WARNING: This is not a blog post written “In Plain English”.  It is a repaste of an article Daniel and I wrote for a technical business bankruptcy legal e-newsletter published by the American Bankruptcy Institute (“ABI”) Business Reorganization Committee.  Here is a link to the article replete with our bios. Foreign Claimants?  No Problem.  All You Need Is a Postage Stamp to Satisfy Claims Objection Service and Declarations from the Debtor to Assert 502(d) Disallowance  By Salene Mazur Kraemer, Esquire, MBA, CTA and Daniel Hart, Paralegal              On November 13, 2015, in the United States Bankruptcy Court for the Southern District of New York, Judge Glenn issued a memorandum opinion in the bankruptcy case, In re: Vivaro Corporation, et al.  (Case no. 12-13810), with the following rulings:  (1) a claim objection against a foreign entity may be served by U.S. mail under Bankruptcy Rule 3007 and need not be served in the same manner required for service of a summons and complaint in accordance with Rule 7004; and (2) when a claim objection is based on § 502(d) of the Bankruptcy Code, the Debtors must meet their burden under § 547 of the Bankruptcy Code  regarding the receipt of an avoidable transfer before the court will disallow and expunge such claims.          In Vivaro, various foreign entities from Pakistan, Costa Rica, Canada, London, El Savador, etc. filed proofs of claim in the debtors’ cases.  Vivaro Corporation, et al. (the “Debtors”) filed various objections to such claims as well as to scheduled claims of such foreign creditors.  At the same time, the Debtors initiated preference actions against such foreign creditors. The bases for the claims objections included § 502(d) of the Bankruptcy Code, which permits the disallowance (even if temporarily) of a claim if there are pending allegations of unreturned preference transfers.       Debtors served the claims objections upon the foreign creditors via U.S. mail and attached copies of the preference transfer complaints to the notices of claims objection.  Debtors used the address listed on the Debtors’ schedules or listed on the appropriate proof of claim.  In the packet sent to the foreign creditors, the Debtors included a declaration from the Debtors in support of their claim objections, which informed each claimant that they were in receipt of an avoidable preference transfer and provided the standard for a preference payment under § 547 of the Bankruptcy Code                  Judge Glenn ruled that Bankruptcy Rule 3007 applies to claims objections and permits service by U.S. mail which includes service by mail on foreign entities, and, therefore, the Debtors’ properly served notice of claims objection to each foreign entity by U.S. mail.   Bankruptcy Rule 3007 states that “[a] copy of the objection with notice of the hearing thereon shall be mailed or otherwise delivered to the claimant, the debtor or debtor in possession, and the trustee at least 30 days prior to the hearing.”  Fed. R. Bankr. P. 3007(a).   Service by Rule 7004(a) was not necessary.   Bankruptcy Rule 7004(a) provides that in adversary proceedings, personal service under Rule 4(e)–(j) F.R.Civ.P. may be made by any person at least 18 years of age who is not a party, and the summons may be delivered by the clerk to any such person.  Fed. R. Bankr. P. 7004(a).                The standard of service of a summons and complaint upon an individual in a foreign country is governed by F.R.Civ. P. Rule 4(f)(1), which is made applicable to adversary proceedings by Bankruptcy Rule 7004(a).  Service must be “[b]y any internationally agreed means reasonably calculated to give notice, such as those means authorized by The Hague Convention….” Fed. R. Civ. P. 4(f)(1).           This Vivaro Court rejected the  Jorgenson v. State Line Hotel, Inc. (In re State Line Hotel, Inc.), 323 B.R. 703, 713 (9th Cir. B.A.P. 2005), decision that Rule 7004 applies to the service of claims objections.  Rather, the Vivaro Court concluded that “Rule 9014 defers to Rule 3007 on the subject of claims objections: [Rule 3007] calls for an objection, not a motion, and authorizes notice, rather than requiring service.”  The Court further reasoned that there is no reason to require different rules of service when dealing with claims filed by foreign entities.  In respect to the second issue, the Vivaro Court ruled that if the Debtors showed proof to the Court that preferential transfers were made and not repaid, then § 502(d) of the Bankruptcy Code requires that the entire claim be disallowed unless the full amount of the avoidable transfer has been repaid.   The Court, however, must be satisfied that the estate or estate representative has established a prima facie basis that the claimants received and have not repaid avoidable transfers.  Although the complaint was not properly served in accordance with Rule 7004(a), copies of the complaint and Debtors’ declaration provided the claimants with notice and evidence of the avoidable transfers.  Such service shifted the burden to the claimants to rebut the evidence that they received an avoidable preference.  In this case, none of the claimants responded to the claims objections or made an attempt to repay the preference transfer to the estate.           The Court held that once a claimant’s liability has been determined, the claimant must be provided with a reasonable opportunity to turn over the property to the debtor’s estate in compliance with § 502(d) of the Bankruptcy Code before the claims may be disallowed.  If the creditor is liable to the estate for having received an avoidable transfer in any amount, the creditor’s entire pending claim must be disallowed in full. Practice Pointers: If you have a foreign claimant, service of a claims objection by U.S. Mail will suffice. If you are attempting to disallow a creditor’s claim based on 502(d) of the Bankruptcy Code, you must first establish a prima facie basis that the claimant received and has not repaid avoidable transfers. Copies of the preference complaint together with declaration from the debtor should suffice.

