BANKRUPTCY2021-06-24T12:13:03-07:00

Quality, Personalized,
Bankruptcy Service

Attorney MJ Vuinovich provides quality bankruptcy services personalized to each client’s circumstances.

Get a Fresh Start

If you are struggling with your finances, you are not alone.

Attorney MJ Vuinovich has built her practice around serving others and she continues this commitment by helping struggling individuals and families get back on their feet again.

Call 928.233.6800 to schedule a consultation.

What is Bankruptcy?

Most people have very few interactions with the legal system, and for that reason, any court proceeding can feel intimidating. At the Flagstaff Law Group, our goal is to make the bankruptcy process as smooth and straightforward as possible for our Northern Arizona clients.

First things first — what is bankruptcy and why is it beneficial? Bankruptcy is a legal action in which a person’s legal obligation to pay his or her debts can be “discharged” or wiped out. Many debts, such as credit card bills, personal loans, medical bills, and repossession or foreclosure deficiencies can be discharged. When a debt is “discharged” a creditor can no longer take any collection action; meaning, the creditor cannot call, write, sue, garnish, or try to collect on the debt in any manner. For that reason, bankruptcy gives a person the protection and opportunity to re-build one’s finances by relieving you of most debt obligations.

What are the Benefits of Bankruptcy?

Depending on your particular circumstances, there can be many benefits to filing a bankruptcy case. Here are just a few to consider:

When you file bankruptcy, the Court immediately imposes the “automatic stay.” This is a rule that means your creditors cannot take any collection action against you. As a practical matter, that means that the minute you file your bankruptcy case, a creditor must stop any garnishment, foreclosure, or other action to collect a debt. This is a significant tool that provides immediate relief to people in need.

If you file bankruptcy, you can usually stop any civil lawsuits against you.  Any disputes over your debts are then resolved in bankruptcy court and many of those debts can be discharged, or wiped out.

If you are behind on your mortgage, a chapter 13 bankruptcy will often allow you to keep your home and bring your mortgage current over a 3-5 year period, with no additional interest or penalties on the missed payments.

This may seem strange, but a bankruptcy filing is often the first step in rebuilding one’s credit.  A bankruptcy can wipe out many of the bad debts on your credit report that are keeping your score low.  With the bad debts discharged, post-bankruptcy, you can utilize credit wisely to build positive payment history and work towards improving your credit.

Through the bankruptcy process, a person can usually discharge, or wipe out, the vast majority of their debt.  This allows you to use your hard-earned income to pay for your necessary living expenses, instead of running on the proverbial hamster-wheel of debt where you pay towards your credit cards each month but then have to put new charges on those same cards to pay for living expenses.

Our Approach

As a small law firm, we pride ourselves in our hands-on approach to solving client’s problems. When you have a question about your case, you will get to discuss the issue directly with your attorney. We value the trust you place in us, and for that reason, we try to honor our attorney-client relationship by providing honest, pragmatic solutions.

Attorney MJ Vuinovich will walk you through each step of the bankruptcy process, advising you how best to protect you and your family. We strive to treat each client’s matter with urgency and importance, without sacrificing due diligence, compassion or competence.

Getting Started

We make the bankruptcy process as smooth as possible.
Take a look at the basic steps involved in the bankruptcy process.

1. Meet with us
Have an initial consultation to discuss your financial goals and how bankruptcy can help you achieve a fresh start.

2. Gather Documents
Flagstaff Law Group provides a clear check list of documents to turn in and a simple questionnaire to complete so that the attorney can prepare your bankruptcy documents.

3. We prepare your files
Once your documents are received, the attorney does a thorough review of your information to properly prepare your bankruptcy schedules and statements, and to manage potential issues.

4. Review and sign
You will sit down to review your documents with the attorney to be sure that you understand the information and that everything is accurate. Once signed, the attorney files everything electronically on your behalf.

Questions about filing for bankruptcy in Arizona

Filing for bankruptcy can feel intimidating. We have answers to common questions that may help put your mind at ease.

Under the Bankruptcy Code, there are three types of bankruptcy relief available.

