First Half Of 2023 Shows Increase In Bankruptcy Filings

First Half Of 2023 Shows Increase In Bankruptcy Filings

It seems like over the past few years, the economy has been tumultuous with no periods of rest and growth. Inflation has increased the price of just about everything, and interest rates only continue to rise. It’s no surprise that upon the start of the second half of 2023, data available from the first half of the year shows an increase in business bankruptcy filings. Chapter 11 bankruptcy gives businesses with debt issues a chance to restructure more profitably while under protection from the court from their creditors. The main difference between a business filing Chapter 11 bankruptcy and filing Chapter 7 bankruptcy is that the business can stay open and continue operations in a Chapter 11 bankruptcy. So while an increase in Chapter 11 bankruptcy filings can signal disruption in the market, there is a silver lining that these businesses haven’t completely given up hope. If you live in the Tucson area and are considering declaring bankruptcy, our firm offers free consultations and experienced guidance. To set up your free consultation, click here or call 520-307-0020.

Bankruptcy Filings

Chapter 11 Bankruptcy Filing Rates Skyrocket For First Half Of 2023

When July comes around, it allows economists and other experts to examine data from the first half of the year, as well as compare that data to the first halves of previous years. In the first half of 2023, there were 2,973 commercial Chapter 11 bankruptcy filings in the United States. There were 1,766 commercial Chapter 11 bankruptcy filings in the first half of 2022, which is an increase of 68 percent. Subchapter V Chapter 11 bankruptcy filings increased by 55%, and personal Chapter 13 bankruptcy filings increased by 23%. 

So what is behind this sharp increase in bankruptcy filings? One thing that makes the market so different from last year is the high-interest rates, as well as the length of time that interest rates have been high. The Federal Reserve has increased rates to a target of 5% to 5.25%. This level has been reached after 10 straight interest rate increases. Interest rates are expected to rise two more times in 2023. Combined with inflation increasing business operating costs, it’s no surprise that many businesses have turned to bankruptcy.

How Does Chapter 11 Bankruptcy Work?

There are several different types of bankruptcy that debtors can file, and they all work differently. Chapter 11 bankruptcy is reported here because it shows how many businesses have filed for bankruptcy with the chance to restructure and continue operating. Both businesses and individuals can declare Chapter 11 bankruptcy. Filing any chapter of bankruptcy triggers the automatic stay, which protects the bankruptcy debtor from its creditors in many ways. Creditors can’t file many types of lawsuits, including evictions, proceed with foreclosures and repossessions, and other forms of collection while the automatic stay is in place. 

When the petition is filed and the automatic stay is protecting the debtor, the debtor’s top creditors form a committee. Any major business decisions must be run past the committee before the company can proceed with them. The debtor will also need the committee’s approval on a plan to emerge from bankruptcy. If the creditors and debtor can agree on the plan, the court will sign off on it and it will proceed. If the committee disapproves of the debtor’s plan, the committee can create its own proposed plan. Once the debtor discharges the Chapter 11 bankruptcy, they will resume authority over the entire business, including major business decisions. 

Alternatives To Chapter 11 Bankruptcy

If you’re considering bankruptcy, chapter 11 bankruptcy might be superfluous to your needs. Filing Chapter 7 bankruptcy or Chapter 13 bankruptcy could help you achieve your financial goals with fewer resources expended. Perhaps bankruptcy isn’t the right option at all, and a different form of debt relief would be more beneficial to you. Our Tucson bankruptcy team can help you decide with your free consultation- click here or call 520-307-0020 today.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most frequently filed bankruptcy in Arizona and the United States as a whole. Depending on your situation, chapter 7 could be the fastest and most convenient way for you to get rid of your debts. This is most often true when the majority of your debts are unsecured and nonpriority debts. You also must be eligible based on income limitations in the state in which you file. While not technically a barrier to filing Chapter 7 bankruptcy, only certain assets are protected when a debtor files this chapter. The assets must be protected by exemptions, which vary by state, and Arizona doesn’t allow for the use of federal exemptions. The debtor must complete credit counseling courses and attend a 341 Meeting of Creditors- 60 days after that hearing, a Chapter 7 bankruptcy debtor will be eligible for discharge. If you’re considering filing for Chapter 7 bankruptcy in the Tucson area, click here or call 520-307-0020 to see if you qualify. 

