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The Benefits of Filing for Bankruptcy

September 27th, 2017

Most people perceive bankruptcy as a dreadful thing, like a complete end to financial stability and future prospects. This is a rather misguided notion of bankruptcy. Filing for personal bankruptcy does have its benefits other than reaching a legal solution to overwhelming debt. Don’t believe it? Read below to find out:

Stop the Never-Ending Collection Calls

One of the major positive aspects that follow declaring personal bankruptcy is the definitive end to collection calls. In Arizona, creditors are legally obligated to stop attempting to collect the debt when a debtor has filed for personal bankruptcy. Your creditor won’t be able to call you, try to foreclose your home, notify your employers, or do anything else to attempt to collect your prior debt. If the creditor harassment continues, you will have a good case for your bankruptcy proceedings. You should contact a bankruptcy lawyer in Scottsdale to find out what your options are if credit harassment continues.

Keep Your Home

Arizona law allows exemptions for homesteads or the primary residence owned by a debtor. The court will not make you homeless and take away your shelter when you file for personal bankruptcy. So it’s a sensible way to try to save your home from debtors. This exemption has a dollar and equity limits and certain exceptions that you should clarify with a lawyer. But filing for bankruptcy will stop a creditor from foreclosing your home.

Protect Personal Assets

The Arizona bankruptcy law allows many personal property exemptions when filing for bankruptcy. That means you would be able to keep valuable assets like books, furniture, cheap motor vehicles, various electronic gadgets, family antiques, clothing, pets and so on in your possession. Creditors will not be able to claim these as collateral.  They are prohibited from taking your things.

Stay in Control of Business

Chapter 11 bankruptcy allows business owners control of their company even after filing for business bankruptcy. So it’s a good way to keep a business afloat when the debts threaten to run your company to the ground. The Chapter 11 bankruptcy also facilitates business owners to reduce debt gradually over time.  Chapter 11 can also aid in getting rid of high-stakes litigation by discharging the pending litigation claims that were previously being waged against your company.

Retain Your Pension Fund and Retirement Assets

You can retain your considerable IRA or other types of qualified retirement plans or pensions when you file for bankruptcy. It’s one another valuable personal asset that will be kept away from the debtors. Put another way, you will exit bankruptcy with virtually identical retirement assets as when you went into bankruptcy.

Start Improving Your Financial Status

When you file for bankruptcy, your credit score would hit rock bottom. But afterward, it will start to climb up again, sometimes rapidly. Filing for bankruptcy is sort of the last step towards regaining financial footing and security. After that, it only gets better. When you start to make debt payments, your credit score would start rising again.  Many creditors are attracted to persons coming out of bankruptcy and offer them credit because they know that the person cannot file another bankruptcy for many many years.

Have a Trustee Oversee Your Monetary Affairs

During your bankruptcy, the court appoints a Trustee between you and the creditors to oversee how the discharge on your bankruptcy filing is being carried out. This spells only good things for your future financial dealings. If pursuing a chapter 11 or 13, you will get a handcrafted debt repayment plan to get back on your feet after the declaring.   If pursuing Chapter 7, most if not all of your debts will be canceled.

Above all, you will feel less stressed. Your money matters will be taken care of, and the creditors will finally go away.  Consider speaking with competent bankruptcy legal counsel today. www.clgaz.com

Same Sex Divorce in Arizona

September 20th, 2017

Same sex marriage has finally become possible in Arizona, after the landmark Oberfell vs. Hodges Supreme Court ruling in 2015. Arizona’s prior definition of marriage as “between a man and a woman” was struck down by the courts as unconstitutional. In another two cases, U.S. District Court Judge John Sedgewick gave favorable ruling recognizing rights of same sex couples as the same as rights of heterosexual couples.

While this is all good news for the LGBTQ community in the state, not all marriages survive, and that includes same sex marriages. Some marriages inevitably end in divorces.  If you are seeking to divorce your same sex spouse, you can find a divorce lawyer in Scottsdale or your local area with our firm.

In September 2017 the Arizona Supreme Court handed down its landmark ruling in McLaughlin v. Jones which now mandates that same sex female co-parents be granted identical legal and custodial rights in a divorce between a same sex female couple.

Rights of Divorcing Same Sex Couples

In Arizona, same sex couples now have the same rights as heterosexual  couples when divorcing. The separating couple will also have the same obligations when dividing property and paying alimony or child support. Child custody will be determined the same as in the case of hetero couples, with priority given to the child’s health and wellbeing.  It no longer matters which Mother “carried the baby to term” when allocating rights to both Mothers in a divorce.   This is a significant shift in the legal landscape as of late 2017.