Chapter 7 Bankruptcy

The most common type of bankruptcy is called Chapter 7.  That type of bankruptcy is called a “liquidation” bankruptcy, but the name is somewhat misleading because most people keep most of their property through the bankruptcy process.  In Chapter 7, a person is able to discharge the majority of their unsecured debt (credit cards, medical bills, personal loans, etc.), in exchange for surrendering any nonexempt property (for a discussion of exempt vs. nonexempt property, see the question “Will I lose my house or car if I file bankruptcy?”).  For most people, Chapter 7 is a quick, straightforward process that takes about 4 months to complete and allows a person obtain a “fresh start.”

Chapter 13 Bankruptcy

If your income is too high or if you want to try to save your home, a Chapter 13 bankruptcy may be a better option for you.  Chapter 13 is a reorganization style bankruptcy that allows the individual or married couple to make a monthly plan payment for three to five years, in exchange for a discharge and the right to keep all property, regardless of whether it is exempt or not.  The length of the plan and the amount of the plan payment will be entirely dependent upon your current income and expenses, as well as what type of debts and property you have.  Some people have a plan payment as low as $50 per month, while others have high monthly payments of $2,500 per month or more.  A qualified bankruptcy attorney can analyze your financial information and determine what your plan payment will likely be, before you file your case.

Chapter 11 Bankruptcy

Last, the third type of bankruptcy available to individuals, married couples, and businesses is a Chapter 11 bankruptcy. Chapter 11 bankruptcy is a reorganization but it has several features that distinguish it from Chapter 13.  First, Chapter 13 has debt limits; meaning, if you have too much debt, you cannot file Chapter 13.  A Chapter 11 bankruptcy does not have any debt limits, so it is available to persons having greater amounts of debts.  Second, a Chapter 11 bankruptcy is not limited to five years, like a Chapter 13 case can be.  Therefore, if a person needs more than 5 years to complete their reorganization, that is possible in Chapter 11.  Depending on your particular circumstances, Chapter 11 can be an excellent option for a small business owner to reorganize debt, while continuing to operate.

Learn more about Arizona Exemptions.

To schedule a 1-hour free consultation, please call 928.233.6800.

Bankruptcy is a legal proceeding filed in federal bankruptcy court. If you have an attorney, the entire process is done electronically. To file a bankruptcy, you will need to compile your financial documents, such as tax returns, six months of bank statements, six months of paystubs, a credit report, and financial statements for any retirement or investment accounts. You will also need to complete several questionnaires detailing your assets, debts, income and expenses. To pull free credit report, go to annualcreditreport.com.

You will also need to take an online credit counseling course. Go here to see the Court-approved list of vendors for that course.  

Once you turn all of your documents into your attorney’s office, the information will be compiled into a bankruptcy petition, schedules and statements. The official court forms for those documents for Chapter 7 are here, and for Chapter 13 are here.  

Once the forms have all been completed, you need to carefully review them with your attorney and sign them. Once signed, they can be filed with the Bankruptcy Court.

