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"

General Review of Bankruptcy

How you can get your life back on track

General Review of BankruptcyDiane Drain2022-09-13T17:19:05-07:00

General Review

As a Bankruptcy Lawyer, I love Assisting Clients with Chapter 7 and Chapter 13 bankruptcy in Arizona.

Many people in Arizona who file for bankruptcy struggle with money and taxes on a daily basis. While not every individual or business requires the same solution, bankruptcy law is frequently used by many debtors in the Phoenix, and throughout Arizona. Many people actually believe that only irresponsible people file for bankruptcy in Arizona; however, this is not true; countless people in your community have already done so. Filing for bankruptcy is the best option for many individuals and businesses, but those who can avoid bankruptcy have other options.

Before filing for bankruptcy, we make certain that you understand your rights and the bankruptcy process. The bankruptcy procedure is complicated without the assistance of an experienced bankruptcy lawyer like myself, but it is much simpler if you follow my instructions.

Get the assistance you need right away by selecting the “Get Started” button that best describes your situation and beginning your journey to financial freedom. Unlike most firms, I meet with each of my clients personally and do not delegate this responsibility to anyone else. Take a look at some of the comments we’ve received from clients about our services at You can also learn more about us by visiting our website.

Still unsure what to do? Read more below…

General Bankruptcy FAQs

How do I hire an Attorney?Diane Drain2022-09-14T07:59:21-07:00
Is it necessary to take any classes before filing for bankruptcy?Diane Drain2022-09-14T07:59:42-07:00

Every customer who files Chapter 7 or 13 bankruptcy must take a credit counseling “briefing” and file a certificate of compliance with their bankruptcy.

There might be a very, very rare exception for emergency conditions, but they must still show that they attempted to obtain the class within the final 5 days of filing, and they must complete the course and produce a certificate of compliance within 30 days after filing their bankruptcy petition. Never presume that the court will allow this late filing; your bankruptcy will almost certainly be dismissed, and you will have to start over (plus there are other consequences).

A financial management class must also be completed within 45 days of filing your bankruptcy. Failure to do so will result in additional penalties and expenditures when it comes to getting your bankruptcy discharged. There will be fees charged for those classes, unless you cannot afford to pay such fees.  Diane and Jay will walk you through the steps.

A word of caution about all of the companies who provide the certificates: their bankruptcy information is frequently inaccurate. You should speak with a bankruptcy lawyer in your state. We’ll tell you all you need to know about both of these classes.

Following your bankruptcy, you must take a Personal Financial Management class.  THIS CLASS SHOULD NOT BE TAKEN BEFORE FILING FOR BANKRUPTCY.

Credit Counseling and Debtor Education classes must be approved by the US Trustee’s Office.

What is the “Mean’s Test”?Diane Drain2022-09-14T07:59:58-07:00

The “Mean’s Test” is a formula that assesses whether a person applying for bankruptcy has enough income to cover all of the allowable expenses, plus enough money to pay non-priority, unsecured creditors like credit cards.

The means test is a method devised by Congress to determine who is qualified to apply for bankruptcy under Chapter 7. People with incomes below the state median and debts that are predominantly not consumer obligations are exempt from the means test. This indicates that if 51 percent or more of the debts are commercial obligations, the potential debtor will not be subject to the means test.

The Debtor must calculate their “current monthly income,” which includes any money from spouses, rents (less costs), bonuses, and any “assistance” from family or friends. Allowable living expenditures and secured and priority debt payments are deducted from total income to arrive at a net income or monthly disposable income that can be utilized to pay down unsecured non-priority debts. If the net income, multiplied by 60, is larger than (1) either 25% of the nonpriority unsecured claims or $6,000, or (2) greater than $10,000, the chapter 7 can be contested. The debtor may be forced to convert the case to a chapter 13 or risk losing all bankruptcy protection. §707(b).

Basically, if a debtor can pay $100 per month to their unsecured creditors, their chapter 7 bankruptcy may be challenged. This law is interpreted differently by different courts.

To comprehend the Mean’s Test, you must first understand a few terms.

