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Bankruptcy Information

Matthew Foley

Matthew Foley

Esq. & MBA

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"An EXEMPLARY Attorney! Dedicated, Caring, Knowledgeable, Experienced. ABSOLUTELY THE BEST!"


Mr. Foley and his staff far exceeded my expectations! No words can adequately express my heartfelt appreciation for the exceptional support I received throughout what was surprisingly a very positive, stress-free, and smooth process. I highly, highly recommend Matthew T. Foley!



September 14, 2016

"Your Excellent Choice!"


Matt and his team rock !!!!!!!!
They took the stress and worries out of the whole process and made it smooth and stress free. He and his staff are caring, knowledgeable, very organized, honest and affordable. They responded quickly to any questions or concerns I had.

I would highly recommend Matt and his team to anyone who needs a bankruptcy...... Thank you so much

July 13, 2017

"Caught in a Bind”


I was in a real bind and not knowing the law, I contacted the best reviewed bankruptcy lawyer in town. After the consultation I left feeling better about my situation with a much better understanding of the law. The man knows his stuff and is very knowledgeable. I hired him and he did an amazing job. I literally did nothing but answer questions in an honest manor. The staff is a collection of incredible people, who are kind and very nice and understanding towards your situation. Thank you so so much for everything and would recommend the heck out of this gentlemen. Awesome experience.

March 6, 2017

"Truly Awesome"


Matt and his team rock!!! They took the stress and worries out of the whole process and made it smooth and stress free. He and his staff are caring, knowledgeable, very organized, honest and affordable. They responded quickly to any questions or concerns I had. I would highly recommend Matt and his team to anyone who needs a bankruptcy or debt settlement attorney.

October 21, 2016

"Brinda ayuda honesta"

Le agradezco a usted y a su equipo de professionales por el apoyo, la guia, comprension y toda la asistencia brindada al lo largo del proceso. Siempre estuvieron ahi para ayudarme, para responder mis preguntas. Gracias al buen trabajo que hicieron pude no unicamente liberarme de mis deudas pero tambien mejoro mi salud, mi bienestar y el de mi familia. No tengo con que pagarle todo lo que hizo por mi. Muchas gracias por todo. Dios lo bendiga a usted y a su equipo y continuen ayudando a nuestra comunidad hispana como hasta ahora... con honestidad y respecto.


August 11, 2017



Mr. Foley handled my chapter 7. After my first meeting with him I instantly felt better about the whole thing. I was stressed about my finances and felt guilty for even considering a bankruptcy. I felt like a total failure. Mr. Foley was able to help me see that it was the right business decision and was also able to help me by pointing me to resources for a redemption loan on my vehicle. If you are considering a bankruptcy attorney, I would recommend you consult with Mr. Foley.

Client #1
July 18, 2017

"Very helpful even though not client (yet)”


Matthew represented us at a Trustee meeting when our Phoenix attorney could not be present. He was knowledgeable and helpful. In addition, when my existing attorney became "disengaged", we contacted Matt and he spent a lot of time helping us understand some issues we were having. He was supportive, helpful, and gave excellent advice even though we were not his clients. I highly recommend him and he will be my first call for any future legal issues.

May 23, 2017

"A saving grace!"


I was literally days away from having my paychecks garnished. Not knowing what to do anymore, I decided to look for an attorney and researched all around Tucson. I came across reviews of Matt's firm on multiple sites and saw he was the highest rated and most reviewed. I decided to go in for my consultation and I couldn't hire him quick enough. Halee was awesome in helping me as well. I submitted all of my paperwork in less than 24 hours and 3 days later, I filed. I was so sick to my stomach in the stress of the debts I had. I was quickly relieved. Matt made me feel comfortable and told me just to relax. I think we are all scared of the unknown and what lies behind Bankruptcy. But I cannot speak highly enough of the positive experience I had with Matt and his team. Thank you so much, from the bottom of my heart. Finally, there is light at the end of the tunnel.



April 27, 2017

"Matt is fearless and unflappable...”


Finding Matthew Foley and his team was like finding cool, clear water in the desert. After wading through several overworked, confused huckster attorneys in the bankruptcy area; finding Matt was like finding an angel. He was not put off by complexities in our case and he was always a calming, soothing commander in the midst of a difficult situation. He was a great strategist and his professionalism was amazing. He was incredibly patient to explain and reassure us of the best course of action. I have been exposed to many attorneys in my life but none have ever impressed me the way Matt Foley has. Even his staff, Halee, Alysha and Austin maintain extraordinary standards of professionalism while always supporting Matt in his mission: to serve and reassure the fiscally challenged throngs that enter through Matt's door hoping for knowledge and assistance. I would give Matthew Foley the highest possible recommendation as the best Bankruptcy Attorney in Arizona. Five Stars are not enough to capture what he does for the people of Tucson, Arizona. I would also recommend him for any position that requires competence, calm professionalism and uncanny skills, knowledge and competency. Matt is fearless and unflappable. Thanks again, Matt!