  1. Initial Consultation to discuss your financial goals and how bankruptcy can help you achieve a fresh start.
  2. Provide completed questionnaires and financial documents to attorney.
  3. Take your pre-filing credit counseling course.
  4. Review and sign your bankruptcy petition, schedules, and statements.
  5. Your attorney will then file your case with the Bankruptcy Court.
  6. Approximately 45-60 days later, you will have your 341 Meeting of Creditors (the name of the hearing is somewhat of a misnomer as it is very rare for a creditor to appear.  At this hearing, you will answer some basic questions under oath about the paperwork you signed with your attorney).
  7. Take your financial management course.
  8. Either the Trustee enters a “Report of No Distribution” (which means your creditors will not receive a distribution) or you will have to resolve any property issues with the Trustee (which is an excellent reason to have a good bankruptcy attorney so that the resolution of any property is thoroughly explained to you before you file and resolved in a way that you are happy with).
  9. Discharge is entered 60 days after your hearing.
  10. Bankruptcy Case Closed.
  1. Initial Consultation to discuss your financial goals and how bankruptcy can help you achieve a fresh start.
  2. Provide completed questionnaires and financial documents to attorney.
  3. Take your prefiling credit counseling course.
  4. Review and sign your bankruptcy petition, schedules, statements, and plan.  Your plan provides how much you will pay each month for 3-5 years.
  5. Your attorney will then file your case with the Bankruptcy Court.
  6. Your first plan payment is due 30 days after your case is filed.
  7. Approximately 45-60 days after filing, you will have your 341 Meeting of Creditors (the name of the hearing is somewhat of a misnomer as it is very rare for a creditor to appear.  At this hearing, you will answer some basic questions under oath about the paperwork you signed with your attorney).
  8. Take your financial management course.
  9. Approximately 45 days after your 341 hearing, the Trustee will issue his “Recommendation,” which is basically a review of your plan and what information or documentation the Trustee needs from you to approve your plan.
  10. You and your attorney then have 30 days to compile a response to the Trustee.  
  11. Along with your response, your attorney will submit a proposed order approving (also called “confirming”) your chapter 13 plan to the Trustee.
  12. The Trustee signs the proposed order of confirmation, and submits it to the Judge for his or her review and signature.
  13. Once signed, the plan is officially “confirmed” or approved.
  14. Continue to make your monthly payments to the Trustee for the length of your plan (3-5 years).
  15. Every year, provide the Trustee with a copy of your state and federal tax return.  Surrender any next tax refund to the Trustee as part of your plan.
  16. The Trustee will distribute all funds in accordance with the approved plan.
  17. Once payments are done, the Court issues a certificate of eligibility, which you sign and your attorney files with the Court.
  18. Discharge is then entered.
  19. The Trustee issues a final report showing where all funds were paid.
  20. The Court closes your case.

In general, most people keep their home and their car through the bankruptcy process.  There are two issues at play in answering whether or not you will be able to keep yours.  The first question is whether the asset is exempt.  An “exemption” is a state law that provides that your creditors are not entitled to take an asset from you or be paid from the value of that asset in the bankruptcy process.  So if an asset is exempt, you keep it, even when you file bankruptcy.  In order to keep a house or a car through the bankruptcy process, you can “exempt” or protect up to $150,000 of equity in a home and $6,000 of equity in a vehicle. (Note: On January 1, 2022, a new law will come into effect that directly relates to the homestead exemption. See HB 2617). What is equity?  Equity is the value of the asset minus any secured debts.  For example, if your home is worth $350,000, but you have a mortgage of $275,000, you have equity of $75,000 (and thus, the equity in your home is probably protected by the Arizona exemption).  

If your home or vehicle is exempt, you want to move on to the second question before you can be sure your home or vehicle will be safe in bankruptcy.  The second issue is whether you are current on your secured debt.  In the simplest of terms, a secured debt means that if you do not pay, the creditor can take the home or car.  So a mortgage or HELOC would be examples of secured debts for a home, and a car purchase loan or title loan would be examples of a secured debt for a vehicle.  A bankruptcy does not “discharge” or wipe out any secured liens on property.  So if you want to keep your home through the bankruptcy process, you have to continue to pay the mortgage.  In a chapter 7 case, if you want to keep your vehicle you must stay current on your vehicle payment. 

For the majority of people that file bankruptcy, they KEEP their home and their vehicle.  That said, if you are seriously delinquent on your mortgage or vehicle loan but still want to keep your property, a Chapter 13 payment-plan style bankruptcy, may be an option to save your home or car.

The entire purpose of filing a bankruptcy is to obtain a “discharge,” which is the Court order stating that you are no longer legally liable for certain debts disclosed in your bankruptcy paperwork.  However, even though many debts are dischargeable, the Bankruptcy Code exempts from discharge certain debts that Congress has deemed should not be wipe out by the bankruptcy process.

Debts that are generally nondischargeable are:

  1. Child Support and Spousal Maintenance.
  2. Government penalty or fine.
  3. HOA dues.
  4. Restitution owed to a victim.
  5. Debts incurred through fraud, embezzlement, or breach of a fiduciary duty.
  6. Debts arising from a willful or malicious injury (this would be intentional conduct to harm someone).
  7. Debt incurred as a result of a personal injury or death caused by a vehicle accident while intoxicated.
  8. Debts you fail to list in your bankruptcy case!  Make sure everything is listed.

