bankruptcies at this time.

Blog: http://www.losangelesbankruptcylawmonitor.com

web: http://www.greifenlaw.com

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