Phoenix Bankruptcy Law Blog

Arizona Social Security Disability Lawyers

Christopher Ariano — Thu, 10 May 2012 20:39:57 +0000

Ariano & Reppucci, PLLC is proud to announce that we are now handling Social Security Disability and Supplemental Insurance claims. Our experienced disability attorneys will represent you throughout the process, including applying for benefits, representation at hearings, and Social Security and federal court appeals. Unlike larger firms, our attorneys handle a majority of the casework, giving you the peace of mind that your matter will not be passed down to a legal assistant or paralegal.

You may be asking yourself whether you should hire a Social Security Disability attorney? Statistically, most Social Security Disability/Supplemental Security Income (SSDI/SSI) claims are denied at the initial claim and reconsideration levels. As a result, most SSDI/SSI claims go to a hearing before an administrative law judge (ALJ) before benefits are approved. This is where a skilled disability lawyer is useful in developing your case, giving you with the best opportunity in obtaining benefits.

Are you concerned about not being able to afford an attorney? Not to worry as our attorneys do not get paid unless you are awarded benefits. We offer free consultations at one of our 5 convenient locations, serving clients in Phoenix, Tucson, Mesa, Casa Grande, and Scottsdale. Call today (602-515-0841) for a free in person or phone consultation to get started with one of our qualified Arizona disability lawyers.

Arizona Company on the Chopping Block in American Airline’s Bankruptcy Plan

Christopher Ariano — Sat, 05 May 2012 19:28:55 +0000

Posted on: May 5, 2012

The financial disaster currently swirling around American Airlines has hundreds of employees in an Arizona call center worrying if they will have jobs in the near future. In an effort to cut their spending on labor, American Airlines is proposing to eliminate over 1,000 jobs and close a reservation center in Arizona. The cost cutting is expected to save the company $1.25 billion, enough to help stave off collapse.

The bankruptcy has been a source of contention. American Airlines has been embroiled in a dispute with some of the labor unions that represent its employees. The airline attempted to convince a judge to allow it to void its current union contracts and impose new contracts to ensure that its cost-saving measures were protected. American argued that if it could not void the contracts, the company would not be able to survive and all of the union employees would be without a job. Until this matter is resolved, the company cannot move forward with cost cutting measures designed to give the company breathing room while attempting a merger with US Airways.

The restructuring plan involves outsourcing jobs at airports that have the fewest number of flights. Airports in the following cities will likely be affected: Hartford, CT; Columbus, OH; Memphis, TN; Ontario, CA; Sacramento, CA; Portland, OR; and Reno, NV as well as airports in Calgary and Vancouver, Canada.

The reservation call center in Tucson, Arizona will unfortunately be closed permanently. About 700 of the agents that work at that location will be given an opportunity to take a new position or to work from home. Additionally, 800 agents will move from working in the office to working from home. Several part-time positions will be completely eliminated.

American Airlines’ bankruptcy attorneys are hard at work in federal bankruptcy court to save the company from total destruction. However, large businesses are not the only ones who need the advice of experienced counsel while going through the difficult bankruptcy process. If you are considering filing for bankruptcy and need some guidance, contact the skilled Phoenix bankruptcy attorneys at Ariano & Reppucci, PLLC. Call today at (602) 515-0841.

Source: “AMR Cuts 1,200 More Jobs in $1.25B Savings Plan,” by Mary Schlangenstein, published at Businessweek.com.

