Maintain Water Well

Arizona water wells are not overseen or regulated by any state, county or local agency. The well owner or manager has the full responsibility for maintaining the ownership status of the well with the ADWR, the operating performance of the well, and for the checking the quality of the water that comes from that well.

Domestic wells (private and shared), however, are not overseen or regulated by any state, county or local agency. Well owners have the complete responsibility for maintaining the ownership status of the well with the ADWR, the operating performance of the well, and for checking the quality of the water.

Maintaining well ownership, performance and equipping records with the ADWR is the sole responsibility of the registered well owner.

maintaining water quality

A.R.S. 45-596(f)(2) requires that septic tanks are located more than 100 feet from water wells.

maintain water well records

Arizona Water Canals

The Ancient Desert Dwellers

The ancestors of present-day Salt River Pima-Maricopa Indian and Gila River Indian communities were farmers who lived in central and southern Arizona for about 1,400 years before European and American explorers came to the region. The intricate canal system that they built spanned nearly 500 miles and may have served as many as 50,000 people at one time.

Archaeologists don’t know exactly why the ancient farmers stopped maintaining their canals around 1450 A.D. It is thought that environmental changes, drought, violent floods or eroding rivers may have made it difficult to farm the Salt River Valley.

The ancient desert dwellers set the groundwork for the water canal system, which follows many of the same paths today.

The Pioneers

In the 1860s, a central Arizona gold rush brought an influx of people to the Salt River Valley. In December 1867, a group of 17 of these new arrivals formed the Swilling Irrigation and Canal Company. This group planned to take water from the Salt River by canal so they could grow crops to sell to miners at Wickenburg and the U.S. Cavalry stationed at Fort McDowell. The waterway became known as the Swilling Ditch, later the Town Ditch or the Salt River Valley Canal.

By March 1868, farmers under the Swilling Irrigation and Canal Company had harvested their first crops on land near the present-day Arizona State Hospital. During that same month, a government survey party came to the Valley and noted that a small community calling itself “Phoenix” had appeared on the scene.

Settlers Form a Water Association

A severe drought in the late 1890s created a water shortage in the Salt River Valley. At one point, river flow dwindled to 25 cubic feet (about 187 gallons) per second. Thousands of acres of agricultural land went out of production and hundreds of people moved away.

For those who remained, the obvious solution was to build a water storage dam to capture spring runoff. In 1902, the National Reclamation Act was passed into law. The Act provided for government loans to “reclaim” arid lands in the Western United States with irrigation projects. In 1903, the Valley settlers formed the Salt River Valley Water Users’ Association. The Association pledged more than 200,000 acres of land as collateral in order to secure a government loan to build a water storage and delivery system.

While the major effort in Arizona was the Theodore Roosevelt Dam, government engineers also saw an opportunity to improve existing Valley canals and create efficiencies by unifying the canal system. One by one, the government purchased the Valley’s private canals.

In 1917, operation of the canal system was turned over to the Salt River Valley Water Users’ Association, which still operates the canals for the federal government today.

Salt River – Rio Salado

In the late 1800’s there were 9 canals siphoning water off the Salt River as it flowed south and then west across the wide desert floor. Most followed the tracks of canals built hundreds of years earlier by the Hohokam Indians. Three canals, the Grand, Salt River and Maricopa, drew north of the westward flowing river. Five canals drew from the south. The newest canal, the Arizona, drew further north, feeding vast acreage across the northwest.

Arizona’s Major Water Canals

Over the past 100 years, nine major water canals have emerged across the greater Salt River Valley.

1. Arizona Canal (1883)

Measuring more than 38 miles long, the Arizona Canal is the longest canal in Arizona. It’s the main canal that transports water to all others on the north side of the Salt River.

The canal was the work of the Arizona Canal Company, which was formed in December 1882. Construction began in May 1883 and was completed in 1885. Water began flowing the next year. The Arizona Canal helped bring water to the north and across to the West Valley, allowing for development of these areas.

