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Law Off of D.L. Drain P.A., Arizona Bankruptcy Lawyer | "Helping You Get Your Life Back on Track"
Law Off of D.L. Drain P.A., Arizona Bankruptcy Lawyer | "Helping You Get Your Life Back on Track"

Diane L. Drain | Arizona Bankruptcy Lawyer

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Arizona Trustee’s Sale Overview

Arizona Trustee’s Sale Process

Arizona Trustee’s Sale OverviewSite Producer2022-08-30T09:37:19-07:00

What is the Arizona trustee’s sale process?

Notice of Trustee's Sale

When a borrower doesn’t perform their financial obligations, a lender may legally seize and sell a home or other property. This method is generically referred to as a foreclosure. There are two types of mortgage foreclosures in Arizona:

  1. The trustee’s sale procedure is the most used in Arizona. When the lender decides to use a trustee’s sale to foreclose on the borrower’s property, there are laws governing the process. Normally the trustee’s sale, in comparison to other processes, is cheaper and quicker (at least 90 days). In this method, there is no court involvement.
  2. The second process is a judicial foreclosure. This is a court procedure. Therefore, it is more expensive and takes longer. The advantage for the lender is that a deficiency action could be brought against the borrower or guarantor. The homeowners’ association (“HOA”), or those who purchased back taxes may also use this court process.
    • The sheriff’s sale comes after the judicial foreclosure. As was already mentioned, the process begins in court. The task of selling the property is then given to the sheriff.

The following will discuss a few of the fundamental of Arizona trustee’s sale:

What choices does a lender have in the event that the mortgage is not paid?

A trustee’s sale is recorded by the real property trustee, who is hired by the lender.  Property located in Arizona is governed by the laws of Arizona. Arizona permits a lender to choose either course of action. You should talk with an experienced Arizona foreclosure lawyer in order to determine your rights and the best course of action (trustee’s sale versus a judicial foreclosure). Each lender’s situation is different and the legal and tax advice you will receive will vary greatly, do not rely on the internet for correct information.

What is a trustee’s sale, and how does it work?

A trustee is hired by a lender to collect the money they invested in the property.  The trustee schedules the property to be sold at a public auction.

If other people bid at the auction, the lender’s receives their full debt, but only their full debt. If no one bids on the property, the lender becomes the new owner.

house precariously sitting on jinga blocks

Our homes are typically both our most expensive investment and most treasured property.

As a creditor’s attorney many years ago, I conducted thousands of trustee sales in Arizona. Because I wanted to help people keep their homes and prevent them from being lost, I left that industry.

The homeowner should always seek legal and tax advice before moving forward with a trustee’s sale (foreclosure), short sale, or deed in lieu of foreclosure. After the process is finished, significant mistakes cannot be fixed.

hand holding clay house, bound with chain

As your circumstances change, you might need to learn about your options for dealing with a home that is suddenly a burden.

The rights and obligations of the landowner and the landowner’s creditors are typically defined by the laws of the state where the land is located (except federal lands). The laws that set the rules of the land differ in each state. As soon as your financial situation becomes troubling, see a knowledgeable attorney who specializes in bankruptcy and foreclosure to learn about your choices. You could be pleasantly surprised by your options.

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Bankruptcy in Arizona and My Philosophy represented with helping hands bridge

Am I Eligible to File Bankruptcy in Arizona?

Chapter 7 Qualifications

The means test is the major qualification for Chapter 7 debtors. If your annual household income is less than the national average, you may be eligible for this type of bankruptcy. This figure is updated every few months.

If you do not qualify for Chapter 7, other options, such as Chapter 13 bankruptcy are usually available.

More on Chapter 7…..

Chapter 13 Qualifications

In Chapter 13 cases have limits on the amount and type of debts. There is also a minimum income and expense requirement. Debtors in Chapter 13 must have enough disposable income to make a monthly plan payment.

More on Chapter 13….

Helpful Insight

The right to file Bankruptcy bankruptcy is Protected by the United States Constitutional.

As early as 1789, Congress was authorized by the US Constitution’s Art. 1, Section 8, Clause 4 to enact bankruptcy laws to assist all citizens in obtaining a fresh start. The first bankruptcy law was enacted in 1800. Clearly, this option has been viewed as an important tool for protecting our citizens. As a result, you should never feel obligated to apologize to me or anyone else for exercising your constitutional rights.

Arizona Bankruptcy Law

When you file for bankruptcy, an automatic stay is triggered, which immediately stops things like:

  • Repossession
  • Wage garnishment
  • Foreclosure
  • Lien placement
  • Creditor harassment

The protected repayment period in a Chapter 13 and immediate debt discharge in a Chapter 7 are two other features of bankruptcy law. If you file for Chapter 13, you will have three to five years to catch up on mortgage payments and other delinquent secured debts. If your income is above the median income you will most likely have a five year plan (there are exceptions).  Most credit card, medical bill, and other unsecured debt is eliminated in a few months under Chapter 7.  But any non-exempt property can be seized and sold to pay your creditors.  The result is different in a Chapter 13.

Confused

Confused? Of course! That is why it is very important to have an experienced Arizona bankruptcy attorney on your side and helping you with the options.

Bankruptcy in Arizona is a complex interaction of multiple laws that should not be attempted without competent legal counsel.

Do not hire inexperienced attorneys who are unfamiliar with bankruptcy law. I say this not to scare you, but because I’ve seen good people make bad and costly decisions without realizing it.

What are the terms “Pre-Petition Assets” and “Pre-Petition Debts”?  What are Assets and Debts after filing the bankruptcy in Arizona?

Pre-petition assets are assets that you owned prior to filing for bankruptcy. Some of these assets may be used to settle pre-petition debts, or payments owed prior to filing for bankruptcy. In a chapter 7, any assets you obtain after filing for bankruptcy in Arizona are usually considered post-petition assets, and most of your pre-petition creditors cannot seize them. Similarly, any liabilities you incur after filing for bankruptcy, referred to as post-petition liabilities, are not discharged in a bankruptcy proceeding. But note that this may differ slightly in a chapter 13 case.

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