      A district court in Michigan affirmed the bankruptcy court's finding that once the debtor signed an lease assumption agreement post-petition, they could not revoke it despite the failure to comply with the requirements for reaffirmation.  Williams v. Ford Motor Credit Co., LLC, No. 15-CV-14201, 2016 WL 2731191 (E.D. Mich. May 11, 2016).  The debtors filed under chapter 7 on 8 June 2015, stating an intent to assume the lease with Ford Motor Credit.  Ford sent them an assumption agreement, which was signed by the debtors on 16 July 2015.  The assumption referenced 11 U.S.C. 365(p) as the basis of the assumption, and averred that the protections under 11 U.S.C. 524(a) did not apply to the lease.  Debtors also signed a stipulation for assumption of the lease, which was filed by Ford with the bankruptcy court on 28 July 2015.     Debtors changed their mind and filed a notice of rescission of the lease assumption on 4 August 2015. Ford's counsel sent a letter challenging the right to rescind the agreement.   A discharge was entered 15 September 2015.  The debtors reopened the case and filed to determine that the assumption was invalid for failure to comply with the reaffirmation requirements.  The bankruptcy court rejected this argument, finding that §524 does not apply to leases assumed under §365.  The district court affirmed, citing §365(p).  Section 365(p) specifically addresses the assumption of a personal property lease by a debtor. It provides as follows:(1) If a lease of personal property is rejected or not timely assumed by the trustee under subsection (d), the leased property is no longer property of the estate and the stay under section 362(a) is automatically terminated.(2)(A) If the debtor in a case under chapter 7 is an individual, the debtor may notify the creditor in writing that the debtor desires to assume the lease. Upon being so notified, the creditor may, at its option, notify the debtor that it is willing to have the lease assumed by the debtor and may condition such assumption on cure of any outstanding default on terms set by the contract.(B) If, not later than 30 days after notice is provided under subparagraph (A), the debtor notifies the lessor in writing that the lease is assumed, the liability under the lease will be assumed by the debtor and not by the estate.(C) The stay under section 362 and the injunction under section 524(a)(2) shall not be violated by notification of the debtor and negotiation of cure under this subsection.Id,  at *3.Thus, the Court found that the requirements for an enforceable assumption of a lease in chapter 7 is 1) an offer by the Debtor to assume the lease 2) agreement by the creditor, and 3) an signed agreement between the parties memorializing the agreement.      This contrasts with the requirements for a reaffirmation under §524, which include the making of the agreement prior to the discharge, disclosures required by §524(k), a cooling off period, a filing with the court, a certification by debtor's counsel if represented, and required approval by the Court if the debtor is not represented.      The Disctrict Court noted a diagreement among the circuits on this issue, citing In re Perlman, 468 B.R. 437, 441 (Bankr. S.D. Fla. 2012) finding that §524 does not have to be complied with, and Thompson v. Credit Union Fin Grp, 453 B.R. 823, 830 (Bankr. W.D. Mich. 2011).   Those decisions requiring reaffirmation as well as assumption generally cite the Bankruptcy Code's policy of protecting debtors, and assumptions without the protection of §524 can impair the debtors' fresh start. They also point out that the assumptions under §365(p) are not self-executing, rather that it simply provides that after a set of requirements are met the liability will be assumed.  The something more required to assume the liability is the reaffirmation of the debt under §524.   The contrary argument is that §365(p) does not reference §524, and Congress would have provided that §365 assumptions also must be reaffirmed under §524 if it had so intended.  Second, they argue that §365(p) would be superfluous if §524 has to be complied with for all assumptions.  Finally, the requirements of §365 and §524 could produce anomolous results.[A]ssumption of a lease under Section 365(p) binds the debtor to the lease terms and the discharge has no effect on the debtor's assumed obligation. Under the logic of [requiring reaffirmation], a lessor would have no ability to enforce a lease agreement assumed by the debtor in the event of a subsequent default. This interpretation would render section 365(p) a nullity and would create an absurd result.In re Mortensen, 444 B.R. 225, 230 (Bankr. E.D.N.Y. 2011).The point being that a creditor could be bound by the terms of the assumption negotiated with the debtor post-petition under §365(p) but the debtor may not be liable for the assumption under §524.   The District Court found the latter line of cases more pursuasive.  It concluded the Congress intentially omitted any requirement of §524 compliance from §365(p), that requiring reaffirmation would strip §365(p) of it's significance and produce anomolous results.   Thus an agreement that complies with §365(p) is enforceable without any §524(c) reaffirmation.  The Court also rejected the debtor's arguments that the agreement did not comply with §365(p).  First, the Debtor's argued that the agreement was made at a time when the trustee had sole authority to determine whether to continue the lease.  Under §365(p)(1) property subject to a personal property lease remains property of the estate for 60 days after filing.  The Court rejected this argument, finding that §365(p)(1) does not grant exclusive authority to negotiate an assumption of the lease to the trustee.  Second, Debtor's argue that §365(p)(2)(B) allows the debtor only 30 days after the creditor indicates it is willing to allow assumption for the debtors to actually assume the lease.  The Court found that this provision simply gave Ford the right to reject the assumption if it was made after the 30 days, but since Ford accepted the assumption the assumption was enforceable.Mike Barnett www.tampabankruptcy.com