Overview of BAPCPA (BANKRUPTCY ABUSE PREVENTION & CONSUMER ACT PROTECTION)

Christopher Ariano — Mon, 02 Apr 2012 00:22:30 +0000

It has been over six years since the Bankruptcy reform act was implemented and some consumers are still in the dark about how the laws have changed. Therefore, in this article we will look at an overview of the new law. In October of 2005, Congress and then President Bush signed into law changes to the Federal Bankruptcy Rules. There are some key points that changed because of this new Bankruptcy law. One of them is the mandatory Credit Counseling course consumers must go through before they file a bankruptcy case. This is a government-approved program and there is list of the approved agencies for each state. The agencies are non-profit budget and credit counseling agencies. The U S trustee must thoroughly review the qualification of these agencies to make sure they conform to the standards now in place. The agencies must prove they can provide qualified counselors, maintain adequate provisions for safekeeping and payment of client funds provide adequate counseling with respect to client credit problems and deal responsibly and effectively with other matters relating to the quality, effectiveness and financial security of the services it provides. In order to be approved by the U S trustee or the bankruptcy administrator the agency will at a minimum have a board of directors where the majority is not employed by the agency. In addition, they will not directly or indirectly benefit financially from the outcome of the counseling services provided to such agency and if a fee is charged for these counseling services, they will charge a reasonable amount and still provide services without regard to ability to pay the fee. The agencies will also provide for safekeeping and payment of client funds including an annual audit of the trust accounts and appropriate employee bonding. They are required to provide full disclosures to a client, including funding sources, counselor qualifications, possible impact on credit reports and any costs of the program, which will be paid by the client and how it will be paid. Credit Counseling agencies must provide trained counselors who receive no commissions or bonuses based on the outcome of the counseling service as well as demonstrate adequate experience and background in providing credit counseling and also have adequate financial resources to provide continuing support services for budgeting plans over the life of any repayment plan. These rules also pertain to the Financial Management classes required in bankruptcy case before it will be discharged. A Certificate of completion will be filed with the bankruptcy court to prove the debtor complied with the requirements.

In chapter 7 cases, the eligibility is much stricter as certain requirements have to be met. A means test is required to be taken to see if your current monthly income is less than the median in your state. If you total current monthly income is above the median in your state and you can afford to pay $100 per month toward paying off your debt, you cannot file a chapter 7 and must proceed under a chapter 13. Whether you can afford to pay $100 per month towards your debt or
$6000 over a five-year period is based on a formula that includes your monthly
income, expenses and the total amount of your debt.

In addition to the above requirements, tax returns and proof of income are also required. If a potential bankruptcy, filer has not paid taxes the prior tax year they must do so before filing for bankruptcy. There is a new priority for unpaid child support and alimony as well. Under the new law, people that are owed alimony or child support take priority over any other creditor.

There are reasons for the bankruptcy reform, as Congress did not just make it up. In 1998, there were increased bankruptcy filings that exceeded over one million then in 2004, 1.6 million cases were filed. The growing perception was filing for bankruptcy was uses as a first rather than a last resort. If you are considering filing bankruptcy, you should hire an experienced bankruptcy attorney that can explain the pros and cons of filing and the difference in the chapters.

Considering a Short Sale?

