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How Filing for Bankruptcy Changed My Life
lawyer, retired law professor, educator, wife, mother
I could tell you how bankruptcy may change your life, but why would you listen to me?
After all, I am the attorney who charges money to help her clients. What makes more sense is that I share my clients’ reports about their lives prior to calling me, the challenges of filing a bankruptcy and how their lives changed after bankruptcy. All of these reports are directly from my clients (as a professional, you will never find a fake review on my website or social media, like so many of other bankruptcy attorneys do). The truth is, I don’t need to lie.
SOME THOUGHTS MY CLIENTS WANT TO SHARE WITH YOU:
- I was scared to the point of panic attacks
- Now, we have hope for the future, more discipline with our finances and eternally thankful for Diane’s guidance through the process.
- My whole life seemed a day to day mix of anxiety and fear.
- That was the hardest time in our life and it was rough on our marriage and mental state.
- We were in serious financial trouble, which created an incredible amount of stress that was beginning to affect my health.
- I was desperate and she made me feel that I could sleep through the nite
I was scared to the point of panic attacks
One and a half years ago, after a series of physical problems, I finally admitted to myself that I could no longer handle my debt load. I was going under, and knew I would have to consider bankruptcy. I had a high credit score and had always been responsible about paying my debts, so the decision was very hard to make. I was scared to the point of panic attacks and had no idea how to find a lawyer. I went on yelp and read through many reviews. When I saw a picture of Diane, I knew she was the person I wanted to work with. What a great decision that turned out to be! From our first phone conversation, her calmness, empathy, and careful, thorough explanations helped me gain confidence in walking through this complicated process. Her and Jay treated with me with such kindness, patiently answering my many questions and quieting my fears with precise, professional knowledge. This is a difficult experience emotionally, but the process is a series of steps, each one of which you will be guided through. Diane and Jay always answered my calls and e-mails in a timely manner. I am so glad I found Diane. Her warmth and caring and wealth of experience greatly eased the stress of going through this difficult and emotional process. I highly recommend using her services. j.R.
Now, we have hope for the future, more discipline with our finances and eternally thankful for Diane’s guidance through the process.
Bankruptcy is not in anyone’s long term plans and was something my wife and I never really considered for years as we slowly drowned in debt. Despite the social stigma of bankruptcy, my wife and I started to educate ourselves about it and realized it was a great option for us. We live in Payson, AZ and talked with the first bankruptcy lawyer we could find in Payson. He made it clear that it was the option for us but we felt demeaned and uncomfortable with some of his suggestions. Still, we felt like it was our only options so we started to move forward with him.
Soon after we retained him, we started doing our research on him and found that he had a number of red flags. Our uncomfortableness was founded. We started searching for a highly rated lawyer and found Diane. Even though she wasn’t 100% sure that representing us was our best option (due to location), she confidently and patiently answered numerous questions for us. She even gave us some other options for lawyers that she highly respected. We truly felt as though she had our best interests in mind.
In the end, Diane was able to represent us and her communication, leadership and clarity throughout the process was night and day different than our first lawyer. I can’t stress to you enough how important it was for us to have made the switch. While we were hurting financially, it was %1000 times worth it to lose the money on the retainer to our previous lawyer.
Bankruptcy is something you have to take ownership of. There was a lot of work for us to do and our case’s quality depended on us taking ownership. However, Diane was a great coach in letting us know each upcoming step and what was needed. She simplified it so that we weren’t ever overwhelmed.
When our family met in court we were at peace and confident in our preparation. Furthermore, there was a high level of respect our trustee had with Diane. This made us feel good about our representation and further confirmed our confidence in her.
It has been a year since my wife and I started to consider bankruptcy and my wife and I find ourselves pondering our last year. This time last year we felt hopeless with our debt and struggling to find any solutions. Now, we have hope for the future, more discipline with our finances and eternally thankful for Diane’s guidance through the process. We out 5 months after discharge (with a credit score of 688 which we didn’t think was possible for us) and happy to be moving into a new year with this behind us.
From beginning to end, Diane was consistent, calm, encouraging, thorough and helped us feel hope again. We can’t say enough great things about Diane!
Bankruptcy was the avenue to financial freedom for our family and it might be for yours too. Our only suggestions are to:
1. Make it a lifestyle change so you can get free and stay free
2.Take ownership of your own situation and your own bankruptcy
3. Hire Diane and trust her to help you! B.K.
That was the hardest time in our life and it was rough on our marriage and mental state.
Diane I just wanted to give you an update on us. We filed bk with you representing us about 7 years ago now. Just wanted you to know we are doing very well. We did listen to you and have no credit card debt to this day. We purchased a home 3 years ago but stayed way under our budget. We bought vehicles but both vehicles are a lot cheaper than what we could have purchased and the one is almost paid off and we have owned it a year. Vehicles are our weakness. We would like to get better in that area.
We have only paid interest on our vehicles and home since we filed. We try to follow Dave Ramsey as much as possible. So paying off everything is our goal. I am doing amazing in real estate now and my husband is still at UPS and doing well.
That was the hardest time in our life and it was rough on our marriage and mental state. We ended up needing counseling 2 years ago for our marriage and our counselor said our problems started 5 years ago and wanted to know what happen then. Well that’s when we filed. I don’t know how people file every 10 years. Thank you for bringing us out of the mess we got ourselves in. We plan on never being in that situation ever again we look at money and credit very differently now. Just wanted to share our story so you can share with others that come in. It is not an easy road to just file bk. Take care and thank you.
Followup from client : please tell people that the first year is hard but after doing a lot of research on how to build our credit by reading bk forums we were able to get back to doing very well. Now we have credit scores in the 740-750 range. So, yes it isn’t the end all, but it isn’t easy either you have to buckle down and not blame each other as well. It happens to more people that the public realizes. K.T.
My whole life seemed a day to day mix of anxiety and fear.