Residency Requirements

Arizona’s residency requirement applies to same sex couples just like any other couple. At least one party of the divorcing couple must have resided in the state for 90 days at least before filing the divorce papers. This can be a somewhat difficult requirement to fulfill for same sex couples who may have recently moved. Because federal law now recognizes same sex marriage in all 50 states, you will have to check with your local divorce attorney on the jurisdictional time limits in your state.

Grounds for Divorce

Arizona does not require couples in non-covenant marriages to provide any grounds for divorce when filing a case. As same sex couples fall into this category, the only ground required is that the marriage is irretrievably broken. One spouse can successfully claim so even if the other doesn’t want to divorce. In case either one of the spouses wants to live apart, it’s possible to file for a legal separation as well.  Some people pursue legal separation so that they can remain on each other’s health insurance after the fact.

Child Custody

Determining child custody in a contentious divorce can be as difficult for a same sex couple as it is for any couple. Because of the 2017 McLaughlin decision, the requirements, rules, and the family law that apply to hetero couples apply equally to same sex couples.  As always, it’s strongly recommended for the couple to resolve custody disputes amicably with the aid of a mediator if possible. It’s best to negotiate shared parenting time in advance with the help of lawyers instead of going to battle in front of a judge.

Same sex couples in Arizona have no reason to believe that a divorce case will be handled much differently than divorce cases for heterosexual couples. If the divorce is particularly contentious, then getting advice from an experienced attorney will be a must. You will have to consult with a family law expert to learn more about child custody.

Breastfeeding Babies and Visitation Rights in Arizona

September 13th, 2017

A recent news article about a judge ordering a breastfeeding mother to switch to baby formula to facilitate visitation for the father has reinvigorated an old debate. In a custody hearing in Maine, a father petitioned that his visitation rights were being violated because the mother is still breastfeeding the child. The estranged couple has a six-month-old baby that the mother is still exclusively nursing. The father wants overnight visitation rights on the weekends, but the mother refused on the account that she needs to breastfeed the baby.

The mother claimed that she couldn’t pump enough breast milk to arrange bottle feeding the baby when the infant is the father. So she claimed that the baby should be with her on the weekends. The magistrate court disagreed.  In the custody hearing, the judge sided with the father and said that keeping the baby for breastfeeding is “not a reason to prevent [the father’s] visitation,” and it could be “considered deliberate alienation” of the father. The court recommended overnight visits that would have the baby fed formula milk.

There are some other details to the case, but the core argument involving nursing mothers’ and fathers’ visitation rights has been percolating for some time. Pediatricians recommend breastfeeding babies for up to 12 months. There’s ample scientific evidence to suggest that babies should be breastfed to ensure their health and psychological well-being. The court cannot dispute these biological factors. However, when arranging parenting time for estranged spouses with infants, breastfeeding could become a hot-button issue.

While the case was adjudicated in a different state, it’s a common question that pops up in family court in Arizona as well. Arizona does not have specific laws with regards to how to handle parenting time for a breastfeeding child. In most cases, babies are kept with mothers so they can nurse on time. If the father wants to visit, then the visits are arranged for two or three hours in a manner that doesn’t disturb nursing. However, these arrangements can change due to court recommendations on what’s best for the child.

Ideally, the best way to handle a father’s visitation with regards to a nursing baby is for the estranged parents to discuss parenting time civilly. It’s strongly advised to obtain Family Law help in Scottsdale to devise a sensible parenting time plan in accordance with court recommendations, parents’ wishes, and, above all, the well-being of the newly birthed child. Fathers who want to spend time with nursing babies should first discuss arrangements with the mother, possibly with the help of a third-party mediator.

Of course, not all estranged parents would be able to sit down together and come up with a neat parenting time plan. In that case, going to court will be the last solution. However, judges decide visitation rights for fathers with newborn babies on a case by case basis. It’s unlikely and rare that a mother would be ordered to switch to formula if she doesn’t want to or is somehow unable to. As the law is not clear on this, only your lawyer will be able to present you with the best legal solutions for the situation.  And you never know, the Arizona judge to whom your case is assigned may end up agreeing with the judge from Maine.

Bankruptcy Exemptions Allowed Under Arizona Law

September 5th, 2017

Arizona bankruptcy law allows for a set of exemptions for assets when filing for personal bankruptcy under any chapter. Exemptions are property the debtor, that is you, can keep when you file for bankruptcy and are later discharged therefrom.

You can only exempt assets specified under the law. There are some debts that are non-dischargeable, or cannot be erased by a judge. Examples of non-dischargeable debt include income taxes owed, student loans, and child support and domestic support obligations. There are much more.

