Bankruptcy timing is one of the most common issues I see this time of year.  As many people are anxious to file their bankruptcy, there are drawbacks to filing too early.  If you plan to receive a tax refund, you should wait to file your bankruptcy and spend the money.  Your tax refund is a non-exempt asset in the state of Arizona.  This means that the refund is treated much like money in your bank account and can be taken from you by the trustee.  You need to make sure that you spend the tax refund you receive on things that are exempt.  Here is a list of Arizona Exemptions. Spending your tax refund on things that are not exempt is dangerous and the trustee can take those assets from you.  Spending money on living expenses like: Food, electricity bills and home supplies is a good idea.  Make sure you keep the receipts for everything you have bought with your tax return money.  Paying your bankruptcy fees is one of the safest and most legitimate ways to spend the money and will get you a fresh start sooner.

Filing for bankruptcy is without question one of the most stressful periods of time in a person’s life. Unfortunately, society attaches a number of negative stigmas to personal bankruptcy leaving many debtors feeling insecure and devalued. Most people going through bankruptcy would rather keep it secret from their friends and family, and many debtors even experience severe emotional reactions to the stresses of bankruptcy.

But bankruptcy can be a good thing too. Not only for your wallet, but your emotions and health as well. All of the stress that comes with piles of debt and harassing creditors can cause serious health concerns for many people. Filing bankruptcy provides much needed financial and emotional relief. Most people feel a heavy burden lifted from their shoulders after filing their bankruptcy paperwork. And the day you receive your discharge paperwork, it can feel like a second chance at creating a debt free and financially healthy life.

Without question there are a lot of different emotions one goes through during a bankruptcy, but it’s important to keep your emotions separate from the bankruptcy process. Too many times people make emotional decisions regarding filing bankruptcy. Its all too common for homeowners to come to attorneys seeking bankruptcy information in an effort to save their home, the same house they have two mortgages on, owe more than the home is worth, and have all around negative equity in. Why do they even want to keep this house? It’s usually because of an emotional attachment to the home they can’t seem to shake. Often times they even know reaffirming their mortgage is a bad idea. I only share this story to illustrate how important it is to separate your emotions from the business of bankruptcy.

It’s also important to understand that millions of Americans go through the same process each year. Chances are, at least one of those friends or family members you don’t want to know about your financial troubles has gone through a bankruptcy themselves. But there is one person who you should never hide any aspect of your financial affairs from, your bankruptcy attorney. Your bankruptcy lawyer has been there before and it’s important to share everything with your attorney about your financial affairs. Talk with your attorney about your feelings and concerns, and listen to his input, as seasoned professionals who understand the bankruptcy process and how to get you back to a financially manageable life (after all that is the main goal of any bankruptcy) he will know what works and what doesn’t.

And most of all, remember there is a light at the end of the tunnel. Filing bankruptcy can help reduce all that stress and helplessness that comes with uncontrollable debt, putting you on the track to financial freedom.

For many consumers looking to bankruptcy credits cards are more than just a luxury, they are a means of living. Many people in financial turmoil rely on credit cards and cash advances to help keep the electricity on and food on the table. If you are considering filing bankruptcy one question you may have already begun to ask yourself is, “Can I continue to use my credit cards?”

The answer is laid out in U.S. Bankruptcy Code §523(c) which states:

(I) consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable;

§523 goes on to clarify luxury goods as excluding “goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor.” In simple terms, what the code states is that any debts to one creditor totaling $500 or more, and taking place within 90 of the bankruptcy filing are nondischargeable. Even charges the consumer may see as essential can be deemed nondischargeable if the creditor can prove the debt was incurred with the intent to never pay the amount back. Furthermore the term “luxury goods” has often been argued in bankruptcy court to include a variety of charges including clothing, electronics, travel and entertainment expenses among others. Determining what does or does not qualify as a luxury good is ultimately in the hands of the Court.

In response to §523 a good bankruptcy attorney will generally advise a client to immediately stop using credits cards for any purchases after first consulting with the attorney and to wait a minimum of 3 months (90 days) before filing bankruptcy. Waiting the full 90 days where feasible greatly reduces the chances the trustee or a creditor will file an objection. If you are considering bankruptcy or in the process of filing bankruptcy it is important to keep your attorney educated on any credit card purchases and provide your attorney with a comprehensive list of your purchases and credit card transactions prior to filing.

In today’s society, bankruptcy is not uncommon.  In fact, even some of the largest businesses are filing for bankruptcy.  Blockbuster, which has been around for many years, announced that they are filing a Chapter 11 bankruptcy.  According to  http://www.bloomberg.com/news/2010-09-23/blockbuster-video-rental-chain-files-for-bankruptcy-protection.html, Blockbuster Inc., which is the world’s biggest movie-rental company, filed for bankruptcy after failing to adapt its storefront model to online technology pioneered by rivals such as Netflix Inc. 

            What is a Chapter 11 bankruptcy?  According to  http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter11.aspx, a case filed under Chapter 11 of the U.S. Bankruptcy Code is frequently referred to as a “reorganization” bankruptcy. 

            According to http://www.bloomberg.com/news/2010-09-27/blockbuster-wins-court-approval-to-pay-studios-claims-for-movies-games.html, Blockbuster Inc. won interim court approval to pay as much as $40.4 million to studios to maintain the supply of movies.  Blockbuster can pay $28 million owed to Sony Pictures Home Entertainment Inc., Twentieth Century Fox Home Entertainment LLC and Warner Home Video, U.S. Bankruptcy Judge Burton Lifland in Manhattan said at a court hearing today. Those studios negotiated trade agreements with Blockbuster in March in which they received security interests in Blockbuster’s Canadian assets.  Blockbuster can pay other studios that negotiate agreements as much as $12.4 million, under Lifland’s order. 

            There are many different bankruptcy options for debtors.  A debtor must determine what bankruptcy option is best for them and their financial situation.  The best thing a debtor can do is to meet with an attorney and discuss their options.  Many law firms have discounted consultations.  This allows a debtor to come into an attorney’s office to discuss their situation with the attorney and not get stuck paying high attorney fees.  Every person’s situation is different so it is best that a person contact an attorney if they find themselves in financial troubles.