Christopher Ariano — Sat, 31 Mar 2012 02:37:11 +0000

Ever wonder what a sort sale is and if you should consider it, well a short sale is
now a common term referenced in the real estate, as the value of the property
is less than what you owe. More and more consumers are considering a short sale
as opposed to letting their home go into foreclosure. The simple term for a short sale is selling your property for less than what you owe. It is subject to certain requirements that lenders review before they will approve the request. To understand a little more deeply there are three important parties in the short sale process, the lender, the buyer and the seller. A short sale does not become good news to the seller of the house on a wider scale. It comes into play in time of financial difficulties when you discover the total amount you have is less than the total mortgage so it is impossible for you to pay your mortgage in full. An example, suppose you have a mortgage that is worth $800,000 and you are paying your mortgage then something catastrophic happens like losing your job or facing a major medical problem and you can no longer afford to pay that mortgage. In good times, you could sell your house and make enough money from the sale where you could start over, but now you are considering a short sale instead. First, you must find a buyer that is willing to pay for the house, and then you can approach your lender and tell them of your intentions to do a short sale in the property. The lender will then decide if they will consider a short sale on your property and will assess the value of the house and compare it with the marker value of similar properties. If the lender finds it acceptable then they can accept the house to be short sold for say $650,000 therefore, you would be saving $150,000 on your mortgage.   Short selling your property is very critical, as the lender simply forgives the amount by accepting a relatively lower than market value of the loan so you are saving in the long run. There are advantages to short selling your property, as the buyer gets the house cheaply the seller retains a good credit score while the lender sells the house at a reasonable market price without having to undergo the stress and expense of waiting for several months to sell the house or risking more money by a costly foreclosure. A foreclosure is a legal process where the lender attempts to recover the balance of what is owed on the mortgage from a borrower that has stopped paying. The differences in a foreclosure as opposed to a short sale, if you do a short sale on your property your credit score is less affected and you would have to wait about two years before
applying for another mortgage at a reasonable interest rate. In the case of a
foreclosure you may have to wait anywhere from three to seven years in order to
apply for another mortgage. The exact period may be determined by circumstances such as illness, death or accident that may result in injury or possibly a job transfer.   In some instances, you may qualify for some incentives
from the lenders and the government up to $35,000as a closing balance that
could help in relocation. Generally a short sale has less damaging effects than
a foreclosure as it harbors more advantages to the seller, buyer and the lender
rather than a more expensive alternative, foreclosure process.   Remember
the individual lender must approve the short sale process and each lender has
certain criteria that has to be met before a short sale is approved.

Short Sale – What is it?

Christopher Ariano — Tue, 27 Mar 2012 06:34:50 +0000

The Short Sale process is not as simple as some would think. Consumers are lead to believe a Short Sale is a way to avoid foreclosure however not everyone would
qualify. You need to know the facts before considering this option. Let us
explore in more detail what a Short Sale is. This is an option for some homeowners use when the bank, credit union or other types of lenders they have
borrowed from provides them with the option of selling their home to a third
party (generally the lender) for a price that is much lower than what they owe
on the loan. Generally, if the homeowner is upside down on their loan a Short
Sale may be an option. The lender must approve this before it can go through. There is usually more than one reason lenders would choose to accept a Short Sale. The key reason is that it would cost them much less, than a foreclosure would. The expense to a lender for a foreclosure is astronomical so the alternative for a lender would allow them to recover at least a partial amount of what they would otherwise completely losing in a foreclosure sale. When a lender has several home loans that are non-performing, the Federal Reserve will often lower the amounts or even suspend funds they provide to the lenders. There are different options available so we will cover some of them. A deficiency judgment in using this option for a Short Sale option, the homeowner would be held liable to pay whatever difference there may be in a Short Sale and the balance of their mortgage loan. It is important to note, that Short Sale information of a deficiency judgment will stay on a homeowners credit report until the balance is paid. Short Sales of this nature typically take numerous years to pay off, as the remaining balance generally equals thousands of dollars. Another option is payment in full with pursuit of a deficiency judgment. This particular type of Short Sales option is
the most common and popular choice among homeowners as they do not have to
worry about the moneys that are required above the amount of what their
property would sell. By this means, they are free and clear of obligations after the process is complete of Short Selling their property. It is best to consult with your particular lender to find out what their qualifications are related to the Short Sale option. There are common Short Sales processes used by most lenders, the first step would be to contact your lender to discuss the options available to you regarding Short Sales. Each lender has procedures and qualifications so it is best to find out what your lender needs to start the process. The next step involves homeowners sending a letter to the escrow company and the property buyer that will list their detailed Short Sale information and authorizing the release of this information. The next step is the settlement statement holding the Short Sale information to be reviewed by the lender. This statement includes the price the property will be sold for, and itemized list of expenses involved, balances on the loans that remain and any other fees that may be applied to the closing of the entire process of the Short Sale. In addition, the homeowner is required to write a letter of hardship that would include in-depth details in regards to the financial difficulties the homeowners are facing. Other items the lender will also need to see validate the necessity for Short Sales that include information of investment accounts, checking and savings accounts, pay stubs from the employer and any other financial records that would indicate a need for a Short Sale. The overall condition of the property as well as the prices of homes comparison that will determine a fair market value will be obtained by the lender through information the broker supplies. Lastly, the mortgage lender to determine if the amounts and conditions are reasonable and to ensure the commission on the real estate is acceptable will scrutinize all aspects of the Short Sale agreement.

