We know you have questions. We have your answers.
*These responses cover most but not every scenario. If you have additional questions or want to discuss your individual case, feel free to contact Curry, Pearson & Wooten P.L.C. We are here to help you.
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A recent life event has permanently changed my ability to make payments on my Chapter 13 bankruptcy repayment plan here in Arizona—what can I do?
At Curry, Pearson & Wooten, we often tell clients about the huge financial commitment that is an Arizona Chapter 13 bankruptcy repayment plan. It can be very difficult to predict your financial situation for the next year, let alone the three to five required. It is not uncommon for people to hit a bump in the road that takes them off the straight-and-narrow payment plan and pushes them back into the very situation from which they worked so hard to escape.
Fortunately, there is a way to alleviate yourself of the repayment plan commitment and some of your debt, called a hardship discharge. Just as a successfully completed repayment plan has limits on debt discharge, this particular type of discharge does not forgive you of all of your debts. Debts like your secured debts, priority debts, tax debt, and student loans will not be discharged, nor will debts you entered into in bad faith.
What a hardship discharge can do is remove you from the repayment plan and forgive your unsecured debt. Being granted a hardship discharge is challenging, however, and you will need to prove three things when you file your motion, including:
- The hardship you are facing is permanent, and the burden is more than you can reasonable be held accountable for.
- The payments you have made to your unsecured creditors is equal or greater to the amount they would have received had you filed for a Chapter 7 bankruptcy.
- Your plan cannot be modified in any way to enable you to make payments.
It can be difficult to be granted a hardship discharge for your debts in an Arizona Chapter 13 bankruptcy, but with the right help, you can file your motion with confidence. Our experienced Phoenix, Arizona bankruptcy attorneys are here to help you, regardless of your circumstances—call us today at 602-258-1000 to find out what we can do for you.
I don’t make a lot of money, but I’d like to take advantage of the benefits that an Arizona Chapter 13 bankruptcy offers—can I still qualify with a lower income?
Filing for Chapter 13 bankruptcy in Arizona does offer many benefits, especially for filers who are interested in keeping their property while getting their debt reorganized into manageable payments. Because of the rigorous payment schedule that lasts for years, however, many potential filers shy away from a Chapter 13 bankruptcy, fearing that their income is not sufficient to sustain both a payment plan and standard costs of living.
What the bankruptcy court will look at to determine whether or not you qualify is your required debt to income ratio. Chapter 13 bankruptcy demands that you pay off certain debt during the repayment plan, such as child support, alimony, and back payments on secured debt like your mortgage. If you do not earn enough to cover payments on these debts over a three to five year span, odds are that you will not qualify.
Another factor that is considered is your disposable income to unsecured debt to disposable income and nonexempt property ratio. In a Chapter 13 bankruptcy repayment plan, your nonexempt property (things such as second homes and cars) will be used to pay off part of your unsecured debt, while your disposable income gets put toward the remaining debt until the repayment schedule is complete.
This makes your situation a tricky one to determine, but the general rule is that if you can afford the payments on your priority debt, you will be approved. If you have very little disposable income and nonexempt property, your payments may end up being “doable,” even on your modest income.
Before committing to an Arizona Chapter 13 bankruptcy, however, it is very important to sit down and take a solid, honest look at your finances to ensure that your financial reorganization will be successful. At Curry, Pearson & Wooten, our experienced Phoenix bankruptcy lawyers can help you determine which path is right for you—call us now at 602-258-1000 to schedule a consultation and get started today!
My husband and I are overwhelmed with our debt, and we will be receiving a few more large medical bills soon—is immediately filing for bankruptcy in Arizona an option to relieve us of this debt?
In matters of life, they say that timing is everything, and bankruptcy is no exception. When you file for bankruptcy here in Arizona (or anywhere, for that matter), the only debt that will be included in your discharge or repayment plan will be the debt that existed at the time of filing. This means that you will assume full responsibility for any medical bills you receive after you file.