It is not current, monthly, or income. Instead, it’s your family’s entire income for the previous six months, plus monthly gifts and donations from others toward household expenses. Social security, maybe unemployment (to be assessed by a court), and benefits to war crimes/terrorism victims are not included in income. §101(10A). The total current monthly income is then deducted from the allowed expenses. The IRS Standards and 707(b)(2)(A)(ii) specify the expenses that are allowed. This last figure is referred to as the Debtor’s “monthly disposable income.” To assist you in gathering this information, our office will provide you with a form.

After calculating “monthly disposable income,” the Debtor must compare it to the median family income in the Debtor’s state.

The Debtor may file a chapter 7 if his or her “monthly disposable income” is less than the median family income. However, continue reading to the next paragraph.

Comparison of Schedules I and J:

Even though the Debtor passed the net current monthly income test, if the Debtor’s real monthly income, minus the allowable monthly costs, is greater than an unstated sum (which is not clearly defined), the Debtor may still have difficulty filing a chapter 7. When a Debtor has been unemployed for numerous months in the last six months, but suddenly earns more than is required to pay the allowable expenses, this situation can arise.

If the court concludes that the Debtor should not be in Chapter 7, the Debtor or their counsel may be sanctioned for reimbursement of the Trustee’s reasonable attorney fees expended in prosecuting the case. (Rule 9011 and 707(b)(4)(A)).

What are executory contracts and how do they work?Diane Drain2022-09-21T09:17:19-07:00

An executory contract is a legal word that refers to a contract between two parties that includes an obligation owed by at least one of them (such as a car lease or a residential lease). A lease agreement for a car or a home is the most typical example.

An executory contract can be assumed or rejected in Chapter 7 bankruptcy by the debtor or the trustee. Before the court delivers a bankruptcy discharge, which normally occurs 90 days after filing, a debtor must decide what to do with an executory contract.

A vehicle leasing is an example of an executory contract. If the debtor does not wish to keep the leased vehicle, he can return it to the leasing firm and be released from any further obligations. If the debtor wishes to keep the car, he or she must assume the lease and make timely payments. The lease assumption must be signed by both the debtor and the creditor, but the judge’s approval is not required. The leasing company can repossess the car if the debtor cannot make the lease payments, but it cannot sue the debtor for any deficiency.

What is the bankruptcy estate?Diane Drain2022-09-21T09:20:02-07:00

All legal or equitable interests of the debtor in property at the time of the bankruptcy filing. (The estate includes all property in which the debtor has an interest, even if it is owned or held by another person.)

Individuals seeking assistance with bankruptcy

If you are an individual seeking assistance with bankruptcy and would like to learn more on how you can take advantage of a FREE, no-obligation consultation with Diane, please click on “Get Started” below.

Business owners seeking assistance with bankruptcy

If you are a business owner seeking bankruptcy assistance and would like to understand how you can take advantage of a FREE, no-obligation consultation with Diane, please click on “Get Started” below.

Bankruptcy in Arizona and My Philosophy represented with helping hands bridge

Our Mission

This firm’s mission is to give you as much control over your life as possible. Please don’t try to avoid reality; doing so only delays the inevitable.

Nobody, and I mean nobody, wants to declare bankruptcy. Having said that, bankruptcy may be your only option to protect your health and peace of mind. It also protects the health and peace of mind of your family, friends and fellow employees or employers.

I am committed to treating our clients with dignity and respect.

Unlike law firms that publicly proclaim at national marketing conferences that their clients are “sales” and their employees are “inventory”.  For example, Lawrence Pew, who is now disbarred, case: 18-2852, charges: 11.  I am disgusted by this attitude, and believe that every attorney should be truly committed to serving their clients.

My goal is to educate you on your options and the entire bankruptcy process from beginning to end.

I also assist you in making future plans. We are focused on quality rather than quantity. To put it another way, we regard each of our clients as an individual with unique needs. We never treat our clients like they’ve walked into a used car dealership, unlike law firms that advertise on television in order to attract as many clients as possible. These lawyers brag to their colleagues about their “monthly gross income of…” They never discuss the value of the services they provide to their clients. That mindset is abhorrent, and it will never be tolerated in my firm.

Helpful Insight

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.

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.

The Right to file Bankruptcy bankruptcy in Arizona 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.

