“My bankruptcy is simple.”
As a Phoenix AZ bankruptcy lawyer, these words always make me cringe. I’ve heard these words time and time again. In fact, I recently heard it from a person who came in to see if bankruptcy was an option. She was adamant that hers was a “simple bankruptcy” because it was “just credit card debt.” She also mentioned how she had done her own research and had determined that her assets – her car and her home – were going to be just fine. Well, that was not exactly the case. In fact, she had jeopardized her paid-in-full car, and she had absolutely no clue.
How did she do that? Doing her own research, she figured out how much equity or value would be protected in bankruptcy. Currently, Arizona exemption is $6,000 equity for a vehicle. Her research showed that her paid-in-full vehicle was in excess of the $6,000. She came up with a plan and transferred 50 percent ownership to her mom by adding her to the title.
Her research led her to believe she only had to wait 90 days to file bankruptcy. She was wrong! Now she had put 50 percent of her vehicle in jeopardy instead of the few thousand over the $6,000 exemption. She did not consider other ramifications like fraudulent transfer, payment to an insider, or bad faith which could lead to revocation of her bankruptcy or even lead to criminal charges.
A “simple bankruptcy,” you say? In my 1,000-plus filed bankruptcies, there has never been a simple bankruptcy.
While many bankruptcies may not necessarily be complex, they are certainly not simple. In a bankruptcy process, the filer signs a bankruptcy petition under penalties or perjury. During the process, it is crucial to list your income and assets accurately. Your creditors must be properly listed and be given proper notice.
You must divulge information regarding your assets and transactions over the last several years. The bankruptcy trustee, or the person appointed by the government to oversee your bankruptcy, will typically request tax returns from the last two years, six months of bank statements, vehicle titles, insurance policies and much more. The trustee has the right to request any document that is beneficial to the administration of the bankruptcy estate.
Now, my intention is not to scare off anyone from filing bankruptcy and getting a fresh start. All I’m doing is pleading with you to get the help you need. An experienced bankruptcy attorney can save you hours and hours of effort required to prepare and complete your petition. An attorney can also save you thousands of dollars and in the worst-case scenario, greatly reduce the chances of your bankruptcy discharge being revoked. An experienced lawyer will also help you avoid the pitfalls and land mines in the bankruptcy world that could jeopardize your financial future.
There are many things a bankruptcy lawyer can do for you. First and foremost, a lawyer can help determine whether or not you should file for bankruptcy. Your lawyer will look through your finances and determine whether a bankruptcy can help you or hurt you. If bankruptcy is the best option for you, your lawyer will then help you determine whether you should file for Chapter 7 or Chapter 13 bankruptcy.
A bankruptcy lawyer will also be able to round up all of the necessary forms needed to file and help fill them out accurately and submit them before the required deadlines. Filing for bankruptcy essentially means that you need to complete a lengthy packet of forms. Bankruptcy attorneys have specialized software that prepares and files your paperwork with the court in an accurate, efficient and timely manner. You are required to provide your lawyer with all the information to fill the forms including details pertaining to your income, expenses, assets and debts.
Since bankruptcy laws keep changing, you need a lawyer who will stay up to date on any changes involving bankruptcy law. In addition to helping you navigate what can be a complex process, a bankruptcy lawsuit can also help protect you from being harassed by creditors. Once you file for bankruptcy and you inform your creditors regarding the filing, creditors are required to stop trying to obtain payment from you immediately.
Your bankruptcy lawyer will also help represent you at mandatory hearings that are part of the bankruptcy process including the meeting of creditors called the 341 hearing. Depending on the type of bankruptcy case you may have to attend additional hearings. Your lawyer will typically represent you at these hearings.
When you go into a bankruptcy proceeding without the help of a lawyer, it’s as if you are handling a complex legal procedure while blindfolded. Consumers who appear in court with no legal representation are at a serious disadvantage. They are often not aware of their rights and therefore, don’t represent themselves properly. A bankruptcy lawyer can help determine whether debt collectors are using illegal methods to recover money. An experienced attorney can even help you prepare a lawsuit against a debt collector who has broken the laws, which could range from illegal contact to making threatening statements.
Here at the Pew Law Center, we do our best to educate our clients about the process, the bankruptcy proceedings as well as your finances. Our clients know and value our services as we guide them through the challenges of bankruptcy. We have saved hundreds of people from making costly mistakes that could have cost them their financial future. Some people let us help them through the process and others end up trying to do this on their own. Some, like the woman who came to see us, believe bankruptcy is a simple matter they can handle on their own. As we saw in this article, bankruptcy is not as simple as you might think. The pitfalls and challenges are many. You can gather the information you need with a simple, no-cost, no-obligation consultation. Call us at 480-745-1770 to find out how we can help you.
Call (480) 745-1770 or fill out our contact form to get help from compassionate professionals. Stop worry and get help today.