Holidays and Bankruptcy-Tips for a Merry Holiday Season and Happy “Debt Free” New Year!
This may be one of our most unpopular posts, but the information contained within can be a saving grace in your future Phoenix Arizona Chapter 7 or Chapter 13 Bankruptcy. As you shop during this holiday season there are some things you must know, if you are facing financial stress and are contemplating filing bankruptcy. Your actions now, how you spend your money, and what you buy, may have a direct impact on your ability to discharge your debts in a Chapter 7 Bankruptcy.
We will meet with clients early in 2012 who need to file a Chapter 7 Bankruptcy in Arizona. During our free initial consultation we review a questionnaire filled out by the potential client. On this form we ask clients to list recently accrued credit card debts. Naturally, individuals will simply list “Christmas gifts” in this section. Once we see this, our in-depth analysis begins.
When you file a Chapter 7 Bankruptcy and attempt to discharge your credit card debts, your ability for discharge is in jeopardy if you have significantly increased the debt in recent months. For example, if you file a bankruptcy in January, and charged a significant sum of money on the cards for Holiday gifts in December, the creditor may object to that debt’s discharge. If this objection is successful, the debt will remain.
Another issue is using cash to buy Holiday gifts. For example, if you buy a brand new laptop for $2000 cash then file a Chapter 7 Bankruptcy, your Bankruptcy trustee may take that asset. In Arizona, you are allowed exemptions for your property. Unfortunately, you only get a $500 exemption for a laptop (well actually a typewriter, yes the laws are very outdated). So what that means is that the trustee can take the laptop, sell it, give you your $500, and keep the rest. OUCH!
Bankruptcy preparation is extremely important. It is imperative you seek the advise of an experienced Phoenix Arizona Chapter 7 Bankruptcy Attorney, in order to properly prepare for filing bankruptcy. At Mostafavi, Marco & Wimmer, we formulate an efficient and effective strategy in order to fully protect our clients during their bankruptcy. For a free consultation call (480) 540-3815 or visit www.mmwazlaw.com.