  The Court in In re Doucet, No. 15-21531, 2016 WL 2603072 (Bankr. D. Kan. May 3, 2016) confirmed a chapter 13 plan paying only attorneys fees, after an extensive analysis of the current case law on the issue.  The Debtor had obtained an order to pay the filing fee in installments, was below median-income, and had no prior cases in the last 8 years.  She supported three dependents, including a 31 year old daughter.  The plan proposed 36 payments of $90 to pay $2,900 attorneys fees and the $310 court filing fee with no dividend to unsecured creditors.  She was employed as a registered nurse with $2,840 gross monthly income.  She owned no real estate, had no unsecured creditors, and no significant non-exempt assets.   The Debtor asserted she has insufficient funds to employ chapter 7 counsel, and may never be able to save funds to do so.  She indicated she was unable to get assistance from friends or family to pay counsel.  She had faced 17 garnishment actions since 2006, at least three of her vehicles had been repossessed, and she had faced numerous eviction actions.  The chapter 13 trustee argued that the “inability to pay attorneys fees for the filing of a Chapter 7, does not constitute ‘special circumstances' permitting the case to proceed as a Chapter 13.  The trustee did not object to the feasibility or reasonableness of the $2,900 fee requested.   In Chapter 13 cases, the court does not approve the employment of a chapter 13 debtor's counsel. Thus, a chapter 13 debtor may generally employ bankruptcy counsel without filing an application to employ.  Unlike other bankruptcy attorneys, a Chapter 7 attorney has no right to compensation under § 330.  Attorneys filing chapter 7 petitions must collect fees pre-petition or risk a discharge of pre-petition fees.  Under Chapter 13, attorney's fees are allowed pursuant to § 330(a) as an administrative expense described in § 503(b)(2). With the enactment of § 330, “Congress intended to provide adequate compensation, on a par with that available in other areas of practice, to attract competent counsel to the bankruptcy specialty.” The bankruptcy practice needs competent attorneys as[i]t is absolutely imperative that competent counsel be motivated to seek, accept and ably handle Chapter 13 cases. That motivation starts with being fairly compensated for the work they perform. The complexity and importance of the work, alone, justify such compensation, but there are other reasons able counsel are vital to the system. The most important reason is that this Court rather routinely sees pro se debtors “give away” rights or property that they would otherwise be legally entitled to retain because of their ignorance of the law.  In re Beck, 2007 Bankr.LEXIS 517, at *9 (Bankr.D.Kan. Feb. 21, 2007)“Studies show that debtors with legal representation tend to have a much higher success rate in bankruptcy proceedings than pro se filers.”1  In one study, only 0.8 percent of post-BAPCPA pro se debtors received a discharge . 2 The same study found that “[n]ot one of the post- BAPCPA cases filed with the assistance of a petition preparer ended in the debtor receiving a discharge.”  Fairly compensated counsel is beneficial to both debtors and the bankruptcy bar because “attorneys must be zealous advocates for their clients while attempting to keep their lights on in their own offices. Preserving the integrity of the bankruptcy system includes encouraging, not discouraging, excellence in legal representation of consumer debtors.  A requirement that attorneys provide pre-petition representation for free or that debtors find family members or friends to bankroll their case runs contrary to the priority structure outlined in §§ 330, 503, and 507 and to the notion that debtors are entitled to competent and properly compensated representation.     Bankruptcy courts are divided on this issue. Courts in New York, New Hampshire, and Massachusetts have rejected attorney-fee-only plans as contrary to the spirit and purpose of the Code.3  However, three circuit courts have found that attorneyfee-only Chapter 13 plans are not per se bad faith.4 Courts in North Carolina, New Mexico, Wisconsin, Illinois, and Kansas have also upheld attorney-fee-only Chapter 13 plans.5 The first circuit's decision in Pufer indicated that the test in determining whether a fee-only plan is filed in good faith is the totality of the circumstances, but added a court-made rule that the debtor “carries a heavy burden of demonstrating special circumstances” justifying their plan, a provision not applicable out of the 1st Circuit.        The Eleventh Circuit in In re Brown, 742 F.3d 1309 (11th Cir.2014) affirmed the bankruptcy court's denial of an attorneyfee-only plan, applying a totality-of-the-circumstances approach. The Eleventh Circuit noted that “the bankruptcy court did not apply a categorical rule prohibiting attorney-fee-centric or attorney-fee-only chapter 13 plans.”  742 F.3d. at 1318.  Additionally, a few months after denying Brown's Chapter 13 plan, the same bankruptcy judge confirmed an attorney-fee-centric Chapter 13 plan.      In Matter of Crager, 691 F.3d 671 (5th Cir.2012)., the Fifth Circuit found that “[t]here is no rule in this circuit that a Chapter 13 plan that results in the debtor's counsel receiving almost the entire amount paid to the Trustee, leaving other unsecured creditors unpaid, is a per se violation of the ‘good faith’ requirement....”  691 F.3d at 675–76.   The Crager bankruptcy court also noted “that it would ‘border on malpractice’ for Crager's attorney to advise her to file a Chapter 7.”Id. at 675.  Ultimately, applying the totality-of-the-circumstances test, the court found the debtor's filing responsible, given the debtor's circumstances.    In Missouri, In re Arlen, 461 B.R. 550 (Bankr.W.D.Mo.2011) held that a Chapter 13 plan which pays only the administrative expenses of the proceeding, primarily debtors' counsel's fees, and makes no payment to any creditor, secured or unsecured, violates the spirit and purpose of Chapter 13 and is not proposed in good faith.   The Doucet Court rejected this analysis, instead finding that a debtor in economic straights should be permitted to file a fee only plan.     The Court rejected the rulings that fee-only plans were automatically in bad faith, rather following the decisions that looked at the totality of the circumstances to determine good faith under §1325.  The purpose of the totality of the circumstances test is simply to determine if there has been an abuse of the provision, spirit, or purpose of chapter 13.  