What You Need to Know About Bankruptcy

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This guide to bankruptcy covers frequently asked questions regarding the bankruptcy process and the different options available when considering bankruptcy.

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  • What You Need To Know About

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    Welcome to JacksonWhite Attorneys at Law and our guide, What You Need to Know About Bankruptcy. We hope the information contained in this booklet will answer the questions you may have about the bankruptcy process and your options when considering bankruptcy.

    We understand that those considering bankruptcy may also have questions regarding other legal issues. These legal issues may include liens, collections, foreclosures, business formation, employment and other real estate and tax matters. JacksonWhite has attorneys available to assist in all of these legal practice areas in addition to bankruptcy. We encourage you to let the dedicated attorneys and staff at JacksonWhite help you with your legal needs.

    For more information about JacksonWhite, please visit us on the Web at www.jacksonwhitelaw.com and www.arizonaseniorlaw.com. Both Web sites are loaded with helpful videos, blogs and information, aimed to help you understand our legal practice areas and answer your legal questions. Our bankruptcy attorneys offer free consultations, so if you are considering bankruptcy, please take advantage of this service. All legal consultations can be set up by calling the JacksonWhite office toll-free at 1-800-243-1160.

    Business/Corporate LawCommercial/Civil LitigationConstruction LawCriminal LawChapter 7, 11, 13 BankruptcyElder LawEmployee BenefitsEstate PlanningFinancial InstitutionsCreditor/Debtor Issues

    Guardianships/ConservatorshipsFamily LawHOA LawInsurance Related DisputesLabor and Employment LawMediation ServicesMedicaid/ALTCS PlanningPersonal Injury LawProbate LawReal Estate LawTax Law

    JacksonWhite Legal Services

  • I Fair Debt Collection 2

    II Bankruptcy Overview 4

    III Chapter 7 Bankruptcy 7

    IV Chapter 11 Bankruptcy 10

    V Chapter 13 Bankruptcy 12

    VI Bankruptcy and Home Foreclosure 14

    VII Legal Assistance 17

    What You Need To Know About Bankruptcy 1

    Table of Contents

    JacksonWhite Attorneys at Law

    40 North Center Street, Suite 200 Mesa, Arizona 85201

    1.800.243.1160480.464.1111

    Additional office in Peoria

    2010 JacksonWhite P.C., all rights reserved. This publication is provided for informational purposes only and should not be construed as individual legal advice. Please consult a knowledgeable attorney regarding your specific legal needs.

    www.jacksonwhitelaw.com

    www.arizonaseniorlaw.com

    www.myaltcs.com

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    What You Need To Know About Bankruptcy2

    Fair Debt CollectionConsumers are always expected to pay back what they borrow. However, this does not mean that collectors can treat consumers without dignity and respect. The Fair Debt Collection Practices Act (FDCPA) was passed to protect consumers against such abuses. The FDCPA limits the types of practices collectors can engage in and provides remedies for consumers who have been mistreated. Consumers who understand the FDCPA can protect themselves and discourage collectors from further abusive practices. Consumers who are not familiar with the FDCPA may miss out on its protections.

    What limitations does the FDCPA place on third-party debt collectors who are trying to locate a consumer?Debt collectors are generally not permitted to divulge information about consumers debt. The FDCPA enforces this by placing the following restraints on collectors who make inquiries into a customers whereabouts:

    Collectors must not disclose information about a consumers debt.

    Collectors must notcommunicate with any one person more than once unless that person specifically requests a return phone call, or unless the collector reasonably believes that the first response was false or incomplete.

    Collectors must notcommunicate by postcard or use an envelope which indicates the contents of the communication.

    Collectors must not communicate with any third-party including the consumers family members and co-workers.

    Collectors must communicate only with the consumers attorney if the consumer has legal representation.

    What limitations does the FDCPA place on third-party debt collectors communication with consumers?Debt collectors cannot harass or threaten consumers in any way, shape or form. The FDCPA protects consumers from such harassment by laying out very clear guidelines for collectors. Debt collectors are prohibited from:

  • 3 Communicating with aconsumer at any unusual time or place, and between the hours of 9 p.m. and 8 a.m.