Some debts are a bit more tricky and are only dischargeable in certain scenarios.  If you have this type of debt, I recommend that you consult with a bankruptcy attorney to see if your debt qualifies for discharge:

  1. Certain tax debts 
  2. Student loans
  3. Property Settlement Division balances due to an ex-spouse

A full list of nondischargeable debts for a Chapter 7 or Chapter 11 case is set forth in 11 U.S.C. § 523(a), and for Chapter 13 is detailed in 11 U.S.C. § 1328(a).

I am often asked whether a person can file bankruptcy without hiring a lawyer.  The short answer is, yes, you can do that.  There are two resources you can review to see if filing without an attorney is a good option for you:

Arizona Bankruptcy Self-Help Center

Upsolve – a nonprofit organization that helps people file bankruptcy without a lawyer.

I freely provide these resources because I believe that, if you have a free one-hour consultation regarding bankruptcy, I think you will see the substantial value in having a bankruptcy attorney in your corner.  In my experience, the old adage that “you get what you pay for,” is true when it comes to a legal proceeding.  Here are the benefits of hiring a lawyer:

  1. Prebankruptcy Planning- If you have an attorney before you file, the attorney can advise you on certain steps to take to legally protect or dispose of your property before filing your bankruptcy case.  Often times, this saves clients thousands of dollars.
  2. Peace of Mind- With an attorney, you have a person review your financial history and documents before you file bankruptcy to ensure that when you actually do file, things go smoothly.  I often find “red flags” in people’s paperwork that can easily be resolved before filing, but cannot be remedied once the case is filed.  
  3. Electronic Filing- If you have an attorney file on your behalf, everything can be done through your attorney and filed electronically.  As a practical matter, you do not have to print and mail documents or drive to Phoenix to file anything.  Your case can be filed from the comfort of your attorney’s office in Flagstaff.
  4. An Advocate at Your Hearing- Bankruptcy does require that you appear in person for one hearing.  For people who have never been through a legal process, this can be extremely nerve raking. If you have an attorney, that person will be at the hearing with you, walk you through the process, and be there to jump in if anything unexpected comes up.  
  5.  Dealing with your Trustee- As the client, you would have very limited interaction with the case trustee.  Instead, your attorney would handle turning in all required documents and can often negotiate on your behalf to resolve any property disputes that may arise.

As a bankruptcy attorney, I appreciate that if you are facing a bankruptcy, you have limited resources.  That said, in my experience, filing without an attorney simply creates too much risk, and hiring a good attorney is the best way to ensure the process goes smoothly.  If you want to have a free one-hour consultation with attorney, MJ Vuinovich, to discuss her fees in detail and what your particular case might look like, call the Flagstaff Law Group at (928) 233–6800.

If you’ve done internet searches in regards to bankruptcy fees, you’ve likely seen that some law firms offer a “zero down” bankruptcy option.  The Flagstaff Law Group does not offer that option to its clients.  But we have good reasons for not doing so:

  1. A “zero down” payment option for bankruptcy fees usually means that you are paying more in fees in the long run.  Essentially, in exchange for payment AFTER your case is filed, the law firm usually charges you a higher fee over a period of time after your case is filed.  By having you pay your bankruptcy fees up front, the Flagstaff Law Group is able to keep your overall expense of filing bankruptcy down, providing highly competitive, low fees, while not losing any quality of service or personal experience through the process.   
  2. We think a “zero down” fee option creates an unethical, conflict of interest.  If you do not pay your fees up front, the Flagstaff Law Group is, in essence, financing your bankruptcy case for you.   Meaning, we would be agreeing to receive payment after your case is filed.  The firm would have to collect those fees from you while your case is still pending before the bankruptcy court.  That divides the attorney’s attention from just ensuring your case is done correctly, to focusing on your payment of fees.  By setting up a fee structure where the attorney is simultaneously working your bankruptcy case and trying to collect fees from you, we see that as inherently creating a conflict of interest.  Instead, the Flagstaff Law Group has you pay your fees before you file so that once your case is filed, 100% of the attorney’s attention in your case is dedicated to ensuring that your case progresses smoothly.
  3. The Flagstaff Law Group is a small, local firm that is unable to operate at the scale that allows a firm to finance fees for its clients.  The Flagstaff Law Group prides itself in the fact that every client will receive personal attention from attorney MJ Vuinovich as part of that client’s bankruptcy case.  The Flagstaff Law Group is not a “bankruptcy mill.”  We provide personal, one-on-one service to each client that is simply not given with many larger firms.  In order to provide that specialized service, the Flagstaff Law Group is not positioned to give alternative fee arrangements.

