Often when meeting with clients that have previously met with other counsel, they indicate that they had not seen the debt relief agency disclosures I provide them at the start of the initial consultation.  While the requirements for such disclosure seems clear in 11 U.S.C. §527, there appears to be lack of recognition or diligence by many counsel in following the law.   This issue came back to bite debtors' counsel in In re Davis, 2019 Bankr. LEXIS 2771, Case #16-33116 (Bankr. N.J. 29 August 2019).  This involved a chapter 13 case where the debtor sought disgorgement of counsel's fee asserting that counsel colluded with the trustee by failing to object to the trustee's certification of default and allowing a late mortgage claim.    At the hearing on the motion, the court sua sponte raised the issue of compliance with §527.  Counsel initially appeared unfamiliar with these requirements, and ultimately acknowledged that he failed to give the debtor the §527 disclosures in writing as required by the Bankruptcy Code.   §§526-528 set forth certain obligations for 'debt relief agencies' (debtor attorneys), dealing with 'assisted persons' (debtors).  A debt relief agency is any person who provides any bankruptcy assistance to an assisted person in return for payment1, and includes consumer bankruptcy attorneys.  An assisted person is any person whose debts consist of primarily consumer debts and the value of whose nonexempt property is less than $192,000.2  Section 527 requires certain disclosures to debtors, including written notice as to the requirement to provide accurate and complete information in the petition and disclosure of all assets and liabilities.  §528 requires that a contract between counsel and debtor be in writing and clearly and conspicuously explain both the scope of services that counsel will provide and the fees or charges for such services.  The contract must be entered within 5 days of the first date on which counsel provided assistance to the debtor.  Under §526(c) any contract that does not comply with the requirements of §§527 or 528 shall be void and may not be enforced by any Federal or State court, and such counsel shall be liable to the debtor in the amount of any fees or charges counsel received, for actual damages, and for reasonable fees and costs if counsel is found to have intentionally or negligently failed to comply with any provision of §§526-528.  The court in In re Seare3 order disgorgement of all of counsels fees where though he provided a written contract with the debtor at the initial consultation, counsel had not signed such contract, and failed to clearly and conspicuously explain the scope of services and fees when the debtor retained him.  Similarly, debtor's counsel in In re Hanawahines4 was ordered to disgorge all fees under §526(a)(1) due to failing to perform all the services promised in the retainer agreement.  The court considered it incredible that counsel not only violated the Bankruptcy Code requirements, but that he refused to acknowledge that he committed a serious error.  The court found counsel's actions egregious due to the nature of the case, as debtors are particularly vulnerable individuals.  The court ordered disgorgement of the $3,473.07 legal fees and $430 in costs debtor had paid to counsel.1 11 U.S.C 109(12A)↩2 F1 U.S.C. 109(3)↩3 493 B.R. 158, 214 (Bankr. D. Nev. 2013), affirmed 515 B.R. 599 (B.A.P. 9th Cir. 2014).↩4 577 B.R. 573, 579-80 (Bankr. D. Haw. 2017).↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com

From: Time.ComBy: Sen. John Thune and Sen. Mark Warner https://time.com/5662626/student-loans-repayment/

A stroke, or cerebrovascular accident (CVA), is a serious, potentially life-threatening condition that occurs when a blood vessel ruptures or creates a blockage, preventing normal flow of blood to the brain. Sometimes, this blockage resolves on its own, restoring normal blood flow. When this occurs, the event is described as a “mini” stroke, or, to […] The post Can You Get Disability for a Mini Stroke in New Jersey or Pennsylvania? appeared first on .

