Chapter 11 Bankruptcy

Chapter 11 Bankruptcy

Chapter 11 Bankruptcy is becoming more and more popular for individuals of higher incomes and more debt to use to save their homes.  The reason for this is that Chapter 13 bankruptcy has debt limits in place which prevent those with large debts (over $1 million and change secured and $360,000 and change unsecured) to actually file for Chapter 13.

Chapter 11 is at its essence, a negotiation with your creditors.  It requires cooperation from all parties involved.  There are a few rules in Chapter 11 that makes this discussion more equal after filing than prior to filing, but you are still attempting to play off the creditors against each other in order to achieve the most reasonable results.

There has been a lot of success recently in using the Chapter 11 bankruptcy to essentially modify the terms of the loan on real property.  That is the hope for a lot of people when they come to see us, and probably the primary benefit we can give for those individuals that are required to go through the Chapter 11 bankruptcy process.

Unfortunately, Chapter 11 is an expensive and time consuming endeavor.  It is very intense and typically (particularly for businesses) has a low likelihood of success.  Fortunately, for individuals, it has a much higher likelihood of success.  Chapter 13 is what these particular individuals should really be in, unfortunately, due to their large debts a Chapter 13 bankruptcy is impossible thanks to Congress.  Hopefully those limits will be increased, or even better, removed in future.  I have not yet heard that idea is on anyone’s mind though.

Thank you for taking the time to read our article.  This was written by Tempe Bankruptcy lawyer Glenn Roethler, partner at Greeves, Price & Roethler, PLC.

Fraud and Bankruptcy

Fraud in bankruptcy can take many different forms.  There is the case of actual fraud – what you normally think of as fraud.  Then there are the bankruptcy specific types of fraud, which may not be fraud at all.  One example of this is payments made to creditors within 90 days (or a year if a relative or a business partner) of filing are considered fraud as those payments could have been paid evenly to all creditors.

Apparently, fraud in bankruptcy may extend to business decisions, prior to the business entering for bankruptcy protection, either Chapter 7 or Chapter 11.  In an article from found here, Bankruptcy Judge Carey may eventually decide that the business decision made by the Chairman of Tribune Co., Sam Zell, to purchase other companies prior to bankruptcy was a fraudulent way to incur more debt prior to entering bankruptcy to the detriment of its other creditors.

Thank you for taking the time to read this blog post by Tempe, Arizona lawyer Glenn W. Roethler, partner at Greeves, Price & Roethler, PLC.

Banks ARE Backed by the Government

In an article posted by Reuters, here, the Kansas City Federal Reserve Chairman, Thomas Hoenig, makes a strong argument that the banks that received TARP money during the 2008 financial crisis exist as government-sponsored entities and should be regulated more stringently.

It is difficult to argue with Mr. Hoenig’s analysis.  It is obvious that these banks are “too big to fail.”  Because of this, the government clearly has taken the position that these large banks are to be backed by the federal reserve.  Therefore, it only makes sense that these banks should have regulations imposed on them to prevent them from going to the federal reserve, hat in hand, and begging for more money due to risky investments that they made on the financial markets.

I, personally, am not a fan of the government supporting any business.  However, I suppose, if the government and the tax payers are going to be required to back the large banks then the large banks have chosen to lose their independence and should, therefore, be required to be forced to follow regulation by the government to prevent the banks from taking unreasonable risks.

Another concerning issue regarding this development is the possibility that these banks will receive preferential treatment under the bankruptcy code.  As many are aware, most student loans are non-dischargeable no matter what bank you received the loan from, so long as it is backed by federal money.  It is not a large stretch to go from that statutory analysis to also conclude that, because the banks are backed by federal money, none of their debts should be discharged by filing for bankruptcy.

The views contained in this article are only the views of Glenn W. Roethler and not that of the firm, Greeves, Price & Roethler, PLC.  Thank you for taking the time to read this article by Tempe, Arizona based attorney and lawyer Glenn W. Roethler.

Bankruptcy Filings Drop in Phoenix, Arizona

In some good news – Bankruptcy filings dropped 6.2% from filings in March of 2009 to March of 2010.

