Phoenix Bankruptcy Law News

October 2010 Archives

Study Says Twitter Can Predict Stock Market

It can be easy to inquire a great deal of debt from a dip in the stock market. One bad trade and you may just suddenly find yourself on the phone with an Arizona bankruptcy lawyer asking about debt relief options.

Yet the Wall Street Journal reports that researchers at Indiana University are now using an unexpected tool to predict stock market trends. A study shows that the 140-character tweets on Twitter can actually predict stocks with 90 percent accuracy, up to four days in advance.

Papago Golf Course Management Files For Chapter 11 Bankruptcy

The non-profit organization that manages Papago Golf Course in Phoenix filed for bankruptcy protection on Wednesday, but the city of Phoenix insists that the golf course will remain open for public use.

The Arizona Republic reports that Papago Golf Course is one of eight golf courses owned by the city of Phoenix. AGA Management went into $9.5 million debt trying to manage the facility, mostly because of the expensive renovations that were involved with the replacement of the course's irrigation system, the replacement of all bunkers, the extensive cleanup, and the replacement of the turf on greens and fairways.

About The Fair Debt Collection Practices Act In Arizona

| 1 TrackBack

The Fair Debt Collection Practices Act (FDCPA) is a federal law that was added to the Consumer Credit Protection Act in 1978. The purpose of the law is to eliminate abusive practices by debt collection agencies and to create guidelines for how debt collectors are to conduct business.

According to FindLaw, FDCPA applies to personal, family, and household debts. The law states that the debt collector can contact the debtor in person, by mail, telephone, telegram or fax. However, if the asks the collector to stop contacting him or her through writing, the debt collector must stop all contact. Listed below are certain types of conduct that FDCPA prohibits. An Arizona bankruptcy lawyer can answer specific information about what the law does and doesn't not allow.

Study Shows That Consumers Will Spend More Money On Travel

The holiday season is now just around the corner and it looks like many more Americans will devote their money toward travel and entertainment before the year ends. Reuters reports that Americans are planning to spend 11 percent more money on air travel over the holidays this year than they did last year.

Because the tourist industry is a large part of the Arizona economy, this news could be good for people living in the state. According to the study, more Americans are planning to take domestic trips rather than vacations to foreign countries. Families of four will reportedly spend an average of $1,800 traveling this year. 54 percent of young professionals said that they would be spending more money this compared than last year.

Glendale In Debt For $500 Million Over Sports District

If any Arizona city is going to declare Chapter 9 bankruptcy, it's likely to be the city of Glendale. The Arizona Republic reports that this West Valley suburb is now in about $500 million of debt from borrowing a significant amount of money for the sports district to pay for a hockey arena, spring-training ballpark, conference center, parking garage and media center. By the time the city pays interest over 30 years, Glendale will have spent close to $1 billion.

How A Credit Score Can Affect Your Employment In Arizona

If you're looking for a job, then it might be a good idea to keep your credit score high and avoid maxing out the credit cards. According to the Arizona Republic, employers will sometimes use credit reports when evaluating job candidates. While the employer does not see the actual credit score of a job applicant, a credit report will show the names of current and past creditors. The employer can also see if the job applicant has ever filed for bankruptcy or had a foreclosure or if the applicant has paid bills on time.

New FTC Rules Go Into Effect This Week For Debt Relief Companies

Are you looking to get out of debt quickly with no upfront fees? There could be a number of different debt relief options that you have, some of which you might not be aware of. When you're facing debt, it's a good idea to contact an Arizona bankruptcy lawyer to learn more about what financial options you have. It's also a good idea to do some research of your own, perhaps even before hiring an attorney.

Red, White, and Blue Press reports that starting on October 27, companies that sell debt relief services for a profit are no longer able to charge a fee before they settle or reduce a customer's credit card debt. Yet even with this new rule, which was implemented by the Federal Trade Commission, consumers should still do research of their own when choosing a debt relief option in order to avoid potential debt relief scams.

Jobless Individuals Fall For Phoenix Employment Scams

It seems that many unemployed people across the state of Arizona will do anything for a job in such desperate economic times, even if it means paying money upfront for the job. ABC News warns that there are now several job scams in the Valley that are targeting unemployed individuals.

Some scams include paying money to a person that claims to be a head hunter who promises to find a job for individuals. According to ABC News, the company Via Entertainment in Phoenix asks people that are looking to get jobs as an extra in movies to pay hundreds of dollars for photos and portraits, but there's no guarantee of a job.

