Filing Bankruptcy Stops Creditors From Collecting

Plain and simple, filing a bankruptcy filing prevents your creditors from continuing their attempts to collect on a debt. This protection is due to the "Automatic Stay," a bankruptcy mechanism that operates to stop a variety of activity, including (1) a lawsuit to collect a credit card debt listed in the bankruptcy filing and/or (2) a garnishment pursuant to a judgment. For a detailed list of what the Automatic Stay applies to, please click here.

This knowledge is very powerful. Filing a bankruptcy petition, in most instances, concludes a creditor's attempts to collect. Once the bankruptcy is filed, the creditor must leave the debtor alone and can only challenge a debt's ability to discharge the debt in certain circumstances.

However, in most situations, a bankruptcy filing is the beginning of the end of the debt. Debtors can use this knowledge of bankruptcy as leverage to negotiate with creditors. Sometimes, a debtor can settle her debt with the creditor for pennies on the dollar.

Jeffrey F. Levine, Esq.

Singer Pistiner, P.C.

(602) 264-0110

jl@singerpistiner.com

phoenix-bankruptcy-lawyers.com

This Blog Site and each entry is being made available to you for educational purposes only. It is intended to give you general information and a general understanding of the law. This blog is not intended to provide specific legal advice. By using this blog/website, you understand that there is no attorney client relationship between you and the authoring attorney or law firm and that the information displayed does not constitute legal advice. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Keeping Debt Collectors and Creditors off Your Back

Many people do not know what to do when they are faced with mounting debt and are being harassed by creditors. Harassment comes in many forms, but the debt collector's favorite method seems to be through the phone. Whether it is a robo-call or someone is actually on the other side, repetitive calls at all hours of the day can quickly bring someone to his/her breaking point.

It is surprising how little someone needs to know to help keep creditors at bay. A debtor can potentially reduce the volume of creditor calls and other forms of harassment simply by consulting the Fair Debt Collection Practices Act (the "Act"). This federal set of laws is intended to lay out the ground rules for debt collection and can be a powerful tool to help even up the battlefield between debtor can creditor.

The Act prohibits creditors from contacting individuals at unusual times or places known to be inconvenient for the debtor. At a minimum, debt collectors (notwithstanding communication from the debtor to the contrary) shall not communicate with the consumer before 8 AM and after 9 PM. Further, except for a few circumstances, a debt collector cannot communicate with a third party in connection with a debt. Therefore, if a debt collector calls your neighbor or co-worker to discuss your debt, that is prohibited.

Speaking of prohibited conduct under the Act, a debt collector may not contact the debtor if he or she is represented by an attorney with respect to the debt. That is why consulting and retaining a bankruptcy attorney is so important in this process. The debt collector must also refrain from contacting the consumer at work if the debt collector knows that this type act is prohibited by the employer. In short, a debt collector may not communicate with anyone other than the consumer, his/her attorney or a consumer reporting agency concerning an alleged debt.

Most importantly, if a consumer notifies a debt collector in writing that he/she refuses to pay a debt or he/she wants the debt collector to cease contacting the consumer, the debt collector must comply with the request. After this written request, the debt collector can only contact a consumer to advise the consumer that the debt collector's further efforts to collect are being terminated, or to notify the consumer that the creditor or debt collector may invoke specific remedies ordinarily used in debt collection, such as a lawsuit.

It may be difficult to actually peruse a claim against a debt collector for violating the Act because of the cost to retain an attorney. However, knowledge is power and the important thing to realize here is that this harassment, by law, can stop. A debtor can easily learn how to harness the Act to his/her advantage by consulting the Act. Applying the info from the Act can save a debtor from unwanted stress and time wasted combatting these collection efforts.

To download a copy of the Fair Debt Collection Practices Act, please click here.

Jeffrey F. Levine, Esq.

Singer Pistiner, P.C.

(602) 264-0110

jl@singerpistiner.com

phoenix-bankruptcy-lawyers.com

This Blog Site and each entry is being made available to you for educational purposes only. It is intended to give you general information and a general understanding of the law. This blog is not intended to provide specific legal advice. By using this blog/website, you understand that there is no attorney client relationship between you and the authoring attorney or law firm and that the information displayed does not constitute legal advice. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Exemptions Protect your Property

As I discussed in the last blog posting, there is a great deal of misinformation floating around about the consequences of filing bankruptcy.

