E.D.N.C.: Lewis v. Equityexperts.org II- Class Ed Boltz Sun, 01/26/2025 - 01:00 Summary: The District Court addressed motions to certify a class action and to extend deadlines in a lawsuit alleging improper debt collection practices under federal and state law granting,  in part,  class certification for two classes under Rule 23(a) and (b)(3), but denying certification for a third class. Notice of Lien Class: North Carolina homeowners who received a Notice of Lien from the defendant substantially identical to the one sent to the plaintiff and subsequently made a payment to the defendant. Notice of Intent to Foreclose Class: North Carolina homeowners who received a Notice of Intent to Foreclose from the defendant substantially identical to the one sent to the plaintiff and subsequently made a payment to the defendant. Unconscionable Collection Fee Class:  Certification for this class, which would have encompassed all homeowners charged over $1,200 in collection fees, was denied due to insufficient commonality and predominance of common issues across the proposed class. The court limited the certified classes to include only those who made payments following receipt of the notices, addressing standing concerns and ensuring class members suffered a concrete injury. Appointment of Class Representatives and Counsel: This ruling advances the case to the next stages of litigation, focusing on the certified classes and the legal issues central to their claims. Commentary: For summary and commentary on the previous opinion in this case:  E.D.N.C.: Lewis v. EquityExperts.org- Excessive Fees illegal under FDCPA   With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document lewis_v._equityexperts_ii.pdf (833.47 KB) Category Eastern District

For nearly a year, I’ve been hanging out on a Facebook “bankruptcy support” group. It’s a world full of misunderstanding, fear, and anguish. But it’s also clear to me that our profession can learn some things from that stew, both individually and collectively. Represented, sorta The thing that glares at me is the number of […] The post What I Learned About Bankruptcy on Facebook appeared first on Bankruptcy Mastery.

Getting married often means intertwining your finances with your spouses. If you get divorced, does that mean you are responsible for your ex’s debt? You might be responsible for your spouse’s debt after divorce and be named as a co-debtor in a bankruptcy case. Spouses often share credit card and mortgage debt, though any debts solely in their name should be theirs alone to repay. Bankruptcy cases involving ex-spouses can be complicated, depending on the number of creditors involved and the means of repayment. For example, if you still share assets with your ex, they could be at risk of liquidation if Chapter 7 is filed. Alternatively, Chapter 13 could protect shared assets and give both exes time to repay shared debts according to their incomes and expenses. For a free case assessment from Young, Marr, Mallis & Associates, call our bankruptcy lawyers at (215) 701-6519 or (609) 755-3115. Am I Responsible for My Spouse’s Debt After Divorce? Generally speaking, your spouse’s debts are theirs and yours and your own, during or after marriage. So, if you get divorced, you may not be responsible for any debt that is solely in your ex-spouse’s name. There are exceptions to this, such as living in community property states, co-signing loans, or being on joint credit cards with your spouse. If you are tied to the debt in any way, you will still be on the hook for it with your ex, even after divorcing them. Any debt your ex-spouse took on before marrying you may stay theirs to repay, like student loans or personal credit cards. How you manage your finances during marriage, such as keeping separate credit cards, could protect you from a spouse’s spending habits or poor financial decisions, as accruing joint debt could cause additional hardships, such as difficulty being approved for a mortgage or car loan. If you are responsible for a spouse’s debt after divorce, creditors might approach you for repayment. Creditors could send harassing calls or mail, attempt to garnish your wages, or repossess your assets to collect on an ex’s debt you share. Addressing this as soon as possible is crucial so that your credit score does not continue to be affected by an ex. Untangling your debts before separating from your spouse, closing joint accounts and shared credit cards, and itemizing all shared debts is important so that your credit score doesn’t drop without you knowing and you aren’t shocked to be named a co-debtor in a bankruptcy case. Will Your Ex-Spouse Be Part of Your Bankruptcy Case After Divorce? Depending on how debt is accumulated during a marriage, both spouses may be liable for repaying it, even after divorce. For example, if both parties are on the mortgage contract, that is both of their responsibilities to manage, no matter how successful their marriage is. Financial hardships during marriage could require one or both spouses to file bankruptcy. Even if you have since divorced your spouse, they may need to be part of your bankruptcy case if you share debt, as