When it comes to a chapter 7 bankruptcy one really needs to make informed decisions, and some decisions just require an attorney’s expertise and guidance. Just because something may be acceptable as a standard practice that doesn’t mean it will be seen that way by the all knowing eyes of the judicial system.
For example, one important, confusing, and often overlooked area in the bankruptcy process is that of re-affirmation agreements, which are typically used to keep vehicles. This mechanism, as opposed to discharging a creditor in a bankruptcy, is the concept of establishing a new payment plan termed a ‘re-affirmation agreement”.
Most often, prior to bankruptcy, many people don’t give too much thought to their credit score, particularly as they are falling into the pit of the real estate and credit card crunch.
Once the bankruptcy has been discharged, however, folks really need to give some thought and develop a plan on how to rebuild their credit and credit score.
With a clean slate, concentration and maneuvering to rebuild ones credit is paramount, especially after a bankruptcy. People often believe that after a bankruptcy they will never qualify or become eligible for credit again. This is not true,
Automatic Stay U.S. Bankruptcy – Arizona
Irrespective of the petitioner’s choice of chapter of the bankruptcy code, when an individual files for bankruptcy, he or she triggers an automatic stay that immediately puts a stop on the actions by creditors against himself / herself (debtor) and his / her (debtor’s) property (see 11 U.S.C. § 362). An automatic stay has the potential to protect the debtors against any and all attempts from the creditors to collect debts, at least for the time being. Chapter 13 of the bankruptcy code, goes one step ahead, and protects the debtors as well as the co-debtors. Conversely, secured creditors may explore their option of petitioning the bankruptcy court for respite from the automatic stay by showing an applicable clause.
Debt collectors stalking debtors through Facebook.com, contacting family, friends or even co-workers listed… Why am I not surprised? Because bankruptcy attorneys see this type of behavior almost daily with bankruptcy clients.
Often, chapter 7 bankruptcy clients have a strange preconception that they can keep certain credit cards, or credit cards with no ($0) balance. For example, a few days a go a potential client came into the office to obtain an intake packet. She mentioned to my paralegal that she planned on keeping a $300.00 credit card she had for “emergencies”, apparently it had a $0 balance.
I have said this before, and I will say it again, and again…, preparation for a chapter 7 bankruptcy is the key to a smooth litigation free experience in the bankruptcy court. A good way to think is in terms of at least 90 days. Ninety days (or more) before you plan to file the initial bankruptcy petition, speak with a bankruptcy attorney. Most likely, he/she will tell you to STOP PAYING ON YOUR CREDIT CARDS.
In summary, filing the bankruptcy petition under any chapter of the bankruptcy code creates an automatic stay (unless you previously filed within the past year – talk with an attorney).
In other words, creditors cannot take any collection actions against you, such as repossessing a car, starting or continuing a law suit, foreclosing a home, garnishments or
When it comes to filing bankruptcy, so many laws, rules and regulations have to be considered that many individuals simply become overwhelmed.
Adding to the stress is the battle of warding off creditor phone calls, threats, lawsuits, and insults that making sound intelligent financial decisions suddenly becomes fraught with overwhelming emotion, and a gloomy or angry frustration quickly sets in, after all, enough is enough. Wouldn’t you agree?
Fortunately, there is a provision within the Bankruptcy law, that helps immensely, termed the “Automatic Stay”.
Each state has its own set of exemption statutes that exempt certain types of property. This prohibits or restricts creditors from taking specific items under certain conditions. Arizona has exemptions that protect a portion of your “homestead”, household goods, a vehicle, guns, work tools, etc.Because of this, most bankruptcy filers do not lose much if anything while going through the bankruptcy process. Arizona’s exemptions are fairly generous when compared to most other states.
I am asked daily about a credit counseling company, and which I prefer (I have no preference). It appears they all have different prices, and they change often. Your best bet is to go to the Arizona Bankruptcy Court Website HERE and pick one out that suits your own criteria – these have been pre-approved by the Court.