Mesa Bankruptcy & Family Law Attorneys https://www.pewlaw.com Fri, 15 Feb 2019 06:12:53 +0000 en-US hourly 1 https://wordpress.org/?v=5.0.3 Can I Protect My Assets from the IRS? https://www.pewlaw.com/can-i-protect-my-assets-from-the-irs/ Fri, 15 Feb 2019 06:11:42 +0000 https://www.pewlaw.com/?p=12801 Paying taxes is burdensome to some people.  There may be times when you miss out on properly computing the correct deductions from your paychecks or you may have overlooked the filing of your taxes for your freelance work income or from your investments.  You may just be surprised when the big tax bill arrives come [...]

The post Can I Protect My Assets from the IRS? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
Paying taxes is burdensome to some people.  There may be times when you miss out on properly computing the correct deductions from your paychecks or you may have overlooked the filing of your taxes for your freelance work income or from your investments.  You may just be surprised when the big tax bill arrives come April.  Not a lot of people have enough cash to pay off unexpected debts and you may be at a loss on how to settle such huge amount of dues. Regardless of the circumstances, you can not just sweep them under the rug. Otherwise, you will risk losing your assets such as your house, cars, personal belongings, and even your money saved up for retirement.

There are ways to protect your most valuable assets. Read on for your options:

  • Get in touch with the IRS.

First things first. You need to call the IRS the moment you receive the notice that you owe Arizona taxes, knowing you will be unable to pay them. Otherwise, the IRS will be compelled to begin collection activities against you and this may involve seizure of your property. You may avoid this inconvenience if you call up IRS (through the phone number on the notice, and sometimes, even the contact person, listed down) and inform them that you do not have the capacity to pay. You may let them know and that you are willing to set up a repayment plan with a more affordable monthly payment.

  • Petition for an administrative resolution

There may be times you may not be able to come up to terms with the IRS simply because you do not enjoy a good relationship with the IRS representative (usually because of miscommunication or personality differences) or perhaps you just do not agree with the conclusions reached by the IRS.  There is still a way to put a stop to the collection activities and the seizure of your assets by petitioning for an administrative resolution where a hearing before an administrative panel is conducted.

A petition for an administrative resolution is your option if you feel that the IRS has overreached in its collection efforts and has been threatening you or going after assets that are not appropriate to the debt you owe. Although you may represent yourself at the hearing, it is a wise move to get one of the best tax attorneys in Arizona at Pew Law Center. They are well versed on law and taxation and can, therefore, make a stronger case on your behalf.

  • Make a stand that you are innocent.

Let us face it, not all marriages are smooth sailing. Marriage is still fraught with secrets between spouses, that may sometimes involve finances. Such secrets can sometimes result to a spouse breaking the law that may get the innocent spouse in trouble as well. For instance, a spouse may hide assets that are later uncovered by the IRS and are taxed. There may also be times that a spouse may not disclose the correct income or intentionally lie about other information on the tax return which results to fraud.

Given the above circumstances, you may argue that your spouse is the one responsible for the debt and you have no knowledge of them.  In this way, you may still be able to protect your assets. Bear in mind, though, applying for Innocent Spouse Relief is a complicated process and the best way to go about it is to work with an experienced tax attorney in Arizona who will apply for it on your behalf improve your success rate.

  • Get the services of a qualified tax attorney in Arizona.

Our experienced Arizona tax attorney at Pew Law Center may be able to help you find solutions to challenge, minimize, or better manage your tax debt. For instance, your attorney may look into your tax returns and look for ways to reduce your tax obligations through getting more deductions or credits. Your tax attorney may also assist you in getting Innocent Spouse Relief or find other means to protect your assets. Your attorney may also negotiate to lower the amount you need to pay for. Attorneys experienced in tax law is a plus since they can look for ways to minimize your losses. A lot of tax matters may end up in subjective interpretations of the circumstances. Therefore,  a tax attorney may also be able to turn the case in your favor depending on how the evidence is presented.

  • You may opt to file for bankruptcy.

If, in the event, you have exhausted all possible options with your attorney and still end up owing a huge deal of money you are still unable to pay. In such cases, bankruptcy filing may be the best move.

If you are qualified, tax debt may be discharged under Chapter 7 bankruptcy. If you file before the IRS moves forward on collection efforts, you can also avoid having a lien placed on your property. Once a lien is placed, it is very challenging to remove. Even a bankruptcy filing is not enough to remove the lien. Not even filing for bankruptcy can have it removed.

Contact Our Arizona Bankruptcy and Tax Attorneys Today

Call our Arizona bankruptcy attorneys at Pew Law Center if you are considering bankruptcy or get in touch with our tax attorneys if you require legal advice on your taxes. All our attorneys at Pew Law Center have vast experience in bankruptcy and tax relief and are therefore fully equipped to handle your cases, are knowledgeable enough to help you get your head around your options to protect your assets and minimize, or better yet, eliminate your tax debt.

