The Top 5 Questions About Arizona Bankruptcy in August 2012

Published By:The Law Offices of Fife & Cesta

By Thomas Cesta1811 S. Alma School Road, Suite 270

Mesa, Arizona 85210Office: 480-850-6541

Question 1: If I am in the middle of filing chapter 7 bankruptcy and am in the middle of a move. Is it ok to buy appliances and furnishings?

I would just like some information regarding if it is ok for me to purchase necessary appliances and furnishings even though I am currently in the process of a chapter 7 bankruptcy. And if so what should i set my limits at.A: As long as the value of your assets will still be less than your exemptions, there is no specific amount you should spend.One caution I would give you is that you should consider using an attorney and not file the case on your own. I have seen too many people file on their own and not consider all of the exemptions and what to do if you are over, and end up costing themselves more, often a lot more, than the attorney would have cost.

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The Law office of Fife & Cesta | 1811 S. Alma School Rd. Mesa Arizona 85210 | 480-850-6541 | http://fifecestalaw.com/

Question 2: Can a large paycheck be an issue in a chapter 7 bankruptcy?

I received one lump sum check, my balance of contract for 11-12 yr. On June 7, I received a paycheck from my school district. This was the "balance of contract" check which equals 4 paychecks ( I do not get paid in the summer). My next paycheck will not come until August. I am afraid that the trustee/courts will see the large amount of money and demand that it be paid to creditors, but it is no different than if I received a check every 2 weeks throughout the summer, just received it all at once rather than every 2 weeks. Are there any provisions for this in chapter 7 bankruptcy? Do they consider the fact that educators are in this boat during the summer?A: The Court/Trustee is not going to look at it as odd. The bigger problem is the impact on the means test. If you have already filed, there is no problem and no one will look at it. But if you have not filed, then the large paycheck, coming during the 6 month look back period, will artificially increase your average monthly income. To adjust for that, you may need to wait until the end of summer to file. I know that it will be included, if you have not filed, because it is computed in full month increments and you got the check last month.Another problem will be still having any of the money in your account at the time of filing. If you have not filed yet, you should really consider using an attorney to properly plan when to file and to deal with exemptions and with non-exempt property. I have seen far too many people file on their own to save money, only to give up more assets than the attorney would have costRe-Published from: AVVO Legal Questions & Answers

The Law office of Fife & Cesta | 1811 S. Alma School Rd. Mesa Arizona 85210 | 480-850-6541 | http://fifecestalaw.com/

Question 3: How do I proceed after a bankruptcy discharge in Mesa Arizona?My Chapter 7 was discharged 11/2011. I know a discharge letter was sent to my creditors, but, I filed pro se. I am still being contacted by creditors. Do I send a copy of my discharge letter to the credit agencies?A: As long as your creditors were listed in the bankruptcy schedules, the discharge order applies to them. The first thing to do is to remind them of this by writing to them, and include a copy of the discharge order. Then, if they continue to contact you, hire a Mesa bankruptcy attorney to represent you in an adversarial action. The Court can impose sanctions against the creditors for violation of the discharge order, including attorneys' fees.If you did not list the creditors in the bankruptcy, then neither the discharge order, nor the FDCPA prevents them from contacting you. However, if your case was a no asset case, you may be able to list them even at this late juncture if you can show that you did not identify them until now. You should not attempt this on your own as it is much more involved than merely filing amended schedules.However, assuming you did list them, and once your letter or an adversarial action stops them from pursuing you, you should also get your credit reports, which you can get for free each year by law at AnnualCreditReport.com. Then, dispute every negative entry and identify that the debt was discharged in bankruptcy. This will help you rebuild your credit.Another idea is to open at least one credit card, and pay your electric bill with it. Make one minimum payment, then pay the card in full after you get the next statement. This will cause the card to be reported as having a balance, then being paid. Repeat this every couple months for about a year. The regular use will help your credit; but paying it off after a cycle keeps the cost of finance charges down. And because you are using it for something you would pay anyway, you should have the funds to pay it in full.Re-Published from: AVVO Legal Questions & AnswersThe Law office of Fife & Cesta | 1811 S. Alma School Rd. Mesa Arizona 85210 | 480-850-6541 | http://fifecestalaw.com/

Question 4: What deductions are used to determine disposable income in the case of wage garnishment?If a wage garnishment is approved, what deductions are made to determine disposable income? Is it only Federal, State and Medicare? Does it include medical/life/dental insurance premiums paid by the employee? What about deductions for 401K? Payments being made to repay a loan from 401K? I'm trying to get an estimate of what the garnishment amount would be assuming the court awards the max 25% deduction. I believe I understand the formula to be used on the disposable income, but need to be clearer on what the exempt deductions are. We really want to avoid bankruptcy if there is any way possible. Also, I was told that if you were in an approved debt counseling program it may help w/the garnishment. True? Thank you for your help.A: In Arizona, the Controlling Statutes are ARS 12-1598.10, and 33-1131. The deductions are only those which are required by law to be withheld. That will mean Federal and State income tax withholdings and FICA, but will not include repayment of a 401K loan, or deductions for a pension or retirement plan, unless plan is of a certain type. Teachers have a required contribution, as do most government employees. Also, if the deduction is required by Court order (such as a child support order), this will also be included.There is a 25% maximum garnishment, so if you get more than one garnishment, only one can be collected at a time, unless they agree to each accept a share of 25%, which rarely happens. However, you can also petition the Court to reduce the garnishment to 15% if you can show an extreme financial hardship, and in my experience the Court view this broadly. If you want to make this argument, the Clerk's Office has a self-help center online, or at the Court, with all the forms you need.Re-Published from: AVVO Legal Questions & Answers

The Law office of Fife & Cesta | 1811 S. Alma School Rd. Mesa Arizona 85210 | 480-850-6541 | http://fifecestalaw.com/

Question 5: Co signer on a RV loan with ex in AZ. Divorce decree awarded him the RV and financial responsibility of it.

He did not get a new loan for it just in his name. Now he is behind on payments and filing bankruptcy and credit union is coming after me.A: As co-signers, the creditor can look to either one of you, or both, to satisfy the debt. Unfortunately, this means that when he files for bankruptcy, the creditor will still be able to get the money from you.Depending on the amount of debt this is, and what other debt you have, you may also want to consider filing a bankruptcy. You should contact a Mesa bankruptcy attorney near you to discuss the pros and cons of filing.But if a bankruptcy is not for you, then you may instead want to contact the lender to negotiate the debt.* Tom Cesta is an Attorney with Fife & Cesta, a compassionate bankruptcy firm conveniently located off the US 60 in Mesa, Arizona. The answers given here are based on the information in the question, but for a complete answer you should have a consultation with an attorney you trust. Call now for a free bankruptcy consultation. We carefully evaluate your situation and give you real advice

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The Law office of Fife & Cesta | 1811 S. Alma School Rd. Mesa Arizona 85210 | 480-850-6541 | http://fifecestalaw.com/