Bankruptcy

If you have become a victim of the economic recession, whether it is a lost job, threats of losing your home or wage garnishments, Neff & Griffith, P.C. Tucson bankruptcy and real estate bankruptcy attorneys can provide you with options concerning your debts.

Jeffrey M. Neff is a member of the Arizona state bar and is a certified real estate specialist. Jeffrey Neff has handled hundreds of real estate bankruptcy problems and has appeared in the Arizona District Bankruptcy Court where he had many Chapter 11 bankruptcy plans confirmed. Jeffrey Neff has litigated many real estate issues in Bankruptcy Court representing both creditors and debtors.

Neff & Griffith, P.C. Tucson bankruptcy and real estate bankruptcy attorneys can help you get out from underneath your debilitating debt, stop harassing creditor phone calls and keep you from having to juggle your bills. We can help you obtain a clean slate by helping you through the bankruptcy process and by addressing your real estate bankruptcy needs. We can represent you and help you with the following:

• Real estate foreclosure
• Credit card debts
• High interest personal loans
• Lawsuits over debt collection
• Collection on medical bills
• Judgments against you
• Strip off a second mortgage on your home
• Chapter 7, 11 or 13 bankruptcy and real estate bankruptcies

 

Frequently Asked Questions

Do I need an attorney to file for bankruptcy?

No, but Arizona state and federal laws concerning bankruptcy and real estate can be complicated and confusing. Neff & Griffith, P.C. Tucson bankruptcy and real estate bankruptcy attorneys will analyze the character and amounts of your debts to determine whether bankruptcy is the right option for you. We will also assist you to prepare your estate and protect your property and real estate, prepare and file complete and proper bankruptcy petitions, attend your creditors' meeting with you, amend your petition if necessary and respond to any questions you or the Trustee may have throughout your bankruptcy process. Neff & Griffith, P.C. Tucson bankruptcy and real estate bankruptcy attorneys will walk you through your bankruptcy until your debts are discharged and your case is closed.

How much does it cost to file for bankruptcy?

The current cost to file a Chapter 7 bankruptcy is $306, $281 for Chapter 13 and $1,046 for Chapter 11. There is only one fee if you and your spouse chose to file together. In addition to the filing fees, debtors must take credit counseling courses before and after they file for bankruptcy. These classes cost between $50-100 each. Neff & Griffith, P.C. Tucson bankruptcy and real estate bankruptcy attorneys can help you make arrangements for your counseling classes.

Regarding attorney's fees, because bankruptcy and real estate bankruptcy law involves complex knowledge and sometimes litigation, it is difficult to quote exact fees without first reviewing your specific situation. However, as a base rate, Neff & Griffith, P.C. charges $2,500 to file a Chapter 7 bankruptcy (which includes the $306 filing fee) and $4,000 to file a Chapter 13 bankruptcy. If you provide us with thorough, accurate, and complete information, your bankruptcy will be filed quickly and accurately, meaning less expenses and costs to you. Neff & Griffith, P.C. also accepts installment payments. Although, your petition will not be filed until the appropriate fees are paid in full.

What is the Means Test?

The Means Test is a mathematical formula that determines whether a debtor seeking bankruptcy protection has sufficient income to pay basic living expenses, and to determine whether there is any extra money to pay unsecured creditors, such as credit cards or an unsecured mortgage. The Means Test requires that a debtor provide his or her current monthly income, including wages, bonuses, familial assistance, rent, alimony, etc. Custom and standard IRS deductions and payments towards secured property (mortgage, car payments, etc.) are deducted from your current monthly income ("net income") to determine how much "disposable income" you have to pay your unsecured non-priority debts (usually credit cards or unsecured mortgage liabilities). If you are facing foreclosure and you have stopped paying your mortgage and you intend to surrender your home, you cannot deduct your mortgage payment from your income for Means Test purposes. Certain income is not considered under the Means Test, such as social security and sometimes unemployment compensation.

