Sun City, AZ asked in Bankruptcy for Arizona

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?

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2 Lawyer Answers
Diane L. Drain
Diane L. Drain
Answered
  • Bankruptcy Lawyer
  • Phoenix, AZ
  • Licensed in Arizona

A: 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: http://www.dianedrain.com/bankruptcy-for-an-individual/. Most Arizona consumer bankruptcy attorneys offer a free consultation about the basics of bankruptcy.

Please take time to educate yourself about bankruptcy and to determine which attorney is the best to help you in the process. Don’t assume the attorney is being honest about their experience and capabilities. Check them out. Avoid the attorneys who advertise on TV or profess a 100% success rate in their Internet ads. It costs hundreds or thousands of dollars for these ads; clients pay for them by paying higher fees. These attorneys mass produce the work and do not offer the client the hands-on assistance necessary in a well-planned bankruptcy. Normally these firms assign all or most of the work to staff and the client rarely talks to an attorney.

When interviewing the attorney ask how long they have practiced bankruptcy law. Ask what percentage of their practice is focused on consumer work. Ask whether they are experienced in both chapter 7 and chapter 13 cases. Ask the attorney for references. Ask about their policy of returning phone calls. They should be committed to answering specific questions about your situation and help you understand your options. If, after talking with them you are still confused about the issues you raised, find another attorney. Check them out with the various ranking sources: such as www.AVVO.com, and the State Bar.

An attorney is should be your guide through this process. They should educate you, be there to assist you in how to avoid pitfalls and help you plan for your future after bankruptcy. There are hundreds of “bankruptcy” attorneys in Arizona. Of those just a few will fit the criteria set forth above. Again, bankruptcy is a very complicated process and you want to use an attorney who will be there when you need them.

My best to you,

Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: Possibly, but your mom needs an experienced bankruptcy attorney to analyze her complete financial situation before any decisions are made.

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