Exemptions apply to single persons or married couples filing for bankruptcy. Married couples who file jointly can claim typically claim all exemptions unless a judge specifies otherwise. Here is a list of notable exemptions under Arizona law:

  • Homestead—Real Property, like a home, where the debtor lives that is worth up to $150,000. Exemptions for sale last 18 months after or until a new property is purchased. A married couple cannot double the exemption up to $300,000 however.
  • Personal property like furniture, vehicles worth less than $6,000, family portraits, electronic gadgets, rugs, bank deposits up to $150, books, and so on that are worth up to $4,000. A married couple can double personal property exemptions.
  • Insurance proceedings such as group life insurance policies, fraternal benefit society proceeds, disability benefits, health insurance claims, and life insurance cash value up of total $25,000 (up to $1,000 per person, or $2,000 per dependent). A married couple can double life insurance value exemptions.
  • Earnings of a minor child.
  • Business or partnership property.
  • Various types of pensions, such as ERISA, 401ks, the board of regents members, IRAs, government worker pensions such as those for firefighters and state employees.
  • Public benefits received such as unemployment benefits, worker’s compensation, and welfare.
  • Value of tools of the trade such as arms, farm machinery, uniforms, teaching aids, and seeds, animal feeds, and so on.
  • Unearned wages for about 75 percent, payment pensions, and other forms of wage income.

The above is just a summary of exemptions. You can ask your bankruptcy attorney in Scottsdale for detailed clarifications. Some exemptions have value limits that you need to get clarified. Married couples can double on some exemptions, but not others.

Exemption limits also apply to equity debtors may have on their real property. Equity is defined as the difference between what the debtor owes on the real property and the actual value of the real property. For example, if you took out a $200,000 mortgage on a house worth $300,000 you would have $100,000 equity in the home.

Some equity is covered by exemptions, so the debtor can repay a previous loan. If the exemption doesn’t cover all of the property, then the appointed trustee can liquidate the asset and distribute the profits. However, remember that not all properties are exempt. You can still keep property without exemption by paying the trustee value of the property.

In addition to the above, there could be federal exemptions for which you are eligible. The federal exemptions are in addition to your Arizona exemptions. In the end, you should contact a lawyer to check out your eligibility for federal exemptions.

 

Who Can File for Chapter 12 Bankruptcy?

August 25th, 2017

Most people are familiar with Chapter 7 and Chapter 13 bankruptcy. Chapter 12 is a special type of bankruptcy clause that allows a specific group of financially “distressed” debtors to file for bankruptcy.

Unlike Chapters 7, 11, or 13 bankruptcies, which most individuals or businesses in debt can apply for, Chapter 12 bankruptcy is specifically reserved for family farmers or family fishermen under the Bankruptcy Code, which the state of Arizona adheres to. The eligible parties can propose a repayment plan for the debt to pay off creditors in five years or less. In this sense, Chapter 12 bankruptcy is similar to Chapter 13.

Chapter 12 doesn’t allow for the automatic discharge of some debts like Chapter 7. However, a judge will review all debts and determine if any are eligible for a legal discharge. Let’s look at who is eligible to file for this type of bankruptcy:

Only Fishermen and Farmers with Regular Income are Eligible

The Bankruptcy Code specifically states that the fishermen or farmers who qualify for Chapter 12 bankruptcy must have what is termed as “regular annual income.” This clause exists because debtors who file a petition must agree to a repayment plan that requires some sort of income. However, income for some farmers and fishermen is almost always seasonal. The law takes this into consideration and does allow relief if needed. You will need a competent bankruptcy attorney in Scottsdale or in your local area to ask for a regular income reprieve.

Categories of Farmers and Fishermen

The family farmers and fishermen are specified in the law under several categories. A “family farmer” or a “family fisherman” could be an individual or a spouse of en eligible individual, or a business entity like a partnership. The individuals must have a professional in commercial fishing or farming to be eligible. The total debt the petitioner is seeking relief from should not exceed $3,237,000 for farmers or $1,500,000 for fishermen.

A majority of the debt in question should be related to farming or fishing. For fishermen, this is least 80 percent, and for farmers, the threshold is at least 50 percent. Also, a majority of more than 50 percent of the income of the petitioner must come from farming for fishing operations for the preceding tax year. For farmers, this must be true for two or three preceding tax years.

Filing as a Corporation

Fishing and farming corporations or partnerships are eligible for Chapter 12 bankruptcy too. There are, however, stringent considerations that determine which types of business entities are eligible. The businesses must be family owned, and more than one-half of the equity or stock in the business must be owned by a single family or its blood relatives.

The corporation or the partnership must be run by family members and relatives. A majority of 80 percent or more of the value of the entity must come from farming or fishing related activities. There are limits to indebtedness levels as well just like for individuals. Also, the business cannot publicly trade stocks after filing for bankruptcy.