Chapter 13 Bankruptcy

Chapter 13 bankruptcy works must differently than Chapter 7 because it reworks debts into a payment plan rather than just wiping them away. Unlike Chapter 7 bankruptcy, chapter 13 bankruptcy offers debtors the opportunity to pay off secured debts and priority debts while protected from their creditors by the automatic stay. Chapter 13 bankruptcy either lasts 3 or 5 years, which is dependent on how the debtor’s income compares to the state median income. A Chapter 13 bankruptcy debtor will need to complete the credit counseling courses and 341 Meeting of Creditors just like a Chapter 7 bankruptcy debtor but will need to continue paying on their plan after the hearing to successfully discharge the case. 

Debt Negotiation

Instead of filing for bankruptcy, some people choose to negotiate with their creditors to try to reduce the balance of their debts. You can hire an attorney to do this for you, or you can do it on your behalf. If you do negotiate your debts, it’s important to stay on top of your payment plans once they’re in place. If you enter into payment agreements that you still can’t afford, you might just end up in bankruptcy court anyway. 

Debt Consolidation

Debt consolidation involves taking out a line of credit with a lower interest rate to pay off the rest of your debts. This will leave you with just one loan payment for your debts rather than juggling several. However, when debts are too high, debt consolidation may simply not be enough. It can also come with significant fees that don’t accompany a bankruptcy filing. 

Considering Bankruptcy? Call Our Tucson Bankruptcy Law Firm.

Bankruptcy filings are up, and you may be among the people who could benefit from protection from your creditors and relief from your debts. If you’re considering declaring bankruptcy in the Tucson area, our law firm is here to help. Our Tucson Bankruptcy Lawyers have years of experience helping clients just like you clear debts and build a stronger credit history. Whether your needs are better suited by Chapter 7 or Chapter 13, we can help you navigate your case effectively. When you’re ready to get started with your free consultation, call 520-307-0020 or contact us.

MLB to Take Over Diamondbacks Broadcasting After Bankruptcy Court Ruling

MLB to Take Over Diamondbacks Broadcasting After Bankruptcy Court Ruling

It seemed like during the pandemic, there were headlines of a massive company declaring Chapter 11 bankruptcy almost every day. While the market calmed down for a bit, bankruptcy filings- particularly Chapter 11 bankruptcy filings- are back up. One Chapter 11 bankruptcy filing that has been relevant for many Arizonans this year has been Diamond Sports Group. This company has been responsible for broadcasting the Arizona Diamondbacks’ games since purchasing the rights from Sinclair Broadcast Company in 2019. On July 18, 2023, a bankruptcy court ruled that the MLB could take over broadcasting Arizona Diamondbacks games due to Diamond Sports Group’s financial troubles. The MLB plans on airing Diamondbacks games without blackouts and making them available on its streaming service. If you’re considering filing for bankruptcy in the Tucson area, our firm can help you get started on the right track. To set up your free consultation, click here or call 520-307-0020.

MLB to Take Over Diamondbacks Broadcasting After Bankruptcy Court Ruling

Diamond Sports Group’s Bankruptcy

Diamond Sports Group, which also owns Bally Sports, declared Chapter 11 bankruptcy and reported debts exceeding $8.5 billion. As mentioned above, the company purchased the broadcasting rights for Diamondbacks games from Sinclair Broadcast Company in 2019- the purchase price was $10 billion including rights to other teams as well. Through that contract, Diamond Sports Group had a 20-year deal with the Diamondbacks for 20 years and $1.5 billion. Diamond Sports Group asked the bankruptcy court to reject that contract with an offer from the MLB to take over Diamondbacks broadcasting at 80% of the contract value. It appears that the MLB will be paying the Diamondbacks contract in full for the current season, but it’s unclear how much they will be paying for 2024 and onward. Now that the MLB will be responsible for airing Diamondbacks games and lifting blackout restrictions, they will be available to 5.6 million households.

What is Chapter 11 Bankruptcy?

Many people have little concept of how Chapter 11 bankruptcy works because Chapter 7 and Chapter 13 have much higher filing rates. Chapter 11 bankruptcy is usually beyond the needs of the average bankruptcy debtor, but it does have provisions available for small business owners. Chapter 11 bankruptcy offers businesses the benefit of staying open and attempting to become profitable once more through the filing. Usually, a committee of the debtor’s top creditors is formed upon a Chapter 11 bankruptcy petition filing. The small business provisions allow a debtor to skip this step and speed up the bankruptcy process in general. Once the debtor and creditor committee agree on how the debtor should come out of bankruptcy and the court signs off, it is up to the debtor to act. The business will maintain control of its day-to-day operations while the case is pending.