Arizona's Unemployment Rate Unchanged in September

Associated Press reports that the unemployment rate in Arizona still remains at 9.7 percent for the second month in a row. In August, the unemployment rate grew to 9.7 percent which was reportedly the highest unemployment rate in the state since the 9.8 percent unemployment rate in August 1983. In September, six economic sectors gained jobs, but five sectors lost jobs. This resulted with the same the seasonally adjusted unemployment rate as the month before.

AZ Students Average $17,000 in Student Loan Debt After College

Now is not a great time to be graduating from college. Student loan debt is on the rise while the unemployment rate in Arizona still remains high at 9.7 percent.

Arizona students that graduated from college in 2009 have an average debt load of $17,008, according to The Project on Student Debt. About 45 percent of college students in Arizona graduate with at least some debt. When it comes to debt from student loans, Arizona actually fares better than most other U.S. states.

West Virginia AG Files Lawsuit Against First Secure Management

The Chandler-based debt relief company First Secure Management has allegedly scammed many consumers looking to get out debt, according to the Charleston Gazette. Apparently there are so many complaints associated with the company that West Virginia Attorney General Darrell McGraw has filed a lawsuit against the company. The lawsuit seeks to stop First Secure Management from operating in the state of West Virginia.

Senator Al Franken's Bill to Crack Down on Debt Collectors

Senator Al Franken (D-Minnesota) plans to propose a bill that would create harsher penalties for debt collectors who use illegal methods to collect money. We already have the Fair Debt Collection Practices Act (FDCPA) in place, but many people in Arizona and across the country feel that this federal law doesn't do enough to stop abusive practices among debt collectors.

Associated Press reports that Al Franken's latest bill would make it illegal under federal law for private firms to use arrest warrants in debt collections. Consumers that are arrested or jailed over unpaid debts would have the right to sue debt collectors over such a practice. The bill also calls for debt collectors to provide more information to consumers about what money they owe, including a breakdown of fees and interest that is owed. The law would also require debt collectors to notify people of what rights they have.

Phase 54 Nightblub Owner Owes Nearly $900,000 In Bankruptcy Case

The Chandler nightclub Phase 54 just opened its doors last May, but it looks like the venue quickly got off to a rough start. The Arizona Republic reports that the Chandler nightclub filed for Chapter 11 bankruptcy protection the day after a Maricopa County Superior Court judge ordered the business to close.

The court ruling came after surrounding restaurants complained that the Phase 54 nightclub violated codes and restrictions of the Chandler Gateway West shopping center. Yet Phase 54 now remains open thanks to the club owner's Arizona bankruptcy lawyer. This is because the Chapter 11 filing put a stay on Superior Court proceedings.

Will Bank Customers Have to Start Paying For Checking Accounts?

Most people in the state of Arizona are now paying zero dollars a month for their checking accounts and savings accounts, according to the American Bankers Association. Yet consumers might not always be able to pay nothing for these accounts. Reuters reports that bank fees are expected to rise in the future with the prediction that customers will soon be paying for extra penalty fees, paper statements fees, and extra money in general for a checking account.

AZ Cities Drop in Best Performing Cities Ranking

The Arizona Republic reports that the Milken Institute ranked 379 metropolitan areas by job and salary growth  along with technology production to create the list of the best-performing cities in the country. While a few cities increased their ranking since last year, many Arizona cities are worse off in 2010.

The city of Phoenix, for example, was ranked to be the 93rd best performing city in 2009, but this year it's at number 117. The city of Prescott was ranked 50th last year among cities with populations below 245,000 but this year the city's ranked dropped to 142nd. Yuma was also ranked 40th in 2009, but ranked 83rd this year.

Crystal Cathedral Files For Chapter 11 Bankruptcy

Associated Press reports that megachurches around the country are financially struggling, partly due to reduced charitable giving in such tough economic times. This has led many megachurches to bankruptcy filings. Most recently, the Crystal Cathedral in Southern California filed for Chapter 11 bankruptcy on Monday so that the church could emerge from $43 million debt.

The Crystal Cathedral in Garden Grove, CA is a landmark and tourist attraction known for its televangelist show "Hour of Power." The Chapter 11 bankruptcy filing comes with the megachurch reportedly owing about $7.5 million to unsecured creditors, which include vendors for services ranging from advertising to the use of live animals. The Orange County megachurch also owes another $36 million for it's mortgage.

TerreStar at $1 Billion Debt, Bankruptcy Filing on the Way

The Virginia-based mobile communications company TerreStar Corp. is in over $1 billion of debt, according to IT World. Because of this large amount of debt, the company is reportedly preparing for a Chapter 11 bankruptcy filing.