I first met Diane in 2009. I was losing control of my finances and therefore my whole life seemed a day to day mix of anxiety and fear. I landed on her website and returned numerous times to understand the process. I found it one of the best and most informative sites on the subject and just decided that whoever was behind all that information was the person I needed. I remember my first visit, I cried thinking my life was over and she quickly alleviated all my fears. There were no demons or dragons. It my constitutional right to be free of debt. For the first time, I felt empowered and had faith that she would get me past this chapter of my life. Indeed she did. Ten years later, after a major backpacking injury, disability and subsequent loss of employment ( I had been basically debt for all those years in between) I needed her again and returned. Her sound advice, again, helped me get my life back, as I knew she would. I’ll be forever grateful. Diane and Jay are a class act. No one does it better. V.M.
We were in serious financial trouble, which created an incredible amount of stress that was beginning to affect my health.
I cannot adequately describe how much we appreciate the help Diane and Jay provided us. We were in serious financial trouble, which created an incredible amount of stress that was beginning to affect my health. After contacting Diane and starting the process I was able to get the first decent night’s sleep I’d had in months. Diane and Jay were always available to answer EVERY question I had, no matter how ridiculous it sounded. Unlike some attorney’s specializing in bankruptcy, Diane takes a hands-on approach from start to finish providing a complete outline of the process as well as the expected timeline. It was quite apparent how lucky we were to have her during our 341 meeting with the trustee. At that meeting there were several individuals assigned to the same time slot and unfortunately most were represented by people they had never met. Diane told us what to expect during the meeting and remained by our side through the entire process. We are coming to the end of this journey and my husband I will be forever grateful to Diane and Jay for giving us our life back! P.E.
I was desperate and she made me feel that I could sleep through the nite
I cannot tell you how grateful I am that Diane Drain took my call. I was desperate and she made me feel that I could sleep through the nite. She explained all my options to deal with my financial situation and did not push me to hire her. Instead, she was more interested in my welfare than in her charging a fee. I really wish more lawyers were as professional and courteous as Diane Drain. L.B.
ADDITIONAL REVIEWS – TALKING ABOUT CHOICES & THE PROCESS
- Education is the key
- A simple mistake could cost you in many ways
- Diane has developed an extensive array of handouts and email templates that addressed every component of the process that a client is experiencing.
- Like many people, I was very apprehensive about filing bankruptcy. At 65 years old, I always thought- That would never be me!
- Mrs. Drain made a very stressful time in my life easier to manage by providing detailed direction through my bankruptcy process.
- Quite frankly I was scared about having to deal with a big credit card company in court.
- At a time when you are most vulnerable and fearful
- Diane helped me straighten out my case, after an attorney from a different law firm, made serious mistakes in my filing that could have been extremely detrimental.
- Remember, this is your bankruptcy, and you get out of it what you put in. It is hard work. It is not easy.
- We got different or incomplete answers from other lawyers.
- We found ourselves in a financial tsunami 2 yrs ago.
- She explains everything that needs to be done. If you do your part and put in the work to make sure everything is accurate, then she will do hers and you will have great results.
- Diane held me accountable for working with her on completing the necessary paperwork so I was involved in every step of the process.
Education is the key
Feeling the questionable unease of financial hardship can be one of life’s most serious challenges; not knowing where to turn for information, who to trust, and how to proceed once you have the information can be overwhelming. I was feeling lost and out-of-control not knowing what to do next and so I contacted the offices of Diane Drain. What I found was a person capable of compassion, empathy, and in my case, a person capable of giving enough information to steer me in a direction of meaning. At this point in time I have not gone down the road of bankruptcy; however, I now have a much clearer understanding of my choices and that has made the financial challenges much easier to deal with. I am indebted to Diane not only for providing her vast knowledge of Bankruptcy law, but the generosity of time she gave me when we went beyond the 30 minute free referral. I highly recommend getting in touch with her if you’re having any financial challenges! T.P.
A simple mistake could cost you in many ways
After choosing to file bankruptcy, I selected another attorney at first, which was a huge mistake. He offered payment plans which seemed to be a good choice at the time. However, his lack of communication and errors in my documents filed with the court were going to cost me in the long run! I fired him and chose to work with Diane and Jay instead, which turned out to be the right decision. Her professional guidance and continuous communication helped me get back on track with filing my case correctly. You cannot afford to make mistakes when filing bankruptcy, or it will cost you. Diane will guide you in the right direction at all times. She was firm and held me accountable for providing the required documents, and even though she was very busy, always made me feel important and welcome, too. She understands that a simple mistake could cost you in many ways, and works very hard to avoid this. Bankruptcy is a delicate situation and one that can be overwhelming. Diane will guide you through it, with very clear and detailed instructions, and excellent communication. Her knowledge of the law and her expertise are second to none, and I highly recommend her! J.D.
Diane has developed an extensive array of handouts and email templates that addressed every component of the process that a client is experiencing.
Diane Drain and Jay provided professional, comprehensive services and support through every step of the bankruptcy process, were always available to answer questions. Diane has developed an extensive array of handouts and email templates that addressed every component of the process that a client is experiencing. These handouts and templates address every aspect of the process and serve as excellent guides and reference materials as you are struggling through what can be a very painstaking ordeal. Diane and Jay were both, very knowledgeable, and very supportive during the entire process, and also assisted in identifying and helping me successfully navigate any pitfalls that I otherwise would not have been aware of. I highly recommend Diane Drain’s Law Office because I received one on one personal advice and guidance from her as needed, compared with the larger law firms where you seldom get to speak with, or receive guidance from the attorney, and instead are serviced by paralegals and other assistants. Diane and Jay made me feel confident through what otherwise would have been a harrowing experience. I recommend them 100%! Thank you Diane and Jay! R.G.
Like many people, I was very apprehensive about filing bankruptcy. At 65 years old, I always thought- That would never be me!
Like many people, I was very apprehensive about filing bankruptcy. At 65 years old, I always thought- That would never be me! But after paying all my bills for 49 years and barely treading water, I was laid off and found myself with nothing. 
I talked to 5 other attorneys before I found Diane, and they were not a good fit. In fact, most gave me inappropriate advice or simply wrong facts. I found Diane from the BBB website and I knew from our first conversation she was the attorney for me. Diane is so knowledgeable, thorough, timely and efficient! She is also compassionate and caring. And Jay (in the office) was wonderful too! I would recommend Diane to anyone who might have to go through the difficult process of bankruptcy. D.W.