Should I File Chapter 11 Bankruptcy?

Chances are, if you’re reading this, you aren’t the CEO of a major corporation. But you may own your own small business that is struggling with debts. If so, chapter 11 bankruptcy might be useful and allow you to preserve your livelihood. But more than likely, your needs would be better served by filing Chapter 7 or Chapter 13. Both of these chapters are generally less complicated and more affordable for the average bankruptcy debtor.

Chapter 7 bankruptcy is the most frequently filed chapter of bankruptcy. It is popular for many reasons. It is the fastest and simplest of the available forms of consumer bankruptcy. A Chapter 7 bankruptcy typically will only last 3 to 6 months from filing to discharge. It can erase many types of unsecured debts, including credit cards, medical bills, and personal loans. It is hardly the financial death sentence some used to believe it to be, especially in this turbulent economy. A bankruptcy debtor is also protected during their bankruptcy by a legal mechanism called the automatic stay. The automatic stay stops wage garnishments, lawsuits, repossessions, and more, which can be crucial to stabilizing the debtor’s financial situation. However, there are many limitations to Chapter 7 bankruptcy. Among other restrictions, the debtor must either earn less than the state median income or pass the means test to qualify based on income for Chapter 7 bankruptcy. To see if you qualify, call to schedule your free evaluation with one of our Tucson bankruptcy lawyers at 520-307-0020 or click here.

Chapter 13 bankruptcy is meant for debtors with higher income who need to pay off secured debts and other debts that are ineligible for discharge in Chapter 7 bankruptcy. Chapter 13 bankruptcy lasts 5 years for debtors who earn more than Arizona’s median income, and 3 years for debtors who earn less. The first type of debt to be paid off in Chapter 13 is bankruptcy fees, including court fees and your attorney’s fees. Second, secured debts will be paid off in the Chapter 13 payment plan. Next, priority debts need to be paid. The last type of debt paid off in a Chapter 13 payment plan is unsecured debt. These are the debts that would be dischargeable in Chapter 7 bankruptcy. If the debtor’s disposable income isn’t high enough to pay off all the unsecured debts, some or all of them may be discharged at the end of the payment plan. A bankruptcy attorney who is practiced in Chapter 13 cases can help you determine if you qualify for Chapter 13 and how much your monthly payments would be. To schedule your free consultation with our firm, click here or call 520-307-0020.

The Benefits of Declaring Bankruptcy

Filing for bankruptcy is a major decision that should be planned carefully, ideally with the assistance of a skilled bankruptcy lawyer. There are some drawbacks to declaring bankruptcy- for example, you will lose your credit cards and the filing will remain on your credit history for several years. But bankruptcy also provides tremendous benefits for anyone facing insurmountable debts, including:

  • Clearing debts with little to no repayment
  • Activating the automatic stay, which can stop lawsuits, wage garnishments, repossessions, foreclosures, utility shutoffs, and more
  • Stopping creditor calls and harassment during the bankruptcy preparation process
  • Creating opportunities to rebuild your credit and build a more positive credit history
  • Offering the option to surrender a financed vehicle or another asset that has a higher loan balance than its market value
  • Closing out other unexpired leases and contracts
  • Learning more about how to avoid amassing debts in the future
  • Making more income available to pay off debts that can’t be discharged in bankruptcy
  • Improving your credit history and score for future financial endeavors

Affordable, Reliable Bankruptcy Representation for Tucson Residents

If you’re thinking about declaring bankruptcy, you’ve probably been experiencing a stressful period in your life. You can ease some of the burden by hiring an expert to guide you through the process. Our Tucson bankruptcy team will help make bankruptcy easy, and that includes paying for it- we offer affordable payment plan options starting as low as zero dollars down. Guard yourself from creditors and begin working towards a brighter financial future. Initiate the process by scheduling your free debt evaluation with one of our experienced bankruptcy lawyers. To get started, click here or call 520-307-0020.