many spouses do. You or your ex could be responsible for one another’s debt because you shared credit cards and bank accounts. Accruing joint debts is common during bankruptcy, and those debts do not just disappear when a marriage dissolves. Creditors may seek repayment until they get it, even filing lawsuits and foreclosure petitions against debtors. In bankruptcy cases involving ex-spouses, our lawyers can review each party’s finances, see how they are intertwined, and confirm their shared debts. We can then identify the appropriate bankruptcy chapter to file and proceed accordingly so that you can address the situation as quickly as possible. Your ex filing for bankruptcy, or your spouse for that matter, does not necessarily affect you if you are not a co-debtor in the case. Even if you are still married, your credit score will not drop if your current spouse files and completes bankruptcy. This is one of the reasons spouses intentionally keep separate credit card accounts after marriage. What to Do if You Are Responsible for a Spouse’s Debt After Divorce Whether you were listed as a co-debtor in your ex’s bankruptcy petition or you are filing a case yourself involving your ex-spouse, our lawyers can help you proceed. A co-debtor’s income doesn’t necessarily affect the bankruptcy chapter the primary debtor can file. So, if your ex’s income alone would place them into Chapter 7, but your income would put them over the threshold to file Chapter 13, the court wouldn’t necessarily consider that. However, avoiding Chapter 7 in these cases might be ideal, as exes could still share assets that neither of them wants to be liquated, which Chapter 7 may require after discharging eligible debts, like credit card debt. What matters is filing the appropriate chapter for the situation, as otherwise, both debtors could be negatively affected. While many exes share dischargeable credit card debt, leading to Chapter 7 filings, others share mortgage debt, which is non-dischargeable. If you are a co-debtor in a case involving your mortgage lender, our bankruptcy lawyers may suggest filing Chapter 13, as that will protect assets from liquidation and give you and your ex several years to repay. Repayment plans for shared debts will consider both debtors’ incomes, and our lawyers can draft these plans for court approval to ensure they are fair. Being responsible for a spouse’s debt without knowing it, like credit card debt, could substantially affect your credit. While being a co-debtor in a bankruptcy case will also make your credit score drop, it will let you address any shared debt head-on and eliminate any remaining financial ties to your ex after divorce. Call Our Lawyers About Your Bankruptcy Case Now For a free case review from Young, Marr, Mallis & Associates, call our Allentown, PA bankruptcy lawyers at (215) 701-6519 or (609) 755-3115.

Law Review: Schwarcz, Steven L., Bankruptcy's Redistributive Policies: Net Value or a "Zero-Sum Game"? (January 01, 2025). Duke Law School Public Law & Legal Theory Series Forthcoming Ed Boltz Thu, 01/09/2025 - 15:41 Available at:  https://ssrn.com/abstract=5079149 Abstract: Although federal bankruptcy law, epitomized by Chapter 11, has a pro-debtor-or at least, anti-liquidation-bias, no scholarship analyzes whether that bias creates net value or merely results in a zero-sum game that redistributes value from creditors to debtors. This Article shows that the bias is due more to accidents of history and self-interested lobbying than to any reasoned analysis of value creation. The bias also is inconsistent with many foreign insolvency laws. The Article analyzes whether bankruptcy law should have such a pro-debtor bias. An empirical analysis of that question is not generally feasible because debtor and creditor costs and benefits in bankruptcy cannot be accurately quantified and compared. The Article therefore engages in a second-best methodology: it builds on the pro-debtor shareholder-primacy model of corporate governance, which is widely viewed as maximizing value, by stressing that model under the circumstances of bankruptcy. This reveals two critical differences. First, creditors become the primary residual claimants of the firm, whereas shareholders are relegated to secondary residual claimant status. This changes the identity of the beneficiary of the "shareholder" primacy model, whose goal is to favor the firm's primary residual claimants. Second, the covenants that normally protect creditors become unenforceable in bankruptcy, suggesting the need for additional creditor protection. Utilizing these differences, the Article proposes and assesses a "creditor-primacy" governance model for debtors in bankruptcy. It also examines how such a model could be applied to maximize bankruptcy value. The Article recommends, for example, a threshold viability test that would require debtors that are unlikely to successfully reorganize, and therefore likely ultimately to liquidate, to be liquidated at the outset of a Chapter 11 case. That would save the considerable expenses of proceeding through bankruptcy, which can severely reduce creditor recovery. Such a test also should reduce agency costs and moral hazard. Furthermore, it should help to avoid the sunk-cost fallacy that leads to a disproportionately high number of supposedly reorganized debtors having to subsequently re-file Chapter 11 cases.  