If you are involved in a minor car accident that results in minimal or no damage to the vehicles, such as a fender bender where nobody involved is injured, are you required to report the accident to the police? Here, traffic and automobile accident attorney Jeffrey Scholnick explains whether or not minor vehicular accidents need to be reported. Do I Need to Report A Fender Bender? While some states require you to report any type of accident, no matter how minor, Maryland law states that minor vehicular accidents that result in no injuries and little-to-no damage to the vehicles involved are not required for investigation by police. Example accidents that do not legally require the police to be notified include minor fender benders such as a vehicle tapping the bumper of another vehicle at a stop sign or red light. While there may not be a legal requirement to report fender benders, it is always advisable to report a vehicular accident, no matter how seemingly minor. It is a legal requirement, however, to exchange information with the other driver in a fender bender and move safely off the road if possible. When Am I Required to Report a Vehicular Accident? Legally, the only accidents in which police involvement is required are instances where: an individual is injured, a vehicle is required to be towed or cannot be moved safely, a driver is under the influence of drugs or alcohol, a driver does not have a license, public property is damaged, a domestic animal is hit, a hit-and-run occurs, or if a driver refuses or is unable to exchange information. Am I Required to Notify My Insurance Company? While it is not a legal requirement to report a minor accident to the police, it is typically a requirement to notify your insurance company, no matter how seemingly insignificant the accident was. In addition, it is always recommended to notify law enforcement of the accident, even if it appears to be minor. This is because the effects of accident-related injuries, such as bruising, stiffness and pain, can be delayed after an accident occurs—in other words, if you fail to file a police report, and later realize that you are hurt and that your car experienced more damage than you originally noticed, this could result in a liability dispute if you later claim that an accident did happen and caused personal injury. In order to obtain a record of exactly what happened at the scene of an accident to protect you from a false or exaggerated claim later on, it is best to notify law enforcement about a fender bender. They may only require a mere exchange of information at the scene, which will provide the security that the incident did occur in case it is later disputed. Discuss Your Car Crash Claim With Car Accident Attorney Jeffrey Scholnick Because more than half of all vehicular accidents in Maryland result in personal injury, it is recommended to involve law enforcement in an accident, even a minor fender bender, to protect you and document what actually happened in case your claims are ever disputed. It is also advisable to discuss your individual case with a car accident attorney, such as car accident attorney Jeffrey Scholnick, before you notify your insurance company about an accident. If you were involved in a car accident in the state of Maryland and seek a qualified car accident attorney to provide you with legal counsel, contact The Law Offices of Jeffrey Scholnick today.  The post Fender Benders: Do Minor Vehicular Accidents Need to Be Reported? first appeared on Scholnick Law.

How Payday Loans Could Cause a Potential Bankruptcy We all get into a money crunch from time to time. Then we end up using credit cards to take care of our needs, or we might ask a friend or family member for a small loan. But if you don’t have those resources available or if your debts have gotten to the point that you can’t keep up anymore, you may have to start looking for alternate options. A payday loan is a popular option because it offers instant cash for those who don’t have good credit or who have limited financial resources. The only thing you have to do to get the loan is show that you have a paycheck coming. The problem with payday loans is that they are way too accessible to those who shouldn’t be taking on more debt and that they come with outrageous interest rates. Many payday loans charge as much as 400 percent interest. You can easily pay back the loan two or three times over in a very short amount of time. Repaying the Loan When you first take out a payday loan, you may have the option to write a check for the full amount plus any interest and fees. You can post-date the check and leave it with the lender. When you are paid, the lender will cash the check and the loan will be paid in full. The problem with this scenario is that you are likely going to find yourself in the exact same situation that led you to taking out the loan in the first place. You are going to be left with no money until your next paycheck