Because of this, it is important to strategically plan your filing to include the bulk of the debt you can reasonable foresee accruing in the near future. While we can never know for certain what life will bring, if you know that your husband has one more surgery to undergo, you can wait to file until you are billed for that surgery.
While it may seem impossible to wait any longer to relieve yourself of this financial burden, there is a very good reason we recommend waiting to file until you can include the bulk of your debt. If you were to file for bankruptcy today, there are very strict limits as to when you can seek another discharge through bankruptcy. This means that if you filed for a Chapter 7 bankruptcy now, you would need to wait another eight years before you can file again. If you filed for a Chapter 13 bankruptcy, your waiting period would be four years.
We know what a huge decision filing for bankruptcy can be, and we want you to get the biggest bang for your buck, both literally and figuratively. If we can help you alleviate your financial pressure in one, effective petition, it will benefit you in the long run. If you have further questions about timing your petition properly, call Curry, Pearson & Wooten’s Phoenix bankruptcy attorneys at 602-258-1000 today to learn more.
What will happen to the cosigners on my loans if I file for bankruptcy in Phoenix?
When you take out a loan, you assume full responsibility for the debt. For many Phoenix residents who have struggled with their finances after the housing market crash and unemployment struggles, lenders may have been wary of their ability to pay the loan in full.
This does not mean that potential borrowers with shaky finances are automatically turned away, however. What many lenders will do (since they do not want to lose business) is require loan applicants with little to no credit or collateral to sign a lease with a cosigner. Cosigners are usually required to have very solid credit and finances, because they will be ultimately responsible for the debt if the primary borrower defaults.
How your cosigners are treated if your file for bankruptcy depends on a few things, primarily the type of bankruptcy your file for. In a Chapter 7 bankruptcy, the automatic stay goes into effect immediately after you file, protecting you from creditors. Your cosigners will not be protected, however, and collection actions will immediately be redirected to them.
This is why many people tend to turn to Chapter 13 bankruptcies. In most cases, both you and your cosigners will be protected in a Chapter 13 bankruptcy case, since you are committing to a repayment plan that will include your cosigned loans. While a Chapter 13 bankruptcy is a huge financial commitment, if you are truly dedicated to preserving your cosigner’s credit, it could be a good option if you will be able to complete the three or five year plan successfully.
If you are struggling to find a balance between what is best for you and your finances and what is best for your cosigners, let the Phoenix bankruptcy attorneys at Curry, Pearson & Wooten help. Our experienced team of lawyers can guide you through the bankruptcy process and allow you to weigh your options before diving headfirst into a huge financial decision. Call us today at 602-258-1000 for a consultation with an attorney now.
My ex-husband pays me both alimony and child support payments each month—will this be counted as income if I file for bankruptcy here in Arizona?
As you prepare to file for bankruptcy, you will be jumping through many proverbial “hoops” to ultimately get your debts discharged. One of the earliest “hoops” to jump through is the means test for the particular bankruptcy that you are filing for.
The means test looks at six-month average of your income and expenses to determine whether your disposable monthly income is sufficient to support a Chapter 13-syle repayment plan, or if you are better suited for a Chapter 7 liquidation bankruptcy. By comparing your income and expenses to other households of your size in Arizona, you will be able to find out which bankruptcy you can file.
As you fill out the means test, your received alimony and child support payments will need to be counted as income. This is important, as the amount you receive in support payments (combined with any income from your job) can impact whether you qualify for a Chapter 7 bankruptcy, especially if this amount pushes your income about the state mean for a household of your size.
The good news is, however, that most child support payments are exempt, which means that the bankruptcy trustee cannot use any portion of these payments to pay off your creditors. This may help set your mind at ease as you navigate through your bankruptcy case, knowing that funds meant for your child or children will remain safe and secure.
Whether your combined income qualifies you for a Chapter 7 bankruptcy or you are financially secure enough to file for a Chapter 13 bankruptcy, our Phoenix, AZ bankruptcy law firm can help. The Arizona consumer bankruptcy attorneys at Curry, Pearson & Wooten can help you escape the overwhelming burden of your debt and help you protect the important funds that are meant to provide for your children. If you are considering filing, let us guide you through the process—call us today at 602-258-1000 to schedule a consultation with a lawyer now.