Commentary: It seems a little odd,  given that,  contrasted with  corporate bankruptcies,  not only is consumer bankruptcy the real and most common form of bankruptcy  but as the paper's call for a "threshold viability test"  looks,  with only a little squinting,  not terribly dissimilar to the  means testing and feasibility standards that are incorporated into Chapter 13,  that there is no mention of consumer bankruptcy here.  While  Chapter 13  bankruptcies often seem more foreign to academics focused on corporate bankruptcies  than the European systems actually considered in comparison here.   Empirical research about whether  consumer reorganizations,  which are more common by several orders of magnitude,  could provide greater statistical insight regarding when, whether and to what extent tighter viability standards  result in greater or lesser recoveries for creditors (of all ilks-  secured,  priority and general unsecured) following both successful Chapter 13 cases and also those that fail.  That could then enlighten the discussion and consideration of the costs and benefits similar tightening of access might have on  Chapter 11  cases. With proper attribution,  please share this post.  To read a copy of the transcript, please see: Blog comments Attachment Document bankruptcys_redistributive_policies_net_value_or_a_zero-sum_game.pdf (440.97 KB) Category Law Reviews & Studies

As a Supplemental Security Income (SSI) recipient, should you be concerned about losing your benefits if you inherit a home? If you already own a home when you inherit another one, it could put you over the resource limit for SSI, making you lose your benefits. However, if you move into the inherited home as your primary residence, the Social Security Administration (SGA) won’t count it against you as a resource. Selling homes while getting SSI can temporarily complicate eligibility, and our lawyers can help recipients plan and prepare for these changes. Disclaiming an inheritance while on SSI might have adverse effects, so do not take such steps before confirming doing so is the right course of action. For a free and confidential case assessment, call Young, Marr, Mallis & Associates’ disability lawyers at (215) 515-2954 or (609) 557-3081 today. Will Inheriting a House Make You Lose Your SSI? Inheriting a house could make you lose your SSI, as eligibility is based on need. The Social Security Administration considers a recipient’s income and resources when giving SSI, and inheriting a home could put your aggregate assets over the threshold. To qualify for Supplemental Security Income, your total resources, or the things you own, may not exceed $2,000 for individuals or $3,000 for couples. Thresholds differ when parents apply for SSI on behalf of their children. This applies to most assets, like vehicles and personal property. Generally speaking, the SSA won’t count your primary residence toward your resources for SSI eligibility. If you inherit a home and do not move into it as your primary residence, the SSA would count the home as an additional resource, potentially revoking your monthly SSI payments. Inheriting assets other than homes to make your primary residence could put you over the resource limit for SSI. There are ways to prevent this, such as by establishing Special Needs Trusts to place inheritances into or spending down small inheritances to purchase resources that won’t count against you, like one vehicle for you to drive. While SSI is a need-based program, other Social Security benefits are not, meaning an inheritance will not affect eligibility. For example, if you suffered a disabling injury and can no longer work after paying Social Security taxes for years, you may qualify for Social Security Disability Insurance (SSDI). While income is still limited for SSDI recipients, inheriting a home won’t affect their monthly benefits or continued eligibility. What to Do if You Inherit a Home and Get SSI Benefits Suppose you inherit a home from a family member, giving you a new place to live while receiving SSI. In that case, you must quickly alert the SSA and make a plan to keep your monthly payments. The Social Security Administration doesn’t count SSI recipients’ primary homes toward their resources, regardless of the property’s value. So, provided you properly inform the SSA of your inheritance and move into your new home relatively quickly, it may not affect your ability to get monthly checks from the SSA. Things can get complicated if you own the current home you live in and plan to move into the newly inherited home as your primary residence. Your previous home would become a countable resource, as would any proceeds from the sale that did not go toward buying a new residence. If you sell your home because you inherited a property you prefer, you may have to pay some benefits back to the SSA, or payments may temporarily pause. SSI recipients who sell their homes and use the proceeds