comes. You may even be in the negative a bit if you didn’t have enough to cover interest and fees. You’ll either have to take on another loan or find other ways to borrow, putting you in a perpetual debt cycle. You can also choose to pay the loan back yourself in increments, but you’ll be running against the problem of the excessive interest rates. Your debt will quickly balloon, and you will add to your financial pressures. You’ll soon get harassing phone calls from the payday lender, and you may even face threats of a lawsuit. You will have only compounded your financial problems. Bankruptcy for Debt Relief Filing for bankruptcy is an effective way to get the debt relief you need without creating more problems for yourself. If you file for Chapter 7 bankruptcy, you may be able to discharge all your unsecured debts, which include credit cards, payday loans, medical bills, and other personal loans. You can file for bankruptcy to avoid taking out a payday loan, or you can file for bankruptcy to deal with the problems caused by taking out a payday loan. If you file for Chapter 13 bankruptcy, you can get a three- to five-year repayment plan that lets you get a better handle on your debts. Your interest rate will be lowered, and your monthly payment will be more affordable. Any debt leftover at the end of the repayment period can likely be discharged. Bankruptcy can help you get out from under crushing debt and start taking control of your finances again. In certain cases, it can even help you hang onto your home or your vehicle. It can free up the money each month to take care of your needs, to minimize your debt, and to start building the safety net you don’t have now. Talk to an experienced bankruptcy lawyer in Mesa to learn how bankruptcy might be able to help you get debt relief. My AZ Lawyers helps people in the Phoenix, Glendale, Mesa, and Tucson areas get debt relief through bankruptcy. Talk to one of our bankruptcy attorneys about whether you qualify for Chapter 7 or Chapter 13 bankruptcy. Your lawyer will thoroughly review your finances to help you understand which filing would help you get the maximum financial benefits. Your attorney will then file quickly to help you get debt relief as soon as possible. Contact us today o speak with an experienced bankruptcy attorney about your options. We’re ready to help you start rebuilding a life free of debt. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 399-4222 The post How Payday Loans Could Cause a Potential Bankruptcy appeared first on My AZ Lawyers.

Is your monthly car payment too high? Are you struggling to pay your monthly bills, and are in danger of falling behind or have already fallen behind on your car payments? Chances are you are reading this article because you have a monthly car payment and other bills you are having trouble paying, and you are considering filing bankruptcy. You may have heard that filing a bankruptcy petition entitles you to modify your car loan and pay less for your car than you promised to pay when you purchased it. This is true, if certain conditions are met. This article addresses the effect of filing a Chapter 13 bankruptcy petition upon your obligations under a retail installment contract for the purchase of an automobile. In other words, this article will tell you the basics of when and how you can modify your car loan, pay less for your car over a greater amount of time, and keep your car. As a Philadelphia bankruptcy attorney, I have done this successfully for my clients many times. What Does “Cram Down” Mean? When you file a Chapter 13 bankruptcy petition, your creditors are notified that they can file a “claim” in the amount owed by you. If you own a car but still owe money on the loan, that creditor will file a claim for the amount you owe, and that claim is “secured” by that car. However, the timing of the purchase of the car relative to the filing for bankruptcy may serve to greatly reduce that secured creditor’s claim to what the car is currently worth. This reduction is called a “cram down” and is available when you file your Chapter 13 bankruptcy petition 910 days or more after purchasing your car. Any sooner, and you will have to pay the full loan balance owed to that creditor. But if your loan qualifies, and your loan balance is greater than the amount the car is currently worth, you can force that creditor to accept payment of the car’s current value in full satisfaction of the loan just by filing a Chapter 13 bankruptcy petition and proposing to pay the car’s current value over time through your Chapter 13 plan. “Cramming Down” an Auto Loan Reduces Your Debt This may sound complicated at first, but consider this hypothetical example: let’s say you took out a five-year loan when you purchased your car four years ago (that’s 365 days/year multiplied by four years, which is somewhat greater than the 910 days required). With a year left on the loan term, you now owe $6,000 on the loan and you file your Chapter 13 bankruptcy petition. Your creditor files a secured claim for $6,000, but you can show the vehicle is currently worth only $2,500. In this instance you can cram that creditor down and pay that creditor only the $2,500 through your Chapter 13 plan in full satisfaction of this loan and the creditor’s claim.  