Mrs. Drain made a very stressful time in my life easier to manage by providing detailed direction through my bankruptcy process.
Mrs. Drain made a very stressful time in my life easier to manage by providing detailed direction through my bankruptcy process. From day one I felt comfortable with Dian and Jay in addition to feeling confident with my decision to file. She is always quick to respond to my questions and was patient in providing clear direction and advice. I would highly recommend Mrs. Drain to anyone in need of her law services.
The Best A.T.
Diane held me accountable for working with her on completing the necessary paperwork so I was involved in every step of the process.
Diane Drain and her assistant Jay are beyond professional. From the moment I called them to inquire about their services, to every phone call and each in person meeting we had, they remained calm, and helped to guide me during a very challenging process. Diane is very thorough and has a wealth of experience. She does not do the work for you and there is a significant amount of paperwork that needs to be completed. Having said that, she walked me through this every step of the way, but Diane held me accountable for working with her on completing the necessary paperwork so I was involved in every step of the process. Diane and Jay were always very positive and consistently receptive in answering and returning phone calls and emails in a timely manner. In summary, they are a class act and able to take a very challenging and difficult process and make it as humane and positive as anyone could. I high recommend using their services. T.J
Quite frankly I was scared about having to deal with a big credit card company in court.
I approached Diane with a large debt problem. Although I was working with a company to pay down the debt, one of the credit card companies decided to sue me. This would have destroyed all my pay-back efforts. Quite frankly I was scared about having to deal with a big credit card company in court. I think they were about to roll me. I sought help from Diane with some degree of trepidation. But Diane was able to explain everything to me even though I was under a lot of personally imposed stress. Diane understood all the emotions that were flowing through me and kept me relaxed enough to get through the entire process. She was part Lawyer, part Psychologist, and part Mother Hen. It was exactly what I needed. I really can’t say that going through Chapter 7 was fun, but Diane made the process acceptable and kept me focused when I needed to be focused. I absolutely recommend Diane to anyone considering walking down this path. Thank you Diane. This has made a huge difference in my life. D.S.
At a time when you are most vulnerable and fearful
If you are considering bankruptcy, make sure you consult with Diane Drain, and learn as much as you can from her website prior to your free consultation. Why? Diane will clearly and patiently explain to you the most critical information you need to be able to decide for yourself if filling bankruptcy is your best course of action to resolve your debts. I can attest from dealing with her that Diane (at a time when you are most vulnerable and fearful) will not lead you to a solution that absolutely is not to the best of your interest even if it means you are not hiring her as in my case. From the information you provide her prior to consultation, I believe she already know if bankruptcy is the right solution for you; accordingly, she already know if she is going get business from you or not. In my case, despite her knowing that bankruptcy for now is not the best solution for me (therefore no business for her) and without giving a hint prior to consultation, she still proceeded with my free consultation and spent way more than twice the 30 minutes allotted. That consultation was most critical because it cleared up my mind to pursue a specific course of action, and gives me all the energy I need to pursue it. Priceless. J.M.
Diane helped me straighten out my case, after an attorney from a different law firm, made serious mistakes in my filing that could have been extremely detrimental.
Diane helped me straighten out my case, after an attorney from a different law firm, made serious mistakes in my filing that could have been extremely detrimental. If not for her very professional guidance, constant communication and follow-up, while being firm and holding me accountable for producing the required documents, I don’t know what I would have done. This was a very tough time for me, and Diane’s extensive knowledge, professionalism, and guidance got me through it. Thank you so much, Diane! You are so very much appreciated. J.D.
Remember, this is your bankruptcy, and you get out of it what you put in. It is hard work. It is not easy.
Diane Drain, and her amazing teammate, Jay were two of the most helpful, caring individuals I have met in a long, long time. The process of bankruptcy is daunting, having a guiding hand and experienced consul are an extremely important aspect. Remember, this is your bankruptcy, and you get out of it what you put in. It is hard work. It is not easy. If you follow Diane’s outline and are proactive, it will go on track and follow its course. If you do not, you will face challenges. Be prepared, trust in Diane, trust in Jay, and her team, you will climb the mountain and be successful. K.B.
We got different or incomplete answers from other lawyers
I had filed for Chapter 7 with Diane and it was the easiest most stress free process. My wife and I were considering for months on just what to do since this was my first time filing and we got different or incomplete answers from the lawyers we talked with which did not help and lead me to put off filing. My wife found Diane and when we consulted with her I immediately felt more at ease as she answered every question no matter how ridiculous I felt to ask and gave me sound advice. More important was that my wife felt we can trust her with how patient and well informed she was which helped with her anxiety and meant the world to me. Diane and her husband Jay are cool, salt of the earth people who REALLY want to help! Hands down the “scary” experience of bankruptcy was not scary at all and we retained her immediately. She was kind, knew what she was talking about and kept me very well informed with each step as we went along. I HIGHLY RECOMMEND her services and I cannot be more grateful to her for all she did in helping me get through my bankruptcy. Good woman and AMAZING lawyer! K.
We found ourselves in a financial tsunami 2 yrs ago.
We found ourselves in a financial tsunami 2 yrs ago. No matter how we did things the financial outlook was getting worse and worse. We finally decided we needed to investigate options. Once we found Diane Drain’s website and started to learn what the process of bankruptcy entailed we felt there could be an answer for us. We made an appoint to speak with Diane and decided this was the path we needed to take. While we were getting our documents in order and other paperwork completed, we became bogged down once again thinking maybe we can try something else, something different. So after delaying almost a year longer in April of 2017 we finally jumped onboard @ 100%. Diane and Jay were great guiding us and making sure we had all the items needed completed. They filed, kept us informed, went to the Trustee’s meeting with us, and kept us inform during the entire process. They made the whole process less painful and manageable. We owe a debt of gratitude for Diane having the wisdom to use her website to promote the education of the bankruptcy process available to everyone. If it had not been for her well thought out website and the detailed information we would have had to take our chances with the process. If you find yourself totally stressed and unsure of how you can repair your financial health, you can rest assured that Diane and Jay will do what is needed to get you through the process. They’ll give you peace of mind once again.