to purchase new ones within three months will not see the proceeds used against them or their eligibility. Swift reporting of inheritance to the SSA is crucial. You must report any potential changes to your eligibility, like an inheritance, within 10 days of the end of the month the change occurred. So, if you inherited a home in January, you would have just over a week into February to inform the SSA of the change. Our Allentown, PA disability lawyers can help you do this so the SSA is aware of your plans to treat the inherited home as your primary residence so that it will not be counted against you as a resource. Failure to report changes, large or small, could result in overpayments from the SSA that it will expect back. The SSA might even sanction payments in some situations, stopping them for six months or longer. Can You Disclaim an Inherited House to Keep Your SSI? If you already own a home and recently inherited another property, your concerns about potentially losing your SSI benefits might make you consider disclaiming the inheritance. This could have serious unintended consequences for recipients that our lawyers can help avoid. In most cases, the SSA views disclaimed inheritances as “constructively received.” This means that, even if you do not accept a home or amount of money left to you, the SSA will act as though you have. The SSA takes a similar approach to assets given away or sold for less than they are worth, what it calls “transferring a resource.” In response to these tactics by SSI recipients, the SSA could stop benefits for up to three years. This could leave you without your disclaimed inheritance or the monthly SSI payments you rely on for financial support. If you anticipate inheriting a home and you already have a primary residence, we can confirm if your SSI benefits will be affected and, if so, for how long. Assuming that disclaiming an inheritance will solve your problems could leave you in a worse situation than you were in previously, which we can help prevent. Call Our Disability Lawyers to Discuss Your Case Call Young, Marr, Mallis & Associates at (215) 515-2954 or (609) 557-3081 to get help with your case from our Levittown, PA disability lawyers.

In Chapter 13, in Virginia, your mortgage payment needs to be on-the-dot current. Paying your mortgage payment by the 14th of the month (or later) gets your Chapter 13 case thrown out at the goal line. That’s because of a local bankruptcy rule, Rule 3002.1-1 in the Eastern District of Virginia Why? Your mortgage is due on the first. They may give you a grace period until the 15th, but it’s due on the first. When you make your last Chapter 13 payment, the Chapter 13 trustee is required by Bankruptcy Rules 3002.1 to ask the mortgage company if you are current. That rule was considered a big victory for the consumer when it passed. The mortgage company had to say if they thought you were current or behind. If you are your mortgage on the 14th instead of the first, your Chapter 13 will be disqualified at the goal line. In this court, that victory turned into a nightmare, in a case called Evans. Now, if the mortgage company says you haven’t yet made this month’s payment, Thomas Gorman, the Chapter 13 Trustee, tells the Judge that your case should be thrown out. Unless you get caught up–and the mortgage company agrees in writing you are caught up–your case is tossed out. You are disqualified at the goal line. What Should You Do? When you are at the third to last payment on your Chapter 13, catch up the house! Make the mortgage payment on the first of the month. Eat oatmeal for a month, borrow from family, stop your 401k contribution, cut expenses everywhere. Get the mortgage payment in on the first of the month. Do what you have to do. There is a detour Suppose instead of being two weeks behind, you are three months behind on your mortgage payment. Sometimes that’s better. Why? The mortgage company will likley go to the judge and ask that your house be taken out of the Chapter 13 bankruptcy. That’s called relief from the automatic stay. If your house is taken out of the Chapter 13, then this problem doesn’t come up.  The Chapter 13 Trustee won’t ask the mortgage company at the end 0f the case if you are current, and the judge won’t throw your case out. Of course you do have to catch the house up outside of the bankruptcy. If you are close to the end of the case and sitting a few months behind, you may want the mortgage company to take your house out of the bankrutpcy by relief from the automatic stay.  If you can get close to caught up, they won’t forclose you. And the rest of your Chapter 13 debts can be cleared at discharge. But if you are only close to caught up and the house is still inside the bankruptcy, your Chapter 13 is thrown out at the goal line. Those other debts you were paying in Chapter 13? They can all come back. Do We Need to Talk? Are you close to the end of your case and still struggling with the mortgage?  Not sure what to do?  Call Vanessa at 703-335-7793 and set up a time for us to talk.     The post Your mortgage payment needs to be on-the-dot current appeared first on Robert Weed Bankruptcy Attorney.

