An Explanation of Bankruptcy in Arizona
An Explanation of Bankruptcy in Arizona
An Explanation of Bankruptcy in Arizona
Poorly managed or unforeseen debt is a tough situation, but deciding whether or not to file for bankruptcy can be even tougher. In order to seek debt relief, avoid foreclosure and property repossessions, and escape from deficiency liability, many choose to file for bankruptcy. It is important to note that the primary reason for the existence of bankruptcy law is to give people and businesses a "second chance". Rather than a person being forever mired in an untenable financial situation, bankruptcy provides a means to financially extricate themselves from such situations and allows them an opportunity to start anew.
First determine if you will file Chapter 7 or Chapter 13 bankruptcy. Chapter 7 is the simplest and quickest form of bankruptcy filing. It is predominantly utilized by single or joint filers who's income levels are below the regional threshold required to file under this chapter. Most Chapter 7 filers have minimal assets or cash, and find themselves unable to meet their day-to-day outstanding financial obligations. In order to qualify, a "means test" will be conducted. If your income is below the median income for families in Arizona, you'll be eligible to qualify.
When filing for Chapter 7 bankruptcy, it will start with a filing of the official petition, schedules and a statement of financial affairs with the bankruptcy court. You will need to provide a list of all your creditors and the amount and type of the claim. You will also need to provide the source, amount and the frequency of your income, as well as a list of all your properties and a detailed list of monthly expenses, on the bankruptcy forms. There is a $299 case filing fee, a $39 administrative fee and a $15 trustee surcharge.
After you file your petition, 20 to 40 days after the trustee will hold a 341 hearing, or "first meeting of the creditors". You will have to be present for that meeting and will be asked questions under oath about your debts. Creditors have 60 days after the meeting to convince the bankruptcy court that your debts should not be canceled.
Now, if you do not qualify for Chapter 7, the only other option is Chapter 13. Chapter 13 protection is usually chosen by filers that are wage earners and have assets they would like to retain. The total secured and unsecured debt for the debtor must be below federally prescribed levels to "fit into" a Chapter 13 bankruptcy. Most Chapter 13 filers have a regular monthly income, and can pay basic sustaining expenses but are unable to maintain other debt interest and/or debt repayment commitments.
When filing for Chapter 13, a proposed payment plan extending over three to five years must be presented and must include payment for all priority claims, such as taxes. The bankruptcy trustee will review the proposed plan for it's accuracy and it will then be distributed to creditors who have the right to object if they find it unreasonable. If the plan is approved you can keep all your assets during the period of the plan and can make monthly payments to the bankruptcy trustee who distributes the payments to the creditors according to the plan. If the plan is completed and approved, your unpaid debts will now be discharged. If it was not completed or approved you will have several alternatives, which an Arizona bankruptcy lawyer can explain.
Now, filling for bankruptcy in Arizona does not cancel all of your debts. Taxes, most student loans, alimony, child support, purchases greater than $550 made within ninety days of filing, debts accrued as a result of fraudulent activity, recent cash advances greater than $825 made 70 days before filing, and fines owed to federal or Arizona government agencies are debts you may be required to pay.
When well planned & executed, a bankruptcy can be a temporary, not a permanent, setback. Scottsdale Law Group understands how intimidating the bankruptcy process may seem and the stress that overwhelming debt can cause to individuals and their families. Working together as a team, Scottsdale Law Group and the debtor can successfully navigate the bankruptcy process, attain the debt relief that the law makes available to everyone, and begin the process of rebuilding the debtor's credit and securing their financial assets. For more information about Scottsdale Law Group, please visithttp://www.scottsdalelawgroup.com.
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