Additional note: 0ne of the things I forgot to put in there was the personal service especially the day of the trustee’s meeting. There were a minimum of 4 people that were meeting their lawyers for the first time. One lawyer asked us twice what our name was. She waited another five minutes and then asked again and I quote ” are you SURE your not the Thomas’s?” I’m pretty sure we know who we are and that is not us.” We thought at the time how odd that was that so many people would not have taken the time to actually meet before hand. Very odd. T.W.
She explains everything that needs to be done. If you do your part and put in the work to make sure everything is accurate, then she will do hers and you will have great results.
Diane is a great attorney that made our BK experience as smooth as possible. Before seeing Diane, we went to another attorney who told us that he couldn’t get us a Ch.7 and our only option was a 13 and that is when we found Diane Drain. The entire process starting with the free phone consultation to a couple meetings in the office got us the Ch. 7 we needed. Diane communicates well through the entire process by phone and detailed emails. She explains everything that needs to be done. If you do your part and put in the work to make sure everything is accurate, then she will do hers and you will have great results. Thank you Diane and Jay for everything. We appreciate it. C.P.
Diane held me accountable for working with her on completing the necessary paperwork so I was involved in every step of the process.
Diane Drain and her assistant Jay are beyond professional. From the moment I called them to inquire about their services, to every phone call and each in person meeting we had, they remained calm, and helped to guide me during a very challenging process. Diane is very thorough and has a wealth of experience. She and does not do the work for you and their is a significant amount of paperwork that needs to be completed. Having said that, she walked me through this every step of the way, but Diane held me accountable for working with her on completing the necessary paperwork so I was involved in every step of the process. Diane and Jay were always very positive and consistently receptive in answering and returning phone calls and emails in a timely manner. In summary, they are a class act and able to take a very challenging and difficult process and make it as humane and positive as anyone could. I high recommend using their services. T.J.
MUSINGS FROM DIANE:
Your parents, or grandparents, told you that life was not easy. Some told you that you have to work for what you want and be willing to pay the dues. If you get something too easy – there is a catch. Other parents had a history of making very poor choices, so their advice was very different. These life lessons direct the path we will take. At the time you were sure they didn’t know what they were talking about. After all, you were going find your own path. Years later you look back to see that they were very wise. Good or bad, their choices lead directly to where or who they are today. The truth is – life is a series of choices, both good and bad. We live our choices. Financial decisions are challenging for us all. Do we buy that fancy (you fill in the blank) or save the money for emergencies? Some choices will open a path to comfort and peace, which other choices will open the door to homelessness. Be careful and remember that the choices you make today directly affect your future.
How Can I Help You?
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How to Manage Your Bills During COVID-19
April, 2020 – The Federal Trade Commission released suggestions on managing your bills during this very difficult time (COVID-19 quarantine).
COVID-19 has disrupted life for everyone on the planet. Each of us is asked to sacrifice for the health of the entire nation and world. Unfortunately, that sacrifice comes at a cost for many. They are unemployed or their income has been reduced, but the bills for their regular living expenses (rent, food, utilities, car payment, and insurance) continue to come, month after month. Yes, there are a few programs that might assist, but most of the programs only delay the inevitable – THEY MUST BE PAID. You don’t get a free place to live. Even if there are mortgages and rental programs, they don’t forgive the debt. Instead, the payments are just postponed to a future date (which may only be 3 months in the future).
Seniors are hit extra hard: not only they are one of the most vulnerable population to COVID-19, but most are on a fixed income, so do not have additional resources if they have unexpected expenses (medical, etc.).
In summary here is what the FTC suggested:
- Know what you owe and will owe for the next year. Make a list of your monthly bills: rent/mortgage, car payment, utilities, student loans, medical bills, and anything else. Look at your bank statements and credit card bills to find occasional expenses (such as annual insurance payment or insurance paid every quarter) and those expenses that only happen occasionally, but are very expensive (such as medical, home and car repairs). By putting this in writing you have something to compare your current spending.
- Don’t be afraid to ask for help, 90 percent of us are in the same situation: Pride can kill you!! If you are not taking care of yourself, then you are more susceptible to the virus. Many companies have special programs to help people right now. Contact the companies you owe money to and try to work out a new payment plan with lower payments or delayed due dates. Make sure to get any changes in writing.
- Find out if your state or local government offers programs that will allow you to hold off on paying some bills right now.
- Trouble paying your mortgage? Here’s some advice on how to manage that. If you have a government-backed mortgage, you may be able to delay the payment by contacting your servicer.
- Need additional help? Check out ftc.gov/creditcounselor for tips on how to choose a counselor who really helps you out.
- Prioritize your expenses: If you still can’t pay everything on time, look at what would happen if you couldn’t pay each bill and decide which to pay first. Is a place to live and food to eat more important than paying credit cards? I would think so. Do not worry about your credit report at this stage – it is, what it is. There is nothing you can do about it today. Instead, focus on having the basic necessities.
- Educate yourself about your options and the legal obligations of the creditors. Don’t assume what a creditor says is accurate (they are in the business to get paid and will lie). Rules govern what a creditor or collection company can do. Some of these rules are brand new (it takes new law at least five years to be interrupted by the courts). Know your rights: what is protected from creditors? Can creditors take my stimulus money? How does bankruptcy work? Check out the FTC’s advice on how to cope with debt in the short term, and how to get out of debt when you are able.
Watch out for scams: In stressful times, scammers are everyone and focus on our seniors, but you too may be vulnerable. Beware of any company that guarantees that creditors will forgive your debts, or makes you pay up front for help. If you are looking for debt relief, make sure to find help you can trust.