The fees charged in your bankruptcy case will depend on the complexity and type of bankruptcy case you file.  The Flagstaff Law Group provides competitive rates for all chapters of bankruptcy.  We offer a free one-hour consultation so that attorney MJ Vuinovich can evaluate your situation, explain what type of bankruptcy is best for your financial goals, and then provide a competitive quote for the fee that would be incurred to retain the Flagstaff Law Group for your case.  Call (928) 233-6800 to schedule your consultation today.  

Any legal proceeding can feel intimidating, but I think that most people considering bankruptcy particularly worrisome.  When I meet with potential clients, I give five rules that, in my experience, generally will provide that your bankruptcy case will go smoothly.  Of course, it is important that you speak to a lawyer about your particular situation to ensure your legal rights are protected.  Without further ado, here are my five rules to help your personal bankruptcy case go smoothly:

  1. Stop using your credit cards and lines of credit.  If you’re planning to file a bankruptcy, you should no longer incur any debts unless it is absolutely necessary.  
  2. Make sure you are not banking with an institution that you owe money to.  If you follow Rule #1 and stop paying your debts, and one of those debts is owed to your bank, the bank may simply go into your bank account and take the money owed.  Obviously, that can be seriously disruptive.  Often times it is best if a person considering filing bankruptcy opens new bank accounts.  Think of it as part of your fresh start.
  3. Do not pay any debts owed to friends or family members.  One of the main principles in bankruptcy is that all creditors should be treated the same.  So, for example, if you paid Bank #1 ten dollars, you should pay ten dollars to all of your creditors.  If you “prefer” one creditor — say a family member or a friend — by paying them instead of paying all of your creditors the same, the trustee can “undo” the transfer.  For example, if you pay your sister $1,000 in the year prior to filing bankruptcy, the trustee can sue your sister to recover that $1,000, so that the funds can be evenly distributed to your creditors.  Obviously, having a friend or family member sued in your bankruptcy case is not something any person would want!  So avoid any payment of debts or gifts to family members.  
  4. Do not give your property away.  You can certainly sell things for their fair market value, but you cannot give your things away.  Don’t panic — many personal items are protected in bankruptcy (exemption laws protect many assets!).  That said, if you give something away, those transfers can be “undone” in bankruptcy.  It also could appear that your bankruptcy was filed with a fraudulent intent.  So simply put, don’t do it!  Talk to a bankruptcy lawyer about proper and appropriate transfers or “exemption planning” that can be done before filing bankruptcy.
  5. Account for your cash.  When you file bankruptcy, you will normally have to disclose three to six months of bank statements.  If there are large cash withdrawals (amounts over $200) the bankruptcy trustee will want to know what you did with that money.  The easiest way to show that is to have a receipt!  So save any receipts that you have for cash transactions.  Otherwise, the bankruptcy trustee may assume you stuffed that cash in your mattress and pursue you to turn those funds over for payment of your debts (even if, in reality, you already spent the money prior to filing your case).  Having to pay your bankruptcy trustee for funds you cannot account for adds an unnecessary financial burden when the solution is simply to save receipts for how your cash is spent.

Having a qualified bankruptcy lawyer on your side is the best way to ensure that your bankruptcy case goes smoothly.  And a bankruptcy discharge is a hugely beneficial tool — it allows honest, hardworking people to put their debt troubles behind them and have a fresh start.  If you would like to discuss whether bankruptcy may be a good option for you and how the five rules above apply to you, please contact MJ Vuinovich of the Flagstaff Law Group to schedule your free one-hour consultation.  

Let’s talk about your next step

Bankruptcy isn’t the right fit for everyone, but often times it is the best tool to provide a person with financial relief.

Call 928.233.6800 to schedule your free one-hour consultation today to see if bankruptcy is the right path for you.

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