Terrestar operates the world's largest satellite and started selling a satellite phone through AT&T. However, the company is one of many satellite communication businesses that has sustained a massive amount of debt. Terrestar built one satellite that was supposed to be part of a network to give cell phone users service in remote areas. Yet, then Terrestar reportedly borrowed an additional $100 million recently to build a second satellite; which furthered piled up company debt.

Top 400 Charities in America See Decrease in Donations

It seems like charities and non-profit organizations are among the groups that have been suffering the most from the recession that ended last year. Time Magazine reports that donations to America's top 400 charities dropped by almost 11 percent  last year and that, together losing billions of dollars in giving.

"It shows that charities are really having a tough time, and this is some of the most successful charities in the United States," Chronicle of Philanthropy Editor Stacy Palmer told Time Magazine. "Usually bigger charities are more resilient, so that's the part that is still surprising."

Movie Gallery Looking to Auction Trademarks

Movie Gallery Inc. used to be the second largest movie and video game rental company in the United States, just behind Blockbuster Video. However, the company shut down after filing for Chapter 11 bankruptcy earlier this year. Associated Press reports that in order to get out of debt, the company will be auctioning off some of its store brands, web domain names, and customer databases in November.

Forbes Ranks AZ As 23rd Best State For Business

Is the state of Arizona a good place to start your business? According to Forbes magazine, it looks as though the Grand Canyon state is not the best state for business, but it's far from the worst.

In tough economic times, a large portion of Arizona businesses are struggling to stay alive and continue growth. Many local business owners are even calling Phoenix bankruptcy attorneys and looking into reorganizing their business under Chapter 11 bankruptcy protection. However, some companies are continuing to thrive.

The Phoenix Business Journal reports that Forbes recently released the "Best States for Business and Careers" for 2010. The rankings of the 50 states take into account the state's business costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life.

Senior Citizens At Greater Risk For Bankruptcy

It looks like senior citizens are at a higher risk for bankruptcy than ever before. According to Credit.com, new studies show that many elderly people that are turning to credit cards to pay off their daily expenses could end up filing for bankruptcy. The median age among people that file for bankruptcy has also increased.

Credit.com reports that data from the Consumer Bankruptcy Project indicates that two-thirds of elderly Americans who filed for bankruptcy name credit card debt and high interest rates as their reason for the bankruptcy filing. This compares to only 53 percent of younger adults that list credit cards as their reason for bankruptcy.

Phoenix Foreclosures in September Hit 2010 High

Foreclosures in Phoenix accounted for 46 percent of all existing single-family homes in the September, which was the largest percentage of foreclosures in any month of 2010. The Phoenix Business Journal reports that based on a housing report released by the W.P. Carey School of Business at Arizona State University, there were 9,005 total resale transactions in the Valley for the month of September. Of the 9,005 transactions, 4,100 were foreclosure sales.

What Happens When You Default On A Student Loan In Phoenix?

Many students find themselves in debt after college and have difficulties staying up-to-date on student loan payments in Phoenix. If the student is delinquent on student loan payments for nine straight months, the loan will enter default. FindLaw states that once the loan defaults, the borrower could face numerous consequences that could include the responsibility of paying collection fees.

Extended Stay Inc. Emerges From Bankruptcy After $3.93 Billion Sale

Some people might remember that the hotel chain Extended Stay, which has numerous locations in Phoenix and Tucson, filed for the largest Chapter 11 bankruptcy by a U.S. hotel owner last year. Yet Bloomberg reports that the hotel chain was recently able to emerge out of bankruptcy after the company was sold for $3.93 billion to Centerbridge Partners LP, Paulson & Co. and Blackstone Group LP.

Many Phoenix bankruptcy attorneys would agree that it was a good decision for Extended Stay to file for bankruptcy because the company was able to cut its debt burden by almost $5 billion. Extended Stay reportedly had almost $7.6 billion debt when the company sought bankruptcy protection in 2009. The U.S .government was among Extended Stay's biggest creditors.

New Jobs Coming To Phoenix

The Arizona Republic reports that there are now some clear signs that the state's job market is getting better. These signs have to do with the fact that more companies are now posting job openings with many businesses announcing relocations or expansions in Maricopa County.

The U.S. Department of Labor reported that the state of Arizona gained about 1,200 jobs in the month of August. This was quite a big deal because it marked the first time in 31 months that the U.S. Department of Labor showed job gains in the state.