There is a lot to consider for a Short Sale. In order to make an informed decision it is best to consult an expert in this area to make sure you make the right decision for your circumstances.

BANKRUPTCY TERMINOLOGY CONCLUDED

Christopher Ariano — Sun, 25 Mar 2012 04:34:01 +0000

In this article, we will conclude the bankruptcy terminology piece so you will have a better understanding of these terms if you come across them in the future. The last terminology explained was non-dischargable debt. The next term is related it is objection to discharagability, which is a trustee’s or creditors objection to the debtor’s being released from personal liability for certain discharagable debts. Common reasons include allegations that the debt to be discharged was obtained by false pretenses or that debt arose because of the debtor’s fraud while acting as a fiduciary. The term objection to exemptions is used when a trustee’s or creditor’s attempt to claim property as exempt from liquidation by the trustee to creditors. This could be property the debtor claimed as exempt, when it did not qualify or there was equity beyond the required exemption amount. This happens more in chapter 7 cases more than any other chapters of the Bankruptcy Code. The next term used in bankruptcy is a party in interest, who is a party that has standing to be heard by the court in a matter to be decided in the bankruptcy case. The debtor, U.S. trustee, or bankruptcy administrator, the case trustee and creditors are parties in interest for most matters. A personal identifier is used to
identify the parties, for example social security numbers, financial account numbers, dates of birth, names of minor children and home addresses (in criminal cases only). The next term is used in a chapter 11, 12 or 13 case, which is a plan. This term is a detailed description of how the debtor proposed to pay back creditors over a certain period of time and is subject to the bankruptcy court’s approval of such plan. Plaintiff, used when a person or business files a complaint
against another person or business with the court. A post petition transfer is a transfer of debtor’s property after the commencement of the bankruptcy case. Preferential debt payment is any payment made to a creditor within 90 days (or insider within 1 year); prior to the bankruptcy petition being filed that gives the
creditor more than the creditor would receive in a chapter 7-bankruptcy case. Priority is the Bankruptcy Code’s statutory ranking of unsecured claims that determine the order of which those claims are paid if there is not enough money to pay all unsecured claims in full, for example money owed to a trustee, or pre
petition alimony or child support which must be paid before any general
unsecured creditor, like a credit card or trade debt. A priority claim is an
unsecured claim that is entitled to be paid ahead of other claims that are not
entitled to priority status. This refers to the priority which these unsecured
claims are paid. Proof of Claim is another common term used in bankruptcy and is a written statement and verifying document filed by a creditor that describes the reason the debtor owes the creditor money. An official form is used for this purpose and is used in chapter 13 and asset chapter 7 cases as well as chapter 11 cases. Property of the estate is all legal or equitable interests of the debtor in property as of the time of filing of the bankruptcy case. Only in chapter 7 cases is a reaffirmation agreement is used. This term is an agreement by a chapter 7 debtor to continue paying on a debt that is dischargeable, for example a car loan, after the bankruptcy to keep the property that would otherwise be surrendered through the bankruptcy. In some chapter, 7 cases retain and pay is used which the debtor chooses to pay. In the legal world not just in bankruptcy the term redact is used meaning a blacking out of personal identifiers like social security numbers, financial account numbers, dates of birth, and minor children names. This is required in bankruptcy cases and it is the responsibility of the filer, be it the attorney, or whatever party is filing the document. Another term you will hear pertaining to a bankruptcy case is a secured creditor, which is a creditor holding a claim against the debtor who has the right to take hold or sell the property of the debtor in satisfaction of the debt owed. This brings us to a related term secured debt. This term is a debt secured by a mortgage, pledge of collateral or other lien or a debt for which the creditor has the right to pursue specific pledged property upon default. This includes a mortgage, automobile or tax liens. Schedules are detailed lists filed by the debtor along with (or shortly after filing) the petition showing the debtors assets, liabilities, and other financial information. Statement of financial affairs is also part of the bankruptcy and is a series of questions the debtor is required to answer in writing concerning sources of income, transfers of property, lawsuits by creditor and others. In chapter 7 cases, a statement if intention is required to be completed by the debtor as it pertains to the intentions of the debtor with regards to secured property of the bankruptcy estate, for example an automobile or home. The last few terms used often in most bankruptcy cases, are trustee, which is the representative of the bankruptcy estate who exercises statutory powers for the benefit of unsecured creditors under the supervision of the bankruptcy court and direct supervision of the United States trustee or bankruptcy administrator. The trustee is an individual or corporation appointed in all chapters 7, 12, and 13 cases and some chapter 11 cases as well. Their responsibilities include reviewing the debtor’s petition and schedules and bringing actions against creditors or the debtor to recover property of the bankruptcy estate. In chapter 7 cases, the trustee liquidates property of the estate and makes distributions to creditors. Trustee in chapter 12 or 13 cases have similar duties but also have the added responsibility to oversee the debtor’s plan, receiving payments from the debtor and distributing
those payments to creditors according to the approved plan. The last term is
United States trustee, which is an officer of the Justice Department
responsible for supervising the administration of bankruptcy cases, estates;
trustee’s and monitors plans, and disclosure statements in chapter 11 cases and
performing other statutory duties. The most used terminology of the Bankruptcy Code has been explained in this and prior articles and is meant to educate you for future reference. An experienced bankruptcy attorney can always explain in more detail as it relates to your specific case so you have a clear understanding of these terms.