The original heading was the old Arizona Dam, located on the Salt River about a mile below the mouth of the Verde River. Unfortunately, that dam was destroyed in a spring flood in 1885. A stronger Arizona Dam was rebuilt by December 1886. Though the second Arizona Dam was the only pioneer diversion dam that survived the big flood of February 1891, it was damaged by a flood in 1905 during the construction of Roosevelt Dam. In an effort to unify the Valley’s water delivery system, the Secretary of Interior agreed to purchase the canal in 1906. The government assumed operations of the Arizona Canal in May of 1907.

2. Grand Canal (1878)

The Grand Canal is the oldest remaining pioneer canal on the north side of the Salt River. It was planned in 1877 and constructed in 1878 by the Grand Canal Company. The original heading of the Grand Canal was plagued by washouts, which would interrupt its water supply for months at a time, so the Old Crosscut Canal was built to provide a more reliable water supply from the Arizona Dam and the Arizona Canal. Today, the Grand Canal receives water from the Arizona Canal by way of the New Crosscut Canal.

The Grand Canal provided a better route for service of central Phoenix than the Salt River Valley Canal, which led to the abandonment of the Salt River Valley Canal in 1925.

The federal government purchased the Grand Canal for $25,731 in June 1906. At that time, the canal served about 17,000 acres.

3. The Crosscut Canals: Old and new (1889 and 1912)

The Old Crosscut Canal was built near 48th Street by the Arizona Improvement Company to unify the entire northside canal system by connecting the Arizona and Grand canals. After the New Crosscut was built near 64th Street, the Old Crosscut was used only for drainage, emergency flood relief or during repairs to the New Crosscut.

The New Crosscut (or Arizona Crosscut) was financed and built by the Water Users’ Association in 1912 and turned over to the U.S. Bureau of Reclamation upon completion in 1913. This canal leaves the Arizona Canal near 64th Street and crosses Papago Park before it drops 116 feet through penstocks (pipes) to the Crosscut Hydroelectric Generating Station south of Washington Street. Then it enters the Grand Canal. The completion of the New Crosscut Canal and hydro plant made electric power generation possible on the canals while still allowing for the efficient delivery of irrigation water.

When it was built, the Crosscut Hydro Plant was the second-largest generating station, the Roosevelt Dam was the largest. The New Crosscut Canal’s bank is where the Valley’s first concrete canal-side bicycle path was built in 1975.

4. South Canal (1908)

The South Canal serves the very important purpose of taking water from the Salt River at the Granite Reef Diversion Dam to all of the other canals on the south side of the Salt River.

The South Canal was built by the federal government between 1907 and 1909 to unify the entire southside canal system. Originally, the South Canal was only 2 miles long before splitting into the Consolidated and Eastern canals. However, the Consolidated Canal, nearer to the river, was repeatedly damaged by floods. In 1920, the Eastern Canal was widened to become the main canal for the southside system. The entire 10-mile stretch to the division gates where the Consolidated and Tempe canals separate is now called the South Canal. The first South Canal hydro plant, built in 1912 at the split of the Consolidated and Eastern canals, was moved to its present site in 1924 to take advantage of a drop in the canal. From 1927 to 1929, the South Canal and parts of the Eastern and Consolidated canals were lined with concrete. The concrete liner saved water and increased the supply to the Roosevelt Water Conservation District (RWCD).

The three most significant features along the canal are the Val Vista Water Treatment Plant, the Hennessy Wasteway and the South Consolidated Hydroelectric Plant.

The Hennessy Wasteway is used to discharge excess rainwater from the Salt River. It is also used as the turnout to the Granite Reef Underground Storage Project (GRUSP). Located on a 350-acre site southwest of Granite Reef Diversion Dam, GRUSP stores water from the Salt River and water delivered through the Central Arizona Project. Water is contained at the site and allowed to sink into the ground, recharging the underground aquifer and bolstering groundwater resources.

