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It is vital that you seek legal advice from a qualified attorney on your individual situation. It will almost certainly cost you less to seek advice before acting than it will to repair your mistakes.


Forced to choose between paying rent and paying credit cards?

“Debt collectors love to call you at work, hoping you will be embarrassed into paying their debt. You can ask them not to call you at work and they have to stop. If the collector threatens you, uses profane language, threatens to have you arrested or calls before 8 am or after 9 pm; call your State Attorney General’s Office or the Federal Trade Commission to report them. They are breaking the law.”

– Diane L. Drain


There are laws that control the actions of collection companies. One of these is the Fair Debt Collection Practices Act. See this article on about your rights as to collection companies. Also see this Cornell site on the Fair Debt Collection Practices Act and many other federal Acts that protect you. I remind you that the information in any articles is generic and may be outdated, therefore it is not to be applied to your particular situation. The information in the Internet sites may also be old. Therefore, you are to seek legal guidance regarding your rights under these laws. Additional information

The filing of a petition in bankruptcy will automatically stop most lawsuits. A few days after your bankruptcy is filed the court will mail a notice to all of your creditors, ordering them to stop all actions against you. If you cannot wait this long, your attorney will contact the creditor and give them your bankruptcy case number and date of filing. Any criminal actions will not be terminated by filing a bankruptcy case.

Constitutional challenges of Proposition 209 denied by Arizona Court of Appeals, Division One (4/30/24)

Arizona Creditors, et al v. State/Arizonans CV22-0765 The prior decision was affirmed: The State and the Sponsoring Organization alleged the Judgment Creditors lacked standing to raise their constitutional challenges. The superior court ultimately found the Act’s Saving Clause constitutional and denied the Judgment Creditors’ request for a permanent injunction or declaratory relief.

Notes: There is some interesting language in Paragraph 29 of the opinion, when talking about Prop. 209 only apply prospectively, and not retroactively: “But “a statute is not retroactive in application simply because it may relate to antecedent facts.” Aranda v. Indus. Comm’n, 198 Ariz. 467, 472, ¶ 24 (2000) (citation and internal quotation marks omitted). When a statute is procedural in nature, it may be applied even where antecedent conduct is involved. Id. at 470, ¶ 11. Where, on the other hand, a statute regulates primary conduct and where a vested right is involved, it may not be applied retroactively. Id.”

Reading between the lines a bit, it seems like the court of appeals is saying that a “collection action” is more procedural in nature, and the new law may apply to that, even if based on facts (i.e., a contract, a judgment, etc.) that arose before Prop. 209 became effective. Thus, a collection, such as a garnishment, attachment, etc., is its procedure, separate and apart from the contract/judgment that gave rise to such collection procedures.

Case in support of garnishment changed from 25% to 10% (with income limits) as of December 5, 2022

HJ Ventures LLC v. Candelario, 2024 WL 449970 (Ariz. Ct. App.) “The superior court issued the writ of garnishment in February 2023, after Proposition 209 took effect. The garnishment proceeding was a separate action even though it was based on a 2016 judgment. Accordingly, the court correctly applied the new version of § 33-1131(B) even though Candelario’s debt arose from a pre-Proposition 209 judgment.

¶14 Second, the conditions necessary to invoke the saving clause are not present in this case. The “rights and duties” at issue here are those affecting the garnishee, and those rights and duties did not come into existence until the writ of garnishment issued in February 2023. Nor is there a contractual agreement addressing the amount of money to be garnished or the interest rate to be charged on a judgment. Thus, the saving clause does not apply. Accordingly, the court did not err by ordering CarMax to withhold 10% of Candelario’s disposable earnings under the amended statute.”

Bankruptcy stops creditors from garnishing your wages; with the exception of child support or alimony payments.

collectionArizona law allows creditors to be paid one-fourth of your after-tax wages with a writ of garnishment. In order to obtain this writ of garnishment the creditor must serve a complaint, obtain a judgment and then obtain a writ. A creditor can even seize money from your bank account, without a judgment, but they first must file a complaint and post a bond.

Garnishment will immediately cease if you file a bankruptcy – but in order to permanently stop that garnishment you must receive a discharge.

Chapter 13:

D. The exemptions provided in this section do not apply in the case of any order of any court of bankruptcy under chapter XIII of the federal bankruptcy act or any debt due for any state or federal tax.” Ariz. Rev. Stat. § 33-1131

Normally no, but there are some exceptions (such as federal student loans and tax debts) rules that must be followed.  Section 207 of the Social Security Act (42 U.S.C. 407 protects Social Security benefits from assignment, levy, or garnishment.

However, the law provides five exceptions:

  • Section 459 of the Act (42 U.S.C. 659) allows Social Security benefits to be garnished to enforce child support and/or alimony obligations;
  • Section 6334 (c) of the Internal Revenue Code (26 U.S.C. 6334 (c)) allows benefits to be garnished to collect unpaid Federal taxes;
  • Section 3402 (F) of the Internal Revenue Code allows beneficiaries to elect to have a percentage of their benefits withheld and paid to the Internal Revenue Service to satisfy their Federal income tax liability for the current year;
  • The Debt Collection Act of 1996 (Public Law 104-134) allows benefits to be withheld and paid to another Federal agency to pay a non-tax debt the beneficiary owes to that agency: and
  • The Tax Payer Relief Act of 1997 (Public Law 105-34) authorizes the Internal Revenue Service to collect overdue federal tax debts of beneficiaries by levying up to 15 percent of each monthly payment until the debt is paid.