Bankruptcy Terminology Continued – Terms You Need To Know

Christopher Ariano — Fri, 23 Mar 2012 02:04:31 +0000

In this follow up article, we will discuss more bankruptcy terminology most commonly used. The next term exempt, is a description of any property that a
debtor may prevent creditors from recovering. Sometimes in a chapter 7 case if
there is property of the debtor’s that is nonexempt the trustee can sell that
property and pay creditors. There are limits of exemption amounts for each category that varies from state to state. It is best to confer with your experienced bankruptcy attorney to find out what the limits are in your state. Family farmer or fisherman are terms used in a chapter 12 bankruptcy case and is an individual, individual and spouse, corporation, or partnership engaged in farming or fishing operation meeting certain debt limits and other statutory criteria for filing a petition under this chapter of the Bankruptcy Code. Bankruptcy trustee’s look for fraudulent transfers, which is a transfer of the debtor’s property made with the intent to defraud or for which the debtor receives less than the transferred property’s value. In cases like that, it could cause the bankruptcy case to be dismissed and possibly sanctions held against the debtor. A fresh start, is the characterization of a debtor’s status after bankruptcy, for example free of most debts, which is one of the purposes of the Bankruptcy Code. The insider term is used meaning any relative of the debtor or of a general partner of the debtor, partnership which the debtor is a general partner, a general partner of the debtor or corporation which the debtor is an officer, director or person in control. The Statement of Financial Affairs asks this question and if it is true, it must be answered truthfully. A joint administration is a court approved mechanism under which two or more cases can be administered together, assuming of course, there are no conflicts of interests, separate businesses or individuals can pool their resources and hires the same professional. A joint petition is common and it is when a husband and wife file together. Liquidation is a term used in a chapter 7 case and it means the sale of the debtor’s property with the proceeds of that property used to pay creditors. Which brings us to a related term liquidated claim, and that is a creditor’s claim for a certain amount of money. This next term implemented when the bankruptcy law changed in October of 2005 and that term is the means test. The means test used to determine whether an individual debtor’s chapter 7 filing is presumed to be an abuse of the Bankruptcy Code requiring the dismissal or conversion of the case (generally to a chapter 13). Abuse is presumed if a debtor’s aggregate current monthly income over 5 years, net of certain statutorily allowed expenses is more than $11,725 or 25% of the debtor’s nonpriority unsecured debt, as long as that amount is at least $7,025. The debtor may rebut a presumption of abuse by a showing of special circumstances that justify additional expenses or adjustments of current monthly income. There is a chapter 13 means test as well. Another term used in bankruptcy is motion to lift stay, which is a request by a creditor to allow them to take action against the debtor or his/her property that would otherwise be prohibited by the automatic stay. Creditors usually request this motion when they want to recover secured property, for example a home or car. Most chapter 7 cases are considered no asset cases, meaning there are no assets to recover that could be used to satisfy a portion of a creditor’s unsecured claim. However, if assets are uncovered by the trustee then the chapter 7 case is converted to an asset case and a notice to creditor’s is sent advising them to file a claim and gives them a specific amount of time in which to file that claim. This brings us to a nondischarageable debt. Debts that cannot be discharged in a bankruptcy, an example is a home mortgage, debts for alimony or child support, certain taxes, debts for most governmental funded or guaranteed educational loans or benefit overpayments, debts rising from death or personal injury caused by an intoxicated driver, or under the influence of drugs and debts for restitution, or a criminal fine included in a sentence on the debtor’s conviction of a crime.