I am unemployed in the traditional sense, but do receive income from other sources—would filing for a Chapter 13 bankruptcy in Arizona work for me?
Many people with little or no income often come to us assuming that their only option of escaping their overwhelming debt is by filing a Chapter 7 bankruptcy. They are very hesitant to proceed because they fear losing their home, car, and other important possessions in an effort to escape their financial burdens.
Chapter 13 bankruptcies offer debtors many unique options, including the ability to strip liens, catch up on priority debts like child support, or get current on past-due mortgage payments. Because it includes a three- to five-year repayment plan, many people that are unemployed, retired, or have nontraditional jobs assume that they will not be able to successfully complete a Chapter 13 bankruptcy.
Whether you are receiving child support payments, income from rental properties, or social security payments, it sounds as though you have a steady income. If you feel as though this income is steady and sufficient enough to support you while also keeping up with your payment schedule, have a standard “job” is not necessarily a prerequisite to filing for Chapter 13 bankruptcy.
When you first file your petition for bankruptcy, the court will review your income to verify that you will be able to adhere to—and more importantly, complete—your payment plan. Don’t wait until your petition to find out if an Arizona Chapter 13 bankruptcy will work for you; Curry, Pearson & Wooten’s experienced Phoenix bankruptcy attorneys can walk you through your case and determine which options are best for you and your unique situation. Call us today at 602-258-1000 to schedule a consultation with a lawyer now.
I earn above-average money, but my support payments to my ex-spouse and children are very high—can I still qualify for an Arizona Chapter 7 bankruptcy?
When filing for a Chapter 7 bankruptcy in Arizona, you will first need to find out if you qualify to file. To discover if you are eligible, you must first take that Chapter 7 means test, created as a way to weed out debtors whose income to expense level would allow them to repay a portion of their debt.
The Chapter 7 means test looks at a six month window of your income, and compares it to your expenses, your household size, and other comparable households in Arizona. If your salary is at or below the median for an Arizona household of your size, you qualify—it is as simple as that. If your salary is above the median, as it sounds like yours is, you will have to delve a bit deeper into the means test.
As you continue with the test, you will be asked to enter information about your monthly expenses—including support expenses like alimony and child support. After subtracting your expenses from your average monthly income, the test will determine if your disposable monthly income is low enough to qualify for a Chapter 7 bankruptcy, or if you will have to instead file for a Chapter 13 bankruptcy.
If you do qualify for an Arizona Chapter 7 bankruptcy, keep one very important thing in mind—support payments are considered priority debts. This means that when you file for bankruptcy, you will still need to stay (or become) current on all support payments, and continue to pay even when your other debts are discharged.
If you are having a difficult time making ends meet financially, the time to act is now. Contact Curry, Pearson & Wooten’s Phoenix bankruptcy lawyers today at 602-258-1000 to discuss your case with experienced professionals.
After losing my job, I fell dangerously behind on many of my bills, including child support payments to my ex-wife. Will filing for bankruptcy in Arizona help me ease some of my financial stress?
Bankruptcy is an incredible powerful financial tool, but even bankruptcy has its limitations, and child support payment is certainly one of the biggest. No matter which way you decide to file—for Chapter 7 or Chapter 13 bankruptcy—your outstanding child support debt is nondischargeable.
Child support is considered a priority debt in bankruptcy, so should you file for a Chapter 7 bankruptcy, your ex-spouse will be one of the first “creditors” that benefits from the liquidation of your assets. While your other debt may end up being discharged, not only will you be held responsible for the remaining back child support payments, but you will also need to keep up with current payments, as well.
Chapter 13 bankruptcy treats child support payments very similarly. Priority debts are included in the three or five year repayment plan, so your back payments will be included in that plan. Before your other debts will be discharged, however, you will need to be up-to-date on all back payments as well as current on your ongoing support payments.