What To Expect From Your Tucson 341 Meeting Of Creditors

What To Expect From Your Tucson 341 Meeting Of Creditors

Dealing with debt is stressful, and so is just about any type of legal matter. When you mix the two, you might be close to filing for bankruptcy. Mistakes at any step in the bankruptcy process can result in negative consequences like asset seizure, loss of the automatic stay, and case dismissal. One of the most crucial parts of a bankruptcy case, whether it’s filed under Chapter 7 or Chapter 13, is the 341 meeting of creditors. This is a bankruptcy hearing in which a debtor must appear before the bankruptcy trustee, and possibly their creditors as well. A skilled Tucson bankruptcy attorney can ensure you’re fully prepared for your 341 Meeting of Creditors and the rest of your bankruptcy case. For your free consultation with our Tucson bankruptcy team headed by attorney Candace Kallen, click here or call 520-307-0020

What To Expect From Your Tucson 341 Meeting Of Creditors

What Is a 341 Meeting Of Creditors?

The 341 Meeting of Creditors gets its name from U.S.C. Title 11 Section 341. A 341 Meeting of Creditors is required in both Chapter 7 and Chapter 13 bankruptcy. Creditors, attorneys of creditors, and representatives of creditors are allowed to appear at a debtor’s 341 hearing. The point of the hearing is for the trustee to conduct an oral examination of the debtor seeking four pieces of information:

  • What consequences will a bankruptcy discharge have on the debtor, including effects on the debtor’s credit history;
  • If the debtor can file bankruptcy under a different chapter;
  • The effect receiving a debt discharge will have on the debtor;
  • The effect of reaffirming any of the debtor’s debts. 

What Happens At The 341 Meeting Of Creditors?

While your 341 Meeting of Creditors may be scheduled to last 30 minutes or longer, you shouldn’t need to appear before the trustee for nearly this long. Several other debtors may be scheduled to appear at the same time as you. Your hearing could take as little as 5 minutes, so you will just need to wait until you are called for your turn. Your attorney should be with you if you are represented, but otherwise, it will be your duty to represent yourself at the 341 Meeting of Creditors. 

The first order of business at your 341 Meeting of Creditors will be confirming your identity. You need a form of photo identification and an original form of identification with your social security number to do this. Most people use their driver’s license as their form of photo identification. Ideally, you will have your social security card available to verify your identity as your 341 Meeting of Creditors. If you don’t have your social security card, you can use a W-2 form, but it must be an original and not a copy. 

There are general questions that trustees will ask most bankruptcy debtors during their 341 hearings. Bankruptcy debtors will need to confirm their identities and that the information in their petitions is true and correct to their knowledge. Other questions will be more specific and based on the debtor’s petition. A Tucson bankruptcy attorney should have their client fully prepared for any and every question the trustee might ask during the 341 Meeting of Creditors. 

Telephonic Hearings

Many bankruptcy courts switched to Zoom appearances for 341 Meetings of Creditors and haven’t switched back since. It’s important to test your internet connection, background noise, and other factors that could interrupt your hearing. You may need to submit a declaration verifying your identity since it isn’t being done physically like in the past. Your trustee should provide your Zoom Meeting ID in advance. Make sure you have information available like your forms of identification, lien documents, and most recent tax returns. For more questions about telephonic 341 Meetings of Creditors, call our Tucson bankruptcy firm for your free consultation at 520-307-0020

What Should I Bring To My 341 Meeting Of Creditors?

As mentioned above, you will need to bring your two forms of identification to your 341 hearing. The trustee may need to continue the hearing to a different date if you don’t have these available. You should have already provided the trustee with your most recent tax return before the hearing, but if you haven’t, you should bring that with you as well. Your trustee will probably want to see your most recent income and accounts statements. Your trustee may inform you in advance of any documentation they would like you to bring to the hearing. While your case likely won’t be dismissed due to your attire, it’s important that your 341 Meeting of Creditors is conducted in a courtroom and you should be dressed appropriately. Candace Kallen and the rest of our Tucson bankruptcy team will make sure you feel confident about your 341 Meeting of Creditors and any other appearance related to our bankruptcy. Click here or call 520-307-0020 to schedule your free consultation today. 

What Do I Need To Do After My 341 Hearing?

After your 341 Meeting of Creditors, you need to complete your second credit counseling course. You should take this course from the same provider as your first credit counseling course. You should set aside about 1-2 hours to complete the course, and your spouse will need to take it with you if you are declaring bankruptcy together. You may also need to complete a short chat with a counselor from the service provider. If you have an attorney, they will receive a copy of the course completion certificate and file it with the court. If you don’t hire an attorney, you need to complete this step yourself. Your second credit counseling certificate must be filed with the court within 60 days of your 341 Meeting of Creditors. If your certificate isn’t filed within this deadline, your bankruptcy is likely to be dismissed. 

