Users considering bankruptcy acknowledge the receipt of the following disclosures as a condition of use of this website:
Notice to Individual Consumer Debtors
Pursuant to 11 U.S.C. Section 342(b)
Types of Bankruptcy
Chapter 7 – Liquidation
Chapter 7 bankruptcy is designed for debtors who are having financial difficulties and are not able to re-pay their debts.
If your current monthly income is above the State Median Income you will be required to perform a Means Test to determine if you are eligible for this type of bankruptcy relief. If you do not meet the requirements of the Means Test then you may be precluded from filing a Chapter 7 and have the option of converting to Chapter 13 or filing a Chapter 13.
Under Chapter 7 a Trustee takes possession of all your property. You may claim certain property as exempt under Arizona law. A copy of the Arizona Exemption Law is attached to this notice. You can only exempt the value of property that is not subject to the liens of your creditors. The Trustee then liquidates the non-exempt property and uses the proceeds to pay off your creditors according to priorities of the Bankruptcy Code.
The purpose of filing a Chapter 7 is to obtain a discharge of your existing debts. If, however, you are found to have committed certain kinds of improper conduct described in the Bankruptcy Code, your discharge may be denied by the Court, and the purpose for which you filed the bankruptcy petition will be defeated.
Even if you receive a discharge, there are some debts that are not discharged under the law. Therefore, you may still be responsible for such debts as certain taxes and student loans, alimony and support payments, criminal restitution, and debts for death or personal injury caused by driving while intoxicated with alcohol or drugs.
Under certain circumstances you may be able to keep property that you have purchased subject to a valid security interest. Some of these options include what is called redemption and the renewal or reaffirmation of an existing pre-bankruptcy debt. Your attorney can explain the options that are available to you.
Chapter 13 – Repayment of All or Part of the Debts of an Individual with Regular Income
Chapter 13 bankruptcy is designed for individuals with a regular and stable source of income who are temporarily unable to pay their debts but who desire to use their best efforts and good faith to pay them in installments over a period of time subject to the protections afforded by the Chapter 13 rules. You are only eligible for Chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code.
Under Chapter 13 you must file a plan with the Court to repay your creditors all or part of the money that you owe them, using your future earnings or by the disposition and/or abandonment of certain collateral such as land and motor vehicles. You are protected from your creditors in most case upon the filing of your case but your plan must be approved by the Court before it can take effect.
Under Chapter 13, unlike Chapter 7, you may keep all of your property, both exempt and non-exempt, as long as you continue to make payments under the plan.
After completion of payments under the plan, your debts are discharged except for any domestic support obligations, student loans, and certain taxes, among others.
Chapter 11 – Reorganization
Chapter 11 is designed primarily for the reorganization of businesses but is also available to consumer debtors. Its provisions are quite complicated, and any decision for an individual to file a Chapter 11 petition should be reviewed with an attorney. Most Chapter 11 cases are simply too expensive for the great majority of consumer debtors. Most individuals are aware of the high profile Chapter 11 cases that have been filed in recent years by many of the commercial airlines.
Chapter 12 – Family Farmer
Chapter 12 is designed to permit family farmers to repay their debts over a period of time from future earnings and is in many ways similar to a Chapter 13. The eligibility requirements are restrictive, limiting its use to those who whose income arises primarily from a family owned farm.
Reputable credit counselors can advise you on managing your money and your debts. They may also be able to develop a plan to repay your debts. But, most credit counselors are not reputable and charge high fees and contributions that will cause you to fall deeper into debt. Furthermore, many misrepresent their non-profit status and/or their affiliations with religious or charitable organizations. The Merna Law Group, PLLC only recommends that a person seek the credit counseling services of a group that has been approved by the United States Trustee Department or the Bankruptcy Administrator.
Honesty is Required
A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury in connection with a case under this the bankruptcy code shall be subject to fine, imprisonment, or both and all information supplied by a debtor in connection with a case under this title is subject to examination by the Attorney General.
IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER
Required by Bankruptcy Code Section 527(b).
If you decide to seek bankruptcy relief, you should be advised that you can represent yourself in all matters connected with the bankruptcy. If you decide to seek bankruptcy relief, you should be advised that you can hire an attorney to represent you. If you decide to seek bankruptcy relief, you should be advised that in some areas you may hire a bankruptcy petition preparer who is not an attorney.