There are more terms in the Bankruptcy Code that will be covered so we will explain those in the next article. If you are thinking about filing for bankruptcy contact an experienced bankruptcy attorney to discuss your situation.

Bankruptcy Terminology – Continued

Christopher Ariano — Wed, 21 Mar 2012 04:29:01 +0000

Many consumers that file bankruptcy do not have a clue about what the terminology means. In this article, we will continue to explain in non-technical language what some of the terms used in bankruptcy mean. We left off with Confirmation, which describes the bankruptcy’s judge’s approval of a plan of reorganization or liquidation in chapter 11 cases or a payment plan in a chapter 12 or 13 case. The term Consumer Bankruptcy is a bankruptcy case filed to reduce or eliminate debts that are primarily consumer debts, which brings us to the term Consumer Debts, which are debts incurred for personal, as opposed to business needs. Sometimes in a bankruptcy case, there are Contested Matters that are matters other than objections to claims that are disputed but are not within the definition of an adversary proceeding contained in Rule 7001, which we discussed in an earlier article. A Contingent Claim means a claim that may be owed by the debtor under certain circumstances for example where the debtor is a cosigner on another person’s loan that fails to pay. Credit Counseling is a common term in the bankruptcy world these days. Generally, it refers to two events in individual bankruptcy cases, the first is individual or group briefing from a nonprofit budget and credit counseling agency that individual debtors must attend prior to filing under any chapter of the Bankruptcy Code. The second is the instructional course in personal financial management in chapters 7 and 13
that an individual debtor must complete before a discharge is entered. There are exceptions to both requirements on certain categories of debtors, exigent circumstances, or if the U.S. trustee or bankruptcy administrators have determined that, there are insufficient approved credit counseling agencies available to provide the necessary counseling. The Creditors Meeting which is also called the 341 meeting, is a meeting of creditors required by section 341 of the Bankruptcy Code at which the debtor is questioned under oath by creditors, a trustee, an examiner or the U. S. trustee about his/her financial affairs. This meeting is usually very short and most of the time the creditors do not even show up. The next term is current monthly income, which is the average monthly income received by the debtor over the six calendar months before commencement of the bankruptcy case, including regular contributions to household expenses from a spouse, or non-debtor’s income, if there is not joint filing, but this does not include social security income and certain other payments made because the debtor was the victim of certain crimes. A debtor is a person who has filed a petition for relief under the Bankruptcy Code using any chapter of the Code for protection. Defendant is used in the bankruptcy arena as well as the litigation areas and it is an individual or a business against whom a lawsuit is filed. The discharge terminology is used in bankruptcy meaning a release of a debtor from personal liability for certain dischargeable debts pertaining to the Bankruptcy Code, a discharge releases a debtor from personal liability for certain debts known as dischargeable debts and prevents the creditor from taking any action towards the collection of those debts. This means the creditor is prohibited from calling, sending letters, filing a lawsuit, or executing on a judgment against the debtor on the discharged debt. This brings us to what a dischargeable debt is and that is when the Bankruptcy Code allows a debtor’s personal liability to be eliminated. In a chapter 11 case, a disclosure statement is a written document that is prepared by the chapter 11 debtor or other plan proponent designed to provide “adequate information” to creditors to enable them to evaluate the chapter 11 plan of reorganization. If this statement is not filed within, the time the court appoints the case could be dismissed for the debtors’ failure to provide the information timely. In a bankruptcy case for any chapter of the Bankruptcy Code equity means the value of the debtor’s interest in property that remains after liens and other creditor’s interests are considered. One example of this is if a house is valued at, $100,000 is subject to an $80,000 mortgage then there is $20,000 of equity in the property. There is a term in the bankruptcy schedules for executory contract or lease that generally includes contracts or leases under which both parties to the agreement have duties remaining to be performed and the debtor can either assume the lease or reject it. If it is rejected it must be
surrendered back to the creditor. There is still a lot of terms used pertaining to bankruptcy that still need to be covered. When you file a bankruptcy petition and hire an experienced bankruptcy attorney, they will have the knowledge of all the terms used pertaining to your case so if you are not sure of what they mean your lawyer can interpret for you so you will understand.