Another feature on the South Canal is the RWCD pumping plant, which takes water from the South Canal into the RWCD Canal. West of Lindsay Road, the South Canal splits and becomes the Eastern Canal to the southeast and the Consolidated Canal to the southwest.

5. Eastern Canal (1909)

The Eastern Canal is a branch of the South Canal that originates west of Lindsay Road near McDowell Road in northeast Mesa. Built by the federal government in 1909, the Eastern Canal replaced the old Highland Canal, which was one-quarter mile to the west. The Highland Canal had been completed in 1888.

Concerns about water rights, coupled with droughts in the late 1890s and early 1900s, helped motivate landowners served by the Highland Canal to pledge their property as collateral to form the Association. Today, the Eastern Canal is the site of the Town of Gilbert’s water filtration plant.

6. Consolidated Canal (1891)

Although it is the largest canal in Mesa (roughly 18 miles long), the Consolidated Canal wasn’t built to serve any of the land within the present city limits.

Started in 1891, the canal was masterminded by Dr. A.J. Chandler and his Consolidated Canal Company. Chandler’s desire was to bring water to the area that now bears his name.

Because the canal was built during one of the driest periods in the Salt River’s history, its owners faced supply problems. Lands with older water rights had first claim on the meager water supply in the Salt River, and the occasional surpluses that occurred were too small to cultivate new land.

Nevertheless, Dr. Chandler was imaginative. Recognizing the problems that owners of the Mesa and Tempe canal companies were having with brush diversion dams, he began bargaining.

In exchange for water to be saved by his proposals, Dr. Chandler offered to build a new diversion dam made of huge boulders. The south end of the dam tied into granite masonry abutments and wing walls – the head of the new canal.

Using a huge dredge, Dr. Chandler built a canal up to 26 feet deep. Two miles south of the heading, the canal emptied some of its water into the old Mesa Canal. The Consolidated Canal then divided into two branches as it does today. The Consolidated Canal also delivers to the Chandler Water Filtration Plant, which is located south of Pecos Road.

The branch heading west was called the Crosscut Canal, and for about two miles, it followed what is now Brown Road to the edge of a small mesa near the Tempe Canal. This spot is where Chandler built the Chandler Falls Power Plant that provided electricity to Mesa and Tempe.

By carrying Tempe Canal water through the Consolidated Canal, instead of through a sandy riverbed, canal owners were able to prevent a considerable amount of water loss from seepage. This “new” water became part of the Consolidated Canal, which followed the old Mesa Canal to Baseline Road and on to Chandler.

Recognizing the water savings that the Consolidated Canal made possible, the federal government later sought to acquire the canal as part of a unified water distribution system for the Association. Government engineers saw that all canals south of the Salt River could be interconnected by building a new 6-mile length of canal from Granite Reef Diversion Dam to the Consolidated Canal.

7. Tempe Canal (1871)

The Tempe Canal is the oldest continuously used canal in Arizona. Construction of the Tempe Canal was undertaken by the Tempe Irrigating Canal Company, which had originally been incorporated in 1870 as the Hardy Irrigating Canal Company, though the name was changed the following year. The first Tempe Canal headed in the Salt River near what is now Mesa Drive in Mesa. It flowed along 8th Street to downtown Tempe and on to the west where it also supplied the San Francisco Canal. A branch served the Broadway-Alameda area south of downtown. In the 1880s, further branches were dug south along Price Road (a portion now known as the Tempe Canal), west along Guadalupe Road and around the base of South Mountain to south Phoenix.

Charles Trumbull Hayden, the “Father of Tempe,” was among the early homesteaders served by the canal. He first came to the Valley in 1870 and saw the need for a store, ferry service and flour mill at the river near what is now Mill Avenue. Hayden began building the mill in 1872. It began operation two years later, using power generated by water from the Tempe Canal by way of an extension ditch. Some of the earliest pioneers in this area were the Sotelo and Gonzales families, who both worked on the construction of an early branch of the Tempe Canal, the McKinney-Kirkland Ditch, and farmed in the area as well.