When you’ve completed your Chapter 13 plan, you own your car. Cram Down Extends the Time to Pay Off Your Car Loan “Cram down” is a powerful tool for a second reason: in this example, not only will your obligation to this creditor be reduced from $6,000 to $2,500, but you will get more time to pay that $2,500 than the year left on the loan term, because that creditor will be paid the $2,500 through your Chapter 13 plan which can typically take three to five years to complete. Therefore, “cram down” not only allows you to pay less for your car in total, but gives you a longer period of time to pay it off, and upon successful completion of your Chapter 13 plan, the car is yours. The Impact of Cram Down on Co-Signers Although this simple scenario is an accurate illustration of the basic principles of “cram down,” many contingencies commonly arise that will affect your ability to cram down a car loan and the extent to which your loan obligation can be reduced. For example, if there was a co-signer on the loan who is not in bankruptcy, that individual’s obligation for the full amount of the loan is not affected by your bankruptcy. This is something you want to consider when contemplating a cram down, and you should consult with your attorney about the ramifications of that for you and for the co-signer. Modifying the Interest Rate and Creditor Resistance The issue of the appropriate interest rate to be applied is a hot subject for debate and requires skillful negotiation with the creditor to avoid paying more over time than you are required to pay. It is understandable that creditors will resist being crammed down. One way in which they do this is to challenge your asserted value of the car and the valuation method used, and assert in turn that the car is worth more than you say it is. The condition of your car and its current value and how to calculate that value are important factors in calculating the cram down, and these are frequently issues that are subject to costly litigation if negotiation is not successful. The issue of valuation also arises in those close cases where the creditor asserts you have “equity” in the vehicle (in other words, you owe less on your loan than what the car is currently worth) and that therefore you must pay the amount due under the loan. However, if you can show that your car is in fact worth less than the amount you owe on the loan, you can still cram this creditor down and pay less. This is Not Advice for Filing Chapter 13 Please take note of this important caveat: this article is not legal advice, nor is it intended to be legal advice. The purpose of this article is merely to illustrate one possible advantage of filing a Chapter 13 bankruptcy petition if you have a car loan that qualifies for “cram down.” This illustration is but one way in which the Bankruptcy Code can be a powerful tool for an honest but unfortunate debtor like yourself, when utilized fully. While it is certainly possible to file your petition pro se, an experienced bankruptcy attorney can guide you through the intricacies of “cram down” and ensure that you pay only what you need to pay for your car and no more.   The post Lower Your Car Payment With Chapter 13 “Cram Down” appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

  In the case In re Green, 2019 Bankr. LEXIS 2643, Case No. 18-80768 (Bankr. W.D. LA, 20 August 2019) the court was faced with an above median income debtor that has surrendered a number of luxury items, but was still wanting to keep and pay for a 2014 Polaris RZR Ranger valued at $5,000, to which the chapter 13 objected.  Mr. Green had been a self-employed contractor whose income dropped from $709,787 in 2017 to approximately $62,325 for the first seven months of 2018.  Three months after filing he obtained new employment as an offshore worker at even less income.  Mrs. Green is a child welfare supervisor netting $2,465.95/mo income.  As of filing, the Greens owned a home, 2 acres of non-adjacent land, a 2018 GMC truck, a 2017 GMC truck, a 2008 Saturn Vue, and 2017 Avis utility trailer valued at $1500, a 2014 Polaris RZR Ranger valued at $4,000, a 2016 Polaris Ranger valued at $12,000, and a 2016 Coachman Camper valued at $35,000.  All but the Saturn and the utility trailer secured loans to various banks.   The original plan provided for $4,050/mo payments and retention of the home and vehicles, but surrender of the non-home real estate, and provided a $18,498 dividend to unsecured creditors, about 27.6%.  