Many people assume that when an individual files for Chapter 7 personal bankruptcy protection, he or she will lose everything. This fear, that the bankruptcy court or a person's creditors will take everything from a debtor, deters many people who are in desperate need of debt relief from filing for bankruptcy protection.

However, the notion that a person automatically loses everything when filing a Chapter 7 bankruptcy is absolutely untrue. In fact, in many instances, and with the proper planning/attorney guidance, a debtor is able to keep almost all of his or her assets while also discharging large amounts of unsecured debt in this relatively short process.

The mechanism that protects a debtor's assets is known as an "exemption." Exemptions are laws that entitle a debtor to retain specific assets and property regardless of how much money that person may owe. There are both state and federal exemptions. Federal bankruptcy law allows a person to protect specific kinds of property from creditor (11 U.S.C. § 522). Each state in which a debtor resides allows him or her to protect specific kinds of property as well. The list of protectable assets varies from state to state. A married couple filing a joint bankruptcy is entitled to two sets of exemptions for most kinds of property.

The following examples discuss a few state exemptions that are available to debtors who file for Chapter 7 bankruptcy protection in Arizona (assuming the potential debtor meets the Arizona residency requirements pursuant to bankruptcy law):

• An individual has an exemption in their home in the amount of $150,000.00. This means the first $150,000.00 of equity in a piece of property goes to the debtor in the event of a sale of that property. The exemption amount is the same regardless of whether it is a single or joint bankruptcy filing. (A.R.S. § 33-1101)

• Each person can protect up to $4,000.00 worth of household furniture, furnishings and appliances that he or she personally uses. In the event a married couple files a joint bankruptcy, the exemption doubles to a maximum of $8,000.00 worth of household assets. In addition, property is valued at "garage sale" values, meaning that the property's worth is significantly undervalued. (A.R.S. § 33-1123)

• A debtor can also protect his or her wardrobe up to $500.00 in garage sale value, which is doubled when there is a joint filing. (A.R.S. § 33-1125(1))

• A debtor can protect almost all of his or her retirement accounts so long as it is an ERISA-qualified retirement plan or a deferred compensation plan. (A.R.S. § 33-1126(B))

• All child support or spousal maintenance that is received pursuant to a court order is fully protected in bankruptcy. (A.R.S. § 33-1126(A))

These are just some of the exemptions available to individuals who file for Chapter 7 bankrtupcy protection. Because of the somewhat complex nature of the US Bankruptcy Code and the interplay of state law, a person considering bankruptcy should consult a local attorney to maximize exemptions and guard against possible issues during the bankruptcy process.

Jeffrey F. Levine, Esq.

Singer Pistiner, P.C.

(602) 264-0110

jl@singerpistiner.com

phoenix-bankruptcy-lawyers.com

This Blog Site and each entry is being made available to you for educational purposes only. It is intended to give you general information and a general understanding of the law. This blog is not intended to provide specific legal advice. By using this blog/website, you understand that there is no attorney client relationship between you and the authoring attorney or law firm and that the information displayed does not constitute legal advice. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Welcome to the Singer Pistiner, P.C. Consumer Bankruptcy Blog!

Welcome to the Arizona Consumer Bankruptcy Blog of Singer Pistiner, P.C. This blog is intended to educate the reader regarding bankruptcy and related debt-relief matters.

While the contents and discussions listed in this blog is not intended to be legal advice, it is our hope that readers will be able to use this blog as an educational tool to dispel the many horror stories and misconceptions that are out there relating to the consumer debt relief process.

Bankruptcy is a tool that, when properly utilized with the assistance of professionals, can relieve an individual from the severe financial pressure of credit card debt, medical bills, types of personal loans and other kinds of debt.

Bankruptcy can also break garnishments, delay foreclosures and force creditors to stop harassing you with incessant phone calls and threats.

Although the economy seems to be stabilizing, many families still face financial uncertainty. Consumers are hurting and need assistance. It is our hope to provide you with some clarity and understanding of the debt-relief and bankruptcy process through this once a week blog.

Jeffrey F. Levine, Esq.

Singer Pistiner, P.C.

(602) 264-0110

jl@singerpistiner.com

phoenix-bankruptcy-lawyers.com

This Blog Site and each entry is being made available to you for educational purposes only. It is intended to give you general information and a general understanding of the law. This blog is not intended to provide specific legal advice. By using this blog/website, you understand that there is no attorney client relationship between you and the authoring attorney or law firm and that the information displayed does not constitute legal advice. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.