The post Can I Protect My Assets from the IRS? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
How Does Bankruptcy Affect My Student Loans in Arizona? https://www.pewlaw.com/how-does-bankruptcy-affect-my-student-loans-in-arizona/ Mon, 11 Feb 2019 10:27:20 +0000 https://www.pewlaw.com/?p=12710 In the majority of courts, you can either obtain the discharge of all your student loans, or you cannot have them discharged at all. However in some courts, student loans may be partially discharged if undue hardship is proven. It is tough to pass the undue hardship test, but it is possible. A scholastic paper [...]

The post How Does Bankruptcy Affect My Student Loans in Arizona? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>

In the majority of courts, you can either obtain the discharge of all your student loans, or you cannot have them discharged at all. However in some courts, student loans may be partially discharged if undue hardship is proven.

It is tough to pass the undue hardship test, but it is possible. A scholastic paper released in the American Bankruptcy Law  Journal discovered that at the very least 40% of debtors that include their student loans in their filing for bankruptcy had been able to have some or all of their students loans discharged.

One purpose of filing Chapter 7 or Chapter 13 bankruptcy is to be relieved of financial debts. However, specific financial debts are nondischargeable, student loans are usually among them. The single exemption is when a debtor can prove that paying off student loans will lead to undue hardship. If you can prove this, you may just be able to have your student loans discharged.

Typically if you wish to discharge student loans, you will be required to file a Complaint to Determine Discharge-ability with the bankruptcy court. This launches an adversary proceeding, aside from you bankruptcy case. You will need to prove to the court that requiring you to pay off your loans will cause undue hardship. To further strengthen your case, it will be better to present other defenses to your creditors proof of claim, such as breach of contract or unfair business practices. Once this is done, the court may consider discharging you of your debts.

It is best to consult the best bankruptcy lawyers in Arizona in order to find out what  are the options available to you. Our bankruptcy attorneys at Pew Law Center will be happy to answer your questions on your student loan discharge.

What is An Undue Hardship Test?

Undue hardship is figured out according to various tests, depending upon the court, yet the majority of courts give an undue hardship motion in the rarest of circumstances.  Usually, you can get a student loan discharge only if you if you experiences severe disability that no longer enables you to work and have dependents, or if you are already a senior citizen. It is smart to get in touch with a seasoned bankruptcy lawyer that is aware of the undue hardship test and how it is applied in your local bankruptcy court. If your bankruptcy lawyer is aware what courts in your location have granted this motion in the past, you will certainly have a far better possibility of encouraging the court. Furthermore, a lawyer can assist you in coming up with defenses to a creditor’s proof of claim.

Among the tests utilized by courts is the Brunner test. Under the Brunner examination, you can only discharge student loans if:

  • Paying back the student loans would certainly lead to you as well as your dependents live in hardship and also make you incapable to keep even a basic  standard of living;
  • Your circumstance will certainly continue over the same time as your student loan repayment period; and also
  • You have actually made a good-faith initiative to pay off the student loans.

An additional examination made use of is the “totality of circumstances test.” Under this test, courts take a look at all appropriate aspects to make a decision whether repaying your student loans presents undue hardship.

If you cannot pass the undue hardship test, and you have actually filed for Chapter 7, you will certainly still owe the student loans after your Chapter 7 case is done. Nonetheless, if you filed for Chapter 13, you may negotiate to pay a reduced amount during your Chapter 13 repayment plan, spread out in a course of three to five years. However, when your Chapter 13 case has ended and your consumer debts are discharged, you will still be required to pay off your student loans.

Consulting an experienced bankruptcy lawyer in Arizona is your best bet to fully understand the implications and the nuances of bankruptcy on your student loans. Call us now at Pew Law Center. We may be able to help you on how to deal with your student loans.

The post How Does Bankruptcy Affect My Student Loans in Arizona? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
Does Bankruptcy Negate Alimony? https://www.pewlaw.com/bankruptcy-negate-alimony/ Sat, 30 Dec 2017 15:41:34 +0000 https://www.pewlaw.com/?p=7485 Alimony payments, also known as "spousal support" is often paid after a divorce by the spouse who earns substantially more money than the other person to whom he or she has been married for several years. Courts rarely award alimony in marriages that have ended quickly or in cases where both spouses earn almost equal [...]

The post Does Bankruptcy Negate Alimony? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
Alimony payments, also known as “spousal support” is often paid after a divorce by the spouse who earns substantially more money than the other person to whom he or she has been married for several years. Courts rarely award alimony in marriages that have ended quickly or in cases where both spouses earn almost equal income. Alimony payments are typically worked into your separation agreement by your divorce lawyer and are paid monthly on a date set by the court. The payments are made until the recipient remarries or if your children are grown.