The Court quoted In re Wark, 542 B.R. 522 (Battler.D.Kan.2015) where the court noted that while in a perfect world chapter 13 debtors would be able to pay their debts in fullInstead, this is a world where debtors are harassed by daily collection calls for admittedly delinquent debts. Where they are repeatedly required to miss work to attend a cattle call docket to explain why they haven't paid old medical bills. Where they cannot afford to keep the gas on, and feel compelled to incur title or payday loans at exorbitant rates to feed their families. Where their meager wages are reduced even further by garnishments. Where they opt not to seek necessary medical care or take prescribed medication because they cannot afford it. This is the world these Debtors live in, and this real world sometimes requires bankruptcy, even if the debtor cannot save enough to pay the up front [sic] attorney's fees required to file a Chapter 7.Id at 578.  The Court rejected the argument that the fee-only cases benefit only the debtor's attorney rather than the debtor.  First, counsel take the risk that they do not receive fees if the case is not confirmed.  Second, if the case is dismissed post-confirmation a substantial portion of the fees may still go unpaid.  These are risks not faced by counsel in chapter 7 cases.  Much of the fees are spent preparing the case for confirmation, and the lower income debtor's often require more work than those of higher income.  Allowing fee-only plans gives debtors access to the automatic stay and the fresh start while adequately compensating counsel.  §1325(b)(1) provides for confirmation if a debtor is committing all their disposable income to the plan.  This suggests that the percentage to unsecured creditors is not a factor in determining good faith so long as the debtor complies with §1325(b)(1) and §1325(a)(4).  The court found that the plan met the requirements of §1325(a)(3) and (a)(7) for good faith, and should be confirmed. Michael Barnett, www.hillsboroughbankruptcy.com1 Alexander F. Clamon, Per Se Bad Faith? An Empirical Analysis of Good Faith in Chapter 13 Fee–Only Plans, 30 Emory Bankr.Dev. J. 473, 481 (2014).2 Lois R. Lupica, The Consumer Bankruptcy Fee Study Final Report, 20 Am. Bankr.Inst. L, Rev. 17, 81 (2012).3In re Paley, 390 B.R. 53, 59 (Bankr.N.D.N.Y.2008); In re Dicey, 312 B.R. 456, 459–60 (Bankr.D.N.H.2004); In re Buck, 432 B.R. 13, 21–22 (Bankr.D.Mass.2010).4 In re Brown, 742 F.3d 1309 (11th Cir.2014); In re Puffer, 674 F.3d 78 (1st Cir.2012); Matter of Crager, 691 F.3d 671 (5th Cir.2012).5 See In re Banks, 545 B.R. 241 (Battler.N.D.Ill.2016) (finding special circumstances allowing debtor to file an attorney fee-only Chapter 13 instead of a Chapter 7); In re Wark, 542 B.R. 522 (Battler.D.Kan.2015); In re Elkins, 2010 WL 1490585, at *3 (Bankr.E.D.N.C. Apr. 13, 2010) (stating that a Chapter 13 trustee should not summarily object to the presumptive fees in a Chapter 13 case solely because the case is an attorney-fee-only case); In re Molina, 420 B.R. 825, 829–33 (Bankr.D.N.M.2009); In re Guzman, 345 B.R. 640 (Bankr.E.D.Wis.2006) (confirming debtors' plan showing no disposable income); In re Alexander, 344 B.R. 742 (Bankr.E.D.N.C.2006) (debtors acted in good faith proposing a no projected disposable income plan).

Why Are Mesa Residents Still Filing for Bankruptcy if the Economy Is Said to Be so Much Better? For the last few years, we have been told just how much better the Arizona economy has gotten and that the hard times we faced in the early 2000s are over. However, if you look around, there is still plenty of hardship to be seen and many of our fellow Mesans are still filing for bankruptcy. So the questions remains: why, when are are supposedly doing so much better than before, do so many of us still need to file for bankruptcy to get ahead financially? Why Are Mesa Residents Still Filing for Bankruptcy if the Economy Is Said to Be so Much Better? Here are some important reasons why so many Arizona residents are still filing for bankruptcy despite a significant economical upswing! Mesa, AZ Here are some important reasons why so many Mesa residents are still filing for bankruptcy despite a significant economical upswing: Low Pay While it is undoubtedly true that the jobless rate has dropped significantly- in fact it is half of what it used to be- the pay rate in Arizona is still disturbingly low. And while many who used to be unemployed may have been able to finally find work, the odds are that the pay they receive is not able to move them out of debt and pay up what they owe. While the economy is doing better, employees are not paid more. In fact, many make less than they used to before they lost their job due to the disastrous economy. The only way to get ahead of the game or even just to even the playing fields is by filing for Chapter 7 and have your debt erased and start over. While bankruptcy can be a great way to jumpstart your financial future, it shouldn’t have to be that way. In 2016, minimum wage is still $8.05 which is hardly enough to pay all the bills that are coming in on a monthly basis. If you add to that the odds that employees have preexisting debt, the odds of catching up on your bills and paying off debts is almost impossible. Lingering Debt Just what type of debt does the typical Arizonan have to deal with? Student Loans For one, many young adults carry their tremendous student loans with them. The numbers relating to student debt are staggering. While in the 1990s about 50% left college with student loan debt, today it is over 70%. This means that currently more than 40 million Americans are paying off student loan debt. In fact, Arizona residents owe more in student loans that in credit card debt Student loans are the most common form of debt for those 24 years old and younger and account for over $8 billion of defaulted private loans. If you connect the dots between student loan debt and the low wages paid, you will understand why people are still not getting ahead. According to CNN, 260,000 Americans with a college or professional degree make at or below the federal minimum wage. Many bankruptcy attorneys may tell you that student loans cannot be discharged in a Chapter 7 bankruptcy proceeding in Mesa, but under certain limited circumstances you can file for bankruptcy because of your student loans and get them discharged. It is essential that you are working with an experienced and knowledgeable Mesa bankruptcy attorney who can clue you in as to which conditions you need to fulfil in order to qualify. Credit Card Debt Credit Card debt is another significant contributor to being indebted and which is driving many to file for bankruptcy. Credit card debt can be exceedingly difficult to pay off, especially in an economy that is on the rebound. While the going was rough, many Mesa residents have resorted to using their credit cards to buy necessary items in the hope they would be able to keep the boat afloat until the tide was coming in and things would get better. However, credit