Chapter 7 Bankruptcy Lawyer Phoenix

If you feel overwhelmed by debt, you’re not alone.  A Chapter 7 bankruptcy allows a Chapter 7 Trustee to gather and sell your nonexempt assets and use the proceeds to pay creditors according to the provisions of the U.S. Bankruptcy Code. This allows you to get a fresh start, moving forward. If you have credit card debt, medical debt, or other kinds of debt after a job loss, divorce, or illness, you may be eligible for Chapter 7 bankruptcy.

A Phoenix bankruptcy lawyer can help you navigate the bankruptcy process and determine eligibility before you begin. If you are interested in filing for bankruptcy, please don’t feel like you must go through it alone. Call 480-702-2272 today for a legal consultation.

Who Can File Chapter 7 Bankruptcy in Arizona?

A debtor under Chapter 7 may be an individual, a partnership, or a company.  Not all individuals are eligible to file for Chapter 7 bankruptcy. You must be under a certain income threshold before you can file.

In Arizona, the current median income for a single income earner is $63,717 per year; a two-income earner household is $80,352.00 per year. The median income increases incrementally for every member of your household. Businesses can also file for Chapter 7 relief if their goal is to liquidate their assets and pay creditors.

All individual debtors must take a Means Test to qualify for a Chapter 7 Bankruptcy. The basic purpose of the Means Test is to compare monthly income and expenses to determine whether or not a Chapter 7 discharge would constitute an “abuse” of the provisions related to Chapter 7 in the Bankruptcy Code.  This calculation does not include certain types of income, like Social Security benefits.

In general, if your average gross income is below the median income in Arizona, you will be eligible to file for bankruptcy.

How Do You File Chapter 7 Bankruptcy in Arizona?

Before filing for bankruptcy, your attorney will determine if you qualify. Your attorney will then review your financial status to ensure that bankruptcy makes practical sense for you. Once those details have been confirmed, your Arizona bankruptcy attorney will prepare your petition, statement of financial affairs and schedules, a master mailing list with all of your creditors, and other documents with the bankruptcy court.

The moment your bankruptcy petition is filed, an automatic stay will go into effect. This stay requires all creditor collections to cease, including calls, home deed of trust sales (nonjudicial foreclosures), and repossessions. Any creditor who wishes to contact you must now go through your Arizona bankruptcy attorney.

Filing for Chapter 7 bankruptcy in Arizona involves several key steps that require careful attention to detail to ensure a smooth process. Initially, it is crucial to gather all necessary financial documents, including income statements, tax returns, and a list of all debts and assets. This comprehensive financial overview will help your bankruptcy attorney assess your situation accurately.

Once your attorney has a clear understanding of your financial standing, they will guide you through the pre-bankruptcy credit counseling requirement. This step involves completing a credit counseling course from an approved agency, which is mandatory before you can officially file for bankruptcy.

This course aims to provide you with a better understanding of your financial situation and explore alternative debt relief options.

After completing the credit counseling, your attorney will assist in preparing and filing the official bankruptcy petition and related documents with the bankruptcy court. This includes the Means Test calculation, which determines your eligibility for Chapter 7 based on your income and expenses. It’s important to note that filing fees are associated with this process, but many law firms offer flexible payment plans to accommodate different financial situations.

Once the petition is filed, the automatic stay is activated, providing immediate relief from creditor harassment, wage garnishments, and foreclosure actions. This legal protection allows you to focus on the bankruptcy process without the stress of ongoing collection efforts.

Throughout this process, maintaining open communication with your bankruptcy attorney is essential. They will represent you during the bankruptcy proceedings, including the First Meeting of Creditors, and ensure that all legal requirements are met. Their expertise will help you navigate the complexities of bankruptcy law and work towards achieving a fresh financial start.

What is the First Meeting of Creditors?

Around 15 days after filing for bankruptcy, you will receive notice from a bankruptcy trustee who has been assigned to your case. You will also receive a request for additional documents, which you must provide as soon as possible.

Around 40 days after filing for bankruptcy, you must attend the First Meeting of Creditors, also called the 341 Meeting of Creditors. During this meeting, the bankruptcy trustee and any creditors who attend will ask you questions about your financial situation. Your attorney will help you navigate these questions and answer them to the best of your ability.

After the First Meeting of Creditors, you will be required to complete a credit counseling course within 60 days. Your attorney will file your completion of the course with the court as proof. Once you have completed the course, if you are an individual, you will receive an Order from the Court discharging your debts.

There is a possibility that there may be a challenge to your discharge in certain circumstances. You will then have a fresh financial start and can begin taking steps toward rebuilding your credit. Companies that file for Chapter 7 do not receive a “discharge” because the company is no longer operational. By comparison, a person needs a discharge to get a fresh start and move on with their life.

Nondischargeable Debts

Nondischargeable debts are those that cannot be eliminated through the bankruptcy process. The most common types of nondischargeable debts are tax claims, debts that you failed to list on your statements and schedules, spousal or child support, alimony, debts related to willful and malicious injuries, debts to governmental units for fines and penalties, federally funded or guaranteed education loans, debts caused by a person’s operation of a vehicle while intoxicated, and debts owed to certain tax-advantaged retirement plans.

How Can a Chapter 7 Bankruptcy Lawyer Help Me?

Chapter 7 bankruptcy is a valid option for those who are in unmanageable amounts of debt with no resolution in sight. Chapter 7 bankruptcy often allows individuals to retain their homes if they are current on their payments. If not, then a Chapter 13 may be a better option.

Qualified retirement plans in Arizona are yours to keep in most situations, unless your retirement accounts are over the limit set by the U.S. Bankruptcy Code (approximately $1 million, which may be increased is justice so requires). If you are struggling with creditor collections, foreclosure actions, or repossessions, Chapter 7 bankruptcy may be an option for you.

Chapter 7 Bankruptcy Attorney Arizona

Resolvere Law PLLC can assist you by walking you through the Chapter 7 bankruptcy process every step of the way. An attorney on our team will help you determine your eligibility, file your petition with the court, answer questions from creditors and trustees, and complete your credit counseling course. You can get a fresh start and work on rebuilding your credit.

To learn more about Chapter 7 bankruptcy, call 480-702-2272 today.