MUSINGS FROM DIANE:
This is a very scary time for everyone, but please remember ‘you are not in this alone’. But you are the only person who can take care of you (even if you are in a busy household). Today, even more than in the past, it is important to know your needs (financial and emotional). Eventually we will return to a new ‘norm’, but it may not be the norm we had last year. Please don’t ignore the current situation. Instead, every day take a few minutes to lay out a survival game plan. Of course, no one know how long this situation will continue, so be flexible in your plan. Focus on what you need to survive – food, a place to live. NEVER be bullied by a debt collector to send money that you should use on life necessaries.
NOT SMART: Buying a fancy gift for your young child is not going to help them, if there is no food in the house. It is amazing how resilient children are in emergency situations. Don’t hide the truth from them, but make sure they are involved in some household decisions.
How Can I Help You?
The post How to Manage Your Bills During COVID-19 appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy & Foreclosure Attorney.
Updated October 24, 2019
From: creditkarma.com
By: Kim Porter
https://www.creditkarma.com/advice/i/what-happens-when-you-file-for-bankruptcy/
The University of Phoenix, Inc. accused of fraud, to pay $50 million and stop collection on $141 million in loans.
In a large victory for consumers, The University of Phoenix agreed to pay $50 million in cash and cancel $141 million in debt owed to the school by students harmed by their deceptive ads. Phoenix’s ads touted job opportunities and relationships with top tech companies.
Federal Trade Commission, Plaintiff, v. The University of Phoenix, Inc., an Arizona corporation; and Apollo Education Group, Inc., an Arizona corporation; Defendants.
To cease collection on $141 million in student loans
This judgment consists of:
1. Payment of Fifty Million Dollars ($50,000,000) to the Commission.
a) Defendants are ordered to pay to the Commission Fifty Million Dollars ($50,000,000).
b) Such payment must be made within 7 days of entry of this Order by electronic fund transfer in accordance with instructions previously provided by a representative of the Commission.
2. Ceased collection of a minimum of One Hundred Forty Million Nine Hundred Sixty-Six Thousand Eight-Hundred and Six Dollars ($140,966,806) in Covered Consumer Debt as follows:
a) Defendants, Defendants’ officers, agents, employees, and attorneys, and all other Persons in active concert or participation with any of them, who receive actual notice of this Order, whether acting directly or indirectly, are permanently enjoined from attempting to collect, collecting, or assigning any right to collect any Covered Consumer Debt. Defendants shall not refer, sell, assign, or otherwise transfer any Covered Consumer Debt.
b) Within 10 business days after entry of this Order, Defendants shall cease collecting on all Covered Consumer Debt and notify any collection agency or other third party collecting Covered Consumer Debt to cease such collection efforts. Within 60 business days after entry of this Order, Defendants shall:
(1) recall, purchase, or otherwise obtain any Covered Consumer Debt that Defendants have referred, sold, assigned, or otherwise transferred to any collection agency or other third party, and
(2) clear all Covered Consumer Debt from Defendants’ financial systems.
c) For any Covered Consumer Debt that has been reported to a Consumer Reporting Agency (“CRA”), Defendants shall, within 10 business days of clearing all Covered Consumer Debt as required by subsection A.2.b request that each CRA delete the Covered Consumer Debt from the consumer’s credit reporting file.
d) To the extent Defendants receive any payments for Covered Consumer Debt after September 30, 2019, Defendants shall, within 30 days of receipt or entry of this Order, refund any such payments.
e) Defendants shall, within 10 business days after entry of this Order, provide a signed declaration to the FTC attesting that they have ceased collection of Covered Consumer Debt as required by this Section III.A.2.
Stipulated Order for Permanent Injunction and Monetary Judgment
MUSINGS FROM DIANE:
Those who are willing to commit the time and effort to get an education need to be applauded, not ripped off. I did not start my upper education until I was married and had a wonderful daughter. That meant sacrificing to pay tuition and costs, plus it meant my job options were limited (needed time to take care of family and study). My beautiful and very smart daughter spent her early grade school years studying with me at the same table. I was lucky enough not to need loans in order to pay for under-grad, because I was working two jobs. Law school was another story. Working outside school was not permitted and I now know why (no time if you are going to graduate). Therefore, student loans were the only option. Had my law school been one that failed to live up to its promises (like the University of Phoenix) , I would have been stuck the significant student loans and no degree to show for my time and effort. The next two decades would have been spent paying off a debt for something I never received. This is what The University of Phoenix, and many other “for profit” schools, knowingly do to their students. Shame on them!!
The post University of Phoenix to Pay $50 M and Stop Collection on $141 M in Student Loans appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy & Foreclosure Attorney.
COVID-19 FORBEARANCE IN ARIZONA CHAPTER 13 BANKRUPTCIES
The following is a guest post – by Gary R. Stickell, a great Arizona bankruptcy attorney and my friend and mentor for more than 20 years.
COVID-19 and CHAPTER 13 BANKRUPTCIES
Most, if not all, mortgage servicers are offering programs of forbearance to homeowners affected by income loss due to the COVID-19 Pandemic. These seem to be for 90 days or three calendar months, possibly extendable to 180 days. (“COVID-19 Hold”). However, these COVID-19 Holds raise several issues for Debtors in Chapter 13 Bankruptcies. These include the process of notifying the Chapter 13 Trustee of these holds and how to treat the unpaid mortgage payments within the Chapter 13 case. I am concerned that Chapter 13 Debtors are not well served by seeking COVID-19 Holds and might endanger both their Chapter 13 cases and/or loan modifications.
Forbearance versus Deferment
In usual times, a forbearance means that the mortgage servicer will not seek enforcement of missed mortgage payment for some given period. At the end of the forbearance period, the missed payments will need to be repaid by an agreement between the mortgage servicer and the borrower.
In usual times, a deferment means that the missed mortgage payments will be deferred to the end of the loan by extending out the maturity date and/or adding a balloon payment.
These are not usual times
According to mortgage modification lawyer Ellen Lawson, the mortgage servers are not sure how they will treat COVID-19 Holds at the end of the hold period. They may choose to treat them as deferments or require some time of repayment. The crisis is too new for the lenders to formulate uniform treatments so lenders are agreeing to a COVID-19 Hold, but are not explaining right now when or how the missed payments will need to be repaid.
