Arizona Bankruptcy and Credit Card Debt
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Millions of people in the United States file for bankruptcy protection every year, and one of the leading reasons for the need for this type of protection is the accumulation of credit card debt. The people of the United States collectively carry almost one trillion dollars in credit card debt, and that comes to an average of more than $9,000.00 of debt per household.
As a result, credit card companies are constantly losing out on the debt they’re owed because of bankruptcy, and especially since the changes in the bankruptcy laws that occurred in 2005, these companies are becoming more aggressive in challenging the discharge of these debts on bankruptcy petitions. Below is an overview of this issue, including the nature of this debt, how its challenged in bankruptcy proceedings and what you should do if you are facing an ever-growing amount of credit card debt. If you’re considering filing for bankruptcy contact one of our skilled bankruptcy attorneys in Phoenixfor a free consultation.
The Nature of Credit Card Debt
Credit card debt is classified in the legal realm as unsecured debt. What this means is that there is no collateral offered in exchange for the extension of credit. In contrast, an auto loan is considered secured debt, because the vehicle is collateral that can be repossessed if the borrower defaults on the financing arrangement. Although there are exceptions, credit card companies do not have the right to collect in this manner.
Although the law has recently changed to an extent, credit card companies can also change their interest rates, and they typically do when someones payment history is not positive. However, they are now required to provide notice of this interest rate change, which was not required even a few months ago.
Credit Card Debt in Bankruptcy Proceedings
When a typical bankruptcy petition is filed by the debtor, the creditors have an opportunity to challenge the imminent discharge, or removal, of certain debts. Until the law changed in 2005, credit card debt could only be challenged in Chapter 7, or liquidation proceedings and not Chapter 13 petitions, which involve a payment plan.
However, that changed in 2005, but credit card companies can still challenge the removal of this debt if they can show that the debtor committed fraud. Some actions that could show fraud include:
- Making several purchases immediately before filing for bankruptcy
- Withdrawing several cash advances immediately before filing
- Opening a new account and using it heavily immediately before filing
Basically, the standard that is generally applied for fraud is whether or not the debtor ever had any intent to repay the debt.
Arizona Bankruptcy Attorneys – How to Proceed
If you are facing mounting credit card debt and youre not sure how to handle it, you need to seek legal help. Contact the bankruptcy attorneys at Montano Arentz & Associates, PLLC as soon as possible to schedule an initial consultation so that an attorney can analyze your financial situation and help you decide what would be best for you as you work towards putting this stress behind you.
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My paralegal , Caroline , was on top of her game - very responsive and always answered any questions I had and in a timely manner . My attorney Rob ,was the best attorney I ever had . He explained everything in great detail and had a great sense or humor . He really knows how to bring light To tough , unfortunate situations - I would absolutely recommend them at anyone -
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It’s an Honor and a Privilege to work for a company that cares about its employees and clients for 12 years. I’ve seen Management go out of their way to help someone whether it’s a personal matter or work related. I am also reminded of many occasions where a Client needed urgent help and we as a Team were able to get the person immediate assistance. At Phillips Law we make that happen through Teamwork and a dedication to our profession. I’ve had numerous jobs in several other fields, those were just jobs. This is a home. Many of us have been here for quite a few years, it feels like one large extended family.
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Many companies talk about teamwork but few practice it. Many companies talk about an employee friendly environment but few actually provide it. At Phillips Law Group the foundation of our success is making sure we work as a team and that we work in an environment that allows everyone to thrive and be at their best every day. Our firm understands that in order for the client to have a great experience the people responsible for that client’s case must be given all the necessary tools and encouragement to make that happen. That’s the Phillips Way. As a manager of this firm in charge of several employees as well as directly affecting the client’s experience I take tremendous pride in saying we live by these premises and we work hard to build on them and make them better every day. This is an amazing place because it has amazing people working here!
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Phillips law group is a great firm! Caroline is great.
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Phillips law group has an amazing staff and i recommend them to everyone.
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Liz Gonzales was great!!!!
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Positive: Professionalism, Quality, Responsiveness, Value As someone who is familiar with the inner workings of the auto insurance industry I can whole heartedly endorse Steven J. Jones and Phillips law group as someone I would want on my side should litigation take place. They handled my case professionally, honestly, and with satisfactory results which I would not have expected without enlisting their help.
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I have been with Phillips Law Group for a little over a year and I have learned what teamwork and family in a workplace looks like. There is always someone around to lend a helping hand, which is something I appreciate and cherish. I feel a sense of joy coming to work every day because of my co-workers as well as being able to help people in what can be a scary and stressful situation. I currently work as a Litigation Legal Assistant with an amazing team. When I started here, I was not very knowledgeable in personal injury. I was lucky to have been placed with an amazing team who was willing to take time to teach and pass on some great skills that have been a huge aid in helping me be successful in my position. I would recommend working here at Phillips Law Group, because they care about their employees and there is so much room for growth.
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Great company and awesome service. Thanks Caroline fabos. Kudos to all.