Arizona Bankruptcy Attorney Blog

I'm not totally happy with the Dodgers Chapter 11 Bankruptcy. It struck me as utterly unnecessary, because there was a huge television deal on the table which would have floated the Dodgers for years, but it was nixed by the commissioner.

So how far will a bankruptcy send economic disruptions and ripples?

Well, all the way to Glendale, Arizona, apparently.

Here's the short version: Greece is the birthplace of democracy and western civilization. Like it, don't like it, there it is.

Here's the current version: Greece spent money it didn't have like a drunken sailor over the last couple of decades, and now owes money to everyone and his brother, because the problem with socialism is that pretty soon, you run out of everybody else's money.

As a result, the other European Countries are about to control the internal economic workings of Greece as a pre-condition to a bailout.

Greece is nonetheless expected, ultimately, to default on its debt. So the point of the current exercise is lost on me, unless it's to punish Greek Citizens for the sins of their politicians.

Now, the pre-conditions to the bailout are currently causing well-organized riots in the streets of Greece; in specific, folks there apparently don't like the massive tax increases that are coming down the pike, and they don't like the "asset sales" that are part of the externally-imposed austerity program.

So lemmie see if I understand this: Greek politicians promised the moon to the Greeks to get themselves elected, and then Greece gave away money and services to the Greeks for free! And Greeks got to retire really early.

And it was good.

Then Greek Government payments out exceeded revenues in, and the borrowing started.

And it was still pretty good.

And then Greece looked like it was going to default on debts owed to everybody in sight.

And things were still pretty good.

And then all the other countries in Europe ganged up on Greece and said, you owe money! We'll bail you out, but we're going to dictate your internal tax structure, and you must sell your assets!

And suddenly it was not very good.

And exactly what assets is Greece going to have to sell?

Will it be the Parthenon? Or maybe Hadrian's Arch? Or maybe all the farmland in Greece?

I don't know yet, but I'll let you know when I figure it out.

But this much appears true right now: Greece got to rule itself for a long time, and then it became part of the Roman Empire.

Right now, it looks like it's about to become part of some other Empire, and once again lose its ability to rule itself.

This much is true: the citizens of Greece are about to suffer a lot, because their politicians couldn't stop buying votes by spending their citizen's money, and then by spending borrowed money.

And that strikes me as pretty darn scary.

There's a smart guy named McDaniel.

Not me!

Well, okay, if you insist.

But there's another one, too! And he writes about bankruptcy options, and how you should find them. His name is Dustin McDaniel.

And he's an Attorney General (not in AZ) who spends a fair amount of focus, apparently, on various sorts of non-lawyer debt negotiation companies, and doesn't appear to like them a lot.

He wrote a press release (or his minions did; same thing, really) and I liked it, because it made a suggestion that the best way to determine your bankruptcy options was to talk to a bankruptcy lawyer. Seems obvious, but there is a lot of noise in the background, so it's pretty easy to be confused.

I think he's right; my preference, of course, is that you talk to an experienced, AV rated, AVVO 10.0 bankruptcy attorney who's been Chairman of the State Bar Bankruptcy Section, but you get to talk to anybody you want!

In any case, here's his press release discussing debt settlement companies, and discussing bankruptcy options. He correctly points out that it's a serious business, filing for bankruptcy. I will point out that it's perhaps a more a serious issue if you're spending otherwise exempt monies from your 401(k) or your IRA to pay credit card debt, or any other debt, for that matter.

But I digress. Here's his press release, and thank you, Dustin McDaniel!

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The Hidden Dangers of Debt Relief
LITTLE ROCK -As debt continues to burden more and more Americans, debt settlement services seem more and more attractive to consumers looking to regain some financial security in such insecure economic times. However, many of these companies make promises that they cannot keep or do not tell consumers up-front that "settling debt" will likely require the consumer to file bankruptcy. Thus, Attorney General Dustin McDaniel issued this consumer alert to caution Arkansans about debt settlement services.

"Debt can sometimes be overwhelming," said McDaniel, "and unfortunately, companies often advertise quick financial fixes, preying on good people's bad fortune. The truth is that there are no quick fixes, and bankruptcy should be the absolute last resort."

Some companies that offer debt relief do not advertise the solution as bankruptcy, even though that is often what they recommend. Consumers are sometimes advised to stop paying their creditors and let the debt relief company negotiate with creditors directly, which just makes matters worse. Other services ask consumers for money up-front, not telling the consumer that the payment is for a fee rather than a payment towards the debt. Still some companies promise to negotiate a one-time settlement with creditors, which they claim can reduce principal payments by 50 to 70 percent. This claim is rarely realized. In fact, over the last few years, the Federal Trade Commission has sued several debt relief companies that simply lie to consumers.