The increase in irrigation brought about by Roosevelt Dam raised the water table all over the Valley. Because of geological formations, land in Tempe was at high risk for waterlogging. The Association had the resources — including the electric power — to drain these lands with pumps, and its commitment to make Tempe a priority for drainage convinced the Tempe farmers to join the Association.

8. Western Canal (1912-1913)

Work on the Western Canal was started in 1911 and the government dug the canal from Price Road to 48th Street before was suspended in 1912 due to funding problems. The government also built three feeder laterals to bring a water supply from the Consolidated Canal and a siphon to carry the Western Canal under the Tempe Canal. Farmers in the south Phoenix area formed the Western Canal Construction Company in 1912 to fund and build the canal from 48th Street to 19th Avenue. When completed, this section was deeded to the U.S. Bureau of Reclamation and the farms of south Phoenix finally had an assured supply of water.

Some farmers in south Tempe and south Phoenix had lands on the lower slopes of South Mountain, which was above the Western Canal. In 1912, these farmers formed the Highline Canal Construction Company and sold stock. They raised $100,000 to build a pumping plant, pipeline and canal. The pumping plant took water from a bay in the Western Canal and pumped it 40 feet uphill through a 1-mile pipe, where it emptied into the Highline Lateral for distribution.

From the Tempe Canal, the Western Canal heads west then turns and curves around to the northwest along the foothills of South Mountain. Roughly at the Maricopa Freeway, the canal continues its western jaunt, then dips to the southwest near 7th Avenue.

Drivers traveling along Baseline Road between the freeway and Central Avenue can see the Western Canal just north of the road. The Western Canal now has the Highline Pumping Plant, located east of Kyrene Road, to lift water to the Highline Canal.

9. The Central Arizona Project (1968)

As the state of Arizona grew, water providers understood that additional water supplies would be necessary to support Arizona’s cities, agriculture, business and industry, and so the Central Arizona Project (CAP), to life. The CAP’s canal system transports water across the desert from the Colorado River, carrying it to the state’s central valley where it adds to the region’s supply.

Lateral Canals

Arizona’s irrigation system includes hundreds of smaller waterways that connect to the main canals. These ditches, called laterals, take water from the large canals to delivery points in irrigated areas. Of the 1,074 miles of drains and laterals, over 85% have been piped to help reduce water loss — and more are lined or piped each year.

Water is routed into and through these laterals by a series of turnout gates. Residential irrigation customers take their water entitlement at regularly scheduled intervals throughout the year by opening valves that release water onto their property for specific time periods.

Most laterals north of the Salt River in urban areas are underground. Many of the laterals that take water from canals in agricultural areas south of the river are open ditches.

FAQ Chapter 7 Bankruptcy

What is a bankruptcy?

Bankruptcy is a way for people or businesses who owe more money than they can pay right now, (a “debtor”), to either work out a plan to repay the money over time, under Chapter 11, 12 or 13, or for most of the bills to be wiped out (“discharged”), as in a chapter 7 case. While the debtor is either working out the plan or the trustee is gathering the available assets to sell, the Bankruptcy Code provides that creditors must stop all collection efforts against the debtor.

When the bankruptcy petition is stamped “relief ordered” upon filing, you are immediately protected from your creditors. What chapter you choose to file under, what bills can be eliminated, how long payments can be stretched out, and what possessions you can keep, and the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure control other details. These are federal laws, which means they apply all over the United States. The code and Rules are found in Title 11 of the United States Code. The various sections of the Bankruptcy Code are referred to throughout this informational packet as “11 U.S.C. § ___.”

What do I do when creditors call?

