Arizona Bankruptcy Attorney Blog

We tell clients this repeatedly.

Why mention this? It's simple: If a creditor (like a bank, for instance) has direct access to your bank account (as banks often do), then you can consider your checking balance dumped into the rancor pit as your creditor laughs their trademarked Jabba the Hutt laugh above you.

You know...

The pit? The one with a Rancor in it? From Star Wars?

Okay, let's put it this way then: If you owe money to a bank where you also store money in a savings or checking account, there's all kinds of technicalities that allow them to siphon the money out of your account without your knowledge or approval. If you owe money and have not made payments they will seize the opportunity, it's a proven fact. It is what they do.

If you're already filing a Bankruptcy then you may have glossed over some of the information you've been given because there's a lot relating to a bankruptcy that's occasionally hard to digest. This isn't one of those things you can sit around to consider; this is an immediate call to action that should have you setting up a bank account elsewhere ASAP.

You can't afford to wait for someone to remind you that you might want to keep your money, so take care of it before the bank makes it a moot point.

If you're still looking into your options to resolve your financial issues and Bankruptcy is on the list, you MUST keep this in mind. DO NOT bank where you owe money if you are filing a Bankruptcy in Arizona (or anywhere else for that matter), because the bank will swim around in your funds like Scrooge McDuck in his money bin, take photos of themselves with YOUR money and leave a bunch of zeroes lying around in your account.

In order to file a Bankruptcy, you'll have to stop paying your creditors and that includes credit cards. Often people will hesitate because they've worked so diligently to protect their credit score and bank accounts to date that doing things like not paying sounds ludicrous or dishonest. If you have misdirected feelings about protecting an unsecured creditor (this counts for ANY unsecured creditor) you need to stop paying them anyway prior to filing because failing to do so means that creditor will be sued by the trustee, which is a bigger hassle for everyone involved. Even the creditor that you were trying to protect.

If there's just one thing you take to heart from this, let it be that you won't be banking where you owe money when you file Bankruptcy. You need a bank account just on general principle, but you need a bank you can rely upon to store money instead of taking it.

It just depends on how much you care about keeping your money.

Moody's is in the business of predicting the future. It has algorithms and analysts who look at numbers and assign credit ratings to very big entities and deals (including the United States, most famously).

Warren Buffett is the media darling of billionaires, and he also is in the predicting the future business, because predicting the future, or causing the future, is the way you become a billionaire with a "b".

The reason I like this video is the following: it may provide comfort to smart business guys who beat themselves up because their business folded.

I routinely talk to gentlemen who tell me they've contemplated suicide while they were contemplating bankruptcy.

The guys who come into my office, obviously, have made one choice. Other folks opt for early-check out, which is probably the wrong choice.

Suicide is forever. Bankruptcy keeps you from buying a new house on credit for two years, or maybe three, depending on who you talk to.

So bankruptcy is a far more flexible remedy than suicide.

But back to our story.

If both Warren Buffett and Moody's failed to notice the gigantic real estate bubble in the United States, how should a poor little millionaire investor?

So if you were a poor little millionaire investor, don't beat yourself up.

An awful lot of doctors, lawyers, cpas, and business owners believed that real estate investing was the way to go, and all of them were and are very smart people.

So don't let one little error in judgment make you believe you're a loser.

Just file your bankruptcy, and get on with your life.

As soon as you get your debts behind you, you'll feel better.

I get the feeling that Central Falls deserves a medal.

While it took it long years of dithering to get there, it finally filed a Chapter 9 Municipal
Bankruptcy Case to deal with its overwhelming debt: fewer than 20,000 inhabitants, and more than $80,000,000 in liabilities.

And the lesson here should be pretty clear if you are owed money by a city: a Bankruptcy Judge can cut your debt in half, eliminate your contracts, and make vast amounts of your wealth vanish with the stroke of a pen.

In the FIRST HEARING in a case.

Also note; one guy's wealth (a receivable) is another guy's debt. And that wealth can vanish instantly in a bankruptcy of any flavor, whether it's a Chapter 7, Chapter 13, Chapter 11, Chapter 12, or Chapter 9.

This is an interesting video concerning the economic troubles of cities and states; if you have too much month left at the end of your money, bankruptcy will at least cross your mind.

And, apparently, it also crosses the minds of folks who are running cities and other municipal entities.

You'll hear these commentators talking about the fact that bankruptcy for cities and municipalities is "bad", because of the effect that it will have on bondholders.

On the other hand, it seems to me that at the point that the bondholders aren't getting paid, Chapter 9 Bankruptcy Cases will get filed, like the one in Central Falls that was filed yesterday!

I have read polls suggesting that 85% of those polled believed that a filing was a good idea.

This is one of those few cases where the agonizing over bankruptcy vs. non-bankruptcy options is happening with a municipality, rather than an individual.

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!

-----------------------------------------------------------------------------------------------------------------------

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.