A debtor considering bankruptcy must bear in mind that a bankruptcy stays on his or her credit report for up to 10 years, making it difficult to get future credit such as mortgages and that any credit extended will probably cost more in terms of interest rates and fees. A debtor should also keep in mind that some debts must still be paid. Accordingly, it is essential to seek the advice of an experienced bankruptcy attorney before making potentially life-altering financial decisions.
Debt, whether from credit cards, medical expenses, mortgages, car loans or other sources, can mount quickly, and you may find yourself unable to keep up. At the Phoenix law office of Joseph C. McDaniel, P.C., our attorney has more than 30 years of bankruptcy law experience, and is one of fewer than 30 lawyers in the state designated as a Certified Specialist in Bankruptcy Law. If you are struggling with overwhelming debt, we can help you understand your bankruptcy options and get the debt relief you need.
We encourage you to learn more about our Arizona bankruptcy law practice. Our firm is dedicated to combining high-quality legal representation with the personal attention and service. Call 602-297-3025 or contact us online to schedule an appointment with an experienced Arizona bankruptcy lawyer. Your initial consultation is free.
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Frequently Asked Questions about Bankruptcy
Q: Why are so many consumers filing bankruptcy?
A: Most Americans with excess debt have acquired their debts over long periods of time. While they intend to repay the debts, they may find themselves unable to do so because of unanticipated changes in circumstances such as medical emergencies, job losses or failed businesses, disability, divorce or loss of spouse. Any of these circumstances, combined with late fees, over limit fees and the extraordinarily high interest rates that creditors now charge can result in insurmountable debt.
Q: What alternative courses of action are there to filing bankruptcy when facing overwhelming debt?
A: Short of bankruptcy, a debtor may attempt to mediate with creditors or negotiate workout agreements to extend due dates, lower interest rates, partially forgive debt or alter other terms. A debtor may execute an assignment of property for the benefit of creditors (ABC), wherein the debtor puts assets in the trust of a neutral third party to pay creditors. A business debtor can sell the business, negotiating the satisfaction of debt as part of the deal. Other creative options to bankruptcy exist. Many debtors, however, find that their creditors are unwilling to agree to reasonable terms or are completely unwilling to negotiate.
Bankruptcy - An Overview
Bankruptcy is a legal vehicle that provides relief to individuals and businesses in serious financial trouble and protects their creditors to the extent possible. Generally, the bankruptcy process assesses the debtor's assets and liabilities and provides a structure within which the debtor is allowed to keep some, and in most cases, all property and ordered to satisfy as many eligible debts as possible, according to an order of priority established by law. Remaining debts are discharged, except those of certain types, like domestic support orders, debt obtained by fraud and most tax debt.
The traditional stigma of bankruptcy has faded and been replaced by the view that it is a fresh start after a time of trouble. Most bankruptcy debtors have experienced unexpected and extreme financial shock, such as that caused by sudden events such as job loss, business failure, death, divorce or illness.
In such cases, filing bankruptcy may be the right answer. If you are facing serious financial challenges, it is very important to seek the counsel of an experienced bankruptcy attorney, such as one from Joseph C. McDaniel, P.C. in Phoenix, Arizona, to help you to assess your legal options.
Consumer Bankruptcy
When an individual falls desperately behind in his or her debt payments, one option may be to declare bankruptcy, a legal proceeding in a federal bankruptcy court that relieves the debtor of some or all of his or her debts. While bankruptcy may not be the best option for everyone, in the right situations, it can provide people with a fresh start. The experienced lawyers at Joseph C. McDaniel, P.C. in Phoenix, Arizona can advise you as to whether bankruptcy may be the right move for you.
Commercial Bankruptcy
Like a consumer, a business sometimes finds itself in the uncomfortable position of being unable to pay its debts. One solution is to file for bankruptcy, a legal process in federal bankruptcy court that releases the business from the obligation to pay all or some of its debts. A lawyer experienced in bankruptcy can advise business owners about whether bankruptcy is right for them.
Credit Counseling Requirement in Bankruptcy
In 2005, Congress passed and the president signed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), a bankruptcy reform law. One of the new requirements BAPCPA imposes on a new bankruptcy debtor is to receive credit counseling from an approved credit counseling agency before the bankruptcy filing. A lawyer experienced in consumer credit and bankruptcy law can help educate debtors about these new counseling requirements.
Surviving the Emotional Effects of Bankruptcy
No matter what circumstances ultimately led to filing bankruptcy, both the practical and the emotional impact on the debtor will be enormous. Confronting the emotional and psychological issues surrounding bankruptcy and reaching an understanding and acceptance of the situation are essential to rebuilding and maintaining a successful financial life. An experienced bankruptcy attorney can guide a debtor through the complicated legal, financial and emotional maze of bankruptcy and steer him or her in the right direction for the future.
Bankruptcy Resource Links
American Bankruptcy Institute Consumer Corner
General information regarding consumer debt and bankruptcy.
Legal Information Institute
A bankruptcy overview from Cornell Law School, including links to state, federal and other sources.
FindLaw Guide - U.S. Bankruptcy Courts
Links to US Bankruptcy Court Web sites.
Official Bankruptcy Forms
From the Administrative Office of the US Courts.
AnnualCreditReport.com®
Official Web site where consumers can obtain free credit reports from the three national credit-reporting companies.
