Chapter 7 Bankruptcy Lawyers in Phoenix
Do you need freedom from crushing debt? Is your income too low to make monthly payments on personal loans, credit card debt, medical bills, and more? Congress created Chapter 7 of the U.S. Bankruptcy Code to allow struggling debtors to obtain a fresh financial start. It is the fastest and most common form of bankruptcy filed each year, but not everyone will qualify, and not everyone will reap the same benefits.
At The Gavel, our job is to assess your financial crisis and determine whether Chapter 7 is the solution you need. We will consider your income, type and level of debt, assets, and many other factors before recommending and moving forward with this form of bankruptcy. Our goal is to help you maximize the benefits of bankruptcy and minimize your losses. With extensive legal experience, we have the knowledge and skills you need to overcome financial hardship sooner rather than later.
What Is Chapter 7 Bankruptcy?
When you file Chapter 7 bankruptcy, the court appoints a trustee, who will liquidate (i.e. sell) your nonexempt assets and use the funds to repay your creditors. Once the trustee completes this process, the court will discharge most—but not all—types of remaining debt. When the court discharges your debt, it eliminates your liability for that debt, permanently prohibiting creditors from attempting to collect payments. The entire process typically takes 4-6 months.
Chapter 7 can discharge unsecured debt, such as:
- Credit card debt
- Payday loans
- Unpaid medical or utility bills
- Deficiency balances owed due to car repossession
If you owe secured debt (i.e. anything with collateral, such as an auto loan or mortgage), you generally have two options:
- Surrender the secured property to the creditor; or
- Keep the property by catching up on arrears and continuing to make payments during the bankruptcy process.
Determining what exemptions you can claim is one of the most critical factors we consider when deciding whether you should file Chapter 7. The goal of bankruptcy is not to strip you of everything you own, but to provide a clean slate upon which you can once again live a normal life.
We understand the level of stress you may be experiencing, and we are here to help. Schedule your free consultation with our Phoenix Chapter 7 bankruptcy attorneys by calling our number (602) 560-4679 today.
To file Chapter 7, you must not have filed a previous Chapter 7 case within eight years of the new case, and you must have lived in Arizona for at least 91 days prior to filing.
Additionally, Arizona bankruptcy courts use the Means Test to determine whether a debtor qualifies for Chapter 7 relief. The Means Test compares your total gross monthly income (including spouse’s income, bonuses, and contributions from family or friends) over a 6-month period immediately prior to filing bankruptcy to Arizona’s median income for your household size.
If your total income is less than Arizona’s median income, you qualify to file Chapter 7. Those who are above the median income threshold could still pass the Means Test and file a Chapter 7 case, but this process involves a longer and more complex calculation of income and expenses. If you do not pass the Means Test, your alternative would be to file under Chapter 13, which involves a 3-5-year repayment plan.
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At The Gavel, we prioritize personal attention and one-on-one communication with our clients. When you retain our services, you will not be treated the way large bankruptcy firms treat their clients. We see every single client not as a case number but as a human being with a family, lifelong ambitions, and the right to live free from the burden of debt. Reach out to our trusted bankruptcy attorneys in Phoenix today.