Once you have retained my office by paying your retainer fee, you may tell all of your creditors, “I have hired the Dunaway Law Group to represent me in a bankruptcy filing. They told me to tell you to direct all further communication to their office. His phone number is 480-389-6529.” Once you tell a collection agency that you have a lawyer they may not call you any more. If they call you back after you have told them you have a lawyer, make sure to get a name and phone number of the person calling you and then contact our office.

Yes. The automatic stay prevents bill collectors from taking any action to collect debts. Once you have retained our office to file your bankruptcy then direct all creditors to our office. You can tell them, “I have hired the Dunaway Law Group to represent me in a bankruptcy filing. They told me to tell you to direct all further communication to their office. Their phone number is 480-389-6529”. The creditors will call our office and verify that you are a client. Once they have verified that you are a client then they will stop calling you.

What happens if I file a chapter 7 bankruptcy?

A chapter 7 bankruptcy begins by filing a “petition” and schedules with the bankruptcy court. The person filing a chapter 7 is referred to as the “debtor”. The debtor is required to disclose to the court all of his or her property and debts and turn over all nonexempt property to the bankruptcy trustee, who then converts it to cash for distribution to the creditors. The debtor then receives a discharge of all dischargeable debts.

Who can file a bankruptcy?

Any person, partnership, corporation or business trust may file a bankruptcy. If the person or entity that owes the money, referred to as the debtor, starts the bankruptcy, it is called a voluntary bankruptcy. The people or entities that are owed money, referred to as the creditors, can also file a petition against a person or an entity who owes them money, and that is called an involuntary bankruptcy. In an involuntary case, the debtor gets a chance to contest the petition and contend it should not be in bankruptcy. Involuntary cases can only be filed under chapter 7 or 11. Voluntary cases can be filed under chapters 7, 9, 11, 12 and 13. Certain types of entities, such as banks and insurance companies, may not be eligible to file bankruptcy, however, almost all other entities can file a bankruptcy. A business that is NOT a partnership, corporation or business trust, cannot file a separate bankruptcy on its own. Those assets and debts would be included in the personal bankruptcy of the owner(s).

What is a joint petition?

A joint petition is the filing of a single petition by an individual and the individual’s spouse. Only people who are married on the date they file may file a joint petition. Unmarried persons, corporations and partnerships must each file a separate case. If you are an individual and have a business that is not a partnership, corporation or business trust, you should list the business as a “dba” (doing business as) on your petition. However, yours will not be considered a joint petition because the business is not an independently recognized legal entity.

How long after filing will the creditors stop calling?

Once a creditor or bill collector becomes aware of a filing for bankruptcy protection, it must immediately stop all collection efforts. After you file the bankruptcy petition, the court mails a notice to all the creditors listed in your bankruptcy schedules. This usually takes a couple of weeks. Creditors will also stop calling if you inform them that you filed the bankruptcy petition and supply them with the “docket number” from your case. In some cases, you or your attorney should contact the creditor immediately upon filing the bankruptcy petition, especially if a lawsuit is pending. If a creditor continues to use collection tactics once informed of the bankruptcy they may be liable for court sanctions and attorney fees for this conduct.

Who notifies the creditors and bill collectors?

After the bankruptcy petition is filed, the bankruptcy court mails a notice to all the creditors listed in the schedules. This usually takes a couple of weeks.

Will my employer and landlord find out about my bankruptcy?

Bankruptcy petitions are public records. However, under normal circumstances, unless your employer or landlord is a creditor, it will not know you filed a bankruptcy petition. If your employer or landlord is a creditor is must be listed as a creditor on the schedules and receive notice of the bankruptcy proceeding. In some states, chapter 13 debtors are required to make payments through the wage garnishment and their employer will learn about the bankruptcy.

Can my employer fire me for filing bankruptcy?

No. 11 U.S.C. §525 prohibits government units and private employers from discriminating against you because you filed a bankruptcy petition or because you failed to pay a dischargeable debt.

Does the spouse of a married person also have to file bankruptcy?

