Financial hardship can make it difficult to keep up with mortgage payments, credit card balances, medical bills, personal loans, and other debts. If you are struggling to stay current, a Tucson chapter 7 bankruptcy lawyer from Lerner and Rowe Law Group can help you understand whether chapter 7 may provide a path toward a fresh financial start.
To get your free consultation and the help you need to take back control of your debt, give our Tucson bankruptcy team a call.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is sometimes called liquidation bankruptcy because a bankruptcy trustee may sell certain nonexempt property and use the proceeds to pay creditors. However, bankruptcy exemptions can protect certain property from liquidation.
The U.S. Bankruptcy Court for the District of Arizona explains that exemptions may allow a debtor to keep property such as a home, vehicle, clothing, and household items, depending on the circumstances of the case.
One of the primary purposes of chapter 7 is to provide eligible individual debtors with a discharge of qualifying debts. Dischargeable debts can include certain unsecured obligations, although some debts are not eligible for discharge under federal bankruptcy law. A discharge also does not necessarily eliminate a valid lien against property.
Who Can File Chapter 7 Bankruptcy?
Not everyone automatically qualifies for chapter 7. Individual debtors may need to complete a means test when their income exceeds the applicable Arizona median income for their household size and their debts are primarily consumer debts. The means test evaluates income and certain permitted expenses to determine whether the filing is presumed to be an abuse of chapter 7.
Other eligibility requirements and filing rules can also apply. For example, individuals generally must complete credit counseling from an approved provider within the required period before filing.
Because eligibility can depend on your income, household, debts, previous bankruptcy filings, and other circumstances, reviewing your situation with an Arizona bankruptcy lawyer before filing may help you understand your options.
How a Tucson Chapter 7 Bankruptcy Lawyer Can Help
Filing for bankruptcy involves detailed forms, financial disclosures, deadlines, and court procedures. A Tucson chapter 7 bankruptcy lawyer can help you understand the process and prepare the information needed for your case.
Your attorney may assist with:
- Reviewing your debts, income, expenses, and assets
- Explaining chapter 7 eligibility and the means test
- Identifying potentially applicable bankruptcy exemptions
- Preparing and reviewing bankruptcy paperwork
- Explaining what property may be at risk
- Preparing you for the meeting of creditors
- Helping you understand which debts may or may not be discharged
- Communicating with creditors and addressing collection issues
- Guiding you through required bankruptcy courses and other case requirements
The District of Arizona Bankruptcy Court maintains a Tucson division and provides chapter 7 forms and filing information for individuals. The court also operates a Self-Help Center in Tucson for people considering or already involved in bankruptcy proceedings.
Chapter 7 Bankruptcy and Arizona Exemptions
Understanding exemptions is an important part of preparing a chapter 7 case. Exemptions determine what property may be protected from liquidation under applicable Arizona law. The District of Arizona specifically directs debtors to Arizona’s exemption provisions under Title 33, Chapter 8.
Exemptions can apply to different types of property, but the amount and requirements depend on the particular exemption and your circumstances. You must properly identify property you are claiming as exempt on the appropriate bankruptcy schedules. The court warns that exemptions are not automatic and that property should be properly listed.
What Happens after Filing Chapter 7?
Once a chapter 7 case is filed, the bankruptcy process continues through several important steps. A trustee is appointed to administer the bankruptcy estate, and the debtor generally must attend a meeting of creditors. The debtor must also complete a required financial management course before a discharge can be entered.
The automatic stay that generally takes effect when a bankruptcy case is filed can provide protection from many collection actions while the case is pending. However, exceptions and procedures for obtaining relief from the stay can apply, so debtors should understand what protections apply to their individual circumstances.
Frequently Asked Questions
Chapter 7 can discharge many qualifying debts, but certain obligations are generally not dischargeable, including some tax debts, domestic support obligations, certain fines and penalties, and some debts arising from fraud or intentional wrongdoing.
Not necessarily. Bankruptcy exemptions may protect certain property, but whether your home, vehicle, or other assets are protected depends on factors such as equity, applicable exemptions, and the circumstances of your case.
The means test is used to determine whether certain individual consumer debtors with income above the applicable state median are presumed to be abusing chapter 7. The calculation considers income, permitted expenses, and certain debt obligations.
The timeline varies depending on the circumstances of the case, including whether there are assets to administer, creditor objections, or other complications. Your Pima County bankruptcy attorney can explain the anticipated timeline after reviewing your situation.
Filing bankruptcy generally triggers an automatic stay that prevents many collection actions. However, the stay has exceptions and creditors can sometimes seek permission from the bankruptcy court to continue certain actions.
Contact a Tucson Chapter 7 Bankruptcy Lawyer Today
If overwhelming debt has made it difficult to keep up with your financial obligations, Lerner and Rowe Law Group can help you determine if filing for chapter 7 bankruptcy protection is the right choice for you.
If you are facing foreclosure, struggling with overwhelming debt, and want to learn more about your debt relief options. Contact Lerner and Rowe Law Group to schedule a free, no obligation consultation with a Tucson bankruptcy lawyer by calling (520) 620-6200, filling out your contact form, or using LiveChat now.