Phoenix Bankruptcy Attorney

Bankruptcy is a process individuals or businesses can undertake to eliminate certain types of debt. It is a federal court proceeding designed to help with both debt elimination and debt repayment. Bankruptcies generally fall under two categories: reorganization and liquidation, and our Phoenix bankruptcy lawyers are well-versed in both types. The reorganization method is used to do just what the name implies; it reorganizes the debts you owe and puts a payment plan in place that will allow you to become debt free over the course of three to five years. Liquidation eliminates debts by giving the collectors the ability to liquidate, or sell, certain assets to amend what you owe them.

Secured Debt

A secured debt is backed with some sort of collateral. This collateral reduces the risk of the debt for the lender and often comes in the form of property loans. A mortgage, for instance, would be a secured debt with the house acting as the collateral. Were you to default on your mortgage payment, the house could be seized and the lender could, in that way, recover his or her investment.

Both Chapter 7 and Chapter 13 bankruptcy can be used to assist with these types of debts. Chapter 7 gives you the option of allowing for repossession, continuation of payments, or paying the creditor a lump sum. Chapter 13 allows you to make up any missing payments in order to prevent repossession or foreclosure.

Unsecured Debt

This type of debt does not have a piece of property attached to it that can be used as collateral. In an unsecured debt, such as a medical bill or a credit card, the lender cannot repossess anything of yours to regain his or her investment without the court’s permission. Chapter 7 and Chapter 13 bankruptcies in Arizona can also both help with these debts, and a Phoenix bankruptcy lawyer at EZ Legal Fees by WantAFreshStart can show you how.

Chapter 7 will wipe out these debts by the sale or liquidation of any non-exempt property you choose. Chapter 13 allows you to set up a payment plan based on how much the creditors would have received from a Chapter 7 filing, your wages, and the amount of your debt.

Filing Bankruptcy

In Phoenix and the rest of Arizona, the process of filing bankruptcy typically follows a series of steps, guided by both federal bankruptcy laws and local court procedures. Our Phoenix bankruptcy lawyers can make navigating the process much easier for you. That being said, here’s an overview of the bankruptcy process in Arizona:

Step #1 Pre-Filing Counseling

Before filing for bankruptcy, individuals are required to undergo credit counseling from a government-approved agency. This counseling aims to assess their financial situation, explore alternatives to bankruptcy, and provide education on managing debt.

Step #2 Choosing the Right Chapter

Based on their financial circumstances, individuals or businesses must determine which chapter of bankruptcy to file under. Common options include Chapter 7 (liquidation) and Chapter 13 (reorganization for individuals). Your Phoenix bankruptcy lawyer will help you decide which is the right option for your unique situation.

Step #3 Filing the Petition

The bankruptcy process officially begins by filing a petition in the appropriate bankruptcy court. In Arizona, bankruptcy cases are filed with the U.S. Bankruptcy Court for the District of Arizona, which has divisions in Phoenix, Tucson, and Yuma. A bankruptcy lawyer in Phoenix will know where you should file.

Step #4 Taking Advantage of the Automatic Stay

Upon filing the bankruptcy petition, an automatic stay goes into effect, halting all collection actions by creditors. This stay prevents creditors from initiating or continuing lawsuits, foreclosing on property, garnishing wages, or contacting the debtor for payment.

Step #5 Scheduling and Attending the Meeting of Creditors

Approximately 20 to 40 days after filing, debtors are required to attend a meeting of creditors, also known as a 341 meeting. During this meeting, the debtor answers questions under oath from the bankruptcy trustee and creditors regarding their financial affairs and the bankruptcy petition.

Step #6 Addressing Creditors’ Claims

Creditors have an opportunity to file claims with the bankruptcy court to assert their rights to repayment. Depending on the type of bankruptcy, the trustee may liquidate non-exempt assets (Chapter 7) or oversee a repayment plan (Chapter 13) to satisfy creditor claims.

Step #7 Attending a Financial Management Course

Individuals filing for bankruptcy must complete a financial management course from an approved provider before receiving a discharge. This course covers budgeting, money management, and responsible use of credit.

