Ellett Law Offices, P.C.

Since 1993, Ellett Law Offices has provided thousands of clients with quality bankruptcy attorney representation. Bankruptcy law is complicated but you will be guided through the process by a knowledgeable and experienced bankruptcy attorney.

What are the Credit Counseling Requirements of Personal Bankruptcy?

August 14, 2014 by  
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If you fell you feel like you are financially under water, you may be considering filing for personal bankruptcy. Personal bankruptcy works to discharge the debts of individuals so they may start fresh. However, there are many steps involved in filing for bankruptcy, many of which must be followed completely and accurately in order to have your bankruptcy granted. An experienced Phoenix bankruptcy lawyer can guide you through the process to make sure all criteria are met.

Proof of Credit Counseling Course

credit counselingOne of the requirements you must meet as you prepare to file for personal bankruptcy is that you show proof that you consulted with a credit counseling agency. This counseling is intended to go over your financial situation to see if bankruptcy is necessary or if there may be other debt relief solutions that can help instead. This counseling is really just a technicality, however, because you may go ahead with your bankruptcy even if the credit counselor suggests other solutions.

Your credit counseling must be conducted by an agency that is licensed by the U.S. Bankruptcy Trustee’s office, and you must complete the requirement in the 180 days prior to your filing. The agency will issue you a certificate of completion, which you must file with the bankruptcy court within 15 days following the filing of your bankruptcy petition.

There are a few exceptions to the credit counseling requirement, which may include physical or mental disabilities, active military service overseas, need for an emergency bankruptcy filing, and more. An attorney can tell you whether one of the exceptions applies to you or not.

Contact a Phoenix, Arizona Personal Bankruptcy Attorney for a free consultation

Bankruptcy helps over a million Americans get back on their feet every year. If you are considering filing for personal bankruptcy, you want to make sure all rules are followed and that all requirements are properly met to ensure your bankruptcy is successful. An experienced bankruptcy lawyer at the Ellett Law offices will make sure that you meet all the qualifications for bankruptcy so you receive the best results possible. If you are considering bankruptcy, call our office today at (602)235-9510 to set up a free consultation.

 

How do I a Modify a Second Lien on my Home?

August 12, 2014 by  
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Owning a home is a source of accomplishment and pride for many American families. Your home can also be used as an asset to borrow additional money to cover large purchases or consolidate other debts. For this reason, many people end up taking a second lien on their home.

lien on homeHowever, your home is also one of your largest monthly expenses. If you are experiencing financial troubles, it may be difficult to stay current on your monthly payments for both your first and second mortgages. Fortunately, there are some options to modify or even eliminate second liens on your home, and an experienced attorney can help determine which option is best for you.

Lien Modification Options

The following are some ways that an attorney can help you make your mortgage payments more affordable:

  • Lien stripping—Lien stripping works to completely remove a second lien under certain circumstances in the process of a bankruptcy filing. A second lien may be eliminated, or stripped, if your first lien is greater than the value of your home.
  • Loan modification—Your lawyer can negotiate with your mortgage company in order to modify your second lien. By reducing the principal amount or interest rate on your second mortgage loan, your mortgage payment can be made more affordable.
  • Second Lien Modification Program (2MP)—This is a part of a federal program called the Making Home Affordable initiative that works to help Americans keep their homes by making payments affordable. If you meet certain qualifications, 2MP can work to modify your second lien so you can keep your house.

Contact a Phoenix Lien Modification Attorney for a free consultation

If you are behind in your first or second mortgage payments, you have courses of action available to you that will keep you from losing your home. At the Ellett Law Offices, we understand that your house is usually your most valuable asset, and that it is extremely important to you and your family. In order to explore options for lien modifications or other help in making your mortgage payment affordable, call our office today at (602) 235-9510 to schedule a free consultation.

 

 

 

 

 

 

 

Which should I File First: Bankruptcy or Divorce?

