Chapter 7 bankruptcy is the most common bankruptcy filing in Arizona. Another key point, Arizona Chapter 7 bankruptcy protection allows debtors to keep exempt and essential assets and property while eliminating dischargable debt. Also, a means test indicates who is eligible to file Chapter 7.
Considering filing bankruptcy? Call our law firm about the zero down program. Especially, if your decision includes needing an attorney, but you don’t have the means to pay for the legal fees up front (which a filing of a bankruptcy will require). Furthermore, if you cannot afford to pay the legal fees up front, be sure to call 480-833-8000 to find out if you qualify for the $0 down program.
A petitioner filing Chapter 13 reorganizes debt and develops a debt repayment plan. In addition, the case is overseen by a bankruptcy trustee. Given these points, Chapter 13 is beneficial for Arizona residents who do not qualify for Chapter 7, or who wish to keep all of most of their property.
ARIZONA BANKRUPTCY CODE
Understanding bankruptcy is an important step to determining if bankruptcy is the right choice to eliminate your debt, and it can help you decide which chapter to file. For example, when individuals or businesses owe more debt than they can pay, bankruptcy laws and rules assist with debt relief. The filing of bankruptcy cases occur in a bankruptcy court; a federal court. In addition, the federal laws that govern bankruptcy cases allow for debtors to liquidate assets to pay debt, or create a repayment plan to reorganize debt and pay back creditors over time.
Arizona bankruptcy laws offer certain protections to debtors who are needing to eliminate debt through reorganization or liquidation. The bankruptcy code, called Title 11 of the United States Code, details these procedures. Furthermore, the bankruptcy code is a uniform federal law that oversees all bankruptcy cases. In addition, it has been amended several times since it’s original completion. In fact, the filing of most bankruptcies in the bankruptcy code fall under Chapter 7, Chapter 11, and Chapter 13. Also, when filing for bankruptcy it must occur in a federal bankruptcy court (not a state court). In fact, the bankruptcy law’s main purpose is to give a debtor a fresh start. In providing a fresh start, a bankruptcy relieves the debtor of most debts and/or the debtor pays creditors back through available properties that can be used for payment.
BANKRUPTCY PETITION AND AUTOMATIC STAY
A bankruptcy case either involves liquidation of property, or establishes a plan to repay creditors. Typically, to begin a case, the debtor files a petition with the bankruptcy court. Statements are also filed that list liabilities, income, assets, the name(s) of creditor(s), and the amount of debt owed. One of the provisions of the bankruptcy law is the automatic stay. Upon filing of a petition, all debt collection attempts must stop. Filing bankruptcy “stays,” or prevents debt collection actions by creditors for payment or property. When the automatic stay is in effect, a creditor may not garnish wages, bring about or continue a lawsuit, or contact the debtor. This includes phone calls demanding payment or making harassing threats to get a payment.
When a bankruptcy petition is filed, creditors listed on the paperwork receive a notice from the court that a bankruptcy was filed by the debtor. When a bankruptcy involves liquidation of property and assets, there may not be much money available to pay creditors. In these cases, normally the debtor is given a bankruptcy discharge. If a discharge is granted, a debtor is no longer personally liable for repaying debt. It is possible for disputes to arise, and in some cases, litigation in the bankruptcy court – proceedings, settlement efforts, or a trial is necessary.
CHAPTER 7 BANKRUPTCY
Chapter 7 is the most common chapter of bankruptcy filed in Arizona. The bankruptcy laws and the Arizona bankruptcy code were designed to give Arizona residents a fresh start by eliminating debt. Chapter 7 bankruptcy is the most frequently filed because it allows debtors to keep exempt and essential assets and property while wiping out overwhelming, dischargable debt.
If you are considering bankruptcy, you should understand the process, and explore all your options for the best method of debt relief. An attorney at My AZ Lawyers will not only guide you through the process from beginning to end, but also explain the different aspects of the law. Our experienced Arizona Bankruptcy attorneys will answer your questions and concerns and give you the information you need to successfully get you out of debt.
BANKRUPTCY COURTS IN ARIZONA
For each judicial district in Arizona, there is a bankruptcy court. In Arizona, the bankruptcy courts are located in:
- Phoenix – US Bankruptcy Court 230 N 1st Ave, Ste 101 Phoenix, AZ 85003
- Tucson – US Bankruptcy Court 38 S Scott Ave Tucson, AZ 85701
- Yuma – US Bankruptcy Court 98 W 1st St, 2nd Floor Yuma, AZ 85364
- Flagstaff – U.S. Magistrate Courtroom, AWD Building, 123 North San Francisco Street, Flagstaff, AZ 86001
- Bullhead City -Mohave County Superior Court, 2225 Trane Road, Courtroom R, Bullhead City, AZ 86442
A United States bankruptcy judge presides over the bankruptcy cases. This judge has the power to make decisions over all matters concerning federal bankruptcy cases.