The Social Security Administration’s responsibility for protecting benefits against legal process and assignment usually ends when the beneficiary is paid. However, once paid, benefits continue to be protected under section 207 of the Act only as long as they are identifiable as Social Security benefits. This applies to money in a bank account where the only payments into the account are from direct deposit of Social Security benefits.

NOTE: It may be that Supplemental Security Income payments may be levied or garnished – check with your experienced bankruptcy attorney.

11 U.S.C. § 523(a)(5) states that a person who files bankruptcy generally cannot discharge his or her obligations to pay support to a child, to a spouse, or to a former spouse in divorce. This also applies in a chapter 13 – 11 U.S.C. § 1328(a)(2). After the 2005 Bankruptcy Reform Act it has become obvious that Congress wants to guarantee that all child support and alimony/maintenance payments are made. This protection goes so far as allowing, if not requiring, that the Bankruptcy Trustees liquidate exempt property to pay these debts. This area of law will be litigated for several years to come.

Other protections: Exception from the automatic stay for efforts to establish orders for paternity, child support, or alimony. 11 U.S.C. §362(b)(2)(A). Exception from the automatic stay for collection of child support or alimony. 11 U.S.C. §362(b)(2)(B). Priority for unsecured claims of the debtor’s spouse, former spouse, or child for alimony or support. 11 U.S.C. §507(a)(1). Priority of a judicial lien for support over the exemptions otherwise available to a debtor in bankruptcy. 11 U.S.C. §522(f)(1)(A).

Nondischargeability of obligations for support owed to children, spouses, and former spouses. 11 U.S.C. §523(a)(5). Possible nondischargeability of obligations for property settlement claims owed to children, spouses, and former spouses. 11 U.S.C. §523(a)(15).

Once a creditor becomes aware of a filing for bankruptcy protection, it must immediately stop all collection efforts (referred to as the automatic stay). After you file the bankruptcy petition, the court mails a notice to all the creditors listed in your bankruptcy schedules. This usually takes a couple of weeks. Creditors will also stop calling if you inform them that you retained an attorney. In urgent cases, we will contact the creditor immediately upon filing the bankruptcy petition, especially if a lawsuit is pending. If a creditor continues to use collection tactics once informed of the bankruptcy it may be liable for court sanctions and attorney fees for this conduct.

The following is a website that identifies the consumer protection laws Title 15 of the United States Code.

bankruptcyWhy choose our firm – because this firm never has been or will be a bankruptcy “mill” made of up inexperienced or indifferent lawyers.  YOU DESERVE BETTER!!

I practiced law since 1985 and find the most dangerous false impression is that bankruptcy is a “one size fits all”. The truth is exactly the opposite – it is extremely rare for one person’s financial and life circumstances to be the same as another. My goal is to customize legal advice to your unique history, needs and wants; all for a very reasonable price.

See the comments from our wonderful clients made about how we helped them find that fresh start.

In re O’Sullivan, 914 F.3d 1162, 1168 (8th Cir. 2019). O’Sullivan involved the avoidance of a recorded judgment that named one spouse but not the other, effectively making the judgment defective as a lien. The bankruptcy court found that even though the recorded judgment did not constitute a lien on the debtors’ homestead under Missouri law, it still impaired the exemption by clouding title. Both the Eighth Circuit Bankruptcy Appellate Panel and Court of Appeals affirmed, finding that a cloud of title caused by a recorded judgment still comes within the definition of “lien” under 11 U.S.C. § 101(37) and impairs the debtor’s homestead to permit avoidance under Section 522(f), even if it is not a lien on a homestead under applicable state law:

[T]here is no “lien” as Missouri law defines it because CRP’s notice of foreign judgment was against O’Sullivan, not O’Sullivan and his wife, who hold the property as tenants by the entirety. Nevertheless, there is a “lien” as federal law defines it because a “cloud upon the title” to the property exists under Missouri law . . . [T]he BAP cited the “practical difficulties [that] may exist for an ordinary searcher of the records or even a title company trying to determine whether the judgment [against O’Sullivan] created a lien and the Property is liable for execution.” The result is that the property’s value and marketability of title would be affected. We agree with the BAP that CRP’s recording of the foreign judgment created a cloud on title under Missouri law sufficient to constitute a “charge against or interest in” O’Sullivan’s property under the Bankruptcy Code. 11 U.S.C. § 101(37). Therefore, we conclude that the cloud on title created by “CRP’s recording of its judgment ‘fastened an existing, but presently unenforceable lien’ on the Property.” As a result, we hold that application of § 522(f) will clear the cloud on title to O’Sullivan’s property and, as a result, the bankruptcy court properly granted O’Sullivan’s motion to avoid the lien.  Id. (citations and footnotes omitted).

See also Bankruptcy court’s opinion In re O’Sullivan, 569 B.R. 163, 166 (Bankr. W.D. Mo. 2017). “CRP’s actions are also consistent with how other parties to a real estate transaction—buyers, sellers, lenders, and most importantly, title companies—treat judgments post-discharge, as liens to be cleared before a transaction may proceed. In the court’s experience, seasoned debtors’ counsel err on the side of caution by filing appropriate § 522(f)(1) lien avoidance motions. When they do so, they may avoid exactly what is happening in this case now—expensive and protracted arguments about whether or not the judgment is a lien. In effect, an unavoided but unenforceable judgment lien gives a judgment creditor post-discharge leverage; if a debtor does not pay something, the judgment lien creditor may not cooperate by releasing the worthless lien that never attached in the first place. The alternative—a rush to bankruptcy court to reopen the bankruptcy case to obtain an order avoiding the lien before the buyer, seller, lender or title company backs out of the proposed transaction—is a similarly unpalatable option.”