card interest rates are rarely known to be favorable (at least not once you have exceeded the introductory rate period), and if you are only able to make minimum payments, you will never be able to pay off your credit card (s). It is easy to be seduced in better times to purchase something on credit with the intention of paying it off. What consumers end up with are payments they cannot keep up with or only making minimum payments on their credit cards which doesn’t even make a dent in the mountain they owe. Why is that? Rates are on the Rise Interest rates have been on the rise and are predicted to continue to rise in 2016. While the pace of the increase is fairly moderate, an increase no matter how small, in interest rates is detrimental to many credit card holders. What exactly does that mean? The continued interest rate increase is going to cause consumers having to pay an additional $1.3 billion in credit card payments. Many will only be able to afford minimum or slightly above minimum payments, which won’t help to pay credit card balances down. This in conjunction with gas prices that are predicted to increase again, leaves less money in taxpayers pockets for other necessary living expenses. While increased employment opportunities and better economic times have led to a decrease in bankruptcy filings in Mesa and elsewhere, the trends is not significant enough to say that things have improved tremendously. There are other factors involved as well. But fact remains that many employees and workers are off worse than they should be and that the quest for debt relief is still strong. There is no shame in having to file for bankruptcy and getting the fresh financial start you deserve, but it also should not be necessary as often as it is. If you are trying to find out if filing for bankruptcy in Arizona could be the right choice for you, contact the experienced Mesa bankruptcy attorneys with My AZ Lawyers today. We can help you to assess your personal financial situation and we also offer free initial bankruptcy consultations. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 499-4222 The post Why Are Mesa Residents Still Filing for Bankruptcy if the Economy Is Said to Be so Much Better? appeared first on My AZ Lawyers.

Do You Know When Glendale Debt Collectors are in Violation of the Law? We’ve all fallen behind on a bill or two in the past and had to answer a call from a debt collector. You may have just forgotten to pay the bill, or you may have had a cash-flow problem that month for one reason or another. However, if you’ve ever lost a job or become seriously ill, you may have gotten far more of those calls than you like because you couldn’t keep up with the bills or had to take out more credit than you could afford to cover other bills. You may have been shocked to hear what some of those debt collectors had to say. In Arizona and throughout the country, you have rights that protect you against some of those behaviors. Whether you have filed for bankruptcy in Glendale to get debt relief or you are still struggling in debt on your own, debt collectors are limited in how they can contact you and what they can say. Here are a few things that debt collectors are not allowed to do by law: Call Too Early or Too Late Everyone has their own ideas about what constitutes “early” or “late,” but the law puts some actual time limits on it. Collectors cannot call you before 8 a.m. and they cannot call you after 9 p.m. If you get calls outside of that time, make a note of the number and time to corroborate with your phone bill. You’ll be asked for that information if you file a complaint. The only exception is if you speak to a bill collector and ask that you be called outside of that time frame. Call You at Work Getting calls from a bill collector at work can be very embarrassing as it can make your financial problems known to people you may not want to know. The law prohibits bill collectors from calling you at work unless you ask them to do so. Again, if you get those calls, make a note of the time and the number. Get the person’s name, as well, if you can. Threaten You Making threats to scare you into paying has been the go-to tactic of many bill collectors in the past. The law now makes specific prohibitions against threats. Bill collectors are never allowed to threaten you with violence or harm, nor can they threaten to have you arrested for not paying your debts. Collectors cannot threaten to garnish your wages or seize your property unless they have a legal right to do so, such as an auto lender who has a right to seize your car for non-payment. In general, they cannot threaten to do anything that they do not have the legal right to do, including taking legal action against you. Make False Claims Bill collectors cannot use a false name or false company name, nor can they falsely claim to work for a credit reporting company. They cannot falsely claim to be an attorney or a law enforcement representative, nor can they falsely claim that you have committed a crime. Collectors cannot send you documents that are designed to look like official court documents, nor can they claim that papers they send you are legal documents if they are not. They cannot misrepresent the amount you owe. Essentially, collectors cannot lie to you in any way. If they do, they are breaking the law and are subject to penalties. Use Profane Language Debt collectors have been known to get quite nasty. In addition to making threats and lying about the consequences you can face for not paying your debts, they can start to get personal and use profane language. The law recognizes this as abusive and prohibits it. Immediately after you get such a call, make notes about what the person said (be specific), the time of the call, the name of the person, and any other relevant details. You will need these specifics if you have to file a complaint. You can put an end to these harassing calls permanently by filing for bankruptcy with a Glendale bankruptcy attorney. My AZ Lawyers can help you understand your options for debt relief. Once you file for bankruptcy, debt collectors are required to stop their efforts. If you continue to get those calls, your Arizona bankruptcy lawyer will step in and handle the collectors on your behalf. Call us today to speak with an experienced bankruptcy lawyer and to understand how bankruptcy can offer you the debt relief you need. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 499-4222 The post Do You Know When Glendale Debt Collectors are in Violation of the Law? appeared first on My AZ Lawyers.