No. In some cases where only one spouse has debts, or one spouse has debts that are not dischargeable then it might be advisable to have only one spouse file. If the spouse have joint debt, the fact that one spouse discharged the debt may show on the other spouses credit report.

Can I keep my credit cards?

Typically no, however, under some circumstances you may be able to keep a credit card if the creditor agrees. There are many factors that must be considered. Some of those include the credit card balance at the time of the bankruptcy, what the credit card company is willing to do and your ability to pay the present and future credit card debt.

Will I have to go to court?

About 30 to 40 days after filing the bankruptcy petition, you will have to attend a “341 Hearing” at the bankruptcy courthouse. This hearing is called the Meeting of Creditors. the trustee is not a judge, but an individual appointed by the United States Trustee to oversee bankruptcy cases. At the First Meeting of Creditors, the trustee will ask you questions under oath regarding the content of your bankruptcy papers, your assets, debts and other matters.

Creditors will also be permitted to ask you questions, although in the majority of cases creditors do not ask questions at the Meeting of Creditors. After the initial meeting you normally do not need to return to court. However, if a creditor or the trustee files a motion or an adversary action you may have to appear in court with your attorney.

What should I do to prepare for filing bankruptcy?

If you intend to file bankruptcy you should stop using your credit cards. If you borrow money with the specific intent of discharging the debt in bankruptcy instead of paying it back, the debt is not dischargeable. In addition, three specific circumstances are worth mentioning: (a) certain luxury purchases over $1225 within 60 days of the bankruptcy filing are presumed nondischargeable; (b) cash advances aggregating $1225 within 60 days of the bankruptcy filing are presumed nondischargeable; and (c) debts involving materially false financial statements are nondischargeable under certain circumstances.

Don’t transfer your assets to friends, family and business associates to protect the assets from your creditors. The transfer may be considered a fraudulent conveyance. If it is, you may lose both the property and your right to a bankruptcy discharge.

Carefully choose the creditors you pay. some creditors, such as landlords, secured creditors, and some utilities should be paid under most circumstances. If you pay a credit card debt that eventually will be discharged, you may be throwing money away. Your attorney should advise you on what debts should and should not be paid while you prepare to file a bankruptcy petition.

Can I file bankruptcy to delay a creditor?

No. Rule 9001 of the Rules of Bankruptcy Procedure requires you to certify that your petition is not filed “for any improper purpose, such as to harass or to cause unnecessary delay…” Bankruptcy is intended as a tool for dealing with debts that can not otherwise be paid. You should not file a bankruptcy petition for the sole reason of delaying a creditor’s actions.

Do I have to disclose all of my assets?

Yes. If you knowingly and fraudulently conceal an asset from the court you have committed a felony and can be fined up to $5,000, imprisoned for up to five years, or both. In addition, the court can deny you your discharge, or dismiss or convert your bankruptcy proceeding.

What kinds of bills can I wipe out in bankruptcy?

Generally, if you go through bankruptcy your goal is to wipe out your unsecured debts. Your unsecured debts are typically major credit cards, department store cards, personal loans or lines of credit from banks, medical bills, or any other money you may owe someone that is not secured.

Can I keep my house and my car?

Yes. Most people filing bankruptcy keep their homes, their cars, and all of the property. However, this assumes you continue making your payments!

Can I get rid of taxes in bankruptcy?

You may have heard that you cannot wipe out taxes in bankruptcy. THAT IS NOT ALWAYS TRUE! Under certain conditions you may be able to wipe out taxes in bankruptcy.

Can I get rid of student loans in bankruptcy?

You may have heard that student loans cannot be wiped out in bankruptcy. THAT IS NOT ALWAYS TRUE! Under certain conditions you may be able to wipe out student loans in bankruptcy, although it is very difficult to do so.

How long does BANKRUPTCY TAKE and who will be notified?

Typically, you can expect your case to take about three to four months from the day you file your papers (known as the bankruptcy petition) until the day the court actually wipes out your debts. Notices will only be sent to those you have listed on your bankruptcy petition.

