The solution for people with insurmountable debt
If you are considering filing for Chapter 7 bankruptcy in Phoenix AZ, the attorneys at the Frutkin Law Firm, PLC, can help explain the process, its implications, and possible alternatives. As perhaps the most common type of bankruptcy filed in the U.S., Chapter 7 entails the liquidation of all nonexempt assets and the transfer of all funds from liquidation to creditors. With Chapter 7, the goal is not repayment of debt, but its complete discharge.
Chapter 7 Bankruptcy in Phoenix, Arizona: The process
The process of filing for Chapter 7 in Phoenix is fairly straightforward. Since The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, all bankruptcy petitioners must take a means test to determine whether or not they are eligible to file for Chapter 7 bankruptcy. The means test compares your personal income with the median Arizona income. If you are below the median Arizona income, you are eligible for Chapter 7; if you are above the median income, other factors such as expenses will be taken into consideration. If, after the means test, you are deemed not eligible for Chapter 7, you will have to file for Chapter 13 bankruptcy.
If you qualify for Chapter 7 under the rules of the means test, you are allowed to file your petition. After a petition is filed, the court appoints a trustee who will be responsible for handling your case, liquidating your non-exempt assets, and distributing the proceeds from sales to creditors.
Then, you must attend a 341 hearing, where a trustee questions you about your property and debts under oath. Creditors can attend this hearing, though most do not.
Exempt property in Arizona
In Chapter 7 filings, 97% of filers do not lose any assets at all. Arizona law provides exemptions from bankruptcy even when your debts are completely eliminated. You are allowed to keep items such as:
- Homestead exemption up to $150,000
- Household furniture, furnishings, and appliances, up to $4,000
- Motor vehicle, up to $5,000 ($10,000 if disabled)
- Retirement funds
- Engagement and wedding rings, up to $1,000
- Books and personal documents, up to $250
The attorneys at the Frutkin Law Firm, PLC, can help you through the complicated process of filing Chapter 7 in Phoenix. We treat our clients with respect and honor their privacy. Our lawyers can help you through the complicated process of filing for Chapter 7 in Phoenix.