If you filed for Chapter 7 bankruptcy, there isn’t much for you to do after finishing your second credit course. Your creditors have 60 days after the 341 hearing to object to the discharge. Otherwise, you will simply wait for your letter from the court discharging your bankruptcy after that 60-day period has elapsed. A Chapter 13 bankruptcy debtor will need to wait much longer to see their case discharged. Once their plan has been confirmed, they will need to keep up with the payments for the plan’s lifespan, which is either 3 or 5 years. For more information about your post-341 bankruptcy requirements, click here or call 520-307-0020 for your free consultation with our firm. 

For Skilled Representation At Your 341 Hearing, Call Our Firm For Your Free Consultation Today

Hiring a Tucson Bankruptcy Attorney to represent you through your case means having a professional by your side at your 341 Meeting of Creditors. You can count on this expert guidance not just at your hearing, but at every step of the bankruptcy process. Protect your assets and set yourself up for a brighter financial future. Qualified clients can utilize our zero-down filing plan, which allows you to pay your bankruptcy fees after your case has been filed. When you’re ready to schedule your free consultation with Candace Kallen or another member of our bankruptcy team, click here or call 520-307-0020.

Stein Mart declares bankruptcy blog

Stein Mart Files Chapter 11 Bankruptcy

Stein Mart Files Chapter 11 Bankruptcy

Stein Mart declares bankruptcy blogOn August 12, 2020, Stein Mart declared Chapter 11 bankruptcy. The discount retailer  is one of many large companies to seek the protections of Chapter 11 since the onset of the coronavirus pandemic. The company’s future is uncertain and employees are preparing for the end of business. 

What Led to Stein Mart’s Demise

Stein Mart has been in business since 1908. It has since grown to 280 locations across 30 states. The company will continue to operate for the foreseeable future, but will likely hold a going out of business sale starting the weekend after the bankruptcy was filed. Unless the company finds a buyer, CEO Hunt Hawkins predicts that the chain will be fully closed by October. 

Stein Mart was already facing financial struggles before the start of the pandemic. Sales at the beginning of this year were $134 million, compared to $314 million for the same period the year prior. Then on March 18, 2020, Stein Mart closed all of its locations in accordance with COVID-19 social isolation guidelines. While locations have begun to reopen with restrictions, the damage has already been done. The company reported approximately $200 million in debts in May 2020. Stein Mart borrowed $10 million for a payroll protection loan under the Coronavirus Aid, Relief and Economic Security (CARES) Act. 

Stein Mart has approximately 8,000 employees who have been furloughed for the past few months, and will need to start looking for new employment. Thankfully for these Stein Mart employees, the extra $600 weekly federal benefit provided by the CARES Act, which was originally set to expire on July 31, 2020, has been extended at a reduced rate of $400 per week until January 31, 2020. 

Business owners considering Chapter 11 need to remember how expensive and complicated of a process it can be. Stein Mart has hired three separate firms for advice and guidance during the Chapter 11 process. Foley & Larder is Stein Mart’s restructuring counsel, Clear Thinking Group is its restructuring adviser, and PJ Solomon is its investment advisor. The company’s stock fell 35% upon filing. 

Chapter 11 Bankruptcy, Explained

Chapter 11 business bankruptcy blogWhile it appears that Stein Mart will be shutting down for good through its bankruptcy filing, Chapter 11 doesn’t require that of a business that files. A company will typically choose Chapter 11 when it wants to remodel the business, because the other option, Chapter 7, requires the business to close and surrender all assets. Once a company files Chapter 11, its main creditors will form a committee that will have authority over major business decisions. The company will submit a plan to the committee on how it should restructure its debt and emerge from bankruptcy. If the committee doesn’t agree to the plan, they may submit their own. 

Chapter 11 has become even more prevalent in this COVID-19 climate. It is a pandemic like no other in recent memory, Many people throughout Tucson, Arizona, and the United States are dealing with tough economic times. Seek assistance if you are struggling to make ends meet. There are a myriad of Tucson Debt Relief options available.