Once your "monthly disposable income" is determined, the amount is compared with Arizona’s median family income. If the debtor's monthly disposable income is less than the median income, the debtor may file a petition for Chapter 7 Bankruptcy (depending on changes in employment status and some other factors). Chapter 7 eligibility is not always guaranteed by this test however; the debtor still must show that his or her actual expenses are greater than his or her real monthly income.

Will my out-of-state debts be discharged if I file for Bankruptcy in Arizona?

Yes! Bankruptcy is a federal proceeding. The bankruptcy court has jurisdiction and the power to discharge any debt you incurred in the United States.

What is the Automatic Stay?

Filing for bankruptcy immediately creates an automatic stay under 11 U.S.C. § 362, which prohibits creditors from taking any action to collect debts against you, and also "stays" any case, litigation, or real estate foreclosure or trustee's sale whereby an adverse party is attempting to obtain or collect your property. Neff & Griffith, P.C. Tucson bankruptcy and real estate bankruptcy attorneys can help you eliminate harassing and exhausting creditor calls by representing you in your bankruptcy.

Will everyone, including my employer, know that I have filed for Bankruptcy?

Filed papers in bankruptcy court become public records. Your filing may also be reported to some credit-reporting agencies and your name may be listed in one or more newspapers, along with everyone else in the state that has filed for bankruptcy (which are quite a few!) The Trustee, after you file, will ask you for copies of several documents, including your tax returns, bank statements, etc. If you refuse to provide your pay stubs, the Trustee may send a form to your employer asking for information about your wages. Therefore, your employer will not be notified, unless you fail to comply with the Trustee's requests.

What happens to my credit rating once I file for Bankruptcy?

In 2005, the bankruptcy laws were amended to provide that debtors cannot file for bankruptcy more than once between an eight-year period. Many creditors quickly solicit debtors after they have filed for bankruptcy, knowing the debtor will not be permitted to seek another discharge within the next eight years. Once your debts are discharged, it is recommended that you do not incur any further debts or obtain any credit cards. Many debtors facing bankruptcy already have low credit scores, but filing for bankruptcy can make them even lower, but only temporarily. It does not take too long for your rating to increase after you have filed for bankruptcy.

Will I lose my property or real estate if I file for Bankruptcy?

Only non-exempted assets may be seized and sold by the Trustee. However, if you owe back child support or alimony, ALL of your property, including exempt property, may be sold by the Trustee. In order to find protection from Arizona's exempt property statutes, you must have lived here for over 2 years. Many people begin to draw on some of their retirement accounts and other exempted property to pay off debt. Neff & Griffith Tucson bankruptcy and real estate bankruptcy attorneys can help prevent you from making these mistakes.

What types of property and real estate are exempt in bankruptcy under Arizona law?

Click on this link to view Arizona's property exemptions

 

Chapter 7 Bankruptcy

If you do decide to proceed in filing for bankruptcy, Chapter 7 Bankruptcy is a liquidation process whereby all of your non-exempt property is sold and converted into cash to pay the creditors that have filed claims against your bankruptcy estate. The debtor and his/her family and friends are allowed to buy any seized assets. With the proceeds, your creditors receive a pro-rata share of whatever the trustee administering your estate collects. Administration expenses are also paid out of the proceeds and are not additional expenses for the debtor.

If the debtor does not have any property other than exempt assets, the case is deemed a "no asset case" and no sale of your assets needs to take place.

Any debts and obligations not satisfied by liquidating your estate are then eliminated and discharged. This means the debtor is absolved completely of the responsibility to pay most unsecured debts. Usually within 120 days of the date of filing the bankruptcy petition, depending on the Court's case load, the debtor’s debts are discharged, unless a creditor files an objection or a time-extension is granted by the trustee. Once your debts are discharged, it is recommended that you do not incur any further debts or obtain any credit cards. Continue to make your real estate and vehicle payments if you want to keep them. You will also be required to make payments pursuant to any Reaffirmation Agreements you may have entered into during the course of filing for bankruptcy.

