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ASU LAW CLEMarch 29, 2013Bankruptcy: Basic Concepts and Applications Bankruptcy: Pros and Cons for Individuals and Small BusinessesUpside Down Real Estate: Strategic Default or Bankruptcy?Presented by Mark A. Winsor, Esq.

Mark takes a creative approach to the practice of law as a result of his unique business background prior to law school in 1997. Mark has been an entrepreneur for over 30 years and has created, developed and directed businesses in financial services, international trade and distribution and professional services. Since becoming an attorney, Mark gained experience in Business Law, Foreclosure and Bankruptcy Law, Real Estate Law, Estate Planning and Asset Protection. For over 8 years Mark has been a talk show host on various radio stations and a frequent speaker at continuing education and seminar events for attorneys, real estate agents and other professionals.Mark A. Winsor, Esq.Winsor Law GroupLocation: 1237 S. Val Vista Dr. Mesa, AZ 85204Phone: (480) 505-7044Fax: (480) 240-5936Email: mwinsor@winsorlaw.comBankruptcy: Basic Concepts and Applications

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Protection of debtors

Fair treatment of creditors (by priority).

Summary of most frequently used chaptersChapter 7: Liquidation [Fresh Start]

Qualifying [median income and means test rules]

Protecting Assets(exemptions and pre-bankruptcy planning).

If assets to distribute:to approved creditors by priority.

Median IncomeHousehold sizeIncome Limit1 42,6912 55,4793 58,2924 63,201Each additional 7,500Chapter 11Reorganization for Businesses and others Helping Businesses to Survive. If it wont work then convert to 7.

Protection for individuals when Chapters 7 and 13 dont work.

Debtor in Possession: More flexibility; higher legal fees /costs.

Fair Treatment of Creditors by Classes.

Plan confirmation. Creditor voting, creditor priorities and other issues.Chapter 13: Reorganization for Individuals

qualifying. Not too much debt. Sufficient income.

Protecting assets (Pay priority and secured creditors and more to unsecured than they would get in a 7)

Plan confirmation: 3 to 5 year plan.

Cram downs.

Lien stripping.

Bankruptcy: Pros and Cons For Individuals and Small BusinessesWeighing in on: Emotionspractical mattersmoral issuesfinancial realityCons:

Credit issues. (More perception than reality)Moral and self esteem issues.Other alternatives, such as debt negotiation, debt counseling, debt restructure may be less intrusive into debtors personal financial affairs.Family and friends who are also creditors will be notified.Public records. Credit bureaus for 10 years after discharge; forever on some applications.Cons:

Public records. Credit bureaus for 10 years after discharge; forever on some applications.Trustee disputes (e.g. over exemptions, fraudulent transfers, preferential payments, and more).


Faster fresh start than debt negotiation or attempts to restructure outside BK.Section 525 protection.More certain planning ability.Sometimes the only option to avoid garnishment and aggressive creditor tactics.Many times BK is the best option to reduce stress in family and preserve relationships and health.many times a financial no-brainer.

Upside Down Real Estate: Strategic Default or Bankruptcy?

Anti-Deficiency statutes

A.R.S. 33-814(g). if Property is a single or dual dwelling on 2 acres or less and the foreclosure is by trustee sale.A.R.S. 33-729. IFProperty is a single or dual dwelling on 2 acres or less and the loan was to buy that property (purchase money).Dwelling; not primary residence.

Refinancing and Bifurcation issues.

Debt forgiveness tax. exceptions: insolvency and bankruptcy. Non-recourse argument.

No need for bankruptcy if protected by anti-deficiency statutes and insolvency rules.Sometimes bankruptcy is not feasible because of qualifying issues or asset protection issues.

Sometimes bankruptcy is not desirable because of emotional, practical or moral reasons.

Sometimes bankruptcy is the best way (or only way) to give the debtor adequate relief (financially/emotionally).

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