How to Get Out of Debt--Fast!

How to Get Out of Debt–Fast!

How to Get A Out of Debt–Fast!

So you’ve had a difficult few years. Things have not gone as planned. You’ve had medical issues, or lost a job, or got divorced, or 1 of a million other things that could happen to cause your own personal financial castle to crumble. You are now in a lot of debt, with credit card bills you can’t afford, a car payment you hate to make, or even a mortgage that feels like an albatross around your neck.

There are debt consolidation companies that take your money and try to reduce your debt. This often takes many years. Then there are negotiations, this can also go on for years. Both of these have one thing in common, there is no honest timeline on how long it will take.

Bankruptcy is the Fastest Way to Get Out Of Debt!

The truth is, the fastest solution to this problem is to file for bankruptcy. You’re probably wondering…really? Do I really need to file bankruptcy? I don’t know, but I wrote another article called “8 Indicators that you need to file bankruptcy” that you should review if you’re rally curious.

In any event, filing bankruptcy eliminates all of your debt with a few exceptions on the day of filing. It truly is the fastest way to get of debt.

Bankruptcy will take care of all of those annoying credit card bills. It will stop those harassing creditor calls. You can usually choose to keep your vehicle or your house, without any more repercussion than you would have by keeping it during a bankruptcy.

Are you interested in fixing your credit score? I talk more about that in my article “How to repair your credit – Fast.”

If you want to learn a lot more about bankruptcy, send us your e-mail and we’ll send you our free e-book, the “Whole Truth About Bankruptcy

The Bankruptcy Petition

The first eight or so pages of the bankruptcy paperwork is called the petition.  The petition is all you technically need to file in order to declare bankruptcy.  The information that you need is pretty basic.  It requires that you know your name, which bankruptcy you are planning on filing, your address and your social security number.

There are several other questions it asks.  These are for creditors to know how to deal with your case.  For instance, it asks if you are renting your house.  This is because, if you are, there are special provisions that kick in that the creditor needs to comply with in order to continue an eviction action against you.

The bankruptcy petition also needs to know if you have a business, or if you are a business that is filing.  Again, this is because different laws are used for businesses than for individuals.  For instance, there is the necessity to list all of your businesses as alternate names if you are an individual.  Additionally, there are additional pages that need to be thoroughly filled out in the Statement of Financial Affairs later on in the paperwork.

Once you have completed the petition, you may file your case.  Once the case is filed, all kinds of deadlines start tolling.  The most important and immediate of these are the five day deadline to complete the creditor matrix and the 14 day deadline to complete the remaining schedules and statements and file them with the court.

We’ll talk more next time about the required documents and the creditor matrix.  Thanks for taking the time to read this.

Phoenix Bankruptcy Lawyer

DIY Bankruptcy

I grew up on a farm.  It was normal for us to do everything ourselves.  I can’t think of a single thing my father hired someone else to do.  This includes things like plumbing, car mechanics, farming and logging. I certainly understand the desire to do everything yourself.

At this point, you’re probably thinking, “Here we go, surprise, surprise, a bankruptcy lawyer is going to try to dissuade me from doing my own bankruptcy.”  Truthfully, I am all for you doing your own bankruptcy.  However, I think you need to do your homework first.  Much like doing a carpentry project, you have to do the homework first, in order to be able to have your desired outcome.

I’ll tell you a secret, there was once a time when I didn’t file any bankruptcies before, and I put my shingle out and did a bankruptcy with zero experience.  Of course, I put the time, energy and money into doing my research into the process before doing it.

I purchased all kinds of books on bankruptcy and read them from cover to cover, repeatedly.  Even doing this, and with a degree in law, I was still confused about certain concepts.  These concepts took several bankruptcies to finally figure out.

Fortunately, these types of things in bankruptcy are relatively rare and not that many cases are affected by them.

I would estimate that I spent 200 hours learning about bankruptcy before I took my first case.  This includes going through every single statute on the bankruptcy documents and looking up every single legal reference.  Quite frankly, I think this made me a much better bankruptcy lawyer.