Other Popular Companies to Declare Bankruptcy During the Coronavirus Pandemic

So far, 2020 has seen a 26% increase in Chapter 11 bankruptcy filings. Some of these include: 

Is Your Stimulus Check Safe or Will It Get Seized for Debt Owed?

economic stimulus check and bankruptcy blogOn 5/10/2020, Our Arizona Bankruptcy Lawyers Team writes:

The spread of Coronavirus has caused many businesses across the country to restrict their services or close entirely. Some businesses that could still operate are having difficulty obtaining shipments from overseas suppliers due to labor shortages. This state of semi-shutdown is set to continue indefinitely, at least until the end of the month. Fearing an economic recession, lawmakers passed a bill to send out $1,200 stimulus checks to Americans who qualify. If you were already in debt before the pandemic started, you may be concerned about your creditors taking your stimulus check.


Tucson bankruptcy attorney

Arizona Unemployment a Predictor of Bankruptcy Increase

On 4/2/2020 our Tucson Bankruptcy Lawyers write:
Record Unemployment Rates could be a clear indicator of the dark financial days looming.
Tucson bankruptcy attorneyNationally, for the week ending March 28, 2020 there were over 6.6 million unemployment claims filed.  In Arizona, there were 89,100.  Both were record setting numbers.  These numbers are reflective of beforeGovernor Ducey put an April 1st “Stay at Home” order into place.  Next week’s numbers will probably be even higher as the first week of Ducey’s order will be reflected.  Early estimates are claims will be in the hundreds of thousands in Arizona alone next week.
With little relief in site, the financial futures of thousands of Tucson residents hang in the balance. The high numbers of unemployment claims are in direct correlation with the COVID-19 pandemic that has not only impacted Arizona but all of the world. Though roughly 93% of all Tucson residents who have filed taxes will be receiving stimulus aid from the government in the near future.  This much needed money will only go so far when so many Tucson residents are facing job loss and a questionable future.
One of the leading causes of people needing to file for bankruptcy is the loss of a job.  The number one reason that people file bankruptcy is medical expenses.  The current Coronavirus pandemic unfortunately could impact a person’s life negatively through either loss of a job/income, through unexpected medical bills or both.
If your life has been impacted by the COVID-19 virus and need to save your home, your vehicle, or just need debt relief and a “Fresh Start”.  Call our Tucson bankruptcy lawyers today.  Our Tucson office is currently offering Bankruptcy by Phone.  This option is available here to help you.  Not only are you able to complete your free initial consultation but also through telephonic, scanning, e-mailing, and other Coronavirus safe methods.  Call our Tucson office at (520) 307-0020.  We are open and here to help you through this current pandemic.

Tucson Company Vector Launch Files Chapter 11 Bankruptcy

Vector Launch developed rockets at a facility in Tucson, Arizona. Vector Launch, Inc., based in Tucson, has suspended its development of rockets to launch small satellites. The bankruptcy plan is to sell some assets to Lockheed Martin Corp. (an aerospace company), then auction the rest. Vector’s board agreed to a loan provided by Lockheed Martin as well as Lockheed’s purchase of the GalacticSky assets.  This chapter 11  bankruptcy may save the business but if agreements cannot be made with it’s creditors, it may be the end of the line for the company.

In response to a management shift and change in financing, the Tucson-based small satellite startup company, Vector Launch Inc. will stop most operations. 

Vector, a small-launch vehicle company in Tucson, Arizona, filed Chapter 11 bankruptcy in December, 2019.  At one time a leading company in the small launch vehicle market, Vector paused operation for a “significant change in financing” and a lay off of almost all its employees.  Vector will hope to reorganize under the Chapter 11 bankruptcy provisions.
Chapter 11 bankruptcy is a bankruptcy designed for businesses who want to re-organize their debt and continue business as they reorganize and it gives them time to pay their creditors over time.  Chapter 11 bankruptcy is the 3rd most popular form of bankruptcy in Tucson based on the Pima County Bankruptcy filings for 2019.

A financial summary reportedly puts Vector’s assets between 10 and 50 million dollars and its debt between 1 and 10 million dollars. With a Chapter 11 bankruptcy, the debtor devises a plan to repay creditors, while they are protected from legal debt collection actions. Vector was founded in 2016 by Jim Cantrell, a veteran of Space X (Elon Musk), has been backed by major venture-capital firms investors. Approximately 50-70 Tucson employees are expected to enter the world of unemployment due to the Vector Launch misfortune.  Cantrell was replaced as CEO of the company by John Garvey earlier in 2019.

An Increase in Minimum Wage Has an Impact on U.S. Workers

Federal minimum wage was created in 1938. Since 1938, the minimum-wage has increased from $.25 to $7.25.  Congress holds the power to set the federal minimum wage. For the longest time in history, (in over 10 years)  Congress has not raised the wage. The federal minimum wage is currently $7.25 an hour. The Congressional budget office is evaluating the impact of increasing the federal minimum wage further. A new report considers what the impact in our country would be if the federal minimum wage was raised to $15 an hour (by the year 2025).

Raising the minimum wage is an issue that spars heated debate. A reported it 27 million people would benefit from the increase in pay. Getting paid more as inflation increases sounds like a good idea. However, there are arguments for and against raising minimum-wage to $15.00.  Some critics opposed to raging raising the minimum wage say employees would actually lose their jobs because employers would not be able to afford paying that wage increase. Currently it is uncertain that the increase in the wage would have an effect on employment.

The current minimum wage in the United States is $7.25 per hour. A survey reveals that 55% of registered voters would be in favor of raising minimum-wage to $15. While Inflation in our nation is holding steady, the purchasing power of the $7.25 minimum wage has declined over the past 10 years. With a purchasing power decrease at the current minimum wage of $7.25, full-time minimum wage workers experience a $3000 loss and annual earnings.

Here is another way to look at this: in 1968, buying power reached its peak, and minimum-wage lost 31% in purchasing power. When all this is taken into consideration, in effect, minimum-wage workers “earn” approximately $6800 less than they would have earned in 1968 (in 1968 the minimum wage was $1.60). The impact on the federal budget and raising the wage even to 10 or $12 is not clear. Yes, raising the minimum wage to $15 an hour would boost pay for almost 17,000,000 workers. On the other hand, there are legitimate concerns that possibly 1.3 million workers will lose their jobs as a result of increase in minimum wage.

An increase in minimum wage may lead to loss of jobs, and therefore, loss of income.  Losing a job is one of the leading factors in U.S. citizens filing for bankruptcy.

Southern Arizona Gets Unexpected Snowfall

Southern Arizona Gets Unexpected Snowfall

Are You Prepared for the Unexpected?

Unexpected snowfall in Arizona. February 21, 2019

An unexpected cold front has led to a rare snowfall in Southern Arizona this week. Areas such as Scottsdale, Goodyear, and Tucson saw the unexpected snowfall while in northern Arizona Flagstaff broke a record set in 1915 with an astounding 31 inches of snow in a single day.  Would you be prepared if an unexpected financial burden happened to you?

Did you know that filing for bankruptcy is often unexpected as well? Often there is a common misconception that people declare bankruptcy because they are simply irresponsible with their budgeting and spending. The assumption that a debtor recklessly racked up their credit cards with vacations, shopping, and outlandish purchases are often furthest from the truth. Sometimes unexpected situations arise that lead to the necessity of filing for bankruptcy.  Much like the weather, these “situations” come out of the blue.
A view of the snowfall in Arizona.Loss of employment is another common cause of bankruptcy filings in Tucson, Arizona. In the housing crisis of 2008-2009, many people in the real estate industry found themselves in this situation. When their income decreased, their expenses stayed the same.  Eventually, many people ended up bankrupt.

When an unexpected change in income occurs, people often have to rely on their credit cards

to make up the difference. This does not mean that they are irresponsibly charging. Credit cards are often used in emergency situations as well such as home or car repairs. Credit cards can be a great backup plan as long as they are used responsibly and payments are made on time.

Furthermore, another main cause of bankruptcy filings are deaths or divorces, which are also often unexpected. There are times when a spouse dies and their retirement income may stop being received by the surviving spouse. In the event of a divorce it is usually difficult to continue to pay necessary expenses on a single income. Additional reasons for declaring bankruptcy in Tucson include:  Student Loan Debt, Loss of a Home or Car, and a higher cost of living.

An unexpected snowfall blankets Arizona. February 21, 2019

A Harvard University study recently found that over-spending barely breaks into the top 10 reasons that lead to a person filing for bankruptcy.  Medical Debt was the number one reason that a person files for bankruptcy.  According to the study, medical debts lead to over 60% of bankruptcy filings. This number also includes those who have some sort of medical insurance. Unexpected medical procedures and things like a heart attack can lead to thousands upon thousands of dollars of debt.

