Bankruptcy provides individuals and married couples with financial relief when facing overwhelming debt. In Phoenix, as in the rest of the United States, there are specific wage limits associated with filing for bankruptcy, and these limits depend on the type of bankruptcy you are considering.
The following is some brief information about wage limits to qualify for bankruptcy filings. To discuss your specific situation and options, speak with our Phoenix bankruptcy attorney today.
The means test is a crucial factor in determining eligibility for Chapter 7 bankruptcy, the most common type. It evaluates your income and expenses to assess whether you have the financial means to repay your debts.
The means test compares your household income to the median income for a household of your size in Arizona. If your income is below the state median, you likely qualify for Chapter 7 bankruptcy. Certain expenses and deductions are considered in the means test, allowing individuals with higher incomes to potentially qualify.
Chapter 13 bankruptcy involves creating a repayment plan to gradually pay off debts over a period of three to five years. Unlike Chapter 7, Chapter 13 does not have a strict means test based on the Arizona median income to qualify to file. Instead, it focuses on disposable income—the amount left after deducting necessary living expenses from your income.
If you have a consistent income and can demonstrate the ability to meet the repayment plan requirements, you may qualify for Chapter 13 bankruptcy. While Chapter 7 is not available if you have too much income, the court wants to ensure that you have enough income to complete the Chapter 13 process. This is why Chapter 13 is often referred to as the “wage-earner’s bankruptcy.”
Bankruptcy laws can be complex, and consulting with an experienced bankruptcy attorney in Phoenix is highly recommended. They can help you navigate the specific rules and regulations, ensuring you make informed decisions.
Understanding allowable exemptions and deductions is crucial in accurately assessing your eligibility for bankruptcy. If you miss an exemption, the bankruptcy court will not apply it for you. You must present accurate and complete information upfront that properly represents your wages, deductions, and more, so you can prove you qualify for the type of bankruptcy that will benefit you most.
Always seek assistance from a bankruptcy attorney if you are considering a case.
Bankruptcy laws are designed to provide relief to individuals facing financial hardship, and the wage limits associated with filing for bankruptcy in Phoenix depend on various factors. If you earn too much to qualify for Chapter 7, filing under Chapter 13 is always an option. Never overlook other options for financial relief simply because you did not initially qualify for one type of bankruptcy.
It’s crucial to seek the guidance of our knowledgeable Phoenix bankruptcy attorneys from Want a Fresh Start who can assess your unique financial situation and guide you through the appropriate bankruptcy process. Contact us for your free consultation today.