    Communicating with a consumer at the consumers place of employment if the consumers employer prohibits it.

    Communicating with anyperson other than the consumer, the consumers attorney or a consumer reporting agency.

    Communicating with the consumer if the consumer provides written refusal to pay the debt, except for very limited purposes.

    Using or threatening to useviolent or criminal means to induce repayment.

    Using obscenities or profanities to abuse the listener.

    Allowing the telephone to ringrepeatedly or continuously with the intent to annoy or harass.

    Making telephone calls without disclosing their identity.

    Making any false or misleadingstatement about their identity or the nature of the debt.

    Must debt collectors provide written notice of the debt?Debt collectors must provide consumers with written notification of the debt. They must send detailed information about the debt within five days of first contacting a consumer. The statement must provide the amount of the debt, the creditor

    to whom the debt is owed, and a statement granting the consumer thirty days within which to dispute the debt. If consumers do not dispute the debt within the 30-day window, collectors can assume the debt is valid. Consumers who dispute the debt, on the other hand, cause the collection to be stopped unless and until the collector provides them with proof of the debt. For this reason, consumers must make a timely response if there is any question as to the debts validity.

    What remedies are available against debt collectors who violate the FDCPA?Consumers have one year from the time they believe the collector violated the FDCPA to bring a lawsuit. Judgments against debt collectors can provide consumers with compensation for actual damages, attorney fees and a statutory fine of up to $1,000, oftentimes with no upfront costs. Consumers should immediately contact a qualified attorney to enforce these remedies. Likewise, consumers who have already filed bankruptcy but who experienced harassment from debt collectors within the past year should also seek to have these remedies enforced. Debt collectors who pay no regard to the law should be stopped, and filing an action in a court of law can be the most effective means of doing so.

    JacksonWhite Attorneys At Law

    Fair Debt Collection contd

  • 4Bankruptcy OverviewThere seems to be a lot of misunderstanding surrounding the bankruptcy process. Many people attach a stigma to the term bankruptcy and fail to recognize the benefits it can provide. There are those who are too hasty to file for bankruptcy and thus make the process harder. You should understand that certain financial situations provide excellent justification for bankruptcy, such that filing can provide you with a real solution to your problems.

    Bankruptcy is by no means a perfect solution to every difficult financial situation. Nevertheless, it does hold a valuable place in the set of tools available to people trying to get out of financial trouble. By gaining an understanding of the bankruptcy process you can become better equipped to deal with financial obstacles that may arise. This booklet examines many of the common questions that arise in regards to bankruptcy and the bankruptcy process. After reviewing this guide, you will stand on more solid footing when deciding whether bankruptcy is appropriate for your particular financial situation.

    What is Bankruptcy?The word bankruptcy means more than general financial

    hardship. It actually describes a legal process under federal law. Different types of bankruptcy are available but they all aim to help people get out of debt. The process by which debt is eliminated varies depending on the type of bankruptcy filed.

    People with consumer debt most commonly file for bankruptcy under Chapter 7 and Chapter 13 of the U.S. Bankruptcy Code. Chapter 7 allows you to discharge your debt and Chapter 13 allows you to create a repayment plan by which you can eliminate debt over a period of years. Businesses most commonly file for bankruptcy under Chapter 11, but it is also available to individuals in certain situations (Ideally, people use Chapter 11 to reorganize debt similar to Chapter 13, but liquidation of assets and discharge of debt sometimes takes place as well. Debt, income and assets are all considered when determining which type of bankruptcy is most suitable to your particular situation).

    What is the difference between secured and unsecured debt?When it comes to borrowing money, all debt is not created equally. There are two general classes of debt, secured and unsecured, which afford

    What You Need To Know About Bankruptcy

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    creditors different remedies in the collection process. Borrowers must put down collateral when obtaining a secured loan to reduce the risk to the lender. If the borrower fails to make payments, the collateral is subject to seizure to help pay the outstanding debt. A prime example is a home purchased with a mortgage becaus