Alimony and Bankruptcy Discharge

Our Arizona bankruptcy lawyers are often asked the question if filing for bankruptcy protection will make alimony payments go away. For starters, when you file for bankruptcy in Arizona, that action places an automatic stay on any collections. This means that creditors can no longer call you and harass you about your debts when the bankruptcy proceedings are going on. They cannot bring lawsuits or file any other type of legal action against you for not making payments on your debts.
However, this automatic stay will not apply to domestic support disputes such as alimony or child support payments. Getting alimony or spousal support payments discharged in a bankruptcy is no mean task. Under the Bankruptcy Code Section 523 (a)(5), alimony payments and debts are not dischargeable by filing bankruptcy. The supported spouse is considered to be a creditor under the bankruptcy proceeding.
Under the law, alimony payments are owed to a spouse, a former spouse or a child and the details of the alimony are typically spelled out by a separation agreement, divorce decree or other types of agreement or court order. That said you might still have a few options to deal with your alimony issues.

What Options Do You Have?

Regardless of what your options are, it is critical that you list the alimony and support the spouse in your bankruptcy petition. A failure to do so will make it almost impossible to discharge this type of debt because courts cannot erase debt that is not listed in a bankruptcy petition.
While alimony cannot typically be erased with a bankruptcy proceeding, there are two exceptions. First, if that alimony debt was legally assigned or transferred to another person by the spouse who is supported, the alimony debt could be erased. Secondly, your alimony debt could also be discharged if the recipient of the payments wrongly interprets a portion of the settlement as alimony.
The bankruptcy judge may change your alimony payments if you can show that it significantly affects your financial position. A bankruptcy may also affect your ability to pay spousal support. The court will take into consideration a number of factors including your earning capacity, cash flow, income, assets and standard of living.
If you are planning on filing for bankruptcy it is critical that you consult an experienced Arizona bankruptcy lawyer to help understand your legal rights and options. The laws surrounding bankruptcy and divorce can be complex and intimidating. You need a knowledgeable lawyer who can help you navigate the process and achieve the best possible outcome in your case.

The post Does Bankruptcy Negate Alimony? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
Does Bankruptcy Eliminate a Second Mortgage? https://www.pewlaw.com/bankruptcy-eliminate-a-second-mortgage/ Sun, 24 Dec 2017 08:12:39 +0000 https://www.pewlaw.com/?p=7481 You may be able to eliminate a second mortgage in a bankruptcy and that depends on whether you file a Chapter 7 or Chapter 13 bankruptcy. A second mortgage, which is also known as a home equity line of credit or HELOC is a loan that allows you to borrow money against your home's value. [...]

The post Does Bankruptcy Eliminate a Second Mortgage? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
You may be able to eliminate a second mortgage in a bankruptcy and that depends on whether you file a Chapter 7 or Chapter 13 bankruptcy. A second mortgage, which is also known as a home equity line of credit or HELOC is a loan that allows you to borrow money against your home’s value. Your property is essentially an asset, which acquires value over time.
A home equity line of credit works pretty much like a credit card, which means you borrow the money as and when you need it. It is different from a home equity loan, which is like a traditional loan where you get the funds up front that you pay back with fixed monthly payments.

How It Works in a Chapter 7

If you are filing a Chapter 7 bankruptcy, the trustee will liquidate unsecured assets to pay off creditors. But, in a Chapter 7 bankruptcy some types of property such as your home are exempt up to a certain value from liquidation. As a result, most individuals who file for Chapter 7 bankruptcy are able to retain their property. Once you have filed for Chapter 7, you may be able to get most of your debts discharged. So, essentially, your personal liability to pay back what you owed on your second mortgage is eliminated.
However, if you wish to continue owning your home, you will have to make payments on your second mortgage. This is because even though your personal liability is discharged after a Chapter 7, the bank has a lien against your home. So, the bank has a right to foreclose your home if you don’t make your monthly payments on your second mortgage or home equity line of credit. If you are running behind on your payments, filing for Chapter 7 might not help prevent foreclosure.
That said, the incentive for the HELOC lender to proceed with a foreclosure is not that high because the sale would be used to first pay off the first mortgage lender. The HELOC lender will only get what’s remaining from the foreclosure sale, which might not be much. So, the lender will be more inclined to help you refinance the mortgage rather than allow the home to be foreclosed.

Second Mortgages and Chapter 13

In a Chapter 13 bankruptcy, you can keep your home and pay back your debt in monthly installments over three or five years. You have a couple of options in dealing with your second mortgage under a Chapter 13 bankruptcy. You can “strip off” or remove the second mortgage if your home’s market value is less than the balance on your first mortgage. The second mortgage then becomes like credit card debt – an unsecured debt. In this manner, you might just being pennies on the dollar.
Chapter 13 also allows you to “cure” a second mortgage in your plan and prevent a foreclosure. For example, if you are $4,000 behind on your payments, you can pay off your debt by paying a fixed amount each month. If the court approves your plan, you don’t even need to get your bank’s approval for such a payment plan. Please remember that if you are opting for monthly payments to pay off your HELOC debt, you would still need to continue to make regular monthly payments on your second mortgage, in addition to what you are paying as part of the Chapter 13 plan.
If you would like to obtain more information about how to deal with your second mortgage in a bankruptcy, contact an experienced Arizona bankruptcy lawyer who can help guide you through the process.