Non-Dischargeable Debts

The following debts are not dischargeable in bankruptcy:

      -  Taxes due within the past 3 years
      -  Debts for fines and penalties to governmental entities
      -  Student Loans issued by a governmental agency; a debtor can, however, claim the student loans impose an "undue hardship", which must be properly plead to the Court and decided by a Judge.
      -  Debts resulting false pretenses, fraud or a false financial statement used with intent to deceive, if the bankruptcy court so rules
      -  Debts not listed on your petition, unless the debtor or creditor knew of the debt and had time to file a claim against your bankruptcy estate
      -  Debts for domestic support obligations (alimony, child support)
      -  $600 + worth of debts that are owed to a single creditor for the purchase of "luxury goods" incurred by the debtor within 90 days of the date you filed your bankruptcy petition
      -  Cash advances from a credit card totaling $875+ incurred within 70 days before the bankruptcy petition was filed
      -  Personal injury judgments entered against you resulting from car accidents in which you were a drunk driver
      -  Post-Petition HOA fees
      -  Money owed to a pension, profit-sharing, stock bonus or other such plans

Chapter 13 Bankruptcy

Chapter 13 is a "reorganization" type of bankruptcy that allows you to consolidate and pay debts according to a "plan" over a number of years. Chapter 13 Bankruptcies are commonly suggested if you are behind on your mortgage payments, but want to keep your home or there are other non-exempt assets you wish to keep from being liquidated. In a Chapter 13, the debtor’s disposable income is used to pay off debts according to a plan over a 36-60 month period. Any debts remaining after the life of the plan are then discharged. Chapter 13 plans are not based solely on the amounts of your debts; payments are determined by what the debtor earns in light of his or her expenses. Debtors make payments to the Trustee, who then distributes the money to the debtor's creditors on a pro-rata basis.

In the current upside-down housing market, additional real estate mortgages on a debtor's property are unsecured because of depreciated property and real estate values. Additional liens on your home beyond your initial mortgage can be stripped when you file for Chapter 13 bankruptcy; after reducing your first mortgage to the current value of your home, if the second lien exceeds any equity, that lien can be stripped off of your property. Lenders are only secured up to the value of the property. First mortgages are typically secured by the property itself. If the second lender has nothing securing its lien, it becomes an unsecured creditor and it most likely will not be able to collect on the second mortgage after the debts are discharged in bankruptcy. Unsecured second mortgages can be negated by filing for Chapter 13 Bankruptcy IF the second lien is entirely unsecured when the value of your home drops below the amount of your first mortgage. This option is only available to individuals that seek to reorganize their debts in a Chapter 13 context. Contact Neff & Griffith, P.C. bankruptcy and real estate bankruptcy attorneys today to discuss your options concerning eliminating real estate debts through bankruptcy.

Are you interested in discussing your options in Bankruptcy?

Call Neff & Griffith, P.C. Tucson bankruptcy and real estate bankruptcy attorneys today. Neff & Griffith offers consultations for those that are interested in pursuing their options in bankruptcy or are facing real estate bankruptcy.

Filing for bankruptcy requires the collection and organization of many items of paperwork. Final bankruptcy petitions can be anywhere from 50-100 pages. It is requested that you bring the following to your consultation, so that we may best assist and advise you:

• Pay stubs from the past 6 months
• Driver's licenses and social security cards
• Tax returns for the last 2 years
• Bank statements
• Notices from creditors
• Accountings of balances due to creditors
• Real estate documents
• Any other documentation you wish to discuss with Neff & Griffith, P.C. Tucson Bankruptcy attorneys

If you chose to file bankruptcy, once your attorneys' and filing fees have been paid in full, you will be given an extensive questionnaire, where you will be required to provide up-to-date and accurate information. Inaccurate paperwork can cause you to have your bankruptcy dismissed, cost you more in attorney fees by having to defend potential bankruptcy fraud claims for which you may face jail time. It is your responsibility to be organized and thorough. These forms will require your signature, so it is imperative that you fill them out honestly. Once we receive your information, we will generate a bankruptcy petition based on the information you provided to us. Once you have reviewed and signed the petition, we will file your petition with the bankruptcy court and keep you notified through the entire procedure.