I am a bankruptcy attorney in Phoenix ($995/Chapter 7) and want potential clients to know the following.When you file Bankruptcy; you are putting yourself into the hands of the Bankruptcy Court. Most of the Rules are intended to protect you from aggressive creditors; but you also need to be careful about what can bite you back.
Until a year ago; bankruptcies were so common that everybody
had much more work to do than they had time for. The number of bankruptcy cases has slowed
down last year and this year; which gives everyone more time to review the
details of every case.
When you file a case, it is assigned to a Trustee appointed
by the Court. That Trustee’s job puts
him or her in many positions. Firstly;
the Trustee is assigned to review your papers filed in court and make sure the
information matches what is available to the Trustee by researching your
government records, bank records, and the like.
Secondly; the Trustee will often protect you from aggressive creditors
that are trying to get more than they deserve or are otherwise harassing you.
The third part is what you need to be prepared for. Trustees are paid very little to manage your
case. If that was all they received;
they would all go bankrupt. Most of
their income is derived from processing non-exempt assets that you may own. For instance; if you file a case right now
and haven’t received any tax refund that is owed to you; your trustee will
“own” that refund because it is part of your bankruptcy estate. If it is small enough it won’t be sufficient
for the Trustee to invest his/her effort into maintaining it and dividing it up
for disbursement. But if it is large
enough the Trustee will keep it and send notices to all of your creditors to
file claims for their shares. The same
sort of process may apply if you own a car that has excess equity. You are allowed only $5,000 in equity in a
car in Arizona; but a husband and wife may claim both of their $5,000
exemptions in one car. If you have
enough excess equity the Trustee may demand that the car(s) be sold, you get
the first $5,000, and the remainder is taken for disbursement to creditors.
The worst of this issue concerns Trustees’ rights to hire
attorneys on a contingency fee basis to look through your case and see if they
can find any excess or non-exempt assets.
These attorneys don’t get paid unless they find something to attach;
therefore they are highly motivated to give your case a good look-over.
This is one of the reasons why it is very wise for you to
look for an attorney who is very experienced in bankruptcy work and knows how
to deal with the ever-changing landscape of the Courts.
Another Trustee you may have to deal with is the U.S.
Trustee. The UST examines your income to
determine if you are eligible to file for Chapter 7 relief. This is another reason you should get an
attorney highly experienced in bankruptcy to represent you. This subject matter is called the “Means
Test” and it is a multi-step process that many lawyers don’t fully understand. The first step simply adds up your Total
Gross Income for the six months before the month that you file your
bankruptcy. If a single person’s income
is less than $3,438 per month or a married couple’s income is less than $4,500
per month, they automatically pass.
Those numbers go up as more dependants are added to the equation.
If you fail the first step your attorney will have to go
through a complicated series of calculations based on standards published by
our old friends the Internal Revenue Service.
Some of these numbers are specific, others can vary based on the facts
and circumstances of people’s lives. You
need an experienced attorney to understand these standards and know when they
can be bent to squeeze you into a Chapter 7.
If not; you will be forced into a Chapter 13 bankruptcy that demands you
to make monthly payments to your Trustee; who then disburses the money to your
creditors according to a schedule of priorities issued by the Court.
The moral of the story is simple; if you need legal
assistance you should hire someone who spends all or most of his/her time in
the chosen field. It will run smoother
and easier and you will sleep a lot more peacefully!
Bill Ponath provides low low cost Chapter 7 and 13 personal bankruptcies. $995 Chapter 7 or $2500 Chapter 13 bankruptcies plus court filing fee. Free consultation with a compassionate attorney who will handle your case personally. Call 24/7, available to meet with you around your schedule. 602-404-0143. Conveniently located in North-Central Phoenix on Tatum. ArizonaBankruptcyLawAssistance.com
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