If you are burdened by debt, here are some tips to remember:
• Talk to your creditors directly. Often times they will lower your interest rate upon request and some may be willing to work out a modified payment plan.
• Talk to a credit counseling service. These organizations will work with you to come up with a monthly payment plan, which you pay monthly to the service which in turn pays your creditors. Counseling organizations may require a fee for this service.
• Talk to an attorney. An attorney can also advise you as to your financial options, especially if you are considering filing bankruptcy.
• Do your homework. Bills can be overwhelming, but you should not make financial decisions based on radio ads or TV commercials alone. Shop around for companies or credit counselors that will work with you to understand your individual financial situation and offer tailored solutions.

If you are unsuccessful in managing your debt, bankruptcy may be the appropriate option. However, bankruptcy has serious consequences. Bankruptcy information stays on your credit report for years, and can negatively impact your ability to complete basic but essential financial transactions like getting a new car or home. It can also impact your career, as many employers review credit reports before hiring candidates. To learn more about bankruptcy, visit http://www.uscourts.gov/bankruptcycourts.html. If you have questions about or are unsatisfied with a debt relief service, contact the Public Protection Department of the Attorney General's Office at 501-682-2341 or toll-free statewide at 1-800-482-8982.

This differs a bit from lender to lender, and from time to time. But, in general, the mortgage company or bank won't start a trustee's sale in Arizona until you miss three payments; and once the trustee's sale starts, it runs for 90 days, under the statute.

So in most cases, you can miss six payments prior to losing your interest in your house, and prior to having to move out. You may be able to stretch that to seven or eight payments if you file a Chapter 7 Bankruptcy a few days prior to the date scheduled for the trustee's sale.

Please DO NOT wait to see me until one day prior to the sale, and ask me to file a Chapter 7 Bankruptcy for you in four hours.

Because I want you in my office a full sixty days prior to the trustee's sale, because if you don't pass the means test then, we'll have to work on Plan "B".

And even if you clearly do pass the Means Test, I want your paperwork to be as complete and accurate as possible, and that takes a certain amount of time!

It's always sad when icons are forced to file bankruptcy cases of any sort. It exposes them to adverse publicity, makes their fans unhappy, and introduces uncertainty into their overall equation.

But the Los Angeles Dodgers aren't by any means the first major league baseball team to file a Chapter 11. They were number twelve.

Why did they file? Well, when you can't make payroll, you only have a few options.

And they had some debtor-in-possession financing lined up, so they filed, and life goes on.

There is a small finger-forest of blame associated with the filing.

The owner, Frank McCourt, says that there was a three-billion dollar deal on the table, and that the Commish (Bud Selig) nixed it.

All that will be sorted out, during the course of the Chapter 11 Bankruptcy.

But I have to wonder if it's generally a good idea to nix a three billion dollar deal when there's no way to make payroll without the deal.

Here's what I have no questions about: if the Dodgers had to file a Chapter 11 Bankruptcy because they couldn't make payroll, this is a depression.

Governments generally do a very bad job of managing businesses.

Remember the Soviet Union? It was the poster child for "communism doesn't work", and it demonstrated its economic failure in a particularly sincere way. By dissolving.

Even if you control the lives of everybody in your empire, if they aren't intelligently motivated ("work or die" doesn't really count), a top-down state-controlled economy doesn't compete well with a system managed from the bottom up by entrepreneurs who are driven by a profit motive.

A capitalistic system is driven by something like Darwinian Selection; a business that makes people happy enough that people will pay for its goods or services, priced at a point where there's profit generated by the company, is permitted to continue producing goods and services.

If it doesn't make people happy enough, it goes out of business and the resources being used by that business are used by some other business that does make people happy.

Over the last decade or two, Communist China has been held up as a poster child for how well a state-run economy works. After all, it grew very quickly, and it produces a ton of product, and it also produces acid rain in other countries from it's smokestacks.

But the hopes and dreams of those who prefer all-powerful governments are currently in disarray, and it has been predicted for several years that the Chinese Economy will fall, badly, as the Soviet Economy fell.

That would be consistent with the lessons of history.

Sadly, a lot of folks have invested a lot of money in China.

This article weighs and balances thoughts that China's economy will melt down (a belief held by Jim Chanos, for instance), and thoughts that China will move on to become the greatest economic power ever, and live happily ever after.

My guess? Since Jim Chanos called Enron, Tyco, and the Sub-prime meltdown, he's a pretty smart guy.

And his opinion and my opinion are pretty similar right now.

The more interesting question is, what effect will a meltdown of the Chinese Economy have on the U.S. Economy?

My guess? The results probably won't be good.

I noticed that my buddies at THELAW.TV built me a new Youtube.com page, and it's populated with a hundred educational bankruptcy videos.

That was downright nice of them!

The issue of whether a person can represent himself or herself comes up from time to time.

The rules are pretty straightforward in Arizona Bankruptcy Cases. You can certainly represent yourself.