The post Does Bankruptcy Eliminate a Second Mortgage? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
How Do I Keep My House and File for Bankruptcy? https://www.pewlaw.com/keep-my-home-after-filing-bankruptcy/ Fri, 01 Dec 2017 21:19:16 +0000 https://www.pewlaw.com/?p=7474 As Arizona bankruptcy attorneys, we often come across individuals or families that will hesitate for file for bankruptcy protection even though they are drowning in debt and are living from paycheck to paycheck. And they do this because they fear losing their home as part of the process. Before you file for bankruptcy and decide [...]

The post How Do I Keep My House and File for Bankruptcy? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
As Arizona bankruptcy attorneys, we often come across individuals or families that will hesitate for file for bankruptcy protection even though they are drowning in debt and are living from paycheck to paycheck. And they do this because they fear losing their home as part of the process. Before you file for bankruptcy and decide what type of bankruptcy you want to file, it is important that you understand how a bankruptcy might affect your home ownership.

Will You Lose Your House?

In an Arizona bankruptcy, secured debts are treated differently than an unsecured debt. A secured debt is one that is secured by property or collateral of some kind. The most common types of secured debts are car loans and home loans. In these case, if you don’t make the payments, the property such as your home will get foreclosed on. When you file for Chapter 7 bankruptcy, it’s important that you continue making the monthly payment on your home if you want to keep it while you are going through the bankruptcy process. If you don’t make the payment, then the bank can ask the bankruptcy court to allow it to initiate the foreclosure process.
You may also be able to save your house by filing Chapter 13 bankruptcy, even if you are behind on the date of filing. For this to work, your income going forward must be enough to allow you to make regular monthly mortgage payments in addition to the Chapter 13 plan payment, which in turn must be sufficient to catch up your arrearage over the next three to five years.

Arizona’s Homestead Exemption

Under Arizona law, the first $150,000 in home equity is protected from the bankruptcy court. This is known as the homestead exemption. For example, if your home is worth $240,000 and you owe $100,000 on the mortgage, then, you have $140,000 in equity. That amount is safe and will not be taken by the bankruptcy court to pay your creditors. This means that the court won’t sell your home and you can continue living there as you were prior to the bankruptcy filing.
However, if you have more than $150,000 in equity, the court may liquidate or sell your home to pay your creditors. You would still be entitled to receive the equity you have in the home first. If you are only slightly over the $150,000 limit, it is unlikely that the court will sell your home since the costs involved in such a sale can be prohibitive. In order to qualify for a homestead exemption in Arizona, the home in question should be your personal residents, the location where you actually live. The home may be a mobile home, condo, town home or a single-family residence.

What’s the Answer?

In the end, the answer may lie in each person’s individual situation. At the Pew Law Center, when our bankruptcy lawyers discuss these issues with clients we look at whether the family can afford the house in which they live and whether it makes financial sense to keep the house and the mortgage that is attached to it. If you are falling behind on your mortgage payments or you think you may fall behind on those payments in the near future, call our experienced Arizona bankruptcy lawyers to obtain more information about your options. Don’t stay away from bankruptcy because of that fear of losing your home.

The post How Do I Keep My House and File for Bankruptcy? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
How Many Times Can You File For Bankruptcy In Arizona? https://www.pewlaw.com/many-times-can-file-bankruptcy-arizona/ Thu, 16 Nov 2017 14:38:42 +0000 https://www.pewlaw.com/?p=7451 If you are overwhelmed by significant debt and are not eligible for other options such as offer-in-compromise or payment plans, you may wish to consider bankruptcy. While it may sound dire, often, bankruptcy is a great opportunity for those saddled with large amounts of debt to potentially eliminate their debt and get a valuable fresh [...]

The post How Many Times Can You File For Bankruptcy In Arizona? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
If you are overwhelmed by significant debt and are not eligible for other options such as offer-in-compromise or payment plans, you may wish to consider bankruptcy. While it may sound dire, often, bankruptcy is a great opportunity for those saddled with large amounts of debt to potentially eliminate their debt and get a valuable fresh start.