August 11, 2014 by  
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Divorce can be extremely emotionally traumatic and can bring significant changes in almost every aspect of your life. As if divorce were not stressful enough, it often also causes substantial financial problems for one or both spouses. All of your hard-earned marital assets and property will be equitably divided, so you will lose approximately half of what you have worked for. In addition to dividing your property, you will also have to divide your debts. This means you may be responsible for significant debts even though your household income and assets may be dramatically decreased. For this reason, divorce often leaves one or both spouses close to financial ruin, and many divorcing parties end up filing for bankruptcy.

In what order should I file?

divorce documentWhether you should file bankruptcy before divorce or vice versa depends on the specifics of your situation. In many situations, if you are your spouse can work together, it is generally better to file bankruptcy prior to a divorce. This can allow you to discharge all of your joint and individual debts, so there is no need to fight over debt division. In addition, you can make use of additional exemptions, so you can keep more property than if you had filed on your own.

On the other hand, some couples are better off waiting until their divorce is over to file bankruptcy. If you and your spouse have a high combined income, it may disqualify you from filing Chapter 7 bankruptcy. If you wait until after your divorce, you may qualify based on your separate income alone. No matter what your situation may be, an experienced attorney can advise you on the best course of action.

Contact an Arizona Bankruptcy Lawyer for a free consultation

At the Ellett Law Offices, our attorneys understand that when you are going through an emotionally traumatic divorce, that last thing you need is additional financial stress or court proceedings. We will help you make the best decision regarding bankruptcy and will work to make sure the process is as stress-free as possible. We aim to make your life easier—not harder—in this stressful time for your family, so contact us today at (602) 235-9510 for a free consultation.

 

 

 

How can a Lawyer Help with Credit Card Debt Relief?

August 7, 2014 by  
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credit card debtMillions of Americans are struggling with credit card debt. Many people do not understand the nature of credit cards, interest, or repayment. At times, a credit card can feel like free money and suddenly a person is facing an overwhelming balance. Other people mistakenly believe that they can make a dent in their credit card debt by simply making the minimum required payment each month, and they do not realize how interest is compounding. Others spend within their means, however then suffer a traumatic event such as unemployment or a medical emergency that completely changes their financial capabilities. No matter what the reason is behind your inability to keep up with payments, you should always contact a debt relief lawyer if you are facing overwhelming credit card balances.

An experienced debt relief attorney can help with the following actions:

  • Negotiate with creditors to lower minimum payments or interest rates.
  • Represent you if a credit card company files a lawsuit against you.
  • Get wage garnishments or bank account attachments lowered or eliminated.
  • Help remove liens on your home or car.
  • Assist you in filing for Chapter 7 or Chapter 13 bankruptcy.

If you decide to file bankruptcy, your creditors will have to immediately stop all collection efforts, including calls, letter, garnishments, lawsuits, and more. Additionally, Chapter 7 bankruptcy allows you to completely discharge unsecured credit card debt and will relieve you of a payment obligations. Even if you decide against bankruptcy, there are many additional tactics and tools an experienced debt relief lawyer has to help you experience relief in the face of significant credit card debt. It is often difficult for a consumer to have the same success in dealing with credit card debt as an attorney.

Contact an Arizona Credit Card Debt Lawyer for a free consultation

If your credit card debt has spiraled out of control, you do not want to put off consulting with an attorney any longer. The experienced attorneys at the Ellett Law Offices are committed to helping Americans get their finances under control. We will go over all of your options and help you choose the best one for your credit card debt situation. Call our office at (602) 235-9510 to schedule your free consultation today.

Ellett Law Offices , P.C.
2999 N. 44th Street,
Suite 330
Phoenix, AZ 85018
Phone: 602-235-9510
Fax: 602-235-9098

How Does the Automatic Stay work in Chapter 7 Bankruptcy?

August 6, 2014 by  
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Falling behind on your bills is always stressful and likely weighs constantly on your mind. You likely have frequent reminders of your overdue bills due to regular phone calls, letters, or other communications by your creditors and bill collectors. It is not uncommon for communications by collectors to reach the level of harassment. Additionally, you may be afraid of losing your family home or your car if you do not figure out a solution soon. If you are in this situation, Chapter 7 bankruptcy may be a good option for you, and can help give you financial relief.