A Closer Look at Avondale Chapter 7 Bankruptcy A Closer Look at Avondale Chapter 7 Bankruptcy Here’s what you need to know about Chapter 7 Bankruptcy in Arizona! Avondale, Arizona Bankruptcy is a dirty word for some. It has the stigma of being only for people who are irresponsible with their money and go on spending sprees without any thought to how they will pay for them (other than using credit, of course). The other stereotypical view of bankruptcy is that it is for unethical business owners who use it to fix the problems caused by their reckless investing decisions. The reality is much different. The types of clients that the average bankruptcy lawyer sees range from those who have lost their jobs and remained unemployed long past their savings running out to those who became unexpectedly ill or injured and drained everything they had on medical bills. Those who struggle after a divorce often find themselves needing to file for bankruptcy. Bankruptcy laws were designed to help those and others who are struggling financially and need a way to get out from under crushing debt. Bankruptcy is a right and a protection under the law, and filing for bankruptcy does not imply a moral failing. In fact, filing for bankruptcy is a much better alternative to taking out additional loans or credit cards, borrowing against your retirement, or borrowing from friends and family — all of which will only sink you into more debt and cause you more problems. Many of the popular beliefs about bankruptcy arise from a lack of understanding about the laws. It’s time to take a closer look at Chapter 7 bankruptcy in Avondale, AZ. Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy When most people talk about bankruptcy, they are talking about a Mesa Chapter 7 bankruptcy. A Chapter 7 is a total liquidation of unsecured debts, such as credit card debts, personal loans, and medical bills. These debts are not promised against assets like your home or car. The credit was extended based on the lender’s belief in your ability to pay it back — nothing more. Chapter 7 does not eliminate student loans, tax debts, or child-support obligations, but it does get rid of just about every other unsecured debt that you have. A Mesa Chapter 13 bankruptcy, on the other hand, is more like a structured repayment plan. Instead of making individual debt payments for your home, credit cards and so on, you make a single payment each month that is distributed among your creditors. Under Chapter 13, you are paying a negotiated settlement, which can include a lower overall debt amount or a lower interest rate on the debt. You end up saving money, but you don’t escape the obligation to pay. Handling Assets in Chapter 7 Bankruptcy One of the biggest concerns people have when they are considering filing for bankruptcy is whether they will lose their home. However, most people will be able to keep their home and other assets when they file for Chapter 7 bankruptcy. Arizona allows for certain exemptions with this bankruptcy filing, including up to $150,000 in equity on a home, up to $6,000 in equity for a vehicle, up to $6,000 for personal goods such as computers and jewelry, and up to $2,000 in value for wedding rings. The full value of retirement accounts is exempt from bankruptcy filings. Therefore, in most cases, you will not have to sell your home or your personal belongings to pay for your debts. The exception, of course, is if you own a luxury home or you have several vehicles. You might then have to liquidate these assets to satisfy your debts. Your bankruptcy lawyer can help you understand your options concerning your assets. Some people turn to bankruptcy when they are at risk of losing their home, such as if foreclosure proceedings have begun against them. Unfortunately, Chapter 7 bankruptcy cannot stop these proceedings. Chapter 7 bankruptcy may help you save your home from foreclosure or your vehicle from repossession by freeing up money that you had been paying toward unsecured debts. You can then use this money to catch up on your home or vehicle payments instead. However, Chapter 7 bankruptcy does not provide any provisions for getting you caught up on those payments or for stopping active proceedings against you. In some cases, Chapter 13 bankruptcy can help. Again, you will need to consult with an experienced Arizona bankruptcy lawyer to understand your options. Qualifying for Chapter 7 Bankruptcy Nationwide, bankruptcy laws were changed in 2005 to make it harder for people to file for Chapter 7 bankruptcy. Now, there are strict qualifying criteria for who can file. Specifically, there is a “means test” that looks at your income compared to the state average, as well as your assets and debts. The amounts are always changing, so it is important that you talk to an Avondale bankruptcy lawyer about the current criteria.Many deductions are available that can help you meet the criteria. For example, you can deduct the taxes taken out of your payment, mandatory retirement deductions, health insurance premiums, and mortgage payments from your income. These and many other available deductions can help you meet the criteria. Again, it is critical that you work with an experienced bankruptcy lawyer who can help you understand what you need to do to qualify and what steps you can take to do so. My AZ Lawyers can help you understand your bankruptcy options and whether filing for Chapter 7 is right for you. Our Avondale attorneys understand that filing for bankruptcy is an emotionally charged choice as much as it is a rational one, and they offer compassionate yet thorough representation to make the process a bit easier. After meeting with a bankruptcy lawyer, you will have a much better understanding of your options and will be better able to make the choice that’s right for your family. Contact us today to learn more about the state’s laws and to start reviewing your finances. You may be able to discharge those debts this year and start over financially, finally working toward the goals you set for yourself. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 499-4222 The post A Closer Look at Avondale Chapter 7 Bankruptcy appeared first on My AZ Lawyers.