Understanding the Types of Bankruptcy

Most individuals who are facing significant amounts of debt end up filing Chapter 7 or Chapter 13 bankruptcy. Chapter 7 is the most common type of bankruptcy that’s filed in Arizona. In a Chapter 7 bankruptcy, an individual’s assets are sold off so that the proceeds can go to paying debt. All proceeds from the sales of the assets are then handed over to a trustee who then pays creditors. Once the creditors have all been paid off, your debts are canceled. Chapter 7 is a good option for individuals who are unable to pay off debts and are looking at lawsuits from creditors.
If you don’t qualify for a Chapter 7, you may be able to file Chapter 13, which reorganizes your debt do you can pay them back with a monthly plan in three to five years. This repayment plan is known as a debt repayment schedule. The payments will usually depend on your income, the money you owe and your ability to pay it back. This is a good option for those who have already filed a Chapter 7 within the past six years or for people who are able to repay their debts in three to five years. This is also a good option for those whose income has disqualified them from filing a Chapter 7 bankruptcy.

How Often Can You File Bankruptcy?

Unless a court has ordered otherwise, there are no restrictions under Arizona law for how many bankruptcy cases you can file. However, there are certain time requirements for discharging the debt, which is, of course, the main motivation behind filing for bankruptcy. Whether or not you can file a bankruptcy and get your debts discharged again will depend on the following factors:

  • The type of bankruptcy you previously filed.
  • The type of bankruptcy you wish to file.
  • How the prior bankruptcy ended (discharge of debts, dismissal or dismissal with prejudice).
  • How long it’s been since you previously filed.

If you got your debts discharged through Chapter 7, you will need to wait eight years from the date you filed that case before you can file another Chapter 7. If you got a discharge in Chapter 13, you’ll have to wait two years from the date you last filed the case. It usually takes three to five years for you to get done with the repayment plan in a Chapter 13 bankruptcy. Once your first Chapter 13 is closed, you may be able to immediately file a Chapter 13 again.
If you previously got your debts discharged through a Chapter 7, but are seeking to file a Chapter 13 now, you must wait four years from the date of your prior filing. This is often called a Chapter 20 bankruptcy, and it can be an effective way to pay off priority debts. If you filed Chapter 13 before and want to file Chapter 7 now, you must wait six years before you file again. However, this limit does not apply if you paid back all your unsecured debts or paid back at least 70 percent of your unsecured debts with the Chapter 13.
Filing for bankruptcy protection may sometimes be the best option. However, it could also become an overwhelming process. That is why it would be in your best interest to contact an experienced Chandler bankruptcy lawyer who can help you better understand your rights and options.
If you live in Chandler Arizona we recommend that you contact us to schedule a time to meet with one of our lawyers.
Pew Law Center
333 N Dobson Rd #5, Chandler, AZ 85224
(480) 582-3457
https://www.pewlaw.com/chandler/

The post How Many Times Can You File For Bankruptcy In Arizona? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
Romano's Macaroni Grill Files for Chapter 11 Bankruptcy https://www.pewlaw.com/romanos-macaroni-grill-files-chapter-11-bankruptcy/ Mon, 13 Nov 2017 21:38:11 +0000 https://www.pewlaw.com/?p=7447 The owner of Romano's Macaroni Grill has filed for Chapter 11 bankruptcy. According to an Associated Press news report, the national restaurant chain's owner, Mac Acquisition, filed for protection with the U.S. Bankruptcy Court for the District of Delaware, citing some $23 million in secured debt with negative earnings of $12 million and on revenues [...]

The post Romano's Macaroni Grill Files for Chapter 11 Bankruptcy appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
The owner of Romano’s Macaroni Grill has filed for Chapter 11 bankruptcy. According to an Associated Press news report, the national restaurant chain’s owner, Mac Acquisition, filed for protection with the U.S. Bankruptcy Court for the District of Delaware, citing some $23 million in secured debt with negative earnings of $12 million and on revenues of $230 million. Macaroni Grill has 93 company-owned locations and 23 franchise locations all of which are expected to remain open.
The company said in a statement that they filed for protection under Chapter 11 to “shed legacy liabilities that were negatively impacting and hindering the company’s path forward.” Macaroni Grill will operate in a “business as usual” mode during the process, the statement from the company said.

Understanding Chapter 11 Bankruptcy

In a Chapter 11 case, the debtor takes the initiative and seeks bankruptcy relief. However, in some cases, creditors may also band together and file an involuntary Chapter 11 petition against a debtor who hasn’t paid up. Most debtors file the Chapter 11 bankruptcy case where they are headquartered. Chapter 11 cases are typically filed by corporations, partnerships and limited liability companies. Individuals can file under Chapter 11 if they have too much debt or income to qualify under Chapter 7 or Chapter 13.
In a Chapter 11 case, a trustee is not appointed. Instead, the debtor continues to operate the business as usual. However, if the court finds that the debtor has acted fraudulently, dishonestly or incompetently, it could appoint a trustee to take over operations. In a Chapter 11 case, the bankruptcy court has all the power. The bankruptcy court must approve everything from sale of assets, entering into lease agreements, shutting down or expanding business operations or getting into other types of agreements.
Creditors, shareholders and other parties may support or oppose the actions that require the court’s approval. In making its decisions, the bankruptcy court will take input from creditors and other stakeholders. Unsecured creditors usually participate in the Chapter 11 case through a committee that is appointed to represent their interests. Unsecured creditors may choose to retain attorneys and others to help them at the debtor’s expense.