Understand Bankruptcy

Do you feel alone, terrified, or lost?

Please let me help you.

First and foremost, do not be ashamed!

Did you intentionally put yourself in this financial bind? Obviously not. You are, however, on the right track because you have asked for assistance.

Filing an Arizona bankruptcy may not be the best option in some cases.

Diane will help you figure out what other options are available to you. However, due to creditors’ refusal to be reasonable and assist you in resolving your current situation, bankruptcy may be the only choice left. Diane promises to guide you through the entire process.  She will help you understand your rights and the complexities of bankruptcy law.

Here’s my gift to you. view this great film of Roger Ridley form Santa, Monica California singing – “Stand by Me” (be sure to turn on your audio and pay attention to the performers’ names and locations. Please disregard the advertisements.)

What are your options for getting help?

Everyone has the right to understand the law and their options. This website was created to give everyone free 24-hour access to bankruptcy information, seven days a week. The advantage is that our website continues to function even when we are not present. We use short educational videos and our intake questionnaire to help Diane review your unique circumstances in order to educate our clients.

There are no costs associated with this initial consultation.

After watching the videos and speaking with Diane, you’ll be told how to enter your own creditor information online. Then, for about three hours, you’ll meet with Diane and Jay to ask and answer questions, go over documents, and make future plans. A second meeting will be held, as well as numerous phone calls and document exchanges. A flowchart will be provided to you to help you understand the procedure. Don’t worry; we’ll be there for you every step of the way. Our primary goal is to help you successfully file for bankruptcy protection.

Expect no one to understand your journey unless they have traveled it themselves.

Fortunately, you are astute enough to search for bankruptcy information so that you can determine whether bankruptcy is an option and what the ramifications may be. You might not realize it, but bankruptcy is a constitutional right.

Many of you start our conversation by apologizing for your present financial circumstances. There is no need to apologize.

Nobody, even governments, has ever had financial certainty. How can you guarantee financial security in your day-to-day life? Health, employment, divorce, the country’s economy, and new company rules, to name a few factors, all have an impact on your situation.

Knowing the unknown?


For instance, consider Shays’ Rebellion. Poor farmers in Massachusetts revolted when creditors came calling during a recession in 1786.

Similarly to 1786, the majority of Americans today blame credit card companies and mortgage lenders rather than the borrower. Fordham Law student Corey Calabrese is the director of the school’s Manhattan Civil Court walk-in clinic for debtors. She continued, “For the first time, Americans are looking at credit card corporations rather than the borrower.” According to a Quinnipiac University poll conducted in February 2009, 62 percent of those polled blamed mortgage lenders “who gave money to people who may not be able to pay it back.” Only one-quarter of those polled blamed the homeowners.

This notion of a new beginning is also found in the Bible.

Where all obligations were to be cancelled every 50th year, according to the Old Testament. The “Year of Jubilee” was the name given to this period. (Deuteronomy 25:10-15) Creditors were also required to discharge their debtors every seventh year. The “Lord’s release” was the name given to this event. (15:1-2) (Deuteronomy 15:1-2) “If you lend money to any of My people who are poor among you, you shall not be like a moneylender to him, you shall not charge him interest.” (25 New King James Bible) “Restore now to them, even this day, their lands, their vineyards, their olive groves, and their houses, also a hundredth of the money and the grain, the new wine and the oil, that you have charged them” (Nebemiah 5:10,11).

Other articles or links…

Root of All Evil Credit Has Taken the Place of Money (a blog post)

It’s impossible to beat free!!

Most consumer bankruptcy lawyers, including our firm, provide free consultations.

Understanding Bankruptcy Law is a Challenge for Everyone – Including Lawyers

Everyone, including attorneys, face difficulties in understanding bankruptcy law.

Every field of law has become far too sophisticated for the majority of people, including excellent lawyers, to comprehend.

Many of us believe that legal services and competent legal advice are out of reach. While that may be true for some, but not for clients seeking bankruptcy help. Because in our office the initial consultation is free. Beware that the Internet, neighbors and acquaintances, as well as inept lawyers and document preparers, are all sources of bad “legal advice” that will be extremely costly to correct later.

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