Step #8 Undergoing the Discharge of Debts

Upon completion of the requirements of the bankruptcy process, eligible debts are discharged, meaning the debtor is released from personal liability for those debts. This discharge typically occurs within a few months after filing for Chapter 7 bankruptcy or upon completion of the repayment plan in Chapter 13 bankruptcy.

Step #9 Attending Post-Bankruptcy Counseling

After receiving a discharge, debtors must undergo another counseling session on financial management. This session aims to equip individuals with the tools and knowledge necessary to rebuild their credit and maintain financial stability after bankruptcy.

Navigating the bankruptcy process in Arizona can be complex. However, with the guidance of a knowledgeable AZ bankruptcy attorney, individuals and businesses can effectively fulfill the legal requirements and secure a fresh financial start. Our Phoenix bankruptcy law office is here to make all of this a little less chaotic.

Your Main Debt Relief Options

Although there are technically several other possibilities, an experienced Phoenix bankruptcy lawyer will point you in one of two directions, Chapter 7 bankruptcy or Chapter 13 bankruptcy.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, often referred to as “liquidation” bankruptcy, is one of the most common forms of bankruptcy filed by individuals and businesses in the United States, including Arizona.

To qualify for Chapter 7 bankruptcy, individuals must pass the means test, which evaluates their income and expenses to determine if they have enough disposable income to repay their debts. Businesses, including sole proprietorships, partnerships, and corporations, may also file for Chapter 7 bankruptcy to liquidate assets and discharge debts.

The bankruptcy process begins with a bankruptcy attorney in Phoenix, AZ, filing a petition with the U.S. Bankruptcy Court, typically in the district where the debtor resides or where their principal place of business is located. For you, this is likely Phoenix. Along with the petition, debtors must submit schedules listing their assets, liabilities, income, expenses, contracts, leases, and other relevant financial information.

Upon filing the Chapter 7 petition, an automatic stay goes into effect, halting all collection actions by creditors. This stay prevents creditors from initiating or continuing lawsuits, foreclosing on property, garnishing wages, or contacting the debtor for payment.

In a Chapter 7 bankruptcy, the court appoints a trustee to oversee the case. The trustee’s primary role is to liquidate non-exempt assets and distribute the proceeds to creditors.

Not all assets are subject to liquidation; certain assets may be exempt under federal or state law, such as primary residences, vehicles up to a certain value, and necessary personal belongings.

The trustee liquidates non-exempt assets and distributes the proceeds to creditors according to the priority established by bankruptcy law. Secured creditors, such as mortgage holders or car lenders, may have the right to repossess or foreclose on collateral if the debtor is unable to reaffirm the debt or redeem the property.

Once the liquidation process is complete, eligible debts are discharged, meaning the debtor is released from personal liability for those debts. Certain types of debts, such as child support, alimony, most tax debts, and student loans (unless undue hardship can be proven), are generally not dischargeable in Chapter 7 bankruptcy.

Chapter 7 bankruptcy provides individuals and businesses with a fresh financial start by eliminating most unsecured debts, such as credit card debt, medical bills, and personal loans.

While the bankruptcy will remain on the debtor’s credit report for several years, they can begin rebuilding their credit and financial stability after receiving a discharge.

When filing for Chapter 7 bankruptcy in Arizona, there will be no repayment plan proposed or enacted. Instead, your non-exempt assets will be gathered and liquidated to pay creditors’ claims. This can settle back payments, leaving you free to continue your payments if both parties agree. Another option, if available, would be to give the holder a lump sum to settle the debt entirely.

Chapter 7 bankruptcy can be a powerful tool for individuals and businesses overwhelmed by debt, providing them with the opportunity to obtain relief and start anew under the protection of the bankruptcy court. However, it’s crucial to consult with a knowledgeable Arizona bankruptcy law expert to understand the implications of filing for Chapter 7 and to navigate the process effectively.