In Chapter 13, in Virginia, your mortgage payment needs to be on-the-dot current. Paying your mortgage payment by the 14th of the month (or later) gets your Chapter 13 case thrown out at the goal line. That’s because of a local bankruptcy rule, Rule 3002.1-1 in the Eastern District of Virginia Why? Your mortgage is due on the first. They may give you a grace period until the 15th, but it’s due on the first. When you make your last Chapter 13 payment, the Chapter 13 trustee is required by Bankruptcy Rules 3002.1 to ask the mortgage company if you are current. That rule was considered a big victory for the consumer when it passed. The mortgage company had to say if they thought you were current or behind. If you are your mortgage on the 14th instead of the first, your Chapter 13 will be disqualified at the goal line. In this court, that victory turned into a nightmare, in a case called Evans. Now, if the mortgage company says you haven’t yet made this month’s payment, Thomas Gorman, the Chapter 13 Trustee, tells the Judge that your case should be thrown out. Unless you get caught up–and the mortgage company agrees in writing you are caught up–your case is tossed out. You are disqualified at the goal line. What Should You Do? When you are at the third to last payment on your Chapter 13, catch up the house! Make the mortgage payment on the first of the month. Eat oatmeal for a month, borrow from family, stop your 401k contribution, cut expenses everywhere. Get the mortgage payment in on the first of the month. Do what you have to do. There is a detour Suppose instead of being two weeks behind, you are three months behind on your mortgage payment. Sometimes that’s better. Why? The mortgage company will likley go to the judge and ask that your house be taken out of the Chapter 13 bankruptcy. That’s called relief from the automatic stay. If your house is taken out of the Chapter 13, then this problem doesn’t come up.  The Chapter 13 Trustee won’t ask the mortgage company at the end 0f the case if you are current, and the judge won’t throw your case out. Of course you do have to catch the house up outside of the bankruptcy. If you are close to the end of the case and sitting a few months behind, you may want the mortgage company to take your house out of the bankrutpcy by relief from the automatic stay.  If you can get close to caught up, they won’t forclose you. And the rest of your Chapter 13 debts can be cleared at discharge. But if you are only close to caught up and the house is still inside the bankruptcy, your Chapter 13 is thrown out at the goal line. Those other debts you were paying in Chapter 13? They can all come back. Do We Need to Talk? Are you close to the end of your case and still struggling with the mortgage?  Not sure what to do?  Call Vanessa at 703-335-7793 and set up a time for us to talk.     The post Your mortgage payment needs to be on-the-dot current appeared first on Robert Weed Bankruptcy Attorney.

Tips For Declaring Bankruptcy In Arizona In 2025 Despite seeming to pass instantly and last way too long at the same time, 2024 has drawn to a close and the new year is upon us. As every issue that has been plaguing our country for generations comes to a head, Americans also face a cost-of-living crisis that can quickly create serious financial problems. More people than ever live paycheck to paycheck. All it takes is one unexpected medical bill, fender bender, being the victim of a low-level crime, or even simple bad luck for a person to begin accruing debt that becomes almost irreversible. At this point, creditors can take actions that will make it harder and harder for the debtor to regain control of their financial situation. If the creditor pursues a wage garnishment, they can automatically take a quarter of the debtor’s paycheck until the debt is repaid, which can cause them to fall behind on other bills. If the creditor repossesses the debtor’s vehicle, they could lose their job, fail their classes, etc. This is a vulnerable position to be in, and some companies will take advantage of this fact by selling debt relief options that only increase debt when bankruptcy is a more effective option.  Want to pause the clock on creditors and potentially clear debts in one fell swoop? Our Arizona bankruptcy firm offers skilled representation with flexible payment plan options. You can learn more about the process of declaring bankruptcy with our firm with a risk-free phone consultation. Schedule your free consultation today at 480-470-1504.  Understand How Your Bankruptcy Timing Could Affect Your Tax Refund If your budget is tight, a few hundred or even thousand dollars from a tax refund could be a huge deal for you and your family. Receiving your tax refund could help you afford expenses like vehicle maintenance and repairs, medical checkups and treatments, and other basics necessary for a comfortable standard of living. But you should also be aware of what could happen to your tax refund if you declare bankruptcy.  