Chapter 7: The Quickest Way to Get a Fresh Financial Start