After objection by the trustee as to the plan not being filed in good faith because it retained property not reasonably necessary for the support of the debtor or dependents per 11 U.S.C. §1325(b)(2)(A)(i), specifically the $472.94/mo payment on the camper, the $350 lot rent for the camper, and the $4,000 payment for the Polaris RZR; the Greens amended the plan to reduce the plan payments to $300/mo and surrendering the GMC trucks, the camper, the 2 acres, and the 2016 Ranger.  The only collateralized property being retained was the 2014 Polaris and the homestead.   This plan provided $6,833.23 to the unsecured creditors, a 21% dividend.  The Greens also filed an unopposed motion to incur new debt to replace the surrendered vehicles with less expensive ones with a $64,000 total debt.  The trustee refiled the objection that the plan was not filed in good faith, referring to retention of the 2014 Polaris.   In a pre-hearing brief the trustee clarified that rather than seeking to require the Debtors to pay the full current monthly income to general unsecured creditors, it was only seeking to have the $5,000 plus interest being used to pay the Polaris be utilized instead to pay toward unsecured creditors.  The court looked to the code requirements.  §1325(a)(3) requires a court to confirm a plan if it has been proposed in good faith and not by any means forbidden by law.  In the Fifth Circuit, a totality of circumstances test is used to analyse good faith, including 1) the reasonableness of the repayment plan, 2) whether the plan shows an attempt to abuse the spirit of the bankruptcy code, 3) whether the debtor genuinely intends to effectuate the plan, 4) whether there is any evidence of misrepresentation, unfair manipulations, or other inequities, 5) whether the filing of the case was part of an underlying scheme of fraud with an intent not to pay, 6) whether the plan reflects the debtor's ability to pay, and 7) whether a creditor has objected to the plan.  The court found that the amended plan was reasonable in that it reflected the Greens' steady adjustment to the loss of income.  The surrender of the luxury trucks, land, and other expensive items, combined with replacement of the vehicles with less expensive ones evidences the Green's sincere attempt to reorganize under a reasonable plan paying creditors more than they would have received in a liquidation.  The court compared this case to that of Matter of Booker, 735 F.App' 316, 317-18 (5th Cir. 2019) reversing a bankruptcy court's order requiring surrender of collateral securing a loan including a fishing boat, equipment, 3 tvs, and a riding lawn mower as a requirement to find good faith on a 4% dividend chapter 13 plan.  The court concluded that a chapter 13 trustee cannot predicate a lack of good faith on the fact that a debtor retains a fully encumbered asset, especially when the debtor has, as here, added the equivalent of the collateral value to the unsecured distribution.  Similarly, the trustee's objection that the Greens had not committed all their available disposable income to the plan was rejected by the court.  Per Hamilton v Lanning1 post-petition changes in income must be taken into account in computing the disposable monthly income in the means test.   Additionally, disposable income  is what remains after allowed expenses and payments on secured debt.  11 U.S.C. §§1325(b)(2-3) and 707(b)(2).  The amount 'reasonably necessary to be expended' under §1325(b)(2) includes deduction for the payments on secured debts that will be made by debtors during the term of the plan.  The trustee's argument that the allowed payments on secured debts under §1325(b)(2)(A)(i) only includes assets necessary for the maintenance of support of the debtor or dependent circumvents the Code's basic waterfall structure for payment of secured claims before unsecured claims under §§726 and 1326; and rewrites the test computations under §707(b) while making meaningless §1325(b)(3)'s reference to §707(b)(2) as the determination of what is 'reasonably necessary' for above-median income debtors.  Prior to BAPCPA bankruptcy courts had discretion to determine whether debtors' expenses for secured claims were reasonable and necessary for above-median income debtors.  However §1325(b)(3) provides clear Congressional intent to depart from such practice, which finding is supported by a majority of courts that have held that above-median-income debtors may deduct ongoing monthly payments on secured debts in accordance with the formula set forth in §707(b)(2)(A)(iii) for property debtors intend to retain, regardless of whether such payments are subjectively reasonably necessary to be expended for the maintenance of support of the debtors or the debtors' dependents.2   Courts have gone so far as to find that with respect to secured debt on luxury items or excessive vehicles, it is the plan proponent who determines its necessity.3  Rather than being part of the disposable income analysis, the debtor's decisions regarding retention of collateral are part of the 'good faith' factors described above.  