THE LAW REQUIRES AN ATTORNEY TO GIVE YOU A WRITTEN CONTRACT SPECIFIYING WHAT THE ATTORNEY WILL DO FOR YOU AND HOW MUCH IT WILL COST. ASK TO SEE THIS CONTRACT BEFORE YOU HIRE AN ATTORNEY.
Although bankruptcy cases can be complex, many of the procedures and cases are routine. Before filing a bankruptcy case, you or your attorney should analyze your eligibility for different forms of debt relief available under the Bankruptcy Code and which form of relief is most beneficial to you. Be sure you understand the relief you can obtain and its limitations.
To file a bankruptcy case, documents called a Petition, Schedules, and Statement of Financial Affairs, as well as in some cases a Statement of Intention need to be prepared correctly and filed with the bankruptcy court. You will have to pay a filing fee to the bankruptcy court.
Once your case is filed, you will have to attend a first meeting of creditors where you will be questioned under oath by a court official called a “trustee”. At this meeting you may also be questioned by your creditors.
If you chose to file a Chapter 7 case, you may be asked to reaffirm a debt. You may want help deciding whether to do so. A creditor is not permitted to coerce you into reaffirming your debts.
If you chose to file a Chapter 13 case in which you repay your creditors what you can afford over a 3 to 5 years, you may also want help with preparing your Chapter 13 plan and with the confirmation hearing on your plan which will be before a Federal Bankruptcy Judge.
If you select another type of relief under the Bankruptcy Code other than chapter 7 or chapter 13, you will want to find out what should be done from someone familiar with that type of relief.
Your bankruptcy case may also involve litigation. You are generally permitted to represent yourself in litigation in bankruptcy court. BE AWARE– Only an attorney can give you legal advice and can represent you in court.
Notice Mandated by Section 527(a) of the Bankruptcy Code.
NOTICE OF MANDATORY DISCLOSURE TO CONSUMERS
WHO CONTEMPLATE FILING BANKRUPTCY
You are notified as follows:
1. All information that you are required to provide with a petition and thereafter, while your case is pending must be complete, accurate and truthful.
2. All of your assets and all of your liabilities must be completely and accurately disclosed in the documents filed to commence your case.
3. Some places in the bankruptcy code require you to determine and list the replacement value of an asset, for instance a car or furniture. When replacement value is required, it means the replacement value established after reasonable inquiry, as of the date of the filing of your case, without deduction for costs of sale or marketing. With respect to property acquired for personal, family or household purposes, replacement value means the price a retail merchant would charge for “used” property of that kind considering the age and condition of the property.
4. Before your case can be filed, it is subject to what is called “Means Testing”. The Means Test was designed to determine whether or not you qualify to file a case under Chapter 7 of the Bankruptcy Code, and if not, how much you need to pay your unsecured creditors in a Chapter 13 case. For purposes of means test, you must state, after reasonable inquiry, your total current monthly income, the amount of all expenses as specified and allowed pursuant to section 707(b)(2) of the bankruptcy code, and if the plan is to file a Chapter 13 case, you must state, again after reasonable inquiry, your disposable income, as that term is defined.
5. Information that you provide during your case may be audited pursuant to the provisions of the Bankruptcy Code. Your failure to provide complete, accurate and truthful information may result in the dismissal of your case or other sanctions, including criminal sanctions.
DEBT ASSISTANCE INITIAL CONSULTATION AGREEMENT
1. The client desires to obtain advice and assistance with debt issues and relief from debt and has scheduled an initial consultation with The Merna Law Group, PLLC This initial consultation with an attorney is free of charge. The client understands that in order for the attorney to give meaningful advice, certain detailed financial information must be provided fully and accurately. The client agrees to give accurate, honest, full and fair disclosure of financial information concerning average income over the previous 6 months from all sources, monthly living expenses, the type and amount of all debts (including names and addresses of all creditors), and a disclosure of all assets and property owned by the client.
2. The attorney agrees to interview the client and give advice and counsel to assist the client in making decisions about debt problems, the possibility of filing bankruptcy, selecting the appropriate chapter of bankruptcy, and how a bankruptcy case may help or hurt the debt problems of the client. The initial consultation will consist of a review of the client’s current monthly income, completion of a monthly budget of regular expenses, preliminary analysis of qualifications for certain chapters of bankruptcy, a preliminary analysis of the client’s debt statements and a recommendation.