Pros and Cons of Chapter 11

The main benefit to the debtor is that this type of bankruptcy gives them a chance to reorganize debts. After filing a Chapter 11, the bankruptcy court issues an automatic stay that keeps creditors at bay, giving the debtor to come up with a repayment and reorganization plan. The business’s goal is to stay profitable while paying back debts. Creditors tend to be patient with a Chapter 11 plan because they stand to benefit more than they would in a Chapter 11 case. Each secured creditor is placed in their own class. Once the bankruptcy plan is confirmed, the debtor is required to make all the payments to creditors as outlined in the reorganization plan.
The main disadvantage of Chapter 11 is that it can be a long and costly process, which can pose more challenges for a business that is struggling to stay afloat. The filing and legal fees alone can be significant. Also, the reorganization plan they develop must be feasible and approved by the bankruptcy court.
If you are in danger of losing your business due to overwhelming debt, call an experienced Phoenix bankruptcy lawyer to find out if filing for Chapter 11 bankruptcy might be the best possible solution for you.

The post Romano's Macaroni Grill Files for Chapter 11 Bankruptcy appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
How Will Bankruptcy Affect My Credit Score? https://www.pewlaw.com/long-bankruptcy-stay-credit-report/ Tue, 17 Oct 2017 17:06:54 +0000 https://www.pewlaw.com/?p=7390 People are often wary about filing for bankruptcy because they know the bankruptcy will show up on a credit report. There is no denying that a bankruptcy has an impact on a credit score, and that lenders may be reluctant to extend no credit to debtors who have filed bankruptcy. Realistically, however, by the time [...]

The post How Will Bankruptcy Affect My Credit Score? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
People are often wary about filing for bankruptcy because they know the bankruptcy will show up on a credit report. There is no denying that a bankruptcy has an impact on a credit score, and that lenders may be reluctant to extend no credit to debtors who have filed bankruptcy.
Realistically, however, by the time debtors are considering bankruptcy, their credit scores have already been damaged. Consumers only resort to bankruptcy when their debt has become unmanageable. They have probably maxed out their credit cards. They have usually missed some payments. Perhaps their wages are being garnished or their mortgage lender has sued for foreclosure. All of those events have a negative impact on credit scores.
In the short term, filing bankruptcy might make it difficult to obtain new credit, although even before a bankruptcy filing, obtaining new credit is not usually an option for debtors who cannot pay their bills. In the long term, filing bankruptcy might make it easier to obtain credit by stabilizing the debtor’s financial situation. How long that will take depends upon the efforts a debtor makes to rehabilitate his or her credit score.

Bankruptcy and Credit Reports

A Chapter 7 bankruptcy remains on a credit report for ten years. A Chapter 13 bankruptcy can no longer be included in a credit report after 7 years. However, the appearance of a bankruptcy on a credit report is only one factor that financial institutions rely upon when they extend credit. A consumer’s credit score is the most important factor that influences the decision to grant a loan or issue a credit card.
Bankruptcy is one of many adverse events that affect credit scores. The good news is that adverse events are given less weight as time passes. While a bankruptcy will appear on a credit report (and therefore affect a credit score) for several years, it will have a diminishing impact over time, particularly if the consumer has taken steps to improve his or her credit score after a bankruptcy discharge is granted.

Bankruptcy and Credit Scores

Credit scores are determined by the three credit reporting bureaus: Equifax, Experian, and TransUnion. They rely on similar methods to calculate a credit score, and the scores calculated by each bureau generally fall within the same range.
Credit scores are influenced by many factors. They include:

  • How much credit is available to the consumer
  • How much of the available credit the consumer has used
  • Whether and how often the consumer has been more than 30 days late in making a payment
  • Whether judgments for unpaid debt have been entered against a consumer
  • Recent reductions in income
  • Recent requests for credit limit increases

Credit scores typically range from 300 to 850. A “good” credit score is usually defined as being in the range of 690 to 700. An “excellent” credit score is typically defined as 750 or higher.
A bankruptcy will probably lower a credit score by 130 to 240 points when it first appears on a credit report. As a general rule, a Chapter 13 bankruptcy will have less impact on a credit score than a Chapter 7 bankruptcy.
Consumers with a credit score below 650 might have difficulty obtaining credit. Few financial institutions will offer credit to consumers who have a credit score below 620. Some financial institutions will make credit available to consumers who have a credit score between 620 and 650, but will charge a higher interest rate. Some lenders will not make loans to anyone with a credit score below the number they define as “good.”
The impact of a bankruptcy will vary from debtor to debtor, depending on other factors that affect the credit score. For example, as credit card companies close accounts in response to a bankruptcy, the factor of “maxed out credit cards” will no longer harm a credit score. The exact amount by which a bankruptcy reduces a credit score is therefore difficult to predict.
Consumers can predict that their credit score will improve each year (and perhaps each quarter) after the bankruptcy discharge is granted. That improvement can be hastened by taking some simple steps to rehabilitate the consumer’s credit.