How the Automatic Stay Helps

chapter 7 bankruptcyIn addition to providing long-term relief from debts, Chapter 7 bankruptcy also works to provide immediate peace of mind through something called the automatic stay. As soon as you file for bankruptcy, the automatic stay goes into effect and all of your creditors are notified that you have filed for Chapter 7 bankruptcy. The automatic stay immediately stops all the following:

  • Collection efforts and communications, including phone calls and letters
  • Repossession efforts
  • Foreclosure proceedings
  • Wage garnishments
  • Eviction efforts
  • Civil Law Suits
  • Collection efforts for public benefit overpayments

As you can see, immediate relief from the above actions can help you situation immensely. You will not have to worry about losing your vehicle or place to live. The stay remains in effect and continues to protect you throughout the Chapter 7 bankruptcy process, so that you may work on getting back on your feet. The automatic stay is only one of the many benefits Chapter 7 bankruptcy can provide.

Contact an Arizona Chapter 7 Bankruptcy Attorney for a free consultation

If you are overwhelmed by debt and unable to pay all of your bills, Chapter 7 bankruptcy can help you wipe away the majority of your debts and start over with a clean financial slate. You will no longer have to worry about harassing phone calls or dodging collectors. If you are struggling financially, an experienced Arizona bankruptcy attorney can advise you whether Chapter 7 bankruptcy is a good option for you. Do not hesitate to call the Ellett Law Offices today at (602) 235-9510 for help.

 

 

Is a Chapter 11 Bankruptcy Right for Me?

August 4, 2014 by  
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You often hear Chapter 11 bankruptcy in connection with large corporations such as United Airlines or General Motors. This does not mean that Chapter 11 filings are limited to huge, multi-million dollars companies, however. Chapter 11 bankruptcy can help businesses of any size, and often helps prevent small business owners from having to close their doors. If you are a business owner and are struggling to pay your debts or suppliers, consider discussing Chapter 11 bankruptcy with an experienced attorney today.

Are you a business owner?

bankruptcy questionsOnly businesses can file for Chapter 11 bankruptcy under the United States Bankruptcy Code. Though companies of all sizes may file under Chapter 11, there are special circumstances for small business owners. If the total of all of your claims is less than $2,490,925, you are considered to be a “small business debtor.” The small business debtor label allows you to skip certain restructuring steps and complete the Chapter 11 process in a shorter period of time.

Do you operate as a partnership, corporation, or limited liability company (LLC)?

Business owners have the option of choosing between Chapter 11 and Chapter 13 bankruptcy. However, only individuals are allowed to file for Chapter 13 bankruptcy. This means that if you operate as a certain type of business entity, such as corporation, LLC, or partnership, you are not eligible for Chapter 13 and Chapter 11 will be the best option for you.

How much debt do you owe?

Even if you are an individual business owner, you still may not be eligible for Chapter 13 bankruptcy. Chapter 13 has a cap on the amount of debt your business may have, and these limits are as follows:

  • $1,149,525 in secured debts
  • $383,175 in unsecured debts

If you owe more than these amounts in either secured or unsecured debts, Chapter 11 bankruptcy will be you business’s best option.

Contact an Arizona Chapter 11 Bankruptcy Lawyer for a free consultation

If your business is struggling, an experienced Arizona bankruptcy attorney can advise you whether Chapter 11 filing is the right solution for you. Do not hesitate to contact one of our lawyers at the Ellett Law Offices to start solving your business’s financial problems. We offer free consultations, so call today at (602) 235-9510 for help.

 

When Can A Bankruptcy Attorney Bring Suit Within A Bankruptcy Case?