Bashas' Grocery Stores Emerging From Bankruptcy

The Arizona-based grocery chain Bashas' Supermarkets Inc. has put their reorganization plan into effect after filing for Chapter 11 bankruptcy in late August. This Chapter 11 bankruptcy case has received a wide amount of attention among Phoenix bankruptcy attorneys because Bashas' is the largest family-owned grocer in Arizona and the 12th largest employer in the state.

AZ Attorney General Terry Goddard Wants Review of Automated Foreclosures

The state of Arizona has one of the highest foreclosure rates in the country, but state attorney general Terry Goddard is now looking into reviewing the foreclosure documents of mortgage lenders to make sure that they're not breaking any laws.

According to the Phoenix Business Journal, Attorney Generals across the country are now looking into how banks review their foreclosure documents. This comes amid the criticism of how large mortgage lenders often use an automated process to speed up the completion of the documentation needed to recover possession of homes from delinquent borrowers. Some state officials and Phoenix bankruptcy attorneys say that this automated process leads to numerous problems, including homes being seized based on false information.

Beaudry RV Closes After Sale of Company

The Tucson dealership Beaudry RV Co. opened its doors in 1972, but sadly the company is now out of business after defaulting on real estate loans. The Arizona Daily Star reports that Beaudry RV filed for Chapter 11 bankruptcy two years ago, with Bank of America, Wells Fargo and Comerica Bank being among the creditors in the bankruptcy case. The company has only temporarily shut down, but it's possible that the closure could become permanent.

It seems that Beaudry RV got themselves into trouble when the owners sold their company to an investment group, because this forced real estate loans to default. Creditors are now asking for the immediate appointment of a liquidating trustee because the sale violated loan documents.

Holiday Spending Expected to Increase

We're just about halfway through October, which means that Americans are already making plans for the holiday season and shopping for their Christmas gifts. Perhaps this year's holiday spending will bring a bit of a boost to the economy, since Reuters reports that spending by affluent Americans is expected to grow four percent to $23 billion.

Studies show that retail sales in September grew for the 13th month in a row. According to Reuters, The National Retail Federation predicts that retailers this year will see their best Christmas and holiday sales in three years. Yet the predicted boost in holiday gift spending will reportedly not come from an increase in household holiday budgets, but will instead come from spending among affluent U.S. families. Holiday gift spending for extended family and friends is expected to decrease, while gift spending on spouses, sons, and daughters is expected to rise.

U.S. Economy Loses 95,000 Jobs in September

Across the country, many Americans are dealing with the hardships of unemployment. TheStreet.com reported that the economy shed a large number of jobs in the month of September, with non-farm payrolls falling by 95,000 last month. The private sector only added about 64,000 jobs during the month of September, when the projected increase was 75,000 new jobs.

Consumer Sues Debt Collector After His Parents Were Called

A man from Louisiana has filed a lawsuit against Nationwide Credit Inc. and Does 1-10 in federal court, alleging that the debt collection agency called his parents and discussed the debt with his Mom and Dad. According to the Louisiana Record, this practice is illegal at the federal level and could be seen as a violation of the Fair Debt Collection Practices Act (FDCPA).

Toni Braxton Files For Chapter 7 Bankruptcy

Even the rich and famous will sometimes get themselves into financial trouble. CBS News reports that R&B singer Toni Braxton filed for Chapter 7 bankruptcy in California, claiming that she has debts between $10 million and $50 million.

Apparently this isn't even the first time that Toni Braxton has been in financial trouble. The singer also reportedly filed for bankruptcy back in 1998 and had a tax lien filed against her in 2008 for unpaid income taxes.

Chapter 9 Bankruptcy: the Bankruptcy Option For Municipalities

When a city, town, or other municipality reaches extreme financial troubles, the municipality can protect the public and start anew by filing for bankruptcy.

The type of bankruptcy for a municipality is Chapter 9 bankruptcy, which allows a city to come back from financial trouble and rebuild credit. Yet this is usually only a last resort for cities and towns with extreme debt. Since Chapter 9 of the U.S. Bankruptcy Code was enacted in 1934, there have been just 600 cases that have been filed under this code, according to the Wall Street Journal. The largest Chapter 9 case was reportedly in 1994, when Orange County, California was sitting in $1.6 billion in debt.

Foreclosure Help Offered Through Valley Homeownership Fairs

Are you facing foreclosure?