Here the Greens have met this good faith requirement by surrendering collateral and replacing vehicles with less expensive versions.   1 560 U.S. 505, 520-21, 130 S. Ct. 2464, 2475-76, 177 L. Ed. 2d 23 (2010).↩2 Baud v. Carroll, 634 F.3d 327, 347-48 (6th Cir. 2011).↩3 Section 707(b)(2)(A)(iii) allows deduction as an expense of payments on secured debt, unless the debtor determines that payment on the outstanding amount of the secured claim is unnecessary by either surrendering the property or avoiding the lien securing the claim. The bankruptcy court did not err in allowing debtors in calculating their disposable income to deduct their secured debt payments on the six vehicles that they intend to retain.In re Welsh, 465 B.R. 843, 851 (B.A.P. 9th Cir. 2012), aff'd, 711 F.3d 1120 (9th Cir. 2013).↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com

   The 11th Circuit Court of Appeals reaffirmed the liberal interpretation of the Florida homestead exemption in Advance Credit, Inc. v. Gamboa (In re Gamboa), 2019 U.S. App. LEXIS 24625, Case No. 18-14367 (11th Cir., 19 August 2019).  The chapter 13 debtor, Gamboa, had been residing in a 40' trailer on the 14 acre property claimed as his homestead since 2013.  The trailer has a living room, two bedrooms, a bathroom, and a kitchen; has electric power, satellite televesion service, water from a well, and is attached to a septic tank.  Gamboa has received mail at the location since 2014.  The property is classified as agricultural land for purposes of Florida's ad valorem tax.   Creditors had obtained judgments against Gamboa in Illinois totaling over $200,000 and perfected the judgments in 2015.  Judge Mark, the bankruptcy judge below had overruled the creditors objections, finding that residing in a property in violation of city or county ordinances or zoning laws does not defeat an otherwise valid homestead claim.1   It also rejected the argument that Gamboa's failure to claim homestead property tax exemption on the property zoned as agricultural defeated the exemptions, as the creditors had failed to show Gamboa had another residence.  Finally, the bankruptcy court after trial held that at the time the judgment was perfected Gamboa indeed intended to make the property his permanent residence and thus qualified for the homestead exemption.  The district court affirmed, accepting as facts 1) at the time the case was filed Gamboa was living in the trailer on the 14 acre parcel outside of a municipality; 2) the parcel was classified as agricultural for property tax purposes, and Gamboa did not claim the property tax homestead exemption; 3) Gamboa was living in the trailer in violation of a Miami-Dade county ordinance; and 4) at all times, Gamboa intended to reside permanently in the trailer.   The court otherwise adopted the bankruptcy court's findings.   The 11th Circuit first examined the applicability of Drucker v Rosenstein, 19 Fla. 191 (Fla. 1882) relied upon by the creditors.  In this case, the debtor had purchased a vacant unoccupied lot, filed a statement in the county alleging it was his homestead, drew up plans and hired a contractor to build a house on the lot, and had lumbered delivered for such purpose.  However, the debtor in Drucker never occupied the lot.  The 11th Circuit found that Drucker stood for the proposition that a person claiming a homestead exemption from forced sale must show he actually occupied the property as a residence.  The Drucker court noted that the residence need not be a house, but could include a tent set upon poles or a cabin erected while building the house.  Given that it is undisputed that Gamboa resided on the property since November 2013, such is sufficient to satisfy Drucker's actual residency requirements.  Nothing in the decisions cited by the creditors requires the trailer to be permitted or permanently placed on the premises in accordance with applicable law and building code requirements for it to qualify as actual residency.  Otherwise, the 11th Circuit likewise adopted the reasoning of the bankruptcy court.  The court did stress in a footnote that the case did not involve a motor home or recreational vehicle that could be used for transportation and is not affixed to real property (though one might wonder how much more fixed a tent is than a recreational vehicle). 1 Judge Mark's full decision in the bankruptcy case can be found at In re Gamboa, 578 B.R. 661, 27 Fla. L. Weekly Fed. B. 133, Case No 16-22495-RAM (Bankr. S.D. Fla. 2017).↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com

New Law Helps Disabled Veterans in Chapter 13 Plans Disabled veterans facing bankruptcy, got a big boost yesterday when the HAVEN Act became law. From now on, disabled veterans can’t be forced to use their veterans disability payment to fund debt repayment plans.  Here in Northern Virginia, there are many disabled veterans, who are also […] The post New Law Helps Disabled Veterans in Chapter 13 Plans by Robert Weed appeared first on Robert Weed - AE.