December 12, 2016

"Excellent choice for bankruptcy"


Matt helped get us a chapter 7 bankruptcy in a quick and professional manner. He explained the process step by step and allowed us from feeling overwhelmed to relieved. He stopped the garnishments from continuing and I even got my garnishment checks back. if I ever needed more help in the future, I would go back to him and recommend him to anyone that needs help with debt.


May 25, 2017

Bankruptcy & Divorce

Debt relief in the context of a divorce involves dissolving community property ties.   In most cases, it is better to file bankruptcy prior to filing for divorce or at least prior to the entry of a final property settlement.

By filing bankruptcy first, the case can be filed jointly. This will avoid duplicating attorney fees and simplify the divorce, by eliminating the need to assign debts.  In bankruptcy, assigned debts can become non-dischargeable “domestic support obligations” with respect to the divorcing spouses (See § 523(a)(5) & (15)).  This is very important because creditors are not bound by the terms of the divorce and ex-spouses can seek future reimbursement.  Also, by eliminating community debts jointly, there is no risk that the court will offset community assets against only one spouse that filed for bankruptcy relief.

There are some instances when a bankruptcy should not be filed until after the divorce has been finalized, which is discussed below (See Below “When to File Divorce Before Bankruptcy”).  The decision to file bankruptcy before or after a divorce pivots on community property concerns and qualification issues.

Overview of Community Property

Arizona is a community property state.  This means assets and debts that are incurred during marriage are presumed to be property of the marital community.  Each spouse has the legal authority to “bind” the community, which means incur debt on behalf of the marital community (See A.R.S. § 25-214).    Community debts even include those liabilities incurred by one spouse for the benefit of the community that were incurred without the other spouse’s approval (Ellsworth v. Ellsworth, 5 Ariz.App. 89 (1967)).  Community property liability is coupled with the obvious contractual liability of the signing spouse(s).  This concept holds true, irrespective of the net benefit to the marital community (Donato v. Fishburn, 90 Ariz. 210 (1961)).

There are several exceptions to community property.  Property owned prior to marriage remains separate property.  Gifts and inheritance also remain separate property of the recipient (See A.R.S § 25-213).  Real property acquired in title as separate property remain such as well.  Debts guaranteeing a loan are not community property, unless both spouses sign the guarantee ((See A.R.S § 25-214(C)).  Also, debts that do not benefit the community are not community debts.  However, the disputing party has the difficult burden of overcoming the community property assumption.  Finally, debts that predate the marriage are not community debts.

A divorce in a community property state involves dissolving the marital community.  Our family law courts are governed by the general principle of equitable distribution, which means the marital assets and debts are meant to be divided equally among spouses.

Final Settlement & Dissolving Community Property

Upon divorce, the court dissolves the estate by allocating community assets and debts among spouses via the property settlement order (Cadwell v. Cadwell, 126 Ariz. 460 (1980) & A.R.S. § 25-318).  In dividing community property, the court has broad discretion.  Considerations can include reckless conduct by a spouse, including excessive spending, destruction or concealment of property, or fraudulent disposition of marital property (See A.R.S § 25-318).  The court can create a lien upon the separate property of either spouse to secure payment for any interest or equity in property, for child support or spousal maintenance, and other causes (A.R.S. § 25-318).  With this authority, the court issues a final property settlement that will be binding on each spouse.

The property settlement order does not bind creditors, nor does it eliminate the community debt.  Upon divorce, the debts transition into joint debts.  The property settlement operates to determine future rights and obligations of the husband and wife relative to these debts (Lee v. Lee 133 Ariz. 118 (App. 1982)).  If community debts are not allocated within the divorce decree, they remain obligations of each spouse (Community Guardian Bank v. Hamlin, 182 Ariz. 627 (Ariz. App. 1995)).  After entry of a final property settlement order, divorced spouse can sue an ex-spouse for payment on a community property debt that was not assigned in the property settlement or in the decree, or for reimbursement for payment of a debt that was assigned to the other spouse (Fisher v. Sommer, 160 Ariz. 530 (Ariz.App. 1997).  Typically, this takes the form of a cross-complaint in the suit regarding the debt.)).

These obligations. i.e. assigned debts, within the divorce decree can become “domestic support obligations” under the bankruptcy code (See 11§ USC 101 (14 A).  This means that if an ex-spouse files bankruptcy on an assigned debt after the divorce, the ex-spouse may still be liable to the former spouse.  For example, if a husband was assigned a credit card debt during the divorce and he files a chapter bankruptcy on the debt, the credit card company could still sue the wife.  In this scenario, which certainly happens, the wife could then sue her former husband for reimbursement.