You can certainly file your own bankruptcy without going through all the hours I put into learning bankruptcy before doing your own bankruptcy.  Luckily, there are few things that aren’t correctable if you make a mistake in bankruptcy.  So, all in all, I have no problem with you doing your bankruptcy, as long as you do your homework.  I wish you the best if you are going to go forward with your DIY bankruptcy.

Please look out for my podcast/articles on how to complete your own bankruptcy.

Alfredo Angelo’s Bankruptcy

There is a current bankruptcy that has been in the news — The Alfredo Angelo Bridal bankruptcy.  This is causing massive amounts of additional stress in one of the already very stressful times in a person’s life.  So, the question remains, what will happen to the people that put in a deposit and didn’t receive a service?

Do the Brides get their Deposits Back?

After reviewing the notice on the company’s website, it is apparent that many brides are not going to receive either their wedding dress or their deposit back.  This is unfortunate, and the only recourse most of these brides have is t submit what is called a proof of claim.

A proof of claim is a document that you file that says that you are owed money from a bankruptcy entity, a business, or an individual. You file this document with the goal of receiving a payout from any assets that the bankruptcy entity has to auction off.  Generally speaking, the companies and people that file proofs of claim receive very little in the way of compensation.  This is a cost of doing business for most lenders of money.  In this case, it is unfortunate that a large portion of this burden is going to be placed on individuals that had no expectation that their deposit and their order would not be fulfilled.

Generally, this usually doesn’t happen.  This is because most businesses don’t take deposits on their services.  However, it’s not unusual for small business owners to continue to perform their obligations even after filing bankruptcy out of a moral sense of obligation.

Happy Endings?

This is, perhaps, the most harmful type of bankruptcy.  It directly affects brides who did not know they bet on Alfredo Angelo’s continued operation when they placed their order and gave the company their deposits.  I don’t predict any happy endings in this scenario.

 

Bankruptcy Fraud and What You Need to Know

In the news, today, there is an article about a widow trying to preserve her $6 million judgment against a financial adviser who filed for bankruptcy protection. There is a cautionary tale to be told regarding using this case as an example for both creditors and for debtors, alike.

Even without looking at the docket, I can safely assume that the widow is alleging that her financial adviser committed actual fraud against her. This is one of several types of fraud that can be pressed against you when filing for bankruptcy.

Arizona State Statutory Fraud

Fraud, as defined by Arizona laws, certainly qualifies for denial of your discharge. This is where an individual makes a knowingly false or ignorant statement where another individual relies on that statement to their detriment. There are other elements, but this is enough to qualify as fraud under the bankruptcy code.  This is the type of fraud proven in a civil court.

If you are a debtor, you cannot discharge this debt.  However, if you are a creditor, you have to assert your rights to prevent your debt from being discharged.  This means that you need to actively protect your judgment against the bankruptcy debtor.

Bankruptcy Fraud

Then there are fraud allegations that arise only in the course of filing a bankruptcy. The most common of these, and also the least worrisome, are instances where a person purchases something on credit and then files bankruptcy on the creditor within a certain amount of time determined by the type of debt borrowed.

I say these are the least worrisome because, usually, there is no intent to defraud the creditors in this situation.  Normally, the result of this type of fraud is repaying the amount of the purchases back to the creditor after the bankruptcy filing.

The other types of bankruptcy fraud are based on intent. These are very problematic and involve lying to the trustee regarding your assets and income. The statement “I forgot” may work. However, forgetting your boat parked in your garage is much different than forgetting some books that you have.  This type of fraud may result in you ending up in jail or facing substantial fines.

Debtors — Tell Your Attorneys Your Whole Situation

The best thing to do is to tell your attorney all of your financial situation.  It is easier for us to deal with the problems prior to filing bankruptcy.  This prevents the trustee from having to do anything on your case.  It also allows you to go into the bankruptcy process fully educated and without any large surprises.

If you’d like more information about the case I highlighted earlier in this post, please follow clink on here.  If you have any questions regarding your bankruptcy situation as either a creditor or a debtor please give us a call or click here.