LIQUIDATION BANKRUPTCY – CHAPTER 7
Chapter 7 bankruptcy is also known as a liquidation bankruptcy. This is a court-supervised process involving a trustee. The court appoints a trustee to take over the case. Furthermore, the trustee oversees the case by taking over assets, reducing them to cash (liquidating assets), and distributes owed debt to creditors. In many Chapter 7 cases, there are little or now nonexempt property and assets. This means there may not be any actual liquidation of assets. In the case of a no-asset bankruptcy, an individual will receive a discharge. A discharge is the release from all personal liability for dischargable debts. In other words, the debt listed in the bankruptcy is forgiven, eliminated, or discharged.
CHAPTER 7 BANKRUPTCY DISCHARGE
A Chapter 7 bankruptcy discharge can be granted in a few months after filing the petition. A bankruptcy discharge is a permanent order stating the debtor is no longer legally required to pay back debt listed in the case. Therefore, a discharge prohibits a creditor from taking action to collect on any debts that were eliminated in the bankruptcy. In addition, a creditor may not communicate in any way or take legal action to collect debt. The discharge is given in Chapter 7 cases approximately four months after the date of the petition filing. There is also an amount of time where a creditor can object to the discharge, and when this period ends without a motion to dismiss the case, the discharge is granted.
All debts cannot be discharged. The most common types of debt that may not be discharged include
- certain types of tax debt
- alimony debt
- child support debt
- debts due to malicious or willful injuries to a property or person
- debts from fines or penalties to governmental units
- student loan debt
- debts resulting from personal injury caused by operating a vehicle while intoxicated
Additionally, a discharge is not automatically granted just because the process is completed. A creditor, a trustee may file an objection. Meaning, a creditor may file a complaint before a deadline date. The bankruptcy code describes the reasons a discharge may be denied. For example, not providing the proper documentation, failure to complete the required credit counseling / financial management course, or covering up property with intent to defraud. A Chapter 13 bankruptcy case is a bit different. Normally the debtor is entitled a discharge when the payments under the plan are completed.
PROVISIONS OF THE BANKRUPTCY CODE
Under the provisions of the bankruptcy code, a bankruptcy trustee collects and sells any nonexempt assets and property. The trustee then uses these proceeds to pay creditors. The Bankruptcy Code outlines property exemptions. Certain exempt property may not be taken and sold by the trustee in a Chapter 7 bankruptcy. The trustee will liquidate any remaining assets that are not exempt. If you have any property that does not fall under the Arizona exemption law, you may lose this property in a Chapter 7 bankruptcy.
Chapter 7 bankruptcy may not be the answer for debt relief for everyone. First of all, you need to qualify to file Chapter 7. Under the Bankruptcy Code, a person must pass a means test to be eligible.
Filing for Chapter 7 bankruptcy in Tucson, Arizona
The primary purpose of a Chapter 7 bankruptcy is to eliminate certain kinds of debt. The bankruptcy court must receive a case filing and administrative fees in order to file a bankruptcy petition. Next, a filer must complete official bankruptcy forms. These forms include the petition to file, schedules, and statement of debt/financial affairs. The filer should also include and provide the following paperwork:
- debtor’s income: amount, source, and frequency of income
- list of creditors, how much is owed to each creditor, and the nature of the debt to each creditor
- detailed report of monthly living expenses
- list of the debtor’s property
One of the schedules the filer must file is that of exempt property. According to the Bankruptcy Code, some property is protected, or exempt, from creditors. However, Arizona has adopted its own exemption law. Filing a bankruptcy petition under Chapter 7 puts the automatic stay into effect immediately. The stay is effective to protect a debtor from collection activity from a creditor. Furthermore, the bankruptcy court appoints a trustee to administer the bankruptcy case, and to carry out the liquidation of the non-exempt assets.
Because of the complexity of the Bankruptcy Code, it is wise to consult with an attorney who can evaluate your debt, listen to your needs, and look at your property/assets.
MY AZ LAWYERS TUCSON BANKRUPTCY ATTORNEYS CAN HELP
Bankruptcy is a matter in which experience matters. My AZ Lawyers Tucson Bankruptcy attorneys have helped Arizona residents get out of debt and get the fresh start as detailed in the Federal Bankruptcy Code. The goal of the bankruptcy laws are to give debtors a clean slate — to erase debt in order to better get back on their feet. In this case, the goal of My AZ Lawyers is to use the power and protection of the US Bankruptcy Code and the Arizona bankruptcy law to provide the best possible legal representation for your bankruptcy case.
Tucson residents are no exception to the many Americans across the nation feeling the hurt of the economy, loss of job, or unexpected life tragedies that create debt that spirals out of control. If you are feeling anxiety, concern, stress, or fear about filing for bankruptcy, or even discussing your financial issues, no worries. Our team of debt relief experts will answer your questions and help you every step of the way. Filing for bankruptcy is a process that is somewhat complex. We will help you file the petition, complete the required paperwork, advise you of your options, and accompany you to the 341 court hearing. As well as, we will give you our best legal representation and advice so that you will feel comfortable, not stressed, about getting yourself on the road to a new beginning — debt free.