Rehabilitating Credit

The appearance of a bankruptcy on a credit report does not make it impossible to obtain credit. Consumers who have sufficient income are often able to obtain a mortgage loan four years after a bankruptcy discharge, and as soon as two years after the discharge if they qualify for a government-backed FHA or VA loan.
Obtaining new credit, however, will depend on having a credit score that meets the lender’s standards. Here are some steps to take after filing bankruptcy to improve that score:
 

  • Pay bills on time. Consumers who don’t have credit still have bills, including rent and utility payments. A judgment for nonpayment of those bills is another adverse event that lowers a consumer’s credit score. Paying bills is essential to rehabilitating credit.

 

  • Get a secured credit card. Applying for ordinary credit cards with a low credit score is usually a waste of time. In fact, a flurry of applications will reduce a credit score. However, most people can obtain a secured credit card after bankruptcy. The consumer must post cash as security which will be used to pay the balance if the consumer misses a payment. A consumer who makes timely payments will begin establishing a positive credit history that will be reflected on a credit score.

 

  • Obtain a car loan. If you need a new car, it is usually easier to obtain a car loan with a low credit score than other loans. Car loans are secured by a lien against the car, and dealers who are anxious to sell cars often do business with loan programs that make credit available to people with low credit scores. Make sure you can afford the loan payment and don’t get suckered by unreasonably high interest rates. If the payments are unfair or more than you can handle, walk away.

 
By rehabilitating credit, the presence of a bankruptcy on a credit report will no longer be a barrier to establishing new credit. The means debtors can often obtain new credit without waiting seven or ten years for the bankruptcy to disappear from a credit report.
 

The post How Will Bankruptcy Affect My Credit Score? appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
Toys ‘R’ Us Bankruptcy: The Rise and Fall of an Empire https://www.pewlaw.com/toys-r-us-bankruptcy/ Thu, 28 Sep 2017 16:41:37 +0000 https://www.pewlaw.com/?p=7264 Toys ‘R’ Us, the nation’s largest toy retailer, has filed for Chapter 11 bankruptcy after suffering from slumping sales and incurring a significant amount of debt. According to a news report on CNN.com, the 69-year-old retail giant was once hailed as the go-to place for children’s toys and gifts. However, over the last several years [...]

The post Toys ‘R’ Us Bankruptcy: The Rise and Fall of an Empire appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
Toys ‘R’ Us, the nation’s largest toy retailer, has filed for Chapter 11 bankruptcy after suffering from slumping sales and incurring a significant amount of debt. According to a news report on CNN.com, the 69-year-old retail giant was once hailed as the go-to place for children’s toys and gifts. However, over the last several years Toys ‘R’ Us has lost its place to Wal-Mart and more recently, Amazon. What’s more, the company amassed $5 billion in debt in its fight to stay relevant by signing major, exclusive licensing deals with toymakers and buying other toy companies like KB Toys.

Struggling with Debt

Toys ‘R’ Us announced that it had managed to secure $3 billion in bankruptcy financing, which it plans to use to restructure the company, alleviate its debt burden and rejuvenate its ailing stores. The bankruptcy filing comes just before the holiday season, obviously the busiest time for them. It plans on keeping all of its 1,600 stores open worldwide. The Wall Street Journal did report, however, that the company would likely close some of its stores that aren’t doing too well as part of the bankruptcy restructuring.
Toys ‘R’ Us has joined a number of companies that have caved to the online threat and filed for bankruptcy protection this year including shoe retailer Payless, and children’s clothing store, Gymboree. Toy companies are also faced with the challenge of children moving to mobile and tablets to play games as opposed to old-school dolls and action figures.

Understanding Chapter 11

Chapter 11 Arizona business bankruptcy involves a reorganization plan and could be filed by individuals and businesses. If the business is in debt because of a failed market for the goods or if sales are so low that the business can’t meet its operating costs, then, reorganizing or restructuring may not resolve the underlying debt problems. However, Chapter 11 can be a useful tool for businesses in a number of different circumstances in Arizona.
In some circumstances, filing for Chapter 11 bankruptcy in Arizona will allow for fast-track resolution. For example, a small business with under $2 million in debt may be fast-tracked in the Chapter 11 process. Also, in Chapter 11, there is no time limit set for long the business bankruptcy may continue. This gives the business and the debtor sufficient time to rehabilitate the company.
Our Arizona bankruptcy lawyers have observed a steady increase in the number of individuals who have chosen to file for bankruptcy under Chapter 11 when they might also qualify for Chapter 13 individual debt reorganizations. It is important for married couples to know that both husbands and wives have the ability to file separately or jointly under Chapter 11 just as they do under other chapters of the U.S. Bankruptcy Code.