This post was written by Tempe and Phoenix bankruptcy lawyer Glenn Roethler.

Bankruptcy Definitions and Lingo

Lawyers and the courts use a lot of legalese, confusing words, and lingo during the bankruptcy process. The following is a brief definition of some of the words we use during a bankruptcy.

Debtor

The “Debtor” this is the person or company who owes money, can’t afford to pay his/her debts, and who files bankruptcy.

Creditor

A “Creditor” is any person, business, or government to whom money is owed by the debtor. An “Unsecured Creditor” is a creditor who DOES NOT have any collateral supporting the loan. For example, credit cards, medical bills, former landlords, cell phone companies, cable company, etc. A “Secured Creditor” is a creditor who DOES have collateral supporting the loan – for example, a mortgage lender, or a loan on a vehicle.

Trustee

Think of the “Trustee” as a referee who oversees your case. The Trustee is an employee of the US Department of Justice. The Trustee’s job is to be sure that both debtors and creditors are treated fairly during the bankruptcy. If you hire a lawyer to help you with your bankruptcy, you will not have much direct interaction with the Trustee. Your lawyer will communicate with the Trustee on your behalf. Typically, the only interaction you have with the Trustee is during your “341 meeting” – the meeting of creditors.

Plan

In a Chapter 13 bankruptcy, “The Plan” is a document your lawyer drafts that explains to the Court, the creditors, and the Trustee how you want to pay your debts and how much you intend to pay.

341 Meeting

The meeting of creditors is also called the “341 meeting.” In Phoenix, Arizona, this meeting will take place about 5 weeks after your attorney files your bankruptcy. Your attorney will go to the meeting with you. You will meet with the bankruptcy trustee at this meeting. The bankruptcy trustee will ask you several questions under oath, and it will take about 5 to 10 minutes. Most of the questions are very simple. See our blog on questions the bankruptcy trustee might ask you.

What is the difference between chapter 7 and chapter 13 bankruptcy?

Chapter 7 is the traditional bankruptcy everyone thinks about. Chapter 7 eliminates – discharges – all of your unsecured debts. By unsecured debts, we mean credit cards, medical bills, deficiencies – amounts remaining due – on vehicles that have already been repossessed, etc. Secured debts include vehicle loans and home loans – or any other loan where the lender has the right to repossess the property. Secured debts may be included in a chapter 7, but if you want to keep the property, you will have to bring the loan current and continue paying on the loan. Otherwise, you will have to surrender the property. Another option is to “redeem” the secured property – this means to pay for it in full at a reduced amount agreed to by the secured creditor. Not everyone is eligible to file a Chapter 7 bankruptcy. There are income limitations based on your household size. Your attorney will be able to advise you on the specifics.

A Chapter 13 bankruptcy can be considered more of a financial reorganization. Using a Chapter 13, a person can pay off arrears and secured debts through the court system by payments to the bankruptcy trustee. In a Chapter 13, a payment plan is set up whereby the debtor makes a monthly payment to the trustee and the trustee pays off the secured debt and a portion of the unsecured debts. Depending on your income, sometimes all of the debts are paid off in a Chapter 13. However, usually only a portion of the unsecured debts are paid – sometimes pennies-on-the-dollar. Everyone’s situation is different. Please don’t make the mistake of relying on advice from your friends, because their situation is guaranteed to be different from yours.

A Chapter 13 is much more complicated than a Chapter 7. To be successful in a Chapter 13, you must have a regular income and be able to make regular monthly payments. The monthly payments will be based on your ability to pay. An experienced bankruptcy attorney can save you a lot of money in a Chapter 13. Some say it is more of an art than a science.

the information gathering/document preparation stage (Part 2)

Bankruptcy lawyers often use paralegals in the information gathering/document preparation stage.  This is because it is a time consuming and often, repetitive process that requires little legal analysis.

I’ve combined the information gathering/document preparation stages into one because the data is generally entered as it is gathered.  It is normal to be given a worksheet for you to take home and fill out.   This information will be used in your bankruptcy to fill out the petition.  It will also be reviewed by a lawyer in order to see if there are any issues that are presented when you gather the data.