Chapter 13 Bankruptcy

Our Arizona bankruptcy lawyers may point you in the direction of a Chapter 13 bankruptcy instead. Also known as a “wage earner’s plan” or “reorganization” bankruptcy,” Chapter 13 bankruptcy enables individuals with steady and reliable income to develop a debt repayment plan with their creditors over the course of three to five years. The time frame allocated to debtors for repayment depends on income level relative to the debts they owe. Filing for Chapter 13 stops creditor harassment by precluding them from beginning or continuing measures for debt collection during the payment period.

Chapter 13 bankruptcy provides individuals with a structured plan to repay their debts over a period of three to five years. Unlike Chapter 7 bankruptcy, which involves liquidating assets to pay off debts, Chapter 13 allows debtors to keep their property while catching up on missed payments through a court-approved repayment plan.

To qualify for Chapter 13 bankruptcy, individuals must have a regular source of income and owe less than certain debt limits (as of 2022, about $1.3 million in secured debts and $419,275 in unsecured debts). Additionally, individuals filing for Chapter 13 must not have had a previous Chapter 13 discharge within a certain timeframe (usually two years) or a Chapter 7 discharge within four years.

The Chapter 13 bankruptcy process begins with the debtor filing a petition, along with detailed schedules of assets, liabilities, income, and expenses, with the bankruptcy court. Unlike Chapter 7, where a trustee is appointed to liquidate assets, the debtor proposes a repayment plan to the court in Chapter 13.

Within 14 days of filing for Chapter 13 bankruptcy, debtors must submit a proposed repayment plan to the court for approval. The plan outlines how the debtor will repay creditors over a period of three to five years. Priority debts, such as mortgage arrears, taxes, and domestic support obligations, must be paid in full, while unsecured debts may be paid in part or in full, depending on the debtor’s disposable income.

After the repayment plan is filed, the bankruptcy court schedules a confirmation hearing to review and approve the plan. Creditors have the opportunity to object to the plan, but if it meets the requirements of the Bankruptcy Code and is feasible, the court will confirm it.

Once the repayment plan is confirmed, a trustee is appointed to oversee the implementation of the plan. Debtors make monthly payments to the trustee, who then distributes the funds to creditors according to the terms of the plan.

Debtors must adhere to the terms of the repayment plan for the entire duration of the plan, typically three to five years. Upon completion of all plan payments, any remaining eligible debts are discharged, providing the debtor with a fresh financial start.

Benefits of Chapter 13 Bankruptcy

#1 Foreclosure and Repossession Prevention

Chapter 13 allows debtors to stop foreclosure proceedings and catch up on missed mortgage payments over time, helping them avoid losing their homes.

#2 Debt Consolidation

Chapter 13 consolidates debts into a single monthly payment, making it easier for debtors to manage their finances.

#3 Protection of Non-Exempt Assets

Unlike Chapter 7, where non-exempt assets may be liquidated, Chapter 13 allows debtors to retain their property while repaying creditors.

Overall, Chapter 13 bankruptcy offers individuals a structured path to debt relief while allowing them to retain their assets and achieve financial stability over time. Navigating the complexities of Chapter 13 bankruptcy requires careful planning and the guidance of a knowledgeable bankruptcy attorney. Before you file bankruptcy, either Chapter 7 or Chapter 13, you’ll want to speak to an AZ bankruptcy lawyer on our team.

Determining Which Type Is Best for You

Your income level, reliability of wages, and amount of debts should be the primary considerations when deciding how to file. Those without steady employment or whose income is significantly less than the sum of their debts may choose to consider Chapter 7. This method will allow your creditors to be paid quickly by using what you have currently in your possession, excluding the assets you’d need to live and work. Chapter 13 is the better option for those whose income to debt ratio is low, as it allows them to manage their debts without foregoing their possessions.

If you have questions about which type of bankruptcy best fits your situation, contact us today. We are experienced Phoenix bankruptcy attorneys dedicated to finding the best solution for you.