The fact that bankruptcy filings have decreased is typically excellent news for the economies and results from job creation and an improving economy.  However, and it is a large however, I do not think that the economy, especially in Phoenix, Tempe, Scottsdale, Chandler, Queens Creek and the other largely over developed areas in the East Valley has yet recovered.  It seems that these areas have yet to recover as many businesses and residences still appear to be empty.

In the alternative to the first scenario of an improving economy, and what I believe is actually occurring, is that people have given up hope.  They have been beaten down by creditors and by debt.  They are walking away from homes, rightfully or wrongfully, and are just ignoring the calls from the bank.  The banks have already obtained all the money they can from these people.  They have bled them dry and these people have decided it is time to throw in the rag and quit fighting.

Personally, I believe that this scenario is a terribly sad.  It prevents people from receiving their fresh start and moving on with their lives.  This is something that bankruptcy can easily do.  With a bankruptcy, people’s credit can start to recover and can start to help them heal their families and their finances.

Truth about Bankruptcy

Bankruptcy can be an intimidating process. Most people do not want to even consider the implications of bankruptcy.  However, there is no reason for this to be true. Bankruptcy is, first and foremost, a financial tool to be used to protect your family or your business in difficult financial times. The banks and creditors have been extremely successful in casting bankruptcy as some sort of moral decision; that declaring bankruptcy is a bad act on par with committing a crime.

In reality, the financial circumstances that lead to bankruptcy are often out of the control of those needing the protection of bankruptcy. This protection extends to normal people just as much as it does to large corporations such as Chrysler and General Motors. Furthermore, the drafters of the Constitution intended bankruptcy to be for the protection of real people, and not just businesses. It was intended to protect people from their creditors in order to allow for those people to reorganize their finances and to become a productive citizen again.
Bankruptcy was also meant to allow people to take risks that they would not otherwise take in order to improve their economic circumstances. In this form it was meant to be a safety net for people to take a chance on new business ventures. When you see the true purposes of bankruptcy, it is clear that there should not be any stigma associated with the bankruptcy decision. In tough financial times like we have recently been experiencing, most of our clients have little to no control over their financial situation due to loss of employment.
In truth, bankruptcy allows for people to become productive citizens again without the crippling weight of excessive debt. It is important to remember that bankruptcy is an economic and financial decision and not a moral decision.

Depending on circumstances, certain debts may be discharged. To discuss what type of bankruptcy may be right for your circumstances, contact the Tempe, AZ Bankruptcy lawyers of Greeves, Price & Roethler, PLC online today.


Estate Planning in Arizona

Estate planning is primarily about how your property and wealth will be handled after death. It’s about making sure your loved ones are taken care of after death. Proper estate planning can assure your surviving family members can avoid the hassles and taxes of probate court. It can also assure that your wealth goes to your surviving family members rather than paying out to state and federal taxes.

Some important questions to consider when you are doing estate planning:

  1. Identify the person(s) who will be the guardian of your minor children.
  2. Will you plan to privately administer your estate, or leave it to the state government?
  3. If you became disabled, who will take care of you?
  4. If you became ill and disabled, who would make medical decisions for you?
  5. How will your family be taken care of should you become disabled?
  6. Do you have a family business succession plan?
  7. How can your plan help avoid family disputes after your death?
  8. Can you protect your surviving spouse from a new spouse who may become a financial predator?
  9. How will you leave your assets to the children of a blended family?
  10. How can you protect yourself from creditors?

These are just some of the questions to be considered during your Arizona estate planning process.

Bankruptcy Law In Phoenix Arizona

As bankruptcy lawyers in Mesa, AZ, we can help you get relief from:

• Unpaid debts
• Credit problems
• Collection calls
• Bankruptcy Litigation

Our bankruptcy law firm in Mesa serves the Tempe, Phoenix, Scottsdale and other surrounding areas and provides many different payment options. These options include a flexible payment plan in most instances. At the Mesa bankruptcy law firm of Greeves, Price and Roethler, PLC, our lawyers strive to maintain an empathetic and understanding environment for you and your family. It is our goal to relieve you from as much of the stress of declaring bankruptcy as possible. We see it as being a part of our job to worry for you, so that you can work on improving your financial circumstances.

The bankruptcy attorneys of Greeves, Price and Roethler, PLC, will provide a free initial consultation. This allows us to get a general idea as to whether or not bankruptcy is a good option for you in your circumstances. It also allows us to find out about your individual situation and to determine the best course of action for you.