Bear in mind that lawyers have a saying: the lawyer who represents himself has a fool for a client.

And you cannot represent your spouse in a bankruptcy case, because you are not an attorney (unless you are, in which case, nevermind!).

And you, unless you are an attorney who can practice law in District Court in Arizona, cannot represent your corporation in Bankruptcy Court here.

The ingredients in the title are parts of the Anna Nicole Smith Saga.

A young lady who was "not just another chicken slinger", and a Guess Jeans Model, and a Playmate of the Year, who married well, and became a rich widow, ultimately defeated her in-laws in the will contest, from the grave!

Except that she could never actually get the money.

Sometimes in-laws can be really irritating, including those points at which they prevent you from getting your hands on...the money!

We should all remember that health beats money every day of the week (money is good, too), because without health nothing much matters. Note that I really want you to take your vitamins.

Actually, love probably falls in a similar category; with love, nothing else matters. And without love, nothing matters at all. But I digress.

Or perhaps I don't digress; perhaps love was the core of the Anna Nicole Smith and Pierce Marshall marriage, and perhaps not. I wasn't there.

But this much is certain: Bankruptcy Court Jurisdiction will never be the same.

On a different note, let me point out that the drafters of the "New Code", back when it was new (effective date October 1, 1979), wanted to eliminate the wasteful, time-consuming fights about whether something was inside or outside Bankruptcy Court jurisdiction.

And now, I suppose, everything old is new again.

Fasting (voluntarily going without food) has a long history as both a religious and a health measure.

Involuntary fasting is generally associated with economic issues, and in that context it's normally referred to as "starving".

But as Nicole Bullock tells us, the Mayor of Harrisburg is currently fasting (along with a large group of her constituents) in an effort to "attempt to demonstrate harmony in the broader community and call for more co-operative and focused problem solving among elected officials," said Robert Philbin, director of communications at the city.

The City Counsel of Harrisburg has suggested an alternative to fasting to fix the city's economic woes: they call it "bankruptcy".

Bankruptcy is a pretty serious remedy, but so is penicillin; and when you need a powerful, broad-spectrum antibiotic, you need a powerful, broad-spectrum antibiotic, even though it has side effects. And so it is with bankruptcy; if you need it, you need it, even though it has side effects.

Note that it makes sense for me to be happy with bankruptcy, because I'm a bankruptcy lawyer!

I'm perfectly happy with fasting as an economic remedy; frankly, most people can't keep it up for very long, so it ought to shorten the decision-making process for Harrisburg.

But I'm used to seeing fasting as a political remedy in places like India, where Gandhi made it famous in his western-educated efforts (he trained as a barrister at University College London, and was called to the Bar in 1891; first, let's not kill all the lawyers, right?) to achieve independence for India from Great Britain.

And generally the resistance to civil authority makes sense when you're dealing with tyranny, but when you're resisting the City Counsel, it makes less sense to me, because they aren't a militarily-supported invading and occupying power; they're elected, and they can be booted out if they're unpopular.

See the difference? One group has bayonets, the other group has recommendations.

I normally prefer that a politician make actual suggestions, rather than declare a day of prayer or fasting; while prayer and fasting are both effective as therapy for souls, cutting the budget normally works better for municipal economic distress.

Whatever the case, it's likely that anybody who undertakes a three-day fast will drop a couple of pounds, lose a little fat along with some muscle, and move into non-diabetic ketosis, which is a state in which the body can access its fat for nourishment.

I also like focus in economic discussions; if there's an economic solution, it's good to spell it out, so that people can talk about it, discuss it, and make an informed decision on it.

If there's a problem with waistlines in Harrisburg, fasting may fix it.

If there's a problems with government spending in Harrisburg, a budget change might work better.

And if it's stubborn economic adipose tissue, then maybe judicious bankruptcy therapy is just the ticket!

Some of my faithful readers have asked me if I quit blogging; I told 'em I was just blogging in different locations (here, and here, and here, for instance).

The reason I took a vacation from my number one ranked, top rated and best Arizona Bankruptcy Blog was simple; my friends at Justia were tinkering with it to give it a much-needed facelift.

Now, Justia is composed of a wonderful bunch of people, and that just makes sense. Because Justia is made up of the folks (Stacy and Tim, both great folks) who started Findlaw, sold out, and then started a new lawyer directory. They also help lawyers with websites and, you know, blogs! And if Kerri, my Justia blog coach, were any nicer, smarter and more helpful...well, that just isn't possible!

Porting my gigantic Arizona bankruptcy blog over to the TypePad platform, with links intact, and with a far nicer user interface, was a pretty big job, especially because I'm such a non-technical kind of guy.

But the website gurus at Justia were more than equal to the task, and all I can say is: "Thank you, Justia!"

So to my faithful readers, I can now say: "I'm baaaaack!"