Yavapai County Bankruptcy Attorney

Bankruptcy is a federal court matter designed to assist with both debt elimination and debt repayment.

There are typically two types of bankruptcy, Chapter 7 and Chapter 13. There is also Chapter 11 which is a good for debtors who are a business. Chapter 11 allows debtors to seek an adjustment of their debts by reducing the amount owed, or a time extension for repayment. If the organization has several layers of debt, the court may order a complete reorganization of debts and a more comprehensive repayment plan. Chapter 11 allows businesses to stay in business while paying their debts.

Arizona Chapter 7 allows for an individual to get a fresh start. It liquidates nonexempt property and then distributes the liquid assets to creditors.

Chapter 13 allows a person to get onto a manageable plan of repayment. Chapter 13 assumes that the person filing has an income and assets that would allow for repayment without sacrificing their quality of life. Chapter 13 typically lasts 3-5 years and within that time frame, if all debts are not paid off, the court may revisit the case and discharge what is left.

CHAPTER 7 BANKRUPTCY

When filing for Chapter 7 bankruptcy in Yavapai County, there will be no repayment plan. Instead, your non-exempt property will be gathered and liquidated to pay creditors’ claims.

To qualify for Chapter 7 in Yavapai County,
“…the debtor may be an individual, a partnership, or a corporation or other business entity. 11 U.S.C. §§ 101(41), 109(b). Subject to the means test described above for individual debtors, relief is available under chapter 7 irrespective of the amount of the debtor’s debts or whether the debtor is solvent or insolvent. An individual cannot file under chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 7 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.” [1]

What is Non-Exempt Property in Yavapai County, Arizona?

