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Law offices of Lonnie K. McDowell, PLC
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Law office sign for my shared suite in Prescott Valley: 'cause the law office next door with the big maroon sign gets tired of sending my clients on over.
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Chapter 7 bankruptcy.

Bankruptcy is a time honored procedure, supported in the US Constitution as well 3000 years ago under Mosaic law in the Old Testament (7 year forgiveness of debts, Deuteronomy 15-1, 2.).  There are several kinds of bankruptcies, but most of the bankruptcies filed in the US are either a 7 or a 13.  And of those two, chapter 7 bankruptcies are much more frequently filed.

A chapter 7 can be with or without assets, but in either case usually results in a discharge within 4-6 months of filing.  Essentially, everything the debtors own is divided into two piles: exempt and non-exempt.  Exempt items (ordinary household goods and furnishings, clothing, appliances, IRA accounts, one vehicle per debtor valued at less than 6,000.00) are not reachable by creditors, and are not treated as part of the bankruptcy estate.  Non-exempt items (cash in your wallet, boats, airplanes, coin collections) can be collected and sold by the trustee, with the money going partly to the bankruptcy trustee, but mostly to repay your creditors.  Part of my job is helping you figure out what is exempt and what is non-exempt before you file, so we know what is stake and can decide what to do about it.

Congress requires two credit counseling/financial planning courses be taken online or over the phone: one before you file, and one after.  Each course lasts an hour or two, depending on the provider.  Failure to take the course could get your case thrown out.  The court schedules a ten (10) minute meeting with the trustee a month or two after you file for bankruptcy; if you miss that meeting without good cause, your case is likely to be thrown out.  If you have a good reason, like a car accident on the way there, or hospitalization for a severe illness, the meeting can be postponed or even waived.

After the trustee meeting, you will sit and wait for a few months for creditors to have an opportunity to object.  Typically no one does. If no one does, the trustee moves forward with  the sale of any non-exempt assets, and the court enters an order of discharge prohibiting creditors from collecting on the listed debts.  Once the trustee has completed sale of assets or determined there are no significant assets, he/she will notify the court, and the case will be closed.

This overview is, by definition, limited.  Call me, and I can help walk you through the process in more detail.
 

Lonnie K. McDowell PLC is a debt relief agency. We help people file for relief under the US bankruptcy code.

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 In October 2012, Jackie Chan (renowned martial artist and international movie star) announced he was planning to leave all his wealth, appx $130M in American dollars, to charity.  “Why leave it to my son? If he is capable, he can make his own money. If he is not, then he will just waste my money.”  While I have had several clients disinherit children for one reason or another, none have done so at a press conference.

More to the story: Jackie’s 30 year old son Jaycee was arrested in 2014 for marijuana possession and served 6 months in jail.  He was released in February 2015 and at a press conference, apologized and said “I received letters of support from my family while in prison.  My treatment in prison was the same as other detainees. My father did not use his connections to shorten my prison sentence. Since I made a mistake, I should receive punishment.”  His time in prison seems to have rehabilitated him, and he’s back in Jackie’s Last Will and Testament.  “He shows a lot more discipline now, and helps out his mother at home,” says Jackie.  Jaycee, who described his past behavior as “very unfilial” at the press conference, has apparently restored his inheritance by cleaning his room and helping with the dishes.  Something to keep in mind, kids.
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