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About Chapter 7 Bankruptcy
Chapter 7 is typically called the “Liquidation Bankruptcy” because in it the Bankruptcy Trustee takes all of the debtor’s non-exempt assets and ‘liquidates’ them – i.e. sells them for the benefit of the creditors. THE TRUSTEE DOES NOT TAKE ALL OF YOUR ‘STUFF’ IN A CHAPTER 7. The key word is ‘non-exempt’ assets – essentially everything the Arizona legislature has deemed not absolutely necessary in order to lead a productive live. Arizona has pretty generous exemptions, and most of my clients find that they do not own anything that is ‘not exempt’ – therefore, the trustee does not take anything from them.
Chapter 7 bankruptcy is a quick process of about 4 – 6 months in a typical case, and at the end all of your dischargeable debt is discharged, and the creditor can never ask you to pay them again. However, Chapter 7 is not for everyone…. if you have the ability to pay back some of your debts, the law may find that you do not qualify for Chapter 7 relief.
Whether one qualifies for Chapter 7 relief is determined by the means test… Now, this sounds like a simple test, and there are some websites out there that lead you to believe that once you fill out their online questionnaire you will find out whether or not you qualify. It is not that simple! Sure, the first step is simple enough: You take your last 6 months of income times two, and compare it with the median household income for a household of your size, in your county, as determined by the IRS.
Yes, that was the simple first step…. it only gets more complicated from there. Too many mistakes are made in this important first part of a bankruptcy filing, and we strongly recommend that even if you decide not to hire Marco Injury Law in Mesa Arizona for whatever reason, do hire a knowledgeable Mesa chapter 7 bankruptcy attorney to walk you through the process.
Chapter 7 Bankruptcy – Process Overview
1. Schedule a free consultation with Andrea to discuss which Chapter is right for you.
2. Work with Andrea and Steve in preparing your petition, schedules and statements.
3. Take “Credit Counseling” class with one of the accredited agencies, online, over the phone, or in person.
4. Review a daft of your petition and schedule a signing appointment.
5. Review and sign your petition, schedules and statements with Steve and Andrea.
6. Your petition is filed. ALL of your creditors MUST stop contacting you.
7. Andrea lets you know the date and time of your creditors meeting.
8. The trustee assigned to your case sends you a letter requesting additional information from you.
9. Your creditors meeting takes place approximately 30 days after your petition was filed.
10. Take “Financial Management” class with one of the accredited agencies, online, over the phone, or in person.
11. Your discharge is entered approximately 90 days after your creditors meeting.
12. Your case is closed approximately 4 – 6 months after your petition was filed.