  1. Homestead – Interest in real property upon which debtor’s house sits, condominium or cooperative, mobile home, or mobile home in which debtor resides plus the land upon which the mobile home is located in the amount of $150,000. May not be doubled by husband and wife. A.R.S. § 33-1101PERSONAL PROPERTY Husband and wife may double all personal property exemptions
  2. Personal Property – Household furniture and furnishings, household goods, including consumer electronic devices, and household appliances personally used by the debtor or a dependent of a debtor and not otherwise specifically prescribed in this chapter in an amount not greater than $6,000 (total fair market value). A.R.S. § 33-1123
  3.  All food, fuel and provisions for debtor’s individual or family use to last up to six months. A.R.S. § 33-1124
  4. All wearing apparel used primarily for personal, family or household purposes with a fair market value not greater than $500. A.R.S. § 33-1125(1)
  5. All musical instruments for debtor’s individual or family use with a total fair market value not greater than $400. A.R.S. § 33-1125(2)
  6. Domestic pets, horses, milk cows and poultry with a fair market value not greater than $500. A.R.S. § 33-1125(3)
  7. All engagement and wedding rings with a total fair market value not greater than $2,000. A.R.S. § 33-1125(4)
  8. Debtor’s library, including books, manuals, published materials and personal documents with a fair market value not greater than $250. A.R.S. § 33-1125(5)
  9. One watch with a fair market value not greater than $150. A.R.S. § 33-1125(6)
  10. One typewriter, one computer, one bicycle, one sewing machine, a family bible, a burial plot, one shotgun or one rifle or one pistol, with a total fair market value not greater than $1,000. A.R.S. § 33-1125(7)
  11. Equity in one car not greater than $6,000. If debtor (or debtor’s dependent) is physically disabled, the fair market value of the motor vehicle must not be greater than $12,000. (Equity is the fair market value of the motor vehicle minus debt to secured creditor). A.R.S. § 33-1125(8)
  12. Professional prescribed prostheses for debtor or a dependent of the debtor, including a wheelchair. A.R.S. § 33-1125(9)MONEY, BENEFITS OR PROCEEDS
  13. Life insurance proceeds not greater than $20,000 if payable to surviving spouse or child upon the life of a deceased spouse, parent or legal guardian. A.R.S. § 33- 1126(A)(1)
  14. Minor child’s earnings unless debt to be discharged was contracted for the special benefit of the minor child. A.R.S. § 33- 1126(A)(2)
  15. Child support or spousal maintenance received pursuant to a court order. A.R.S. § 33- 1126(A)(3)
  16. All money, proceeds or benefits from employer health, accident, disability insurance benefits or similar employer benefit program. A.R.S. § 33- 1126(A)(4)
  17. All proceeds from destruction of or damage to exempt property and all proceeds or benefits arising from fire or other insurance on exempt property. A.R.S. § 33- 1126(A)(5)
  18. Cash surrender value of life insurance policies where for a continuous unexpired period of two years such policies have been owned by a debtor and have named as beneficiary the debtor’s surviving spouse, child, parent, brother or sister, or any other dependent family member, except for the amount of any premium that is avoidable by a creditor as a fraudulent transfer. A.R.S. § 33- 1126(A)(6) and A.R.S. § 20- 1131(D)
  19. An annuity contract where for a continuous unexpired period of two years such contract has been owned by a debtor and has named as beneficiary the debtor, debtor’s surviving spouse, child, parent, brother or sister, or any other dependent family member, except for the amount of any premium that is avoidable by a creditor as a fraudulent transfer. A.R.S. § 33- 1126(A)(7)
  20. Any claim for damages for levy upon or sale under execution of exempt personal property or for wrongful taking or detention of exempt personal property. Does not apply to annuities, nor to cash surrender values increased by premium payments made within two years in excess of the average annual premium paid during the previous three years. A.R.S. § 33- 1126(A)(8)
  21. Bank deposit not to exceed $300. This sum is not exempt from normal service charges assessed by the bank holding the funds. A.R.S. § 33- 1126(A)(9)
  22. Benefits from ERISA-qualified retirement plan or deferred compensation plan except those amounts contributed within 120 days before a debtor files for bankruptcy. Does not apply to an alternate payee under a qualified domestic relations order. Does not apply to assets of bankruptcy proceedings filed before July 1, 1987. Not exempt from orders resulting from a judgment for child support arrearages or child support debt. A.R.S. § 33- 1126(B)
  23. Prepaid rent, including security deposits as provided in § 33-1321(A) for debtor’s residence, not exceeding the lesser of $2,000 where debtor has not claimed a homestead exemption. Not exempt from orders resulting from a judgment for child support arrearages or child support debt. A.R.S. § 33- 1126(C)
  24. Group life insurance policy or proceeds. A.R.S. § 20-1132SCHOOL EQUIPMENT
  25. Library and philosophical and chemical or other apparatus used for instruction of youth in any university, college, seminary of learning, or school. A.R.S. § 33-1127FIRE FIGHTING EQUIPMENT
  26. All fire engines, hooks and ladders, with the carts, trucks, carriages, hose, buckets, implements and apparatus, all furniture and uniforms of any fire company or department formed under Arizona law. A.R.S. § 33-1128PUBLIC PROPERTY
  27. All court houses, jails, public offices, buildings, lots, grounds and personal property, the fixtures, furniture, books and papers and appurtenances belonging and pertaining to the jail and public offices belonging to any county or any city of this state and all cemeteries, public squares, parks and places, public buildings, town halls, markets, buildings for the use of fire departments and military organizations, and the lots and grounds thereto belonging and appertaining, owned or held by any town or city or dedicated by such town or city to health, ornament or public use, or for the use of any fire or military company organized under Arizona law. A.R.S. § 33-1129

For the entire list, download the PDF.

CHAPTER 13 BANKRUPTCY

Arizona Chapter 13 Bankruptcy is for those people whom have a steady income and can pay back debtors. The court has a formula that offsets income to expenses and takes the disposable income to pay back debtors.  The time allowed to repay debtors is dependent  on income level relative to the debts owed.  Filing Chapter 13 stops creditor harassment.

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.

[1] http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics