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Questions Answered by Diane L. Drain
3 Answers | Asked in Bankruptcy for Arizona on
Q: Removing garnishment - Chapter 7

Someone owes me money and I won a default judgement and just filed for garnishment. I received notice that they are filling for Chapter 7. The email from the her lawyer said I had to contact her employer to remove the garnishment. Do I need to do this, or should they do this? Honestly, I don't... Read more »

Diane L. Drain
Diane L. Drain answered on Jan 13, 2020

Never demand payment (or continue with a garnishment) if someone is in bankruptcy - this can very VERY costly for you. There is a chance that they will fail to follow through with the bankruptcy and the case will be dismissed; at that time you can move forward with the garnishment. It is best for... Read more »

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2 Answers | Asked in Bankruptcy for Arizona on
Q: No I filed in feb 2019 I gave them 2018 tax refund
Diane L. Drain
Diane L. Drain answered on Jan 6, 2020

The bankruptcy estate has a right to a pro-rata share of your 2019 refunds.

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3 Answers | Asked in Bankruptcy for Arizona on
Q: So my case was closed and now reopened I gave them 2018 tax return now its reopened will I have to give the 2019 also
Diane L. Drain
Diane L. Drain answered on Jan 6, 2020

Probably not if you filed your bankruptcy in 2018. But, it is best to talk to your bankruptcy attorney in order to make sure your interests are protected.

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2 Answers | Asked in Foreclosure for Arizona on
Q: A timeshare was foreclosure, what should i do?
Diane L. Drain
Diane L. Drain answered on Jan 4, 2020

Sorry, but I am not sure what you are asking.

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2 Answers | Asked in Foreclosure and Real Estate Law for Arizona on
Q: There is an auction coming up, I saw the owner just placed a "lis Pendens" to stall post auction.

Checking the county recorder's office, this was recently filed. The bank foreclosed, but it looks like she wants to live in the house awhile after the auction. How much trouble will a Lis Pendens be? It could be that she thinks no one will bid on her house with that move. I don't really know if... Read more »

Diane L. Drain
Diane L. Drain answered on Jan 6, 2020

'Lis Pendens' means there is litigation pending that might involves the real property.

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3 Answers | Asked in Bankruptcy for Arizona on
Q: My dad is a senior citizen who does not have any real assets and lives on his social security.

He has accumulated significant debt via credit cards and other loans via One Main Loan and Lending Club. He had a stroke this summer and has been off work and fell behind. This is how I became aware. He drowning trying to make payments. I just watched a webinar thru the National Senior Citizens... Read more »

Diane L. Drain
Diane L. Drain answered on Dec 27, 2019

Thank you very much for contacting my office. I realize this is a challenging time for you and that you have lots of questions. It is okay to be anxious and overwhelmed; the trick is not to fight it. Instead, you are on the right track by educating yourself about options to help deal with your... Read more »

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1 Answer | Asked in Bankruptcy for Arizona on
Q: Inheritance question during chapter 13

I am 3 years into Chapter 13 case, 2 years left. My plan base shows as $22,000 so about $10,000 left to go for discharge. This amount is for secured creditors only, unsecured showing as not receiving much of anything. My father is ill so wondering how that works if I was to get inheritance? I have... Read more »

Diane L. Drain
Diane L. Drain answered on Dec 19, 2019

I assume you do not have an attorney, but if you do you must contact them for guidance. Generally, in chapter 13, any inheritance goes to administrative claims, priority debts, creditors that filed proof of claims, then the debtor.

I hope this is helpful.

Note - if you do not...
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2 Answers | Asked in Bankruptcy for Arizona on
Q: We were released from chapt 7 in April but had a car accident in March can this be incl

Filed for chapter 7 in Dec 2018, was released pending taxes, receipt, filings from creditors, etc by trustee in april 2019. My wife had a car accident in March of 2019, and we are now being sued. Can this be included in the bankruptcy since we had not been release as of that date?

Diane L. Drain
Diane L. Drain answered on Dec 16, 2019

No - when a bankruptcy is filed it includes the debts you owe on the day of filing, not future debts. You may qualify for a chapter 13, but you will not be able to get a discharge, so it is very important you talk to an experienced chapter 13 attorney to determine your rights.

I hope this...
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2 Answers | Asked in Bankruptcy for Arizona on
Q: I own a truck that’s paid off and has a value of $1,200 and I also have a loan on a Car that has negative equity.

I’m filing chapter 7 with no assets other than my truck. Will they let me reaffirm my Car Loan with negative equity, and keep my truck? Or will I have to give up my truck in order to keep my Car loan?

Diane L. Drain
Diane L. Drain answered on Nov 26, 2019

Your question is confusing and I need a lot more information in order to fully answer your question (plus, I am sure you have a hundred, plus more). If you have a vehicle with a loan and want to keep the vehicle, then continue to pay for it. Make sure to look at the applicable exemption... Read more »

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1 Answer | Asked in Bankruptcy for Arizona on
Q: What are the requirements for filing bankruptcy?
Diane L. Drain
Diane L. Drain answered on Oct 31, 2019

You must fill out more than 60 pages of information about what you owe, own, have done in the past, earn today, earned over the last 6 months, earn the last 60 days, earn the last 3 years, plus much, much more. If you want a free consultation then follow these directions:

I know this is a...
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1 Answer | Asked in Bankruptcy, Divorce and Family Law for Arizona on
Q: During a divorce in az Are premarital assets considered community assets after a joint bankruptcy?

Married 12/26/17

Bankruptcy filed 12/03/18

Bankruptcy complete 3/19/19

Diane L. Drain
Diane L. Drain answered on Sep 21, 2019

You should talk to your bankruptcy attorney because the answer depends on certain facts.

2 Answers | Asked in Bankruptcy for Arizona on
Q: My parents did a reverse mortgage on their home in my Dad's name alone. He just passed away and my Mom is $100k in

credit card debt. She will loose her home to the company they signed the reverse mortgage with. She will recieve $300k from a life insurance policy. Is there anyway for her to file bankruptcy to get rid of the unsecured debt and protect the life insurance money so she can survive financially?

Diane L. Drain
Diane L. Drain answered on Sep 21, 2019

It depends on the type of life insurance. Please understand that bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step. I am attaching a link to some free videos that explain how bankruptcy works:... Read more »

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2 Answers | Asked in Bankruptcy for Arizona on
Q: (BK 7) Parent helped pay for back mortgage pymnts (3) directly to mortgage company is that an issue.

We meet the means test. Just curious if thats an issue. Payment since then have been current through us.

Diane L. Drain
Diane L. Drain answered on Jul 17, 2019

Expenses paid by others is "income" - but there are four places that income is addressed in a bankruptcy. Bankruptcy is a very complicated process (somewhat like a Rubik's cube - one answer changes others). Please take time to educate yourself about bankruptcy before jumping into the unknown. As... Read more »

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2 Answers | Asked in Bankruptcy for Arizona on
Q: Is a brokrage account (e-trade) of $295.00 an exempt asset? I have no current job (were living off my partners income).

Asking if it exempt when filling BK7

Diane L. Drain
Diane L. Drain answered on Jul 17, 2019

It depends on whether you use Arizona (lived in Az for more than 2 years) or federal exemptions. Bankruptcy has thousands of rules governing specific situations. If you have an attorney - ask them which question. If you do not, then consider hiring an experienced attorney to help protect you and... Read more »

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2 Answers | Asked in Bankruptcy for Arizona on
Q: filed chapter 7 8 mo ago didn''t qualify. filing again now and do qualify. what problems will i face

i walked away and the case was dismissed the first time. just after the dismissal i lost my job. after a month and a half, got a new job for much less money. I am filing again with the same lawyer (made payments until 100% paid), two hours before our signing meeting, her assistant called to say... Read more »

Diane L. Drain
Diane L. Drain answered on May 21, 2019

You need to ask the attorney to answer your questions. You paid their fees so have a right to understand what you are asked to do. Ethically the paralegal cannot give you legal advice, only the lawyer.

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2 Answers | Asked in Tax Law and Bankruptcy for Arizona on
Q: Why do I need to endorse my entire tax refund to my trustee if she says she would only take a portion of it.

Filed Chapter 7 on 3/20/18. It was finalized (discharged) July 2018. My trustee stated that I needed to give her my entire refund. Once she receives if than she would take portion of it from January to March and refund me back the rest of the amount. When I asked how much she would be taking she... Read more »

Diane L. Drain
Diane L. Drain answered on Mar 22, 2019

In our office, we work with the trustee to pay only a portion, but that can depend on the trustee. If you have an attorney you need to ask for their guidance. If you do not have an attorney you should talk to a volunteer attorney at the Arizona Bankruptcy Court - www.azb.uscourts.gov.

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3 Answers | Asked in Bankruptcy for Arizona on
Q: Can I get a used car a month before filing bankruptcy?

I am filing for bankruptcy the middle of March chapter 7 in Arizona. I am surrendering my current vehicle. My husband is filing also with me and he has a vehicle he is affirming. If I get a used car from a dealership right now, am I okay to do so?

Diane L. Drain
Diane L. Drain answered on Feb 23, 2019

The short answer is "yes", but there is a lot more information that you should know before filing a bankruptcy. I realize this is a challenging time & you have lots of questions. It is okay to be anxious & overwhelmed. You are on the right track to educate yourself about how to deal with your... Read more »

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2 Answers | Asked in Bankruptcy for Arizona on
Q: I filed a Ch7 in May 2018 and was granted a discharge. My case is still open because the trustee wanted to wait until I

filed my 2018 tax return saying "you're low income and you have kids, so I know you'll get a big return." Is it left to the trustee's discretion whether he can take a portion of my return, or does a judge decide that? Would low income circumstances be relevant in whether I can keep my return or... Read more »

Diane L. Drain
Diane L. Drain answered on Feb 20, 2019

Unfortunately the trustee has an obligation to collect all non-exempt funds. The current Arizona law does not protect earned income credit or child care credit.

Most Arizona consumer bankruptcy attorneys give free consultations and this issue is discussed every time. This is why I...
Read more »

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3 Answers | Asked in Bankruptcy for Arizona on
Q: How does bankruptcy affect tax refunds?

I filed 2018 tax return and is expected February 27th, 2019. I’m not filing bankruptcy till Mid March. I was told that I need to spend all my refund on bills and nothing personal (vacation, furniture, clothes, etc.) Am I correct with this? Or am I still able to use my refund for other things than... Read more »

Diane L. Drain
Diane L. Drain answered on Feb 9, 2019

I realize this is a challenging time & you have lots of questions. It is okay to be anxious & overwhelmed. You are on the right track to educate yourself about how to deal with your financial situation. As a lawyer & retired law professor I am committed to education as a foundation for anyone... Read more »

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3 Answers | Asked in Bankruptcy for Arizona on
Q: I filed a Chapter 7 in May of 2018, after my 2017 return was spent on reasonable things. Can the trustee ask for tax

returns that I file for in 2019? What would happen if I didn't pay them? I am considered a low-income family.

Diane L. Drain
Diane L. Drain answered on Jan 12, 2019

It depends on the trustee. The trustee has a right to a portion of the 2018 refunds - depends on when you filed your case. For instance if you filed half way through 2018 then the trustee has a right to half of the federal and state refunds. If they requested a copy of your 2018 federal and... Read more »

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