What if I have used my credit cards just before bankruptcy?

If you intentionally run up your credit cards in hopes of wiping them out in bankruptcy, you have committed fraud. If you reasonably purchased necessities or needed to support yourself, that is not fraud.

What affect will bankruptcy have on my credit?

Bankruptcy may appear on a credit report for up to 10 years. But that doesn’t mean you can’t get credit for 10 years.

Can I rebuild my credit after bankruptcy?

Yes. You may have heard about people who have filed bankruptcy two or three times. Maybe they are the best proof that people can actually get credit after bankruptcy. If they weren’t able to get credit after their first bankruptcy, they would not have had to file bankruptcy again.

Basic Procedure

Upon filing, you will be required to file a sworn list of creditors, a schedule of assets and liabilities, a list of exempt property, a schedule of current income and expenditures, a statement of your financial affairs and a statement of intent regarding consumer debts secured by property of the estate. You will also be required to surrender to the trustee all property of the estate. 11 U.S.C. §521. The order of relief is granted when you file. What this means, among other things, is that an automatic stay is triggered, prohibiting creditors from pursuing you or your property outside of the bankruptcy proceeding.

The clerk of the court will give notice of the bankruptcy to your creditors.

There will be a meeting of creditors called to question you about your debts and ability to pay. The U.S. Trustee sets this meeting and you are required to attend. This meeting is called the meeting of creditors. A creditor or the trustee assigned to your case may object to your listed exemptions within 30 days after the meeting of creditors.

An objection to your receiving a general discharge of all your debts must be filed by the Trustee or a creditor within 60 days following the first date set for the creditors meeting. If no objections are filed, and if no motion to dismiss is pending, the court will ordinarily grant a discharge upon expiration of the 60 day period. Bankruptcy Rules 4004 and 1017; 11 U.S.C. §727.

A creditor may object to the dischargeability of a particular debt at any time if the debt: (1) is for a tax or customs duty; (2) is not listed in the schedules so that a creditor could file a proof of claim; (3) is related to alimony or child support; (4) is a government fine or penalty; or (5) is a government insured student loan.  Any student loans guaranteed or insured by the government or a non-profit institution will not be dischargeable. This means that you will continue to be liable for the payment even if you file bankruptcy.

A creditor may object to the dischargeability of a particular debt only within 60 days of the first date set for the meeting of creditors, if the debt: (1) is a consumer debt incurred close to filing; is a result of fraud; or (3) is a result of a willful and malicious injury to a person or property of another. Bankruptcy Rule 4007; 11 U.S.C. § 523.


A debtor’s goal in any chapter 7 bankruptcy is to have as many debts discharged as possible. The general rule is that all debts created before the bankruptcy filing are discharged. Discharge destroys any personal liability you may have on a claim or debt.


There are ten categories of debt excluded from discharge under §523. These fall into two areas: debts that are not dischargeable due to the wrongful conduct of the debtor and debts that are not dischargeable due to public policy.

The debts not dischargeable due to the debtor’s misconduct include those created by intentional torts, fraud, larceny, embezzlement, fiduciary violations, and drunken driving. The debts not dischargeable due to public policy include alimony and child support, taxes and customs duties, governmental fines, penalties and forfeitures, educational loans, unscheduled debts and certain debts surviving a prior bankruptcy case. A claim must fall within one of these exceptions to be found non-dischargeable.

To prevail on a fraud exception, the creditor would need to show that there was a false, material representation of fact made by the debtor that the debtor knew was false at the time he made it, made with the intention of deceiving the creditor. Some courts have held that when a credit card is used, the debtor impliedly represents that the debtor has the ability and intention to pay for the goods and services charged. Those courts have therefore found that some credit card debt is non-dischargeable under the fraud exception.