  SOURCE CREDIT: Fiona Robertson Graphics An aging analysis is often needed to mount an ordinary course defense in a preference action that a debtor has initiated against your client creditor, who could be a supplier, a lender, a trade creditor, a landlord.   EXAMPLE: Debtor retail toy store buys toy inventory from Defendant Supplier Creditor on Net 30 day terms and has done so for years. Debtor always paid in about 45- 60 days (or 15 to 30 days late– the  “lag time”). The purchase history is evidenced by 1000’s of invoices, purchase orders, and checks.   As the Debtor started its “slide into bankruptcy”, it slowed down payments to this Supplier Creditor and started paying in 75 to 100 days after invoice within the 90 days prior to filing bankruptcy (35-70 day “lag time”).  Debtor paid Supplier $100,000 in those 90 days about 75-100 days after invoice.   Post- bankruptcy, the Debtor or a Trustee sues the Supplier Creditor for a return of the $100,000 alleging that the payments were preferential payments. To argue the ordinary course of business defense provided for creditors in the Bankruptcy Code, the Supplier must show that the timing of the payments in the 90 day period was consistent with Pre-Preference Period transactions, that this was a typical supplier/debtor credit relationship where the Debtor and Supplier over time had fallen into a pattern of regularly paying and accepting payments on a late basis. The Supplier must show that during the Preference Period, the average lag times remained substantially the same. The Creditor had come to expect this and had accepted these payments to be made in the “ordinary course of business.” As a debtor draws closer to the filing of a bankruptcy, it is generally the case that almost all invoices will be paid with less frequency. A creditor must prove more than just that fact. See Hansen Lumber, 270 B.R. 273 (even where representative of debtor acknowledged that as debtor got closer to filing bankruptcy, the invoices were being paid with less frequency and the creditor defendant was treated no differently than any of the debtor’s other suppliers, debtor’s batch payments to supplier were still preferential). Generally speaking, there have been two ways in which Courts have done an “aging analysis” comparing the timing of preferential payments to the course of dealings established by the payment history between the parties: the “ranging method” and the “averaging method”. For the “ranging method,” the first step is determining the range of “lag times” for payments made by the Debtor to the Creditor during the Preference Period, (if possible, also taking into consideration both the number of invoices and the dollar amount of invoices).  The second step is determining whether this Preference Period range of “lag times” falls within, or close to, the range of lag times for payments made by the debtor to the creditor prior to the Preference Period. Calculating a “lag time” is described below. For the “averaging method,” a creditor simply compares the average “lag time” for payments made during the Preference Period with payments made during the Pre-Preference Period.  To calculate the average, one must first count the days after invoice date for each invoice, add up the total number of days and divide by the total number of invoices. Global Distribution, 103 B.R. 949, 953 n.3 (citing In re First Software Corp., 81 B.R. 211, 213 (Bankr. D. Mass.1988). If a debtor is a making payment to the creditor which pays many invoices (a batch basis), there is an issue as to whether the “lag time” is calculated on a “batch” basis or on an “unbatched” basis (invoice by invoice).  Uh. yeah, this analysis can get more complicated. As I have previously written here, I have developed an extensive series of excel spreadsheets to generate an “aging analysis” to defend preference litigation.  I am able to take a client’s 1000s of invoice transactions, input them into excel and do an analysis using both the “ranging” and “averaging” methods on both a “batched” and “unbatched” basis.  The analysis must also account for how the “Ordinary Course” defense interplays with the “New Value” defense (another defense to preference allegations).  More on that later. In true scholarly fashion, I amassed 100’s of cases in various Circuits that scrutinize what is a reasonable “average” or reasonable “range” in determining whether a transfer is ordinary or not. I know this is riveting stuff.  But, this type of litigation can make or break a creditor, thrusting the creditor also into a liquidation itself if forced to disgorge payments a Chapter 11 Debtor has made to it for bona fide goods or services.  Trust me, my clients are fuming after being hit with one of these lawsuits. Feel free to reach out if you have any additional questions about the “aging analysis” in a preference action.  The age of the transaction is only one factor in determining whether a transfer is or is not within  the ordinary course defense, but albeit a weighty one.  This post does not constitute legal advice.  Consult an attorney about your specific case.

Common Glendale Bankruptcy Misconceptions! Bankruptcy Will Solve All of My Financial Problems Common Glendale Bankruptcy Misconceptions!! Learn more about the facts behind bankrupcty. Glendale, Arizona Declaring bankruptcy isn’t easy. In Glendale you’ll be required to show proof of income, to list all of your debt, and to show how much equity you have in secured debts, such as your house. There are many debts that a Peoria bankruptcy won’t eliminate, including secured debts such as your mortgage and vehicle loans, student loans, child support and federal and state tax debt. In addition you will be required to pay court fees and filing fees. A Glendale bankruptcy lawyer can guide you in deciding if bankruptcy is the right choice for you. I Will Lose Everything Not necessarily. When filing bankruptcy most debtors are allowed to keep their home if they can show that they will be able to make the mortgage payments. You will also be allowed to keep your vehicle. The rest of your assets must be turned over to a bankruptcy trustee although some assets may be exempt, such as pensions and retirement accounts. In addition, you may be allowed to keep tools or equipment that are necessary for you to earn a living. Contact your Glendale lawyer for more information. If I File Bankruptcy I Will Never Be Able to Borrow Money Again This isn’t necessarily true. Filing bankruptcy will definitely have a negative effect on your credit rating for a long time to come. It will remain on your credit report for 5 to 7 years. One of the main factors that contribute to your ability to obtain a loan will be the amount of time that has passed since your bankruptcy discharge. Another deciding factor will be your current money management. You can begin rebuilding your credit immediately by paying bills on time and incurring as little debt as possible. You may also be able to convince a business or institution to give you a loan if you make a large down payment. Each time you successfully pay off a loan it will rebuild your credit. Having to File Bankruptcy is the Worst Thing that Can Happen Some people find that the effect is quite the opposite. If you have been afraid to answer the phone due to creditors threatening and harassing you, filing for bankruptcy can bring a great sigh of relief. Filing for bankruptcy is a difficult decision, but once the decision is made, filing for bankruptcy brings immediate relief from those harassing creditors. In addition bankruptcy filing will stop wage garnishment and various other legal proceedings against you. Fact: There is Help Available If you are in financial trouble and things appear hopeless, bankruptcy may be the answer to your problems. Call to schedule a consultation with a bankruptcy lawyer at My AZ Lawyers. A bankruptcy lawyer can advise you on whether filing bankruptcy is necessary, how to save the assets you want, and if it would be better to file a Chapter 7 for discharge of debts or to file a Chapter 13 to reorganize your debts. The sooner you get started the sooner can get relief from creditors, take back control of your finances and begin to rebuild your credit. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 499-4222 The post Common Glendale Bankruptcy Misconceptions! appeared first on My AZ Lawyers.