If so, you're certainly not alone. As we reported in an earlier blog post, foreclosures now make up 45 percent of the existing homes in the Phoenix area. As a result of the dramatic increases of foreclosures in the Valley, many Arizona residents are contacting Phoenix bankruptcy attorneys so that they can delay the foreclosure process by filing for bankruptcy.

Maricopa County Approves High Wage Fund

The Maricopa County Board of Supervisors has a new plan to boost Arizona's economy and bring in new high-wage jobs to the area. According to the Phoenix Business Journal, the Board approved an economic development fund of $7 million to recruit businesses and industries that pay higher wages.

The $7 million fund will come from interest and cash reserves in Maricopa County's general fund. Companies in the area can now apply for job training and infrastructure money as long as they pay 125 percent of the county's median income. The median income for Maricopa County now stands at $31,000 a year. Hence companies would have to pay their employees $38,750 to qualify.

ABA: Loan Delinquencies Slightly on the Rise

Just how much trouble does the average consumer have when it comes to making payments on a loan? Reuters reports that the American Bankers Association released a report this week that stated overall loan delinquencies rose to 3.0 percent in the second quarter of 2010, which is slightly up from the 2.98 percent rate of the first quarter. Yet overall, the delinquency rate has dropped since last year, where loan delinquency was at 3.35 percent in the second quarter of 2009.

FTC Implements Rules to Stop Debt Settlement Scammers

Thousands of consumers across all 50 U.S. states have complained to the Better Business Bureau that they've been scammed by companies that promised to renegotiate or change the terms of their debt. The debtor will typically pay a fee to the debt-settlement company, but little action will be taken to settle the consumer's debts. This leaves consumers with even more financial troubles than they started out with.

The Washington Post reports that the Federal Trade Commission recently implemented a new law that requires debt-relief companies to make specific disclosures to potential customers, such as how long will it take to get results, cost of services, and any potential negative consequences that could arise as a result from seeking debt relief. Legitimate non-profit organizations that help people renegotiate their debts aren't covered under the new rules of the FTC, but it is the for-profit debt relief service companies that are impacted by the new regulations.

Nearly 1.2 Million Americans Have Filed For Bankruptcy This Year

Despite the facts that show our recession is over and that our economy is improving, the number of personal bankruptcy filings in this country are now at the highest that they've been at since 2005. The Wall Street Journal reports that in September, personal bankruptcy claims shot up to nearly 1.2 million for the year and this number is expected to reach 1.6 million by the end of 2010.

Higher Halloween Spending Could Boost the Economy

Now that October has arrived, consumers are starting to prepare for Halloween by spending money on costumes, candy, and decorations. With enough consumer spending, the Halloween ghosts and ghouls will perhaps be able to scare away the poor economy in Arizona.

Reuters reports that Americans will spend an average of $66.28 on Halloween this year, which would be a 17.7 percent increase in spending from last year's holiday. Results of surveys show that people will also perhaps be a bit more spirited this year, as two out of five Americans say that they plan to wear a costume on the scariest day of the year. These predictions are up from the one third of Americans that wore a costume last year

Foreclosures Hit Record High in U.S.

According to the Phoenix Business Journal, foreclosures hit a record high in the month of August with 339,000 homes across the country receiving default notices and foreclosure filings for that month. The state of Arizona was unfortunately ranked in the third worst spot nationally when it comes to foreclosures, only behind Nevada and Florida with one out of every 165 homes in the state being in the process of a foreclosure.

Department of Housing Launches Save My Home AZ

Arizona, California, Florida, Michigan, and Nevada are among the five states that have seen the largest rates of foreclosure with home values declining by more than 20 percent. This is why President Barack Obama announced on February 19 that the U.S. Department of Treasury would be financing $1.5 billion in foreclosure mitigation to these states. According to Tri Valley Central, the state of Arizona is receiving $125.1 million of those funds.

Chicago Cubs In Mesa At A Steep Price?

[Editor's Note: This post has been edited to indicate that Arizona is planning for a spring training stadium for the Chicago Cubs, not a tentative move for the Cubs to train in Arizona as originally reported.]

 

There's plans for the Chicago Cubs baseball team to have a spring training stadium in Mesa, but the plan is not going to come at a cheap price. The Arizona Republic reports that Mesa city managers estimate the total bill to be $99 million, with the preferred site for the Cubs being near Riverview Park. A contract would commit the Cubs to staying in Mesa for at least 30 years.

Yet it's up to Mesa voters to decide if the Cubs are worth the city going into debt. Proposition 420 on the November 2 ballot asks for voters to approve of the city spending.