How to Halt a Wage Garnishment When Filing for Bankruptcy Getting over your head in debt doesn’t just create financial pressures for you. The more delinquent you become with your accounts, the more calls and emails you will get from your creditors, both at home and at work. You will get the calls every day of the week and during the day or at night. It will get to the point that you don’t want to answer the phone or open up your email. As time goes on, your creditors will take more measures to try to get you to pay your debt. Eventually, they may even file for a wage garnishment, which would allow them to automatically deduct your paycheck for a specific amount. Your creditors can’t just decide to do this on their own. They have to petition the court to approve the process, and they are limited in how much they can garnish. The court will determine how much can be garnished based on how much you make, how much you owe, and how long it will take to pay back the debt. You can put an immediate stop to wage garnishment by filing for bankruptcy in Mesa. Whether you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, an automatic stay is issued, which puts a stop to all collection activities, including wage garnishment and harassing phone calls. What Happens after the Automatic Stay Filing for bankruptcy around Mesa and getting the automatic stay issued is just the first step in the bankruptcy process. After that, you will need to provide information about your income and your debts in your filing. If you are filing for Mesa Chapter 7 bankruptcy, you will be asking to have all your unsecured debt, such as credit cards, discharged. You will provide all the information, and you will attend a meting of the bankruptcy trustee to review the information and to get a judgement. Your creditors will have a chance to attend that meeting, but few do. If the Chapter 7 bankruptcy is issued, that debt will be discharged. If the creditor that was garnishing your wages was an unsecured creditor and that debt was discharged, the wage garnishment will be ended permanently. If you are filing for Chapter 13 bankruptcy, you will work with your attorney to develop a debt repayment plan that will last between three and five years. Your Mesa Bankruptcy attorney will negotiate your debt so that you have an affordable monthly payment and perhaps a lower interest rate. You may get some of your debt discharged if you are not able to repay everything within that three- to five-year period. Wage garnishment will stop since you will have a new repayment plan. Qualifying for Bankruptcy You can’t just decide that you want to declare bankruptcy and then file the paperwork. You must meet the eligibility criteria to file. For Chapter 7 bankruptcy, you must meet a “means test,” which looks at how your income compares to the poverty level where you live. The means test also takes your monthly bills into consideration, as well as your assets. Chapter 13 bankruptcy also has eligibility criteria, but they are not as strict. It is best to talk through the criteria with a qualified bankruptcy attorney who can help you understand the best strategy. Wage garnishment can be embarrassing, and it can end up causing more financial hardship for you since you now have to operate with even less free income each month. But filing for bankruptcy can put an immediate end to the wage garnishment and can help you get lasting debt relief. Talk to one of the experienced Phoenix bankruptcy attorneys at My AZ Lawyers to learn about your options. An attorney from our team will review your finances and debts to get a better picture of your situation and will recommend a course of action. You will learn whether Chapter 7 or Chapter 13 bankruptcy would be better for you, and your attorney will help you understand how to get maximum debt relief. Call our office in Mesa right now to talk with an experienced bankruptcy lawyer about your options for debt relief. We serve clients through the Phoenix, Glendale, Mesa, and Tucson areas. Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 399-4222 The post How to Halt a Wage Garnishment When Filing for Bankruptcy appeared first on My AZ Lawyers.