Bankruptcy Terminology You Should Know

Christopher Ariano — Sun, 18 Mar 2012 03:30:46 +0000

Many consumers that file bankruptcy do not have a clue about what the terminology used means. In this article, we will attempt to explain in non-technical language what some of the terms used in bankruptcy mean. We will go in alphabetical order to make it easier to follow. The first terminology, Adversary is basically a term that means a lawsuit rising or related to a bankruptcy case that is commenced by filing a complaint with the bankruptcy court. This could be
initiated by a debtors’ attorney against a creditor that has violated some part
of the Bankruptcy Code, for example trying to collect the debt after the
bankruptcy petition if filed which a stay is immediately in affect. Assume is
another term used in bankruptcy meaning an agreement to continue performing
duties under a contract or lease. An example of this would be a debtor leasing
an automobile and wants to keep the lease so they will assume it. The next term, Automatic Stay is an injunction that automatically stops lawsuits, foreclosure, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed. Bankruptcy is a legal procedure for dealing with debt problems if individuals and businesses, specifically, a case filed under one of the
chapters of title 11 of the United States Code (Bankruptcy Code). Another term
used in bankruptcy is the Bankruptcy Administrator, which is an officer of the judiciary serving in the judicial districts of Alabama and North Carolina who, like the U. S trustee, is responsible for supervising the administration of the bankruptcy cases, estates, and trustee’s; monitoring plans and disclosure statements as well as monitoring creditor’s committees. They also monitor fee applications as well as perform other judiciary duties of the bankruptcy court. Bankruptcy Code of course is the informal name for title 11 of the U S Code (11 U.S.C. Section 101-1330), the federal bankruptcy law. The Bankruptcy Estate means all legal or equitable interests of the debtor in property at the time of the bankruptcy filing, which includes all property in which the debtor has an interest, even if it’s owned or held by another person. A Bankruptcy Judge is a judicial officer of the United States district court who is the court official with decision making power over federal bankruptcy cases. The term Bankruptcy Petition is a document filed by the debtor, (in a voluntary case), or by creditors (in an involuntary case), which open the bankruptcy case, (there are official forms used for the bankruptcy petition). There are six (6) chapters of the Bankruptcy Code. Chapter 7 bankruptcy, is a chapter of the Bankruptcy Code providing liquidation,
for example, the sale of the debtor’s nonexempt property and the distribution
of the proceeds to creditors. Chapter 9, provides reorganization of
municipalities (which includes cities, towns, villages, counties, taxing districts,
municipal utilities and school districts. Chapter 11, generally provides for reorganization involving a corporation or partnership, usually a chapter 11
debtor proposes a plan of reorganization to keep its business alive and pay
creditors over time, consumers in business and individuals can also seek relief
under a chapter 11. Chapter 12, provides for adjustment of debts for family farmers and fisherman. Chapter 13, provides for adjustments of debts for an individual with regular income, which allows a debtor to keep property and pay debts over time, usually 3 to 5 years but no longer. Chapter 15, deals with cases of cross border insolvency. Another term used is chapter 13 trustee, which is a person appointed to administer in a chapter 13 case, a chapter 13 trustee’s responsibilities are similar to those of a chapter 7 trustee however, the chapter 13 trustee has the additional responsibility of overseeing the debtors’ plan, receiving payments from the debtor and disbursing those funds to the creditors. A claim, is a creditors’ assertion of a right to payment from the debtors or the debtors property. Complaint is a term used in bankruptcy, which is the first or initiatory document in a lawsuit that notifies the court and the defendant of the grounds claimed by the plaintiff for an award of money or other relief against the defendant. The confirmation term is the bankruptcy judge’s approval of a plan of reorganization or liquidation in chapter 11 or payment plan in chapter 12 or 13. There are additional terms to learn about that we will continue in the next article. The terminology in bankruptcy is very important to know and understand. An experienced bankruptcy attorney can help you understand what these terms are in more detail as it pertains to your individual case.