Chapter 13 Bankruptcy
In pending Chapter 13 Bankruptcies, there are three general circumstances as to mortgages. They are cases with conduit payments, cases without conduit payments and cases with loan modifications in process or completed.
Conduit and non-conduit mortgage payments
A conduit payment in an Arizona case requires that the Chapter 13 Plan payment include payment of ongoing mortgage payments as well as payments for mortgage arrears and other debts. If a mortgage server grants a COVID-19 Hold during a conduit plan, the Trustee will need to stop making the ongoing payments to the mortgage lender. The Arizona Chapter 13 Trustees advise that an Amended Plan or Modified Plan must be filed to stop the ongoing payments to the mortgage lender reducing the Plan payment. When the COVID-19 Hold period is over, then whatever arrangement is made as to the missed mortgage payments must be set out in a subsequent Amended Plan or Modified Plan.
In a case without a conduit payment, there appears to be no need to file an Amended Plan or Modified Plan at the outset of the COVID-19 Hold. However, at the end of the hold period, whatever arrangement is made as to the missed mortgage payments will need to be included in an Amended Plan or Modified Plan.
Failure to comply with Chapter 13 plan provisions
Failure to make ongoing mortgage payments may result in the dismissal of a Chapter 13 case without a discharge if arrangements are not made with the mortgage lender. If the mortgage servicer reports a delinquency to the Chapter 13 Trustee, the Trustee will move for dismissal of the case. This not only endangers any provision regarding the mortgage but the other debts, car loans, tax debts and unsecured debts.
Loan Modification in Chapter 13
For those borrowers seeking a loan modification through the Bankruptcy Court’s program or otherwise, the COVID-19 Hold puts everything on hold including any pending loan modification application. This means an active loan modification review under the Bankruptcy Court’s Mortgage Modification Mediation (“MMM”) Program will be put on hold for ninety days and will not proceed forward. All of the documents previously provided to the mortgage servicer will become outdated and a new financial package will need to be uploaded in 90 days. When the loan modification review starts 90 days later, after the COVID-19 Hold expires, the Debtor will be three months more delinquent on their loan making a loan modification review more difficult. If the Debtor has been approved for a trial plan or is in the middle of an active trial plan, and then requests a COVID-19 Hold, the COVID-19 Hold will most likely cause the trial plan to be forever broken.
If a Debtor has been so impacted economically by COVID-19 that they cannot make their Chapter 13 Plan payment, then the COVID-19 Hold is a possible option to consider, but the COVID-19 Hold should only be used by Chapter 13 Debtors as a last resort if they are pursuing loan modification.
As to loan modifications already in place, the COVID-19 Hold could nullify incentives dependent upon the borrower making timely payments under the modification agreement. An example of one such incentive that could be lost is partial forgiveness of the loan balance for timely payments for X number of years after the effective date of a permanent modification.
I thank my friend and mortgage modification guru, Ellen Lawson, Arizona attorney, for much of the information concerning how mortgage servicers are handling forbearances. https://ellenlawsonlaw.com.
MUSINGS FROM DIANE:
This article should help you understand why it is very important to hire an attorney who knows what they are doing (my guess is that you did not understand some of the article above, but certainly you did not understand the implications). Any attorney who writes articles to help educate others is focused on the welfare of the client, not how much money they could get from the client. Education is the basis for a well planned bankruptcy. Today I saw nine new cases filed by an Arizona firm that does not fall into the category that Gary and several other good bankruptcy attorneys fit. Months from now several of those nine will face serious problems because no one educated them BEFORE the bankruptcy was filed. They will lose tax refunds, their family is sued and/or they lose their discharge (which is the entire reason they filed the bankruptcy to start with.
Consumer bankruptcy is complicated and takes work. Any law firm who makes it look simple is misleading their clients. Unfortunately, their clients will not know there is a problem until the ceiling falls in on them. Then it is too late to get out of the bankruptcy.
Be careful and use your common sense. Lastly, remember that you have a right to be treated with respect. IF ANY ATTORNEY TREATS YOU RUDELY – FIRE THEM because it is never going to get better. (Yes, I am thinking about specific attorneys when writing that last sentence.)
How Can I Help You?
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Don’t fall for these five myths about the stimulus payments
Published: April 21, 2020From: MarketWatchBy: Andrew Keshner
https://www.marketwatch.com/story/do-i-have-to-pay-back-my-1200-stimulus-check-dont-fall-for-these-five-myths-about-the-stimulus-payments-2020-04-18
In the middle of an election year where healthcare is already a hotly debated issue, the COVID-19 pandemic has stirred further discussion about whether major changes are necessary. During the Democratic presidential primary, the concept of Medicare for All split the candidates. While the candidate who promoted that concept has since dropped out of the Read More
The CARES Act neglected to protect people from creditors, but some lawmakers are working to correct that.
April 16, 2020
From: The Motley Fool
By: Dan Caplinger
The coronavirus crisis is causing severe financial pain across the U.S., where tens of millions of people have lost their jobs and filed for unemployment benefits in just the past month. For those who have lost income, a federal stimulus check could be vital to their financial well-being right now.
Unfortunately, many people who were already having money troubles before the COVID-19 pandemic hit are now running into a new challenge with their stimulus payments. Debt collectors are rushing in to try to grab up those stimulus checks in order to satisfy people's past debts. Because of the way that lawmakers set up the stimulus check program, what those debt collectors are doing appears to be legal -- but it also threatens to undermine the entire point of the program, which was to rush cash to hard-hit Americans so that they could cover their current expenses during this crisis.
Despite the best of intentionsThe Treasury Department has worked hard to try to get stimulus money to people rapidly. For those who included direct deposit banking information with their 2018 or 2019 tax returns, the Treasury is using that data to send stimulus payments directly into people's bank accounts. For most people, that's the fastest way to get the money where it needs to go.