Arizona does not have an exemption that bankruptcy debtors can specifically use to protect their tax refunds. It also doesn’t offer a wildcard exemption that the debtor can use on any asset of their selection, nor does it allow debtors to use the federal exemptions, which offer a wildcard exemption. The trustee has authority to take a certain percentage of a debtor’s post-bankruptcy tax refund- this is how the trustee gets paid. The amount the trustee can take depends on the month of the year in which the bankruptcy petition was filed. So hypothetically, if a debtor filed their bankruptcy in January, the trustee could take 1/12, but if the debtor filed their case in July, the trustee could take 7/12. A debtor anticipating their tax refund may want to file their case as early as possible to reduce how much can be taken by the trustee. Another option would be to wait until receiving and spending the tax refund (on reasonable purchases) before filing for bankruptcy. For tips on which types of purchases to make to spend your tax refund before filing for bankruptcy in Arizona, call 480-470-1504 for your free consultation with our firm.  Prepare To Lose Your Credit Cards And Avoid Certain Pre-Bankruptcy Credit Card Spending Many people considering filing for bankruptcy don’t realize that it doesn’t only clear their credit card debts, but the ability to use credit cards in general until the case is complete. A bankruptcy debtor loses all of their credit cards upon filing for bankruptcy, regardless if they were current on their monthly bill. There is no picking and choosing which debts are cleared and which can stay. If you have points and other benefits saved up, you should use them to your benefit as much as possible before filing your petition. You can apply for new credit cards- carefully- after your case has been discharged. This is approximately 3-6 months for chapter 7 debtors, and 3 or 5 years for chapter 13 debtors.  A bankruptcy filing at the start of the year means that your holiday spending might affect the dischargeability of your credit card debts. Your bankruptcy trustee will be reviewing your credit card statements for luxury purchases and cash advances. These are valuable assets not considered necessary to daily living that theoretically could be contributed to pay off your bankruptcy debts. And if your credit card statements reflect recent cash advances, this could create suspicion that you have a stash of cash at home that isn’t protected by exemptions. Avoid cash advances of more than $1,100 in the 70-day period before filing your bankruptcy petition. You should also avoid luxury purchases exceeding $850 in the 90-day period before your filing. Luxury purchases are those not necessary to maintain a reasonable standard of living, which can sometimes mean choosing designer brands over generic for items that are otherwise necessary. Surpassing these restrictions can result in you remaining liable for these debts after your bankruptcy discharge. It can also draw stricter scrutiny to other issues in your bankruptcy petition. Learn more about credit card spending while preparing for bankruptcy by scheduling your free consultation with our firm- call 480-470-1504 to get started.  Don’t Make Preferential Payments And Transfers If you believe that you will be filing for bankruptcy in the new year, now is not the time to repay friends and family in favor of your other creditors or transfer valuable assets to them that could be lost if you file. Sometimes, potential bankruptcy filers come to us with the idea of transferring a second vehicle that isn’t protected by Arizona’s bankruptcy exemption to a sibling or friend. Lawmakers didn’t miss these types of potential loopholes when writing the Bankruptcy Code. The trustee assigned to your case will be reviewing your financial information to make sure that you didn’t make any such transfers in preparation for your bankruptcy filing. If the trustee catches these kinds of transfers, they have the authority to “claw back” payments and transfers, or you could be left to compensate your bankruptcy estate for that amount. This can be embarrassing and awkward at a minimum, or even be fatal to your bankruptcy case. If you have concerns about transfers and preferential payments before an Arizona bankruptcy filing, call 480-470-1504 for your free consultation.  Prepare For A 2025 Bankruptcy Filing With Our Arizona Bankruptcy Team Many people already view the new year as a fresh start, and this will only become more true if you discharge your debts through bankruptcy. You should always take advantage of time to prepare if you foresee a legal matter on your horizon. Although special filings are available for emergencies, thoroughly planning your bankruptcy is the best way to avoid issues throughout your case. Get the most out of your bankruptcy filing and make 2025 the year of your best financial decisions yet. Want to learn more about Arizona bankruptcy law, changes coming in 2025, and everything else you need to know to make your case run smoothly? Learn more about your Arizona bankruptcy options with your free consultation with your free consultation at 480-470-1504.  MY AZ LAWYERS Email: info@myazlawyers.com Website: www.myazlawyers.com Mesa Location 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: 480-448-9800 Phoenix Location 343 West Roosevelt, Suite #100 Phoenix, AZ 85003 Office: 602-609-7000 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: 623-469-6603 The post Tips For Declaring Bankruptcy In Arizona In 2025 appeared first on My AZ Lawyers.