While it may not seem as though bankruptcy can do much directly to ease your financial stress from child support dues, in reality, filing can still be very helpful. When you are able to eliminate your other financial stressors, such as overwhelming credit card debt, you will find that your money is freed up to attend to your true priority debt.
Being behind in your child support payments while you are already spread too thin financially can be incredibly stressful, especially because caring for your children is a top priority regardless of your finances. If you are concerned about your ability to keep up with your child support payments and are considering filing for bankruptcy, give our Phoenix, Arizona bankruptcy attorneys at Curry, Pearson & Wooten a call today at 602-258-1000 to discuss your options.
Can I file for bankruptcy in Arizona without a lawyer?
To get straight to the point, yes—you can file for bankruptcy in Arizona without the help of an attorney. If you want the assurance that you will enjoy the maximum protection that bankruptcy offers, however, you may want to call in the professionals.
On the surface, it really does sound easy enough. File the paperwork, show up to your meeting of creditors, and voila—your debts are discharged. Once you get deeper into the bankruptcy process, you may find that there is a lot more to bankruptcy than many do-it-yourself sites let on.
Beyond the most basic “oops” like filing paperwork incorrectly, one of the biggest (and most financially devastating) mistakes that many solo-filers make is not maximizing their exemptions. This could mean the difference between keeping or losing your home, treasured family heirlooms, or car.
As you can imagine, creditors are not always overjoyed to hear that your debt to them will be discharged, so they may protest loudly—and legally—when they find out that you have filed for bankruptcy. If your attorney has been with your case from the start, he or she will know your case and your finances like the back of their own hand, and will be able to swiftly act to ensure that your bankruptcy case moves forward past adversary proceedings.
When you are moving forward with a major financial decision, let alone a major life decision, why leave anything to chance? An experienced lawyer can help you pave the way to financial independence from start to finish—call the Phoenix bankruptcy attorneys at Curry, Pearson & Wooten today at 602-258-1000 to learn how a lawyer can help you.
I am a pilot here in Scottsdale, and I just received a letter of correction from the FAA—am I in trouble?
As a pilot, it can often feel as though the Federal Aviation Administration goes a little overboard with enforcement actions and inspections. Behind the façade of rules and punishments, however, the FAA’s primary goal is to keep aviation safe for everyone. When pilots commit gross violations and infractions, the system may be safer without that particular pilot flying for a year or more, which is why certificates are suspended or revoked. For smaller mistakes or infractions, however, different action may be more appropriate.
As a Phoenix-area pilot, you know full well how challenging our airspace can be under VFR flight rules. With expansive Class B, restricted airspace, and heavy VFR traffic going into and out of several smaller area airports, nearly everyone has been at risk of making a mistake such as missing a radio call or clipping Class B or D airspace inadvertently. When you have a small violation—or even a near violation—even the FAA understands that legal enforcement actions are too much. This is where administrative actions like warning letters or your letter of correction come into play.
Your letter probably contains information on your alleged violation, as well as steps you will need to take to ensure that you are compliant in the future. Whether it is a training course that you need to take or important logbook updates, you will be given a timeframe in which you need to complete the corrective actions and report back to the FAA. Once you are in compliance, your letter of correction will be kept in your file with the FAA for two years. If you do not comply, the FAA may choose to pursue legal enforcement such as a certificate suspension.
While administrative actions like your letter of correction have less of an impact on your certificate than a legal enforcement action, it holds equal weight and importance with the FAA. Just as with a more serious infraction, you will want to be absolutely sure that you understand what you did to receive the letter and what you will need to do to become compliant. If something is unclear, or you disagree that you committed the alleged violation, it may be wise to discuss the situation with an attorney.
The Arizona aviation attorneys at Curry, Pearson & Wooten are experienced pilots and veteran FAA employees familiar with what is required to stay safe and compliant. If you have a question regarding an administrative action taken against you, call us now at 602-258-1000 to discuss your situation with a lawyer.