However, millions of people owe certain kinds of debt for which creditors can garnish bank accounts. That includes just about any type of debt on which collection proceedings have advanced far enough for creditors to get a court judgment. When debt collectors present banks with garnishment orders, banks follow procedures that often include freezing accounts. To regain access to their funds, banks require account holders to provide proof that the money that's come into the account is somehow exempt from garnishment. Most people in debt don't know how to respond effectively to such demands even in the best of times -- let alone when they are stuck in their homes, when bank branches are closed to the public, and when courts aren't functioning at anywhere near normal capacity.
Lawmakers could have specifically designated the stimulus payments as exempt from garnishment or debt collection proceedings. However, they didn't include such clear provisions in the CARES Act, which leaves the matter up to legal interpretation. That ambiguity set the stage for debt collectors to act -- and they're acting quickly.
Fixing the problemNow that they've identified the problem, legislators at the state level are working fast to address it. State laws govern much of the legal framework around debt collection, so in some states, those receiving stimulus checks already had some protection. Other states are moving to pass emergency legislation that exempts the stimulus payments from debt collection proceedings.
Congress could also take action, although it might be difficult for it to do so quickly enough to make a difference. Passing a federal law that reclassifies stimulus money into the same category as other exempt payments would offer everyone across the nation protection.
What you can doIf you're already aware that your bank account might be subject to a garnishment order, there are some things you can do to try to protect yourself. They include:
- Having your stimulus payment sent to a different bank account. Often, garnishment orders will apply to all bank accounts, but if you know that debt collectors have only identified one of your accounts, then having your stimulus money deposited into an account at a different institution might protect it.
- Getting a physical stimulus check. The IRS is seeking banking information for many Americans through its Get My Payment tool, with the goal of expediting those stimulus payments. However, if you anticipate problems, getting a physical check and cashing it will help keep it from getting locked up in a frozen bank account.
With the coronavirus pandemic wreaking havoc on all our lives, the last thing any of us need is for our stimulus checks to get taken away. If you think debt collectors might be looking to take your stimulus payment, don't wait for lawmakers to help you out -- do what you can to protect yourself and your finances.
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If I File Bankruptcy Will I Lose My COVID-19 Stimulus/Rebate Money?
When someone files for bankruptcy they can keep certain things that are “exempt”.
Stay with me as I explain this process.
Every state has a list of items that a creditor cannot seize. Those items are referred to as “exempt property“. This protection is the same for everyone in that state, even if they file for bankruptcy protection. There are also federal exemptions that protect certain property, such as Social Security, VA income, and more.
Congress failed to protect the COVID-19 Stimulus/Rebate money from creditors.
When Congress passed the CARES Act (March 27, 2020), they were smart enough to protect the stimulus/rebate funds from state and federal government debt collection, but they completely forgot about all the other debt collectors (banks, credit cards, personal loans, bank overdrafts, etc.). Congress intended to give those with low to middle income some additional money, to boost our economy. Unfortunately, if you have an overdraft in the same bank where your stimulus funds are deposited, there is a good chance your bank will take the money. Or, if a creditor or collection company has a judgment against you they have the right to garnish bank accounts and wages (depending on the exemption laws of your state).
Bankruptcy and exemption laws.
Earlier, I mentioned that every adult has a right to protect certain “exempt property”, which includes someone filing for bankruptcy protection. In filing for bankruptcy, that person must determine whether they are required to use state or federal exemptions or a combination of both to protect their property (please don’t try to do this on your own – hire a very good bankruptcy attorney). For instance, if someone lived in Arizona for more than two years and files for bankruptcy protection they will use Arizona exemptions. Arizona laws protect income from welfare, unemployment, child support, and alimony, but not income from child care credit or earned income credit. Federal exemptions protect Social Security, SSDI, VA income, and certain other sources.
When Congress passed the CARES Act, they largely protected the funds from state or federal debt collection. But forgot to protect the COVID-19 funds the same way that federal exemption laws protect Social Security or SSDI. Instead, they left open a huge loophole for debt collectors.
Congress failed to protect the COVID-19 Stimulus/Rebate money from seizure by the bankruptcy trustees.
Since Congress failed to protect the funds from creditors, that also means they failed to protect the funds from a bankruptcy trustee. If someone files for bankruptcy protection and is going to receive the stimulus/rebate monies, the bankruptcy trustee may take those funds (the chapter 7 trustee is paid a percentage, pays his/her attorney, then the few remaining bucks go to the creditors).
Still there? Trust me, we are almost to the answer.
In the world of consumer bankruptcy, there are two types of bankruptcy trustees: Chapter 7 and Chapter 13. The Chapter 13 trustee is an employee of the United States Trustee’s Office, a agency of the Department of Justice. The United States Trustee has authority over their employees and can dictate their actions.
Compare that to chapter 7 trustees, who are independent contractors for the United States Trustee’s Office. That means the chapter 7 trustee can use their own discretion whether to go after certain assets. Some of our Arizona trustees will take a tax refund of $500, while others feel that is out of line and set their limit at $1,500. Some of our trustee attorneys earn almost One Million Dollars a year collecting funds from debtors. My point is that all the chapter 7 trustees have the right to take anything that is not exempt. Under Arizona law the stimulus/rebate monies are NOT EXEMPT.
United States Trustees Office Report:
On April 7, 2020 the United States Trustees Office issued a report: Notice to Chapter 7 and 13 Trustees Regarding Recovery Rebates Paid to Consumer Bankruptcy Debtors Under the Cares Act of 2020.
The report states (according to the CARES Act) that the stimulus/rebate funds are not be to included in calculating the debtor’s income for the prior six months (referred to as the means test).
The question that was not addressed in the CARES Act was whether the creditors have a right to the “recovery rebate”.
For the answer we must address chapter 7 and chapter 13 separately.
Chapter 13 (remember the chapter 13 trustees are employees of the US Trustees Office): for cases filed on or after March 27, 2020, the recovery rebate may be relevant (see § 1325(a)(4)). For cases filed before March 27, 2020, the recovery rebate is excluded from that analysis because it would not have been available in analyzing the reconciliation for payment to creditors in a chapter 7 case. Again, remember that the funds are NOT included in the means test analysis.