3. The initial half-hour consultation and interview will be performed by an attorney free of charge. In the event that the client decides to file a bankruptcy case, a new written agreement must be signed by the client and the attorney which will supersede this agreement relating to attorney fees and expenses. This new agreement will also provide a detailed explanation of the services performed or to be performed by The Merna Law Group, PLLC
4. ALL INFORMATION PROVIDED BY THE CLIENT WITH A BANKRUPTCY PETITION MUST BE COMPLETE, ACCURATE, AND TRUTHFUL. ALL ASSETS AND ALL LIABILITIES ARE REQUIRED TO BE COMPLETELY AND ACCURATELY DISCLOSED IN THE DOCUMENTS FILED TO COMMENCE THE CASE. REPLACEMENT VALUE OF EACH ASSET DEFINED IN TITLE 11 UNITED STATES CODE SECTION 506 MUST BE STATED IN THOSE DOCUMENTS WHERE REQUESTED AFTER REASONABLE INQUIRY TO ESTABLISH SUCH VALUE. INFORMATION PROVIDED DURING THE CASE MAY BE AUDITED AND THAT FAILURE TO PROVIDE SUCH INFORMATION MAY RESULT IN DISMISSAL OF THE CASE OR OTHER SANCTION, INCLUDING A CRIMINAL SANCTION.
DISCLAIMER REGARDING CREDIT RECOVERY PROGRAM AND OTHER SERVICES-
The Merna Law Group, PLLC reserves the right to withdraw, change, or modify any services at any time offered through this website or other advertising media which are not specifically addressed in the retainer contract signed with this firm. A users is not entitled to any services advertised without a specific written agreement signed with an authorized agent of The Merna Law Group, PLLC. The Merna Law Group, PLLC does not warrant, guarantee, assert the effectiveness of their credit recovery program. This program is delivered “as-is”. The Merna Law Group does support effective measures to speed the increase in your credit score after the filing of a bankruptcy. However, given the multitude of factors effecting a credit score The Merna Law Group does not warrant any outcome. Users agree to arbitration regarding any claim by a third-party arbitration service or individual qualified in arbitration and selected by The Merna Law Group prior to any legal action. This does not apply in the event of a fee dispute or collection of unpaid fees.
STUDENT LOAN DEBT:
Any debt, including student loan debt, may have a tax liability if the full balance is settled, forgiven, or deemed uncollectable by the holder of the debt. You should consult a tax professional to determine if you will have tax liability. The Merna Law Group, PC does not provide this information as part of their analysis.
Any representations with regards to resolving your student loan debt assumes that YOU will diligently review the status of every student loan annual and submit the necessary extensions and updates to continue the programs you are enrolled in. Our services to not extend to subsequent year maintenance, reminders, updates, or resubmission unless a specific retainer is executed to retain us for those services.
In many situations you have to recertify each year that you qualify for a payment status. If you change your tax filing status, earn more money, reduce your family size, etc. your eligibility for the monthly payment we negotiate may not continue. Please consult us before any changes that may effect you renewing the program and payment we assist you in qualifying for.
As of 2014, if you default on your student loan debt you will be assessed an additional penalty of 18.5%.
W are not offering debt settlement or credit repair. We are offering a Student Loan Debt Management Program.
You should be aware that your security clearance can be denied or not renewed if your student loans are in default.
While we may assist clients with student loan debt outside the state of Arizona as an administrative task, we are not attempting to provide legal advice regarding state specific issues and are not intending to practice law or advertise the practice of law in any other state than Arizona.
No attorney-client relationship is created or intended without a signed retainer agreement with all parties signatures. In the event there is a co-signer on any loan being address, we do not represent or warrant that the co-signer will not suffer negative consequences based on the resolution we are suggesting.
Attorney John G. Merna is designated as the person responsible for the content of this site in compliance with the Virginia Bar rules. Any term or condition listed is applicable to the user of this site with the assumption they are not clients. Any term or condition listed herein which is not consistent with the rules and guidelines of the Virginia Bar will be considered not applicable to any client upon the signing of a retainer agreement with The Merna Law Group, PC.