Chapter 7 Bankruptcy FAQs

Lerner & Rowe Law Group

What Is a Chapter 7 Bankruptcy and How Does It Work?


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Our team of qualified Phoenix bankruptcy lawyers can help guide you through the Chapter 7 bankruptcy process.

A chapter 7 bankruptcy is a proceeding under the federal law in which the debtor seeks relief. Chapter 7 bankruptcy deals with liquidation. The term debtor refers to a person who files a chapter 7 case. In a chapter 7 bankruptcy, the debtor must turn in his or her nonexempt property, if any exists, over to a trustee.  The trustee then converts the property to cash and pays the debtor’s creditors. In return, the debtor receives a chapter 7 discharge, granted approximately 90 to 120 days after the chapter 7 bankruptcy is filed by your Phoenix bankruptcy lawyer.

What is a chapter 7 discharge?

A chapter 7 discharge is a court order releasing a debtor from personal liability on dischargeable debts and ordering the creditors not to attempt to collect them from the debtor. Most taxes, back alimony, and child support are not eligible for discharge in a chapter 7. Secured creditors (i.e. houses and vehicles) must be paid if the debtors want to keep or retain the car or house.

How do I know I am able to file a chapter 7 bankruptcy?

Any person who resides, or does business in, or has property here in the state of Arizona can file a chapter 7 bankruptcy; except a person who has filed a chapter 7 bankruptcy in the last 8 years. The law only allows you to file a chapter 7 bankruptcy once every 8 years. Additionally, to qualify for a chapter 7 bankruptcy relief, a person must go under a process called means testing.

What is means testing?

Means testing is a method of determining a person’s eligibility to qualify for a Chapter 7 bankruptcy. Under means testing, with experienced Phoenix bankruptcy lawyers, a person whose current monthly income from all sources multiplied by 12 exceeds the median annual income for the person’s state and family size, cannot file for a chapter 7. A person who is above the median must file for a chapter 13, if there is disposable monthly income available to be able to fund the chapter 13 repayment plan. Experienced Phoenix bankruptcy lawyers will help determine if Chapter 7 is available for you.

May a husband and wife file joint under a chapter 7 bankruptcy?

Yes. A husband and wife may file a joint chapter 7 bankruptcy case. In the event of a joint chapter 7 case, only one set of bankruptcy forms is necessary. The couple will only have to pay one filing fee. Both parties, the husband and his wife, must complete the required credit counseling before filing the case. Additionally, after filing the case, both must take and finish the required financial management course. A husband and wife should file a joint chapter 7 bankruptcy if both of them are liable for significant dischargeable debts. If both spouses are liable for a substantial debt and only one spouse files under chapter 7 bankruptcy, creditors may later attempt to collect the debt from the non-filing spouse. The advice of an experienced Phoenix bankruptcy lawyer is essential in determining whether both spouses should file.

Reach Out to the Top Bankruptcy Lawyers in Phoenix

Filing for Chapter 7 bankruptcy can be a confusing process. This is why it is in your best interests to have a team of qualified Phoenix bankruptcy lawyers to guide you through the process. Lerner and Rowe Law Group has the bankruptcy lawyers to help you determine if bankruptcy, and what type, is right for you. Reach out to us, anytime 24/7, by dialing 602-667-7777. You can stop by our offices Monday-Friday, 8am to 5pm. Or check out our convenient LiveChat feature on our website to start the process. We will give a free initial consultation and have flexible payment options available after we’ve successfully won your case. So don’t hesitate. Contact us today!

The information on this blog is for general information purposes only. Nothing herein should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.