Chapter 7 (trustees are independent contractors): In chapter 7 cases, the “property of the estate” issue will only arise in cases filed after March 27, 2020. Regardless of whether the rebate is property of the estate, the United States Trustee expects that it is highly unlikely that the trustee would administer the payment after consideration of all relevant circumstances, including: the modest amount of the recovery rebate; the applicability of state and federal exemptions; any interest of a non-debtor spouse in the recovery rebate; the cost to the estate of recovering and administering the recovery rebate, including litigation with debtors who may seek a judicial determination; and the extent to which recovering the recovery rebate will enable creditors to receive a meaningful distribution.
In both Chapter 13 and Chapter 7 cases: Trustees are directed to notify the United States Trustee prior to taking any action to recover recovery rebates or objecting to a chapter 13 plan based on the treatment of recovery rebates.
Now that you have a brief education in the “legalese” world of bankruptcy and exemptions – what does this all mean?
It means that the United States Trustee is not a fan of any bankruptcy trustee taking someone’s CARES Act stimulus/rebate funds. Is this an absolute prohibition? No, but only time will tell how our more aggressive trustees (Arizona has some of the most aggressive trustees in the Nation) will address this issue.
MUSINGS FROM DIANE:
Every day someone calls “I just have a simple question…..”. The caller goes on to ask their question, but normally I have to explain that there is a lot more information I need before that question can be answered correctly. It is like looking at the tiny tip of an iceberg and assuming that is all there is (how did that go for the folks on the Titanic?)
That same person would never think of calling their doctor and asking a question about a medical situation. Instead, they know the doctor will need blood tests and an x-ray before competently diagnosing the problem.
Whenever there is a new law, like the CARES Act, it takes years to analyze each issue in order to anticipate how someone’s situation will be affected by the the new law and existing laws. Just like doctors guessing at the solution for a new virus – lots of guessing.
How Can I Help You?
The post If I File Bankruptcy Will I Lose My COVID-19 Stimulus Money? appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy & Foreclosure Attorney.
Can my Bank, Creditor or Collection Company Take My Stimulus Money – COVID-19?
March 27, 2020 a new law (CARES Act) was passed which gave funds to everyone in order to pay basic necessities (such as food, rent, gas). Congress forgot to protect those funds from your creditors or your bank.
When Congress passed the CARES Act, they were smart enough to protect the stimulus funds from state and federal government debt collection, but they completely forgot about all the other debt collectors (credit cards, personal loans, bank overdrafts, etc.). These creditors are the ones that Congress should have been focusing on because they are the great majority of all debt collectors.
Do you owe your bank for overdraft fees or unpaid credit cards?
If so, don’t be surprised that your bank keeps the monies you were supposed to receive as part of the COVID-19 funds. The monies are coming from the IRS, using the same bank account information that you used for your tax refunds (both this year and last). If that account is closed the monies will go back to the IRS. Or if that account is overdrawn, or you are not paying a credit card with that bank, then you may find that your bank keeps the money to “offset” what you owe them.
Is every bank taking the stimulus funds?
Some banks say they will not take the funds (there are differing reports on who will not keep the funds), but only time will tell if they will follow through with their promise to let their customers use those funds as they were intended – to pay rent, food and other absolute necessities.
Several articles:
Some banks are taking coronavirus stimulus checks for overdrawn accounts, New York Post
Your Stimulus Check Could Be Seized By Your Own Bank, Forbes
Some Banks Keep Customers’ Stimulus Checks if Accounts are Overdrawn, the New York Times
Debt collectors can take the stimulus funds
For a debt collector to garnish your bank account they first need to sue you and then get a judgment (this may be different in your state). Once they have the judgment they can serve a writ of execution on any bank that has your funds (or your employer). The bank will freeze your account and carve out any amount that is exempt under your state law exemptions. Exemptions are different in each state so it is important to talk to an experienced bankruptcy attorney licensed in the state where you live.
Twenty state attorneys general and Hawaii’s Office of Consumer Protection asked Treasury Secretary Steven Mnuchin to ensure that debt collectors and creditors cannot take those funds. A. Treasury spokesperson said the department “is looking into the issue”. Meanwhile, people who desperately need the money, are left high and dry (after all, they don’t need food for their family just because they are out of work for the last four weeks).
Debt collectors can garnish coronavirus stimulus checks because of a loophole, USA Today
WHAT CAN YOU DO TO PROTECT YOUR STIMULUS FUNDS?
CHANGE YOUR BANK ACCOUNT INFORMATION WITH THE IRS
Here’s how to change your bank account information with the IRS: The portal on IRS website where you can update your bank account info is up as of 4/15/20, named “Get my payment“.
I did not file tax returns – how do I get my stimulus money?
Those who don’t have to file tax returns can now submit a simple application to get your COVID-19 funds. Check out the IRS website.
But, you don’t need to do this if you receive Social Security, SSDI, survivor benefits or supplemental Social Security, Railroad retirement and survivor benefits – your funds will go to the same bank account where those monies are automatically deposited.
WARNING: bank, creditors or collection companies cannot garnish your Social Security, SSDI, survivor benefits or supplemental Social Security, Railroad retirement and survivor benefits, but, at this time, they can garnish your stimulus funds.
Tax Scams
Be very careful of anyone who contacts you asking for information such as your bank account, social security number, or other information that is none of their business. The IRS has important information about some of these Scams Targeting Taxpayers. Be very careful because this is your financial future and you need to protect it.
MUSINGS FROM DIANE:
Congress passed the CARES Act in record speed, the problem is that they did not think about the needs of the people who really need the stimulus funds. These are the people who are out of work and cannot afford to pay rent or buy food. These are the people who cannot pay their bills (perhaps long before we knew about COVID-19). The stimulus funds were going to be a God-send for these people. They could pay rent and buy food, but now they are finding that no one was smart enough to protect the funds from greedy banks, creditors or collection companies.
Can this be fixed? Yes, by the click of a pen. The Treasury Department could designate the funds as exempt from garnishment by redefining the checks as “benefit payments”. Treasury Secretary Steven Mnuchin is aware of the problem, but has failed to act thus far.
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