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Wage Garnishment in Arizona

By Ben Wright | Published November 30, 2015

Apart from settling a debt, bankruptcy is the only other way to forcibly stop wage garnishing. Wage garnishing is when creditors can take a percentage of your paycheck to pay debt that is owed. In the state of Arizona, the maximum that creditors can garnish from a debtor’s pay check is 25%. Filing bankruptcy stops wage garnishing because an Automatic Stay will be put into place that prohibits creditors from collecting money.

After your bankruptcy has been discharged, collection agencies cannot continue to garnish wages because the debt is extinguished via the discharge order. The exception is if a bankruptcy is dismissed without discharge. If this occurs, wage garnishments can commence once again to pay your debt.

You may even to be able to get some of the garnished wages back. This just depends on if the bankruptcy was filed and if the creditors were alerted on time. Creditors would have to give the garnished wages back, even if they were not alerted in time because under bankruptcy law it is prohibited to garnish wages during a bankruptcy.

To stop wage garnishment as quickly and efficiently as you can, you must list and notify your creditors as soon as you file. Also, notifying the payroll department of your employer can also put a stop to wage garnishing.

Source: Nolo: Law of All, “How Bankruptcy Can Stop Wage Garnishments,” Baran Bulkat, 2015.

Posted in Bankruptcy in Arizona, Chapter 7, Personal Bankruptcy | Tagged Automatic Stay, Discharge, Wage Garnishment |

Why Does Bankruptcy Have a Bad Reputation?

By Ben Wright | Published November 23, 2015

The only reason bankruptcy has such a bad reputation is because it is discussed by people who know very little about filing bankruptcy. It has been said countless times that filing for bankruptcy and getting your debts discharged ruins your credit score. However, most people who need to file for bankruptcy have already lowered and ruined their credit score on their own with missed and late payments.

Bankruptcy is meant for honest people who are suffering through tough times and need assistance getting rid of the financial hole they are drowning in. Depending on the type of bankruptcy that is being filed, your debt will be discharged or a payment plan will be set up and you will receive a fresh start. What is so bad about that?

Getting your debts discharged allows for a fresh start and a chance to rebuild your life. Bankruptcy relieves you and your family from unforeseen medical expenses, car accidents, credit card bills, and life tragedies that were never expected.
Bankruptcy is not for the lazy and irresponsible. Bankruptcy is for those who are trying to take back their life and protect themselves and their family from debt.

Source: National Bankruptcy Forum, “Is Filing Bankruptcy Bad? Can It Be Good?” Allan Bloomfield, March 11, 2014.

Posted in Personal Bankruptcy | Tagged Bankruptcy Discharge, Bankruptcy Reputation |

Chapter 7 versus Chapter 13 Bankruptcy

By Ben Wright | Published November 16, 2015

What is the difference between Chapter 7 and Chapter 13 bankruptcies? Chapter 7 bankruptcies allow you to erase many debts without having to pay any of it back to creditors. Chapter 13 bankruptcies also erase many debts at the conclusion of a 36 or 60 month payment plan. Chapter 13 bankruptcies also allow you to pay off tax debts over time or catch up on delinquent car and house payments in order to be able to keep your property.

There are advantages of a Chapter 7 filing in Arizona. For example, all debts will be erased for the most part, unless a Reaffirmation Agreement is signed. Wages cannot be garnished after discharge, and collection agencies cannot contact you anymore. Your case will usually be completely discharged after about 6 months from filing.

Chapter 13 advantages in Arizona include keeping all your property as long as you can afford a payment plan. Payment plans are put into place after filing bankruptcy because debt is then reduced. More types of debt are dischargeable in Chapter 13 bankruptcies than in Chapter 7 bankruptcies and you are protected from wage garnishment and collection agencies. Your case will usually be completely discharged after about 3-5 years from filing.

Here at Wright Law Offices, we can help you determine which type of bankruptcy is best for you! We are a debt relief agency and can you file for bankruptcy relief under the Bankruptcy Code. Call our Phoenix bankruptcy lawyer at 602-456-6085 for a free initial consultation.

Source: Arizona Bankruptcy Law, “Arizona Chapter 7 Bankruptcy or Arizona Chapter 13 Bankruptcy?” 2013.

Posted in Bankruptcy in Arizona, Chapter 13, Chapter 7 | Tagged Chapter 13 Bankruptcy, Phoenix Bankruptcy Lawyer |

Bankruptcy Facts and Myths

By Ben Wright | Published November 13, 2015

There are many myths about bankruptcy. Bankruptcy often has an aura of difficulty and confusion. We are here to tell you about the facts!

For starters, bankruptcy courts are located all over the United States. Contrary to popular belief, bankruptcy is actually filed and handled in federal court and bankruptcy is based off of federal law.

Filing for bankruptcy actually calls for an appearance in court and is more than just filling out some legal documents. There are two main types of bankruptcies that individuals may be able to file: Chapter 7 and Chapter 13. The type of bankruptcy that you may be able to file is, in part, based off of your median income.

Bankruptcy does not always mean that all debt is forgiven. Some debts, such as tax debts and mortgage arrears cannot be discharge but can be included in a Chapter 13 plan payment. The Chapter 13 plan payment is typically based on what you owe, how much you owe, and how much money you earn. In Chapter 7 bankruptcy, there is no monthly plan payment but you also may still owe many tax debts and/or mortgage arrears.

After filing bankruptcy and having your debts discharged, you may be able to purchase a house after three years with an FHA loan. In addition, our bankruptcy clients typically are approved for car loans right after the bankruptcy is discharged. If you would like more information about bankruptcy and its implications, call Wright Law Offices at 602-456-6085.

Source: Enlighten Me, “Top 10 Facts About Bankruptcy Law,” 2015.

Posted in Chapter 13, Chapter 7, Personal Bankruptcy | Tagged Bankruptcy Court, Chapter 13, Chapter 7 |

Are You Drowning in Debt and Thinking about Bankruptcy?

By Ben Wright | Published November 11, 2015

If you are nervous about filing for bankruptcy, you are not alone! Every year across the United States, as many as one million or more families and individuals file for bankruptcy. Even previous American Presidents have filed bankruptcy. Bankruptcy is not something to be ashamed of in any aspect. After filing bankruptcy, it is possible to be successful and move on to bigger and better things.

President Thomas Jefferson and President Abraham Lincoln both have filed for bankruptcy. In fact, Thomas Jefferson filed several times, even after his presidency! The main reason that caused them both to file were failed business ventures. Creating and opening a business costs a lot of money and is a gamble. If a business is not successful, filing bankruptcy may be the only solution to get rid of debt.

Bankruptcy can give you the opportunity to get back on track and go on to having a successful and brighter future. Bankruptcy also allows for a new financial start and helps you get past difficult, but temporary patches in life.
Struggling with the labyrinth of debts that cannot be paid is an extremely difficult for anyone to deal with. Fortunately, bankruptcy is a survivable option.

Source: CNN, “Seven Famous People Who Survived Bankruptcy,” Ethan Trex, November 19, 2008.

Posted in Bankruptcy News, Chapter 7, Personal Bankruptcy | Tagged American Presidents, Bankruptcy Filings |