Tips For Declaring Bankruptcy In Arizona In 2025 Despite seeming to pass instantly and last way too long at the same time, 2024 has drawn to a close and the new year is upon us. As every issue that has been plaguing our country for generations comes to a head, Americans also face a cost-of-living crisis that can quickly create serious financial problems. More people than ever live paycheck to paycheck. All it takes is one unexpected medical bill, fender bender, being the victim of a low-level crime, or even simple bad luck for a person to begin accruing debt that becomes almost irreversible. At this point, creditors can take actions that will make it harder and harder for the debtor to regain control of their financial situation. If the creditor pursues a wage garnishment, they can automatically take a quarter of the debtor’s paycheck until the debt is repaid, which can cause them to fall behind on other bills. If the creditor repossesses the debtor’s vehicle, they could lose their job, fail their classes, etc. This is a vulnerable position to be in, and some companies will take advantage of this fact by selling debt relief options that only increase debt when bankruptcy is a more effective option.  Want to pause the clock on creditors and potentially clear debts in one fell swoop? Our Arizona bankruptcy firm offers skilled representation with flexible payment plan options. You can learn more about the process of declaring bankruptcy with our firm with a risk-free phone consultation. Schedule your free consultation today at 480-470-1504.  Understand How Your Bankruptcy Timing Could Affect Your Tax Refund If your budget is tight, a few hundred or even thousand dollars from a tax refund could be a huge deal for you and your family. Receiving your tax refund could help you afford expenses like vehicle maintenance and repairs, medical checkups and treatments, and other basics necessary for a comfortable standard of living. But you should also be aware of what could happen to your tax refund if you declare bankruptcy.  Arizona does not have an exemption that bankruptcy debtors can specifically use to protect their tax refunds. It also doesn’t offer a wildcard exemption that the debtor can use on any asset of their selection, nor does it allow debtors to use the federal exemptions, which offer a wildcard exemption. The trustee has authority to take a certain percentage of a debtor’s post-bankruptcy tax refund- this is how the trustee gets paid. The amount the trustee can take depends on the month of the year in which the bankruptcy petition was filed. So hypothetically, if a debtor filed their bankruptcy in January, the trustee could take 1/12, but if the debtor filed their case in July, the trustee could take 7/12. A debtor anticipating their tax refund may want to file their case as early as possible to reduce how much can be taken by the trustee. Another option would be to wait until receiving and spending the tax refund (on reasonable purchases) before filing for bankruptcy. For tips on which types of purchases to make to spend your tax refund before filing for bankruptcy in Arizona, call 480-470-1504 for your free consultation with our firm.  Prepare To Lose Your Credit Cards And Avoid Certain Pre-Bankruptcy Credit Card Spending Many people considering filing for bankruptcy don’t realize that it doesn’t only clear their credit card debts, but the ability to use credit cards in general until the case is complete. A bankruptcy debtor loses all of their credit cards upon filing for bankruptcy, regardless if they were current on their monthly bill. There is no picking and choosing which debts are cleared and which can stay. If you have points and other benefits saved up, you should use them to your benefit as much as possible before filing your petition. You can apply for new credit cards- carefully- after your case has been discharged. This is approximately 3-6 months for chapter 7 debtors, and 3 or 5 years for chapter 13 debtors.  A bankruptcy filing at the start of the year means that your holiday spending might affect the dischargeability of your credit card debts. Your bankruptcy trustee will be reviewing your credit card statements for luxury purchases and cash advances. These are valuable assets not considered necessary to daily living that theoretically could be contributed to pay off your bankruptcy debts. And if your credit card statements reflect recent cash advances, this could create suspicion that you have a stash of cash at home that isn’t protected by exemptions. Avoid cash advances of more than $1,100 in the 70-day period before filing your bankruptcy petition. You should also avoid luxury purchases exceeding $850 in the 90-day period before your filing. Luxury purchases are those not necessary to maintain a reasonable standard of living, which can sometimes mean choosing designer brands over generic for items that are otherwise necessary. Surpassing these restrictions can result in you remaining liable for these debts after your bankruptcy discharge. It can also draw stricter scrutiny to other issues in your bankruptcy petition. Learn more about credit card spending while preparing for bankruptcy by scheduling your free consultation with our firm- call 480-470-1504 to get started.  