The Earned Income Tax Credit (EIC) is a tax credit that helps you keep more of what you earned. The credit was initially passed in 1975 to offset the burden of social security taxes and provide incentive for working. How is it calculated, and who qualifies?

The majority of clients we work with in our bankruptcy practice would be considered “consumer” debtors. Credit card debt, home equity loans, car loans, and medical bills often make up the majority of what they owe to creditors. Bankruptcy laws are written to allow consumer debtors to exempt much of the property they have acquired. The ability to retain property is often a major factor in deciding to file bankruptcy. How much property is exempt under the bankruptcy law is also one of the determining factors in deciding whether to file chapter 7 or chapter 13 bankruptcy.

Because there is additional proof needed to show undue burden, the majority of those individuals who file bankruptcy do not file the additional adversary proceeding necessary to receive a discharge. This accounts for very low number of student loan discharges given to debtors by bankruptcy courts each year.

Filing for bankruptcy is complicated and stressful. You may be confused about what you are asked, or the state of your finances. This may lead you to be inaccurate or not thorough. And rumors and misconceptions about bankruptcy lead people to hide assets and not be upfront with their attorneys. All of this can lead to huge problems down the road. Below are the five biggest mistakes bankruptcy filers make when they file for Chapter 7 or Chapter 13 bankruptcy.

A common question that comes up when clients are considering chapter 7 bankruptcy is what impact bankruptcy will have on IRAs and other retirement accounts. When we file your chapter 7 bankruptcy, we have the opportunity to use what are termed “exemptions” under the U.S. and Arizona bankruptcy laws.

The answer to this is no…and yes. In Arizona, wedding rings are exempt up to $2,000. This means that for both you and your spouse, you can exempt a total of $2,000 of the value of your wedding rings. For most people, this is more than enough to keep their rings safe. But what if, during better economic times, you purchased more expensive jewelry? Technically, the Trustee can have you turn over your jewelry. Does this happen often? No. Could it? It could.

In this next post we will be discussing the issue surrounding dismissal or conversion of bankruptcy and the role and mechanism of the means test and presumption of abuse

Before the court confirms your chapter 13 plan, you will have to pass what is commonly referred to in bankruptcy law as the “feasibility” test. This isn’t really a test, but the court will look at whether or not the information we provide in the bankruptcy forms and schedules show enough income so that you can make the proposed payments. Whether it is the monthly payments you are proposing or a lump sum payment to be paid at the end of the plan, we should be able to show that the plan can be reasonably completed with the resources we report in the schedules.

What Happens to Utility Bills in Bankruptcy? When debts pile up, it can become overwhelming to pay any bills. And during the summer especially, Arizona utility bills can be astronomical. And because utilities are very important, you may wonder what will happen to your service if you file a bankruptcy petition. Will you still have […]

In previous blogs, I have written introductory information about the basic process in chapter 13 bankruptcy. In this next series of articles, I will discuss some of the issues surrounding chapter 13. In order to file chapter 13, you must be an individual with regular income. There are limits to the amount of debt you can have and still be eligible to file chapter 13. As of April 1, 2013 the limits are now $1,149,525.00 for secured debt and $383,175.00 for unsecured debt. These numbers are adjusted every three years. If you are close to these numbers, be sure and contact our office to get the current applicable limitations.