Understanding the bankruptcy process is important to avoid any mistakes during filing. In Arizona, debtors are to undergo credit counseling months before filing for bankruptcy. Completion of a financial management course is then required after filing bankruptcy.
There are several types of bankruptcy. To know if you are qualified for a Chapter 7 or Chapter 13 bankruptcy filing, a means test must be taken. Such a test is used to evaluate the resources and circumstances of one seeking debt relief. Following relevant bankruptcy laws, the monthly income and expenditure of a debtor are compared with the median income in Arizona. This will decide if an individual is financially eligible to file for either of the two bankruptcies mentioned.
For you to be qualified to file for bankruptcy, you must be able to list down all your assets, financial resources, monthly living expenses, secured debts, and unsecured debts. Afterward, you are to check assets that count as exempt or nonexempt in your bankruptcy case. You must be completely honest when you fill out the required documents. Note that you may be sued in bankruptcy court for giving false information. As such, as you seek debt relief, you should consult with a good bankruptcy attorney for assistance.
Filing a bankruptcy petition, though tedious, can tremendously help you with your financial problems. One of the main reasons why people consider bankruptcy filings is because of the immediate effectivity of an automatic stay. An automatic stay may stop wage garnishment, debt collection, and even foreclosure.
If you decide to file for bankruptcy under Chapter 13, you are to propose a repayment plan, which must be delivered in good faith. In a reorganization bankruptcy, tax debt and child support should be paid in full. Unsecured debt like credit card bills and medical bills may be partially paid. Generally, if you filed bankruptcy under this chapter, you repay your unsecured creditors with the amount equivalent to your non-exempt assets.
In a bankruptcy Chapter 13 debt-repayment plan, for a period of three or five years, your disposable income must be used to pay all your debts. The payments are usually automatically deducted from the debtor’s wages. Your bankruptcy lawyer will explain to you the usual process. The actual arrangement will likewise depend on your actual bankruptcy petition.
To ensure that there will be minimal interaction between a debtor and a creditor, a bankruptcy trustee shall be assigned by the bankruptcy court. The first role of a trustee in bankruptcy cases is to arrange a meeting of creditors (that the debtor is required to attend). After you file a Chapter 13, you are required to appear in a bankruptcy hearing. The judge will either approve or deny your proposed repayment plan. Bankruptcy trustees shall then manage the distribution of funds to lenders. Towards the end of your payment plan, certain types of debt may be reduced or discharged.
Bankruptcy law is a complex matter. Trusted bankruptcy attorneys can explain to you the nuances of the bankruptcy procedure. They will also help you decide on the right option for your bankruptcy case. For legal help and assistance, call an experienced bankruptcy law firm. Contact us at WantAFreshStart, LLC.