July 7, 2014 by  
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Before a bankruptcy attorney brings a suit within a bankruptcy case, the bankruptcy attorney must first ascertain whether “the action at issue stems from the bankruptcy itself or would necessarily be resolved in the claims allowance process.” Stern v. Marshall, 131 S. Ct. 2594, 2618 (2011). Section 157(b)(1) authorizes a bankruptcy court to “hear and determine all cases under title 11 and all core proceedings arising under title 11, or arising in a case under title 11.” However, the Supreme Court, in Stern v. Marshall, held that it is unconstitutional for a bankruptcy court to resolve a state common law claim and that “Congress may not vest in a non-Article III court the power to adjudicate, render final judgment, and issue binding orders in a traditional contract [or tort] action arising under state law, without consent of the litigants, and subject only to ordinary appellate review.” Id. at 2615.

Even if the estate has a claim against a creditor, who filed a proof of claim in the bankruptcy proceedings, the bankruptcy court still does not have power to adjudicate the claim. For example, in Stern v. Marshall, the debtor’s stepson initiated a defamation claim against the estate, and the debtor filed a counterclaim that was based on state common law. The Supreme Court explained that “there was never any reason to believe that the process of adjudicating [the stepson’s] proof of claim would necessarily resolve [the debtor’s] counterclaim.” Id. at 2617. Therefore, a creditor cannot consent to a bankruptcy court’s adjudication of a claim that is not resolved in the process of ruling on a creditor’s proof of claim.

Equitable Subordination

July 7, 2014 by  
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Equitable subordination is an equitable remedy for bankruptcy debtors or creditors when one creditor has performed inequitable conduct that has harmed the debtor or creditors of the bankruptcy estate. Equitable subordination was codified in the Bankruptcy Code under section 11 U.S.C. 510 (c) and is within the court’s discretion whether this remedy will be utilized.
In order for a court to grant an equitable subordination claim, three elements must be met: (1) the claimant engaged in some type of inequitable conduct, (2) the misconduct injured creditors or conferred unfair advantage on the claimant, and (3) that subordination would not be consistent with the Bankruptcy Code. In re First Alliance Mortgage Co., 471 F.3d 977, 1006 (9th Cir. 2006) (citing Matter of Mobile Steel Co., 563 F.2d 692, 701 (5th Cir. 1977)). Even though equitable subordination is an equitable remedy, it “is a dramatic remedy, and one that is rarely granted.” In re GTI Capital Holdings, LLC, No. 03-07923-SSC, 2007 WL 2493671 at *14 (Bankr. D. Ariz. Aug. 30, 2007). The Ninth Circuit has explained that gross and egregious conduct is required before a court will equitably subordinate a claim. In re First Alliance Mortgage Co., 471 F.3d at 1006. Additionally, “the level of egregious conduct necessary for equitable subordination is high; even independently tortious and fraudulent conduct does not necessarily rise to the level required for equitable subordination in bankruptcy.” Id. (citing In re First Alliance Mortgage Co., 471 F.3d at 1007).

Bankruptcy Attorneys Are Allowed To Be Paid Out of Disposable Monthly Income (DMI) in a Chapter 13 Bankruptcy Case

June 23, 2014 by  
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Bankruptcy attorneys are allowed to be paid out of Disposable Monthly Income (DMI) in a Chapter 13 bankruptcy case. Courts have generally held that the term “ unsecured creditor” is a catch all term designed to address creditors not referenced elsewhere by Congress in allowing debtors to deduct certain payments to unsecured creditors. Since bankruptcy attorney fees are not included in form B22C, they are allowed to be paid out of the debtor’s disposable monthly income. In re Puetz, 370 B.R. 386, 391 (Bankr. D. Kan. 2007); In re Smith, 09-64409, 2012 WL 6553786 (Bankr. N.D. Ohio Dec. 14, 2012); In re Echeman, 378 B.R. 177 (Bankr. S.D. Ohio 2007).

Further, the Advisory Committee Notes to Official Form B22C agree, noting,

“The Chapter 13 form does not provide a deduction from disposable income for the Chapter 13 debtor’s anticipated attorney fees. There is no specific statutory allowance for such a deduction, and none appears necessary. Section 1325(b)(1)(B) requires that disposable income contributed to a Chapter 13 plan be used to pay ‘unsecured creditors.’ A debtor’s attorney who has not taken a security interest in the debtor’s property is an unsecured creditor who may be paid from disposable income.” In re Puetz, 370 B.R. 386, 391 (Bankr. D. Kan. 2007) (citing Official Bankruptcy Form 22 advisory committee note ¶ D.3).