Contacting an Experienced Lawyer

Whether you are an individual or a business attempting to reorganize and get your life back, the experienced Mesa bankruptcy lawyers at the Pew Law Center can help you understand the law better and help you grasp the unique benefits you may have as an individual petitioner under Chapter 11. Call us for a no-cost, no-obligation consultation.

The post Toys ‘R’ Us Bankruptcy: The Rise and Fall of an Empire appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
Why People File For Bankruptcy in Tempe, Arizona https://www.pewlaw.com/people-file-bankruptcy-tempe-arizona/ Mon, 14 Aug 2017 17:37:54 +0000 https://pewlaw.com/?p=7178   There are three common events that cause people to file for bankruptcy in Tempe, AZ. These include: Divorce Health problems Estate Planning Issues Job Loss or Curtailment of Income If you find yourself experiencing these problems, you are not alone. There are many ways that even the most prepared Tempe resident can find themselves [...]

The post Why People File For Bankruptcy in Tempe, Arizona appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>
 
bankruptcy attorney tempe
There are three common events that cause people to file for bankruptcy in Tempe, AZ. These include:

If you find yourself experiencing these problems, you are not alone. There are many ways that even the most prepared Tempe resident can find themselves in, what seems to be, an insurmountable financial challenge. There are many causes, but there are also many ways to get out of these situations. For many, there is a lot at stake including your property, your business, and your future. During times like these, you need to speak to a bankruptcy attorney to help you determine which chapter to file.

Should I File For Bankruptcy in Tempe?

We can help you solve your debt problems and get you on a healthy financial path. At the Pew Law Center, we offer bankruptcy services and debt reduction plans under Chapter 7, Chapter 13 and Chapter 11 of the US Bankruptcy Code for all Tempe residents. Each chapter is a type of case that offers specific procedures, rules, and relief from debt.
There are times when people go through difficulties in their financial lives. They often wonder if they are in such bad shape that they need a bankruptcy attorney. Are you unsure if your situation requires filing for bankruptcy? The best thing to do is speak to an Arizona bankruptcy attorney to receive a professional evaluation. With their qualified experience, you can find out more about your debt relief options.
Credit card debt: If you carry high credit card balances and are at a point where paying the balance is unrealistic, this is a sign that bankruptcy could be a potential option for you. Credit card debt is usually unsecured debt meaning that in Chapter 7 proceeding it can be discharged and, once your proceeding has concluded, your debts could be eliminated completely.
Medical debt: Statistics are showing that medical debt is surpassing credit card debt as one of the leading reasons people in the United States file bankruptcy. Anyone who has a large sum of unsecured medical bill debt should consider a Chapter 7 or a Chapter 13 filing. These filings could be of substantial help and may enable you to lighten your load financially and give you that fresh start that you need.
Borrowing from retirement accounts: Have you been borrowing against your 401 k or your IRA? Sometimes borrowing from a retirement account is the first sign that you are getting overwhelmed financially. It can be a bad idea to borrow your retirement money to pay off debts that are dischargeable. 
Foreclosure or repossession: Are you on the brink of losing your home to foreclosure? Have you fallen behind on your car payments and worried it will get repossessed? Call our Chandler bankruptcy lawyers now to discuss your options. Even if it is the last minute, there are emergency filings your attorney can do for you to stop a foreclosure action or a repossession from occurring. These are valuable assets and you can prevent your property loss.
Creditor Harassment: Often the greatest sign of financial trouble is when creditors start calling throughout the day. They can leave threatening messages or try to intimidate you into paying them money that is owed to them. If you are in bad financial shape, any money you have is likely going to the bare bones expenses of food and utilities. Stop feeling intimidated and get your finances back together by talking with an attorney about filing the right type of bankruptcy to stop collection activity right now.
Wage garnishment: If you have already started to lose part of your paycheck to debts that you owe, you are already facing trouble. You might get yourself further into a hole because you are now losing out on money you could be saving for your future.
Poor credit: Some people think bankruptcy will destroy their credit. Your credit will get hit temporarily but immediately after filing you will begin to rebuild your financial life. Your credit score will go up over time if you make responsible financial decisions moving forward..
Begin making smart financial decisions now. Speak with a Tempe bankruptcy attorney now to get on the path to recovery.
If you live in Chandler Arizona we recommend that you contact us to schedule a time to meet with one of our lawyers.
Pew Law Center
333 N Dobson Rd #5, Chandler, AZ 85224
(480) 582-3457
https://www.pewlaw.com/chandler/

The post Why People File For Bankruptcy in Tempe, Arizona appeared first on Mesa Bankruptcy & Family Law Attorneys.

]]>