The review by the lawyer is critical in order to allow for adjustment of timing of the bankruptcy and to see if there are any issues that need to be sorted out prior to filing the bankruptcy.  This can include selling property, spending money, buying new property, etc.

This process is usually fairly short, but can take time, depending on what the bankruptcy lawyer determines is best for your case, whether waiting, or filing immediately.

Just remember that timing of your bankruptcy is critical, and that if this is not addressed in your meeting, you should seek assistance elsewhere.

This post is written by Bankruptcy lawyer, Glenn Roethler.  Please find additional information at www.grattorneys.com.

What to Expect from your Lawyer During the Bankruptcy Process? (Part 1)

Every bankruptcy lawyer has a different process when it comes to how they practice.  However, there are general steps that you should expect to experience while going through the bankruptcy process.  These steps are the introduction, the information gathering/document preparation stage, the document review stage, the filing time, the filing day, the 341 hearing and, finally, post bankruptcy.

Today, we will start with the first step of the bankruptcy process:  The introduction.

The introduction is usually done in person or over the phone.  Normally, when you call an attorney, you will speak with either the lawyer or the lawyer’s staff.  This is where you get to learn a little bit about the attorney.  Be sure that when you call, you ask how long the lawyer has been in business, if you will be meeting with an attorney, how many bankruptcies the attorney has done.  This is important, because these questions allow you to judge whether this is a place where you are interested in doing business, quickly.

In our firm, we generally have our lawyers meet with you at the first consult, and to speak with you on the phone. We do have a couple of very experienced and trusted paralegals that we allow to conduct initial consults, but that is fairly rare.  Further, it is not unusual for a bankruptcy firm to have you deal primarily with a paralegal — particularly during the information gathering/document preparation stage, but you really should meet your attorney before you make it to the 341 hearing.

Once you decide to move forward with an attorney, you move onto the information gathering/document preparation stage.  This is the subject of part two of our series.

Argentina Going Bankrupt?

Currently Argentina is in default on its loans. This does not mean that Argentina is going to go bankrupt, but rather that Argentina has not paid its loans. It is still possible for Argentina to not have to inflate its way out of debt, which is how Argentina has cleared its debts in the past or to find other investors willing to be Argentina’s white knight and pull them out of debt with a large cash infusion. This really seems unlikely, considering that during the previous default they badly abused investors that attempted this, who are some of the investors causing this default.

It is interesting to look at the effect of governmental manipulation of currencies. In Argentina’s case it is leading on a path to bankruptcy, due to failing to manipulate the currency “properly.” Properly meaning the Keynesian role of government to flood or restrict the markets with currency in order to soften the blows of economic events.  Argentina is failing its role and will now, most likely, have to inflate it’s way out of debt to avoid bankruptcy.

How does this effect the general population?

This harms the general public badly because Argentina’s bankruptcy would causes a dramatic decline in the value of people’s savings, and causes asset prices to inflate, making it hard to buy assets. It is possible that it would be as bad as what happened in Germany in the early 20th century with people using wheelbarrows full of worthless paper money to buy bread.

How is the general population reacting?

I recently spoke with a CEO of a Bitcoin company.  He informed me that Bitcoin is very popular in Argentina.  When I asked him why, he told me that the general populace is concerned with the corruption and the poor economic policies of the government.  They are desperately seeking a non-regulated, government free currency and are flocking to the crypto-currencies like Bitcoin.  They are fleeing there because these types of currency, while potentially vulnerable to manipulation by hackers (like we saw with Mt. Gox), are not vulnerable to manipulation by political entities or any other form of corruption, like graft and political extortion.

This means that the people of Argentina are creating their own currency with an international money, that cannot be manipulated.  This is a wholly rational thing for the people of Argentina to do, particularly since this is an appreciating currency, when compared to the Argentinian Peso, which is depreciating.

All in all, the big winner in this is going to be the crypto-currencies and the Argentinian people, who will have a secondary money, that is mostly anonymous to move around their government’s broken fiscal policy, and to not experience it again in the future.