Advance Consultation with Expereinced Bankruptcy Attorney Is Best Way to Avoid Pitfalls of Preference Statute

June 23, 2014 by  
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Often a person facing the prospect of bankruptcy assumes it would be in their interest to pay off a debt to a friend or family member prior to the bankruptcy filing. Nothing could be further from the truth. These payment may be subject to capture by the bankruptcy estate. In other words, the representative of the bankruptcy estate can sue the recipient of the payments and take the money away from them. There are ways to protect assents in advance of a bankruptcy filing, but making a preferential payment is not one of them. Consulting with an experienced bankruptcy counsel early in the process will allow for the optimization of asset protection and exemption planning. Those who reside in Arizona should consult with an Arizona Bankruptcy Attorney because bankruptcy exemptions are based on the state of  residence.

In order to successfully establish a prima facie case for recovery of a preferential payment,, a plaintiff must prove that the payment was: (I) a transfer, (ii) of an interest of the debtor in property, (iii) made to or for the benefit of a creditor, (iv) for or on account of an antecedent debt, (v) made while the debtor was insolvent, (vi) made within 90 days or one year, in the case of an insider that (vii) resulted in the creditor receiving a greater distribution than it otherwise would have in a hypothetical chapter 7 distribution. Typically, a preference claim must be brought within twp years from the bankruptcy petition date to bring the preference action. The plaintiff bears the burden of proof in establishing all of the following elements of the prima facie case.

A transfer is defined by § 101 of the Code as “every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property, including retention of title as a security interest and foreclosure of the debtor’s equity of redemption.” 11 U.S.C. § 101.The transfer sought to be recovered, or avoided, must qualify as a transfer of an “interest of the debtor in property.” 11 U.S.C. § 547(b). A transfer of an “interest of the debtor in property” will include the transfer of “all legal or equitable interests of the debtor in property as of the commencement of the case.” 11 U.S.C. § 541.The transfer must have been made to or for the benefit of a creditor, as the term “creditor” is broadly defined pursuant to § 101 of the Code.: The next requirement for establishment of a successful preference case requires that the plaintiff prove that the allegedly preferential transfer was made “on account of an antecedent debt.” 11 U.S.C. § 547(b)(2). To satisfy this requirement, the debt must have been incurred prior to the allegedly preferential transfer.

For the purposes of a preference action, the Debtor is presumed to have been insolvent during the 90-day period preceding the filing of the bankruptcy petition. 11 U.S.C. § 547(f). A defendant may offer evidence to rebut the presumption of insolvency, and the plaintiff bears the ultimate burden of proof as to the Debtor’s insolvency. : A determination of insolvency is based on a typical balance-sheet assessment as to whether the liabilities of the debtor exceed the value of its assets

The preferential transfer which the Plaintiff seeks to avoid must have been made within 90 days prior to the filing of the bankruptcy petition, or between 90 days and one year before the date of filing if the creditor is an insider of the debtor. While the Bankruptcy Code provides numerous examples of parties that would qualify as insiders of a debtor, the list is not exhaustive and a determination of a party’s alleged insider status is often left to the court. The legislative history of the Bankruptcy Code provides the following definition: “one who has a sufficiently close relationship with the debtor that his conduct is made subject to closer scrutiny than those dealing at arm’s length with the debtor.”

Pursuant to § 547(b)(5), the final element that must be proven in order to establish a valid preference requires that the transfer must have enabled the creditor to receive more than the creditor otherwise would have received if: the case were a case under chapter 7 of this title; the transfer had not been made; and such creditor received payment of such debt to the extent provided by the provisions of this title. 11 U.S.C. § 547(b)(5).The practical effect of § 547(b)(5)is to precludes recovery of a transfer made to a fully secured creditor because the secured creditor would not be deemed to have received more as a result of the transfer than it otherwise would have pursuant to a chapter 7 liquidation.

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