Don’t Make Preferential Payments And Transfers If you believe that you will be filing for bankruptcy in the new year, now is not the time to repay friends and family in favor of your other creditors or transfer valuable assets to them that could be lost if you file. Sometimes, potential bankruptcy filers come to us with the idea of transferring a second vehicle that isn’t protected by Arizona’s bankruptcy exemption to a sibling or friend. Lawmakers didn’t miss these types of potential loopholes when writing the Bankruptcy Code. The trustee assigned to your case will be reviewing your financial information to make sure that you didn’t make any such transfers in preparation for your bankruptcy filing. If the trustee catches these kinds of transfers, they have the authority to “claw back” payments and transfers, or you could be left to compensate your bankruptcy estate for that amount. This can be embarrassing and awkward at a minimum, or even be fatal to your bankruptcy case. If you have concerns about transfers and preferential payments before an Arizona bankruptcy filing, call 480-470-1504 for your free consultation.  Prepare For A 2025 Bankruptcy Filing With Our Arizona Bankruptcy Team Many people already view the new year as a fresh start, and this will only become more true if you discharge your debts through bankruptcy. You should always take advantage of time to prepare if you foresee a legal matter on your horizon. Although special filings are available for emergencies, thoroughly planning your bankruptcy is the best way to avoid issues throughout your case. Get the most out of your bankruptcy filing and make 2025 the year of your best financial decisions yet. Want to learn more about Arizona bankruptcy law, changes coming in 2025, and everything else you need to know to make your case run smoothly? Learn more about your Arizona law office with your free consultation with your free consultation at 480-470-1504.  MY AZ LAWYERS Email: info@myazlawyers.com Website: www.myazlawyers.com Mesa Location 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: 480-448-9800 Phoenix Location 343 West Roosevelt, Suite #100 Phoenix, AZ 85003 Office: 602-609-7000 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: 623-469-6603 The post Tips For Declaring Bankruptcy In Arizona In 2025 appeared first on My AZ Lawyers.

Bankr. MDNC: Hughes v. MTGLQ Ed Boltz Tue, 12/31/2024 - 18:30 Summary: Brenda Hughes asserted that MTGLQ and U.S. Bank violated the discharge injunction under 11 U.S.C. § 524(a) and sought a determination that a state court judgment reforming a deed of trust was void. Prior to bankruptcy,  Ms.  Hughes  had signed a promissory note secured by a deed of trust, which was,  after the completion of her bankruptcy, reformed by a state court to correct errors.    Ms.  Hughes alleged that the Defendants violated the discharge injunction by continuing foreclosure actions and sending communications related to the debt.  She further  sought a declaration that the reformation judgment was void and that Defendants' actions violated the Bankruptcy Code. The bankruptcy court began by finding jurisdiction over the adversary proceeding and ruling that the claims were not barred by the Rooker-Feldman doctrine or issue/claim preclusion, as the claims involved enforcing the discharge injunction rather than challenging the state court's judgment. The bankruptcy court found that the reformation of the deed of trust was a permissible in rem action that did not violate the discharge injunction nor,  since it did not impermissibly seek to reestablish Ms.  Hughes personal liability,  was it void under 11 U.S.C. § 524(a)(1)..  Similarly,  the foreclosure proceeding, which enforced the lien on the property (but not personal liability), was also permissible and did not violate the discharge injunction.  Lastly, the foreclosure letter and Requests for Contact were deemed informational and necessary for pursuing in rem rights, thus not violating the discharge injunction. A demand letter dated  August 13, 2023,  which stated that Shellpoint was a debt collector  seeking to collect a debt,   could, however,  plausibly be interpreted as a demand for payment and allowed this claim to proceed, along with the monthly mortgage statements,  which did not appear to have any bankruptcy discharge disclaimer. Accordingly,  the court granted Defendants’ motion to dismiss claims related to the reformation action, foreclosure action, and specific communications (e.g., requests for contact),  but allow the claims related to  the August 13, 2023 letter and mortgage statements  to proceed.  Commentary: This case may be impacted by Koontz v. SN Servicing,  which was argued at the 4th Circuit Court of Appeals at the beginning of December and raises issues regarding the extent to which the lack of personal liability (in Koontz resulting from the lack of a reaffirmation)  impacts subsequent in rem  collection efforts. See the attached amicus brief.   With proper attribution,  please share this post. To read a copy of the transcript, please see: Blog comments Attachment Document hughes_v._mtglq.pdf (831.58 KB) Document amicus_brief_koontz.docx (197.19 KB) Category Middle District