The bankruptcy will not protect the husband from the terms of the divorce decree, unless he files a chapter 13 bankruptcy that affords a broader discharge, including some domestic support obligations.  To avoid future domestic support obligation issues, the bankruptcy should generally be filed before the divorce.

When to File Divorce Before Bankruptcy

In some situations it is better to hold off on bankruptcy until after the divorce has been completed.  In the event that both spouses do not qualify for a chapter 7 bankruptcy, it is better to file a chapter 13 bankruptcy after the divorce has been completed.  By waiting, a debtor will have better clarity on their expenses, including any child support or alimony obligations.

A second reason to postpone bankruptcy is to use the property settlement phase of the divorce to assign non-exempt assets to a spouse that does not want to file bankruptcy, or will be filing a chapter 13 bankruptcy.  An alternative would be to have the family court enter a temporary order allocating assets, which could also protect non-exempt assets.  This will allow the other spouse to file a chapter 7 bankruptcy without losing the non-exempt assets.  If the divorce petition has been filed, a bankruptcy can still be filed, which will “stay” the family court proceeding, at least to the extent of property settlement.  This is because, upon commencement of a Chapter 7 bankruptcy, the community property becomes part of the bankruptcy estate.

Another consideration to filing bankruptcy first, is that an Arizona family court judge can balance a debtor’s discharge of community debts against assets of the non-filing spouse, i.e. providing a non-filing spouse a greater portion of assets to offset their sole and separate liability of otherwise discharged debts.  However, this risk is perhaps secondary to risk of creating non-dischargeability issues

As a word of caution, the trustee will review a divorce decree and non-exempt assets cannot be disproportionally assigned to one spouse.  If the property settlement and/or divorce appears to circumvent the bankruptcy code, the bankruptcy trustee can void transfers and take other such action as necessary.  To avoid any issues, a debtor’s bankruptcy attorney should be working in parallel with a debtor’s divorce lawyer.

General Advice for Divorcing Spouses & Debt

The best advice for divorcing spouses is to work together with debt issues.  Filing a joint bankruptcy prior to divorce is generally the ideal option.  However, a law firm will not undertake dual representation of divorcing spouses if they do not cooperate with each other and the attorney.  When appropriate, a lawyer will have clients sign a “conflict of interest” waiver with specific language that requires termination of services in the event spouses fail to cooperate.  It is always beneficial for spouses to work together.

Creditors are not bound by a divorce, nor necessarily aware of the divorce.  Spouses should notify creditors of the divorce.  Arizona statutes requires spouses to furnish credit reports to each other for such purposes (See A.R.S § 25-318(H)).  Credit lines should be closed, paid off, or otherwise transferred to only one spouse.  However, if both spouses signed for a credit line, it may be difficult to remove a name without closing the account.

One of the unknown benefits of bankruptcy and divorce has to do with credit reporting.  By filing bankruptcy, ex-spouses are no longer at the mercy of each other with respect to their credit.  For example, if a wife was assigned a house, which has a mortgage in the husband and wife’s name, the husband’s credit is at the mercy of whether the wife decides to make the mortgage payment.  By filing bankruptcy, the mortgage payment will no longer show on the husband’s credit.  Thereafter, if the wife decides to let the home go into foreclosure, it will not affect the husband.  Remember, a creditor is not bound be the divorce and will likely not voluntarily remove a name from a mortgage.  The bankruptcy forces the creditors to cooperate.

A bankruptcy should not be filed prior to the divorce if both spouses are not in agreement on the decision.  If one spouse files bankruptcy prior to the property settlement order, all community property becomes part of the bankruptcy estate (11 U.S.C. § 541(a)(2)(A)).  Arizona courts have ruled that initiation of the marital dissolution does not terminate a spouse’s authority to bind the community, which includes a spouse filing bankruptcy on behalf of the community (See A.R.S § 25-214(B).  By filing bankruptcy, the family court proceeding will be “stayed” with respect to the division of property.

Upon filing bankruptcy, all community property is pulled into the bankruptcy estate, even if one spouse contests the filing of bankruptcy (See In re Peterson, 2010 WL 3842157 (D.Ariz.)).  Bankruptcy will then alter the division of property.  In bankruptcy, the court is bound by fairness to creditors under the federal bankruptcy code, whereas, a family court is bound by a Arizona’s general principles of equitable distribution among spouses.  The contradiction among laws is settled in favor of federal bankruptcy code (See Supremacy Clause, Article VI, Clause 2, of the United States Constitution). Therefore, a bankruptcy filing that is not properly planned can jeopardize all community assets.

In conclusion, divorcing spouses should meet with a bankruptcy attorney if there are any debt issues accompanying the dissolution of a marriage.  Ideally, this conversation should take place prior to the property settlement phase of the divorce.  The goal of a planned bankruptcy is to eliminate debt, protect property, assist future credit reporting, and to help the dissolution of community estate.

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