50 Cent Wishes He Had Fifty Cents A recent and notable celebrity bankruptcy is that of famous music artist 50 Cent Well-known rapper 50 Cent is making headlines — concerning financial matters well beyond 50 Cents.  On July 10, 2015, 50 Cent was ordered to pay $5 million to Lastonia Leviston. She sued 50 Cent over a sex tape that the rapper distributed / posted online involving Leviston.  On July 13, 2015, 50 Cent filed for Chapter 11 bankruptcy protection. Filed in the U.S. Bankruptcy in Hartford Connecticut, court documents reveal that 50 Cent’s debts are “primarily consumer debts.” A.K.A Curtis Jackson, 50 Cent had reported debts and assets of approximately $10 million to $50 million and lists between 1 and 49 creditors.  The rapper filed for the Chapter 11 protection the same day he was to appear in a NY state court to determine if he owed damages to rapper Rick Ross’s ex-girlfriend, Leviston. Generally, filing for bankruptcy will place an automatic stay and stop all collection activities from creditors.  Although his lawyers did not comment on how he may use his bankruptcy protection to achieve a fresh start, as he tries to organize his financial affairs, 50 Cent supposedly may continue his involvement with his business interests and continue to work as an entertainer. The bankruptcy petition did not reference the lawsuit earlier mentioned by Ms. Leviston. The rapper’s Chapter 11 filing comes after his boxing promotion company SMS Promotions also filed for debt relief under the Chapter 11 Bankruptcy code on May 26, 2015. This move was related to the sex tape lawsuit, which accused him of posting a 13-minute sex tape as part of a “rap war” or “rap beef”between Mr. Ross and himself, according to court documents.   It is unclear to what extent 50 Cent squandered his wealth: he was for a short time the most popular rapper in the world, selling over 20 million copies of his first 2 albums.  He appeared on the gangsta rap music scene, then founded G-Unit Records, and made deals with companies such as Reebok and Vitaminwater.  Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 499-4222 The post 50 Cent Wishes He Had Fifty Cents appeared first on My AZ Lawyers.

Chapter 13 and Vehicle Repossession Is your vehicle safe from repossession when you file chapter 7 bankruptcy? What if you hadn’t completed your Chapter 13 and your car was repossessed? Are you able to get your vehicle back? Chapter 13 and Mesa Vehicle Repossession Is your vehicle safe from repossession when you file chapter 7 bankruptcy? Are you able to get your vehicle back? Mesa, Arizona Most creditors are prohibited immediately from any collect activities against you when you file for Chapter 13 bankruptcy. An Automatic Stay also prevents a car loan lender from repossessing your vehicle. Typically, you will be able to keep your car when you file Chapter 13 bankruptcy protection. Car payments that you are behind on may be made up through the Chapter 13 payment plan to avoid repossession. Also, if you owe more than the car is worth, you may be able to reduce the value of the loan to the current replacement value of the car. The automatic stay, prohibiting creditors from taking collection efforts against you, also prevents your car lender from repossessing your car. Essentially, the automatic stay will protect you in several situations: if the lender has already repossessed your car, or if the has not yet (but would/will) repossess your vehicle. When you file for bankruptcy, no repossession action can be taken. If your repayment plan in the Chapter 13 bankruptcy deals with the back payments on the car loan, the lender may not repossess your vehicle during or after the bankruptcy. You must stay current on your payments through this plan/agreement, however. The payments are designed to cover the depreciation of the car during the time in which the payments are made. Once you file for bankruptcy, you must make your payments until your plan is confirmed. FILING CHAPTER 13 COULD ELIMINATE REPOSSESSION AND ASSIST WITH AN UPSIDE DOWN CAR LOAN If your car has been repossessed, contact our Arizona Bankruptcy Law Firm immediately. Our experienced attorneys can help you get back your vehicle and help you to attain the automatic stay to stop creditors from collection actions. If your car was repossessed before you file for bankruptcy, you may be able to get the car back if the arrangements for payments are provided in the repayment plan per the Chapter 13 bankruptcy (assuming you continue making the monthly payments). Our Mesa Arizona Bankruptcy Law Firm Helps clients in Arizona Seek a resolution to their financial problems. If you are facing creditor harassment, financial crisis, repossession, or other financial challenges and problems caused by the loss of a job, injury, sudden death or injury, or if you are a victim of a failing economy, it is time to take action and protect your rights under the Arizona federal bankruptcy protection. Our Arizona Bankruptcy Law Firm and experienced Arizona Bankruptcy attorneys have been helping clients in Arizona achieve their debt relief goals, end harassing contact by creditors, stop foreclosures, and prevent repossessions. Our attorneys would like to discuss your unique financial situation and use our experience with the Arizona bankruptcy courts to use the powers and legal protection of Chapter 7 and 13 bankruptcies in order to give you the solutions, options, and support you need in order to achieve financial freedom. Bankruptcy is not a punishment. Bankruptcy is a means in order to take that first step to improve your financial issues. It could be your chance for self-improvement and a second chance at financial success. Facing a repossession is an urgent financial problem, and if you are in this situation, time is of the essence. It is important to take action immediately and seek the counsel and support of an attorney experienced in Arizona Bankruptcy law. If a creditor has taken possession of your property, you must contact an attorney at our Arizona Bankruptcy Law firm now. Our attorneys may be able to help you recover your repossession through bankruptcy protection if we act quickly. Our firm has helped clients in Arizona recover or prevent reposession of: furniture personal property cars trucks jewelry boats Losing your car can have a great impact on your life: it can completely disrupt your entire lifestyle — getting to work, taking your kids to school…. it is important property that you may not be able to live without. Our established, professional Mesa bankruptcy lawyers have the knowledge of dealing with financial issues such as vehicle repossessions. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 499-4222 The post Chapter 13 and Mesa Vehicle Repossession appeared first on My AZ Lawyers.