Phoenix, AZ, Foreclosure Defense

Foreclosure defense can be a critical component of filing for bankruptcy, especially in cases where homeowners are at risk of losing their homes due to mortgage default. Bankruptcy, particularly Chapter 13 bankruptcy, offers homeowners powerful tools to halt foreclosure proceedings and protect their homes. Here’s how foreclosure defense intersects with filing for bankruptcy:

Automatic Stay

One of the most immediate benefits of filing for bankruptcy, whether it’s Chapter 7 or Chapter 13, is the automatic stay. Upon filing for bankruptcy, an automatic stay goes into effect, halting all collection activities, including foreclosure proceedings. This provides immediate relief to homeowners facing imminent foreclosure, giving them time to explore their options and devise a plan to address their mortgage arrears.

Chapter 13 Repayment Plan

Chapter 13 bankruptcy offers homeowners a structured repayment plan that allows them to catch up on missed mortgage payments over a period of three to five years. By proposing a repayment plan to the bankruptcy court, homeowners can stop foreclosure and keep their homes while repaying their mortgage arrears in manageable installments. This provides a viable alternative to foreclosure and allows homeowners to retain their most valuable asset.

Loan Modification

Filing for Chapter 13 bankruptcy can create an opportunity for homeowners to negotiate a loan modification with their mortgage lender. Through the bankruptcy process, homeowners and lenders may be more inclined to negotiate favorable loan modification terms, such as lower interest rates, extended repayment periods, or principal reduction, to facilitate the successful completion of a Chapter 13 repayment plan.

Asset Protection

In addition to halting foreclosure proceedings, bankruptcy offers homeowners certain exemptions to protect their home equity and other assets from liquidation. Chapter 13 bankruptcy allows homeowners to retain their property while repaying debts, thus safeguarding their home from seizure by creditors. By strategically utilizing bankruptcy exemptions, homeowners can preserve their homes and other assets.

The Importance of Legal Representation From Arizona Lawyers in Foreclosure Defense

Those in overwhelming debt are often also facing foreclosure. Foreclosure defense within the context of bankruptcy often requires skilled legal representation. Experienced bankruptcy attorneys can assess a homeowner’s financial situation, evaluate available defenses against foreclosure, and develop a comprehensive strategy to protect their home. Attorneys can also represent homeowners in bankruptcy court, negotiate with lenders, and advocate for their rights throughout the foreclosure defense process.

Foreclosure defense provides homeowners with powerful tools to stop foreclosure, protect their homes, and regain financial stability. By leveraging the automatic stay, Chapter 13 repayment plans, loan modifications, asset protection measures, and skilled legal representation, homeowners can navigate the complexities of bankruptcy and foreclosure defense to secure a brighter financial future.

The Benefits of Working with a Bankruptcy Lawyer

Declaring bankruptcy is a difficult decision, but it can be the best option for some people. When you decide to declare bankruptcy, it’s important to choose the right lawyer to help you through the process. Here are some of the benefits of working with a bankruptcy lawyer in Phoenix.

• They can help you navigate the bankruptcy process: The bankruptcy process is complicated, and a lawyer can help you understand it and make sure you’re taking the right steps.
• They can help you protect your assets: A lawyer can help you figure out which assets you can keep and which ones you’ll need to surrender in bankruptcy. This is an important consideration, as you don’t want to lose more than you have to.
• They can help you rebuild your credit: After bankruptcy, you’ll need to start rebuilding your credit. A lawyer can help you understand how to do this and what steps you need to take.
• They can give you peace of mind: Dealing with bankruptcy can be stressful. A lawyer can help reduce your stress by handling everything for you and keeping you informed throughout the process.
• They can help you get a fresh start: Bankruptcy can be a new beginning. A lawyer can help you start over and make sure you’re on the right track.

Contact Our Debt Relief Lawyers Today

Is it time for a fresh start? We know this is a difficult time for you, and a Phoenix bankruptcy attorney is here to make it as easy as possible. As leading bankruptcy attorneys in Arizona, EZ Legal Fees by WantAFreshStart is dedicated to helping you take back control of your life by managing your debt, whether through a payment plan or filing bankruptcy if appropriate. We can help you understand the options available to you. Contact us today to begin.