Arizona Chapter 7 Bankruptcy Attorney

Bankruptcy Attorney in Arizona Assisting Clients with Chapter 7 Bankruptcy Filings

Is Chapter 7 bankruptcy right for you? If you are having significant difficulty paying off debts and are struggling with monthly payments to creditors, you may be able to get a fresh start by filing for Chapter 7 bankruptcy. In particular, if you owe substantial amounts of debt because of an unexpected event, such as a serious medical condition, bankruptcy may be able to help. Chapter 7 bankruptcy is known as “liquidation bankruptcy,” which means that the debtor’s assets will be liquidated and the profits will be used to help pay off debts owed. Once the bankruptcy court finds that all elements of the case have been satisfied, then the debtor’s debts will be discharged. She then can begin rebuilding her credit and working to recover financially.

If you have questions about filing, an Arizona bankruptcy attorney can speak with you today.

Understanding the “Means Test” for Chapter 7 Bankruptcy

Not all Arizona residents are eligible to file for Chapter 7 bankruptcy. To be eligible for Chapter 7 bankruptcy, you must pass what is known as the “means test.” An FAQ sheet from the United States Bankruptcy Court for the District of Arizona explains that the means test was developed as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. It determines whether a debtor’s income and debt allow her to file for Chapter 7 bankruptcy. In the event that a Chapter 7 discharge might be considered an “abuse” under the law, then the debtor may be eligible to file for an alternate form of bankruptcy, such as Chapter 13.

What is the means test? It asks for information about your gross monthly income six months before you filed for bankruptcy. In most situations, if your gross monthly income falls below the median income in Arizona, then you may meet the means test and be able to file for Chapter 7 bankruptcy. If your income does not fall below the median income in Arizona, there may be other ways to show that you do in fact meet the means test and thus should be eligible to receive a Chapter 7 discharge. However, the law is complicated, and it is important to learn more about your eligibility for Chapter 7 bankruptcy by speaking with an experienced Arizona Chapter 7 attorney.

Liquidation and Exemptions

When your assets are liquidated in a Chapter 7 proceeding, certain property will be exempt. Under Arizona law, there are numerous exemptions, which means that you will be able to keep that property and it will not be subject to liquidation. For example, Arizona allows a generous homestead exemption of up to $150,000. This means that interest in the debtor’s home—up to that amount—can be exempted from liquidation. In addition, a personal property exemption of up to $6,000 can allow a debtor to keep personal property, including home furnishings, clothing, books, and other objects.

An Arizona bankruptcy attorney can discuss exemptions with you in detail and help you understand which assets may be exempt from liquidation.

Discuss Your Case with an Arizona Chapter 7 Attorney

If you have questions about your eligibility for Chapter 7 bankruptcy, a dedicated Chapter 7 attorney in Arizona can assist you. It is important to contact a bankruptcy law advocate before moving forward with your case.