Chapter 7 Filing Fee – Can it be Waived?

Christopher Ariano — Sat, 17 Mar 2012 03:07:50 +0000

Have you contemplated filing Bankruptcy but do not have enough money for the filing fee? Well there is a way that the filing fee can be waived but it must conform to the Official form otherwise you may have to pay the fee. When a chapter 7 case
is filed the filing fee is paid at the same time, however in lieu of paying the filing fee or filing for an installment application a debtor may file the application for the filing fee at the same time the petition is filed. The court initiates the case in the same manner by assigning a case number and processing all the paperwork. There is a standard of eligibility that must be met in order for the debtor to file the application for a waiver or deferment f the filing fee. A debtor who has income less than 150% of the poverty guidelines applicable to the family size and that is unable to pay the filing fee in installments. The United States Department of Health and Human Services (DHHS) defines poverty guidelines separately for each state, which includes District of Columbia and Hawaii. The income comparison on the poverty guidelines take the total combined monthly income as reported on line 16 of schedule I of the bankruptcy schedule. However, food stamps and housing subsidies are excluded in this figure. The income of the spouse is included whether or not a joint petition is filed unless the spouses have separate households and do not file the petition jointly. Also included in the total monthly income is any dependant in the household that has income. Family size is defined as the debtor, spouse, and any dependants listed on schedule I in the
bankruptcy schedules. The bankruptcy court considers the totality of the
circumstances in determining if the debtor is unable to pay the filing fee. A
debtor is not disqualified from a waiver of the filing fee just because the debtor has either paid or promised to pay an attorney, debt relief agency or document
preparer. Regardless, it is the debtor’s responsibility to prove to the court the filing fee should be waived.

In a case where the debtor files a chapter 7 and the filing fee is waived but the
case gets converted to a chapter 13 case, the debtor is responsible for paying
the chapter 13 filing fee, however the conversion order give the debtor ten (10) days to either pay the filing fee in full or in installments. The court can vacate an order waiving the filing fee if developments in the case or administration of the estate demonstrate the wavier was initially unwarranted. This is up to the individual court to decide. In addition, other fees may be waived at the discretion of the bankruptcy court for individual debtors whose filing fee was waived. If the debtor is approved for installment payments, they must certify they will not make additional payment or transfer any additional property to an attorney or other person for services in connection with the case until the filing fee is paid in full.

An experienced bankruptcy attorney can advise you in your individual circumstances if you are unable to pay the filing fee or if you case does convert to a chapter 13 and the court is requiring you to make the chapter 13 filing fee or risk the case being dismissed. It is always a good idea to consult a bankruptcy attorney.