This is not the only potential problem that can arise with credit card or similar debt. Section 523 also provides that there is a presumption that certain consumer debt created right before filing a chapter 7 is non-dischargeable.  The presumption of non-dischargeability will apply if the debt is consumer debt for so-called “luxury goods or services” incurred within 40 days before the filing, owing to a single creditor aggregating more than $500.00. Further, the presumption of non-dischargeability will apply if there are cash advances made by a creditor for more than $1,000 that are extensions of consumer credit under an open end credit plan within 20 days of filing bankruptcy.

Luxury goods and services are not defined by the Bankruptcy Code and the determination of it will be contingent upon the facts and circumstances of each case.

Any credit based upon false financial statements is subject to exception from discharge. Statements made in the financial statements have to be materially false with the intent to deceive the creditor to fall within this exception. Note that a credit application should not qualify as a “financial statement” if it does not require a disclosure of debts.

It is crucial for the debtor to include all creditors in his schedules filed with the Court. If a debtor knows of the creditor and does not schedule him, the creditor is denied participation in any distribution; to protect the creditor from this type of problem, the code provides that unscheduled claims may be non-dischargeable.

Debts created by willful and malicious injury will also be excepted from discharge. These types of claims arise from intentional actions by the debtor, done with malice that causes damage.  It is important to note that ordinary negligence claims are dischargeable. A plaintiff with a personal injury claim would need to allege significantly more than simple negligence to have his or her claim deemed non-dichargeable in the Bankruptcy Court.

Not only may a single creditor attempt to have a particular debt found non-dischargeable pursuant to §523. Chapter 7 debtors also need to be aware that, pursuant to U.S.C. §727, upon motion by the trustee or a creditor, the court may disallow a final discharge of all debts, if the debtor, among other things:

  1. Destroys or conceals his property within one year before filing or after the date of filing, with the intent to hinder, delay or defraud a creditor;
  2. Conceals, destroys, falsifies or fails to preserve records of his financial conditions;
  3. Knowingly in a bankruptcy case makes a false account, oath or claim;
  4. Gives, offers, receives, or attempts to obtain money, property or an advantage for acting or forbearing to act;
  5. Withholds from an officer of the estate records related to his property or financial affairs;
  6. Fails to satisfactorily explain any loss of assets; or
  7. Refuses to obey court orders or respond to questions posted by the Court.

Cash on Hand – What does that meaN?

Cash on hand is anything in a bank account, safety deposit box, your wallet, under the mattress, etc. Money that is “pending” in your bank account is considered to still be in the account! So just because you have written checks from your account, unless they have cleared your account it is still considered to be in your account and “cash on hand”!


You give it to the bankruptcy trustee!

Pitfalls of Bankruptcy


stop incurring more debt

Prior to filing bankruptcy you must stop using your credit cards. If you borrow money with the specific intent of discharging the debt in bankruptcy instead of paying it back, the debt is not dischargeable. Cash advances before bankruptcy can be seen as fraudulent and unable to discharge in bankruptcy.

Section 523 of the bankruptcy code also provides that there is a presumption that certain consumer debt created right before filing a Chapter 7 Bankruptcy is non-dischargeable. 

preferential treatment of creditors

Do not pay back money to family members or friends before filing bankruptcy.

do not give away or transfer assets

Do not transfer assets to friends, family and business associates prior to filing bankruptcy in an attempt to conceal those assets from your creditors. The transfer may be considered a fraudulent. If it is deemed fraudulent, you may lose both the property and your right to a bankruptcy discharge.

Carefully choose the creditors you pay. some creditors, such as landlords, secured creditors, and some utilities should be paid under most circumstances. If you pay a credit card debt that eventually will be discharged, you may be throwing money away.

These blog posts are not intended nor shall it be deemed to be the rendering of legal advice. Reading these blog posts does not create an attorney-client relationship, nor shall it impose an obligation on the part of the attorney to respond to further inquiry. Contact the Dunaway Law Group at 480-389-6529 or message us HERE.