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Bankruptcy in Arizona, Part 2

Continued from Bankruptcy in Arizona, Part 1


Taking up where we left off, Arizona residents have a straightforward system under the aegis of the Bankruptcy Code and the protection of the U.S. Bankruptcy Court.  Some states--with a huge populace--or other states, with outlandish geographic areas, may have multiple districts.

District of Arizona

In that regard, Arizona is lucky...there's only one bankruptcy court to deal with, the United States Bankruptcy Court for the District of Arizona. Don't get me wrong: anytime you're upside-down on your debts, the Bankruptcy Court can be your safe haven. That being said, each regional/district court may have local rules that apply to your specific situation--which is why it's worthwhile to choose a trained, experienced bankruptcy attorney in your area.

Fees to rise; approved ID required for Pro se filers

For example, on the District court of Arizona's home page, an Oct. 21 notice says, "If you are filing a new petition and are not represented by an attorney, you must provide a current government issued photo identification card when you bring in or mail your petition to the clerk of the U.S. Bankruptcy Court." The notice goes on to detail which types of ID are accepted and to explain its privacy and retention policy. That's easy enough, and so is the Oct. 14 notice that some fees will increase, beginning Nov. 1, 2011.

However, other notices may leave one shaking one's head. For example, an Aug. 31 notice concerns residential mortgages, foreclosures and relief from the automatic stay; in the first case cited, a bank sought to "get relief" from the automatic stay that the debtor received merely by filing the Chapter 13 petition (in other words, asking the court to set aside the stay for the asset in question, the debtor's home).
New Guidelines for filing stay relief motions in cases assigned to Judge Charles G Case II:

In light of the recent Panel decision(s) of In re Veal --- B.R. ----, 2011 WL 2304200 (9th Cir. BAP, June 10, 2011), In re Sardana (unpublished and not for citation), and In re Matson (unpublished and not for citation) the Court adopts the following procedures for hearings on relief from the automatic stay for residential mortgage properties.

1. A party seeking stay relief in order to enforce a secured obligation against real property has the burden of making a colorable showing that it has standing to enforce the note and deed of trust or mortgage. To meet this burden, Movant must provide evidence, in the form of assignments, endorsements or otherwise, demonstrating that it is a person entitled to enforce the note under the Uniform Commercial Code as well as a complete chain of title of the beneficial interest under the deed of trust or mortgage.

Appelate panel splits on two, seemingly similar cases

The notice continues to explain in specific terms what it's requiring or mortgage lenders, servicers or other parties attached to such a motion. In the Sardana case, the appelate panel remanded the case back to the bankruptcy court for an evidentiary hearing. In the Matson case, the panel  agreed with the bankruptcy court's ruling that CitiBank could seek relief from the automatic stay.

Judge seeking efficiency re: disputed mortgages

Furthermore, however, what this guideline is saying is that--in Judge Case's courtroom, at least--the judge wants certain evidence included in the motion when such creditors attempt to override the automatic stay. Unfortunately, unless you're familiar with such language and these issues ("mortgage servicer," "the note," "beneficiary," etc.), it may seem as though the court is trying to make it easier for creditors to foreclose.

Knowledge of law crucial when trying to save a home

Specifically, because "Arizona is not a 'show me the note' state, as emphasized by
A.R.S. § 33-807," if you are trying to protect your home via a Chapter 13 filing, these legal issues are important to you and deserve attention and counsel from an attorney well versed in both the federal bankruptcy code and Arizona property law.

Next-- Bankruptcy in Arizona, Part 3: bankruptcy "reform," Chapter 7 versus Chapter 13.

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