Make sure that you are prepared for the unexpected.  If you are facing unexpected debt or a financial crisis, get in touch with a Tucson debt relief expert to let you know the many options available to you.  Call (520) 307-0020 for a free consultation.

Arizona snowfall event.

It’s Not Your Fault! Dealing with Bankruptcy Guilt

Many people reach the point where they know that they need to file for bankruptcy but resist doing so because of the many myths and stereotypes surrounding the legal process. Others file but continue to live with guilt over doing so, feeling like they have let down their family or done something bad.

The truth is that it is not your fault! Bankruptcy was established by law to provide debt relief to those who need it, and it is a valuable financial tool. Here are a few things you can do to move past the stigma and get over your guilt surrounding the idea of filing for bankruptcy:

It's Not Your Fault! Dealing with Bankruptcy Guilt

It’s Not Your Fault! Dealing with Bankruptcy Guilt

Bankruptcy was established by law to provide debt relief to those who need it, and it is a valuable financial tool.
Tucson, Arizona

Understand the Truth about Bankruptcy

There are many myths surrounding bankruptcy that can make you think negatively about it, but your bankruptcy lawyer can help you understand the truth about these myths.

Myth #1: Only irresponsible spending leads to bankruptcy. The truth is that there are a great number of situations that can lead to financial problems. You might lose a job unexpectedly and be unable to find employment. You can burn through your savings and max out your credit cards while you are trying to stay afloat. You could become seriously ill or injured and face the same predicament. Or you could divorce and lose a great deal of income. There are many things that can happen that are beyond your control that lead to bankruptcy.

Myth #2: Only the poor or uneducated file for bankruptcy. You can just look at the news to know that this isn’t true. High-profile billionaires like Donald Trump have filed for bankruptcy several times. Bad things can happen to anyone, regardless of education or status. It is not always bad choices that lead to bankruptcy.

Myth #3: Bankruptcy doesn’t affect a lot of people. In Arizona alone, more than 50,000 people file for bankruptcy every year. Many, many more are in situations that bankruptcy could help but are struggling not to file because of the misconceptions they have about the process.

By understanding the truth about bankruptcy, you can maintain the proper perspective about your filing and let go of that guilt.

Be Honest about How Your Finances are Affecting Your Situation

Tucson Bankruptcy Help
Many people put off filing for bankruptcy because they deceive themselves about their financial predicament. They believe that things aren’t that bad, or they tell themselves that they will have the situation under control “soon” by working harder or getting a loan.

When you are honest about your financial situation and how it is impacting your life, you can be objective about the choice to file bankruptcy and know that it is the best solution. You won’t feel guilty about making that choice because you’ll see that it is the best way to handle your finances and will provide the most benefits. You can liken it to taken medicine that you don’t like so that your body will heal.

Forgive Yourself for the Things You Cannot Control

Bad things happen to even the best people. You can’t control whether a tornado destroys your home and wipes out your savings or whether your spouse gets cancer and medical bills reach into the hundreds of thousands. Even with the best planning and the most fastidious of savings, you won’t be able to come through the other side of some of these situations unscathed.

Forgive yourself for the things that led to your situation that you cannot control, and let go of the guilt you feel. If bad decisions led to your bankruptcy filing, forgive yourself for those, as well. Learn from your mistakes and vow to make better decisions going forward.

Accept that Bankruptcy is a Legal Right

Filing for bankruptcy isn’t a way to game the system or “get one over” on your creditors. In fact, there are provisions built into the bankruptcy law to ensure that no one is able to spend prolifically with the idea of discharging it all in bankruptcy.

Accept bankruptcy for what it is: A legal right. The law was designed to protect people like you who are struggling. It is not social welfare — it is a legal way to get out from under crushing debts when you do not have the means to pay for them. That way, your life is not destroyed and you have the chance to start fresh.

Learn more about bankruptcy and how it might help you by calling My AZ Lawyers. Our experienced Tucson bankruptcy lawyers will help you understand the different types of bankruptcy and how each might help you get the debt relief you need. You may be able to completely discharge your unsecured debts, such as credit card balances, or you may be able to get a structured debt repayment plan with lower interest rates. Contact us today to talk with a bankruptcy lawyer and learn about your options.

Published By:
My AZ Lawyers

Tucson Location:
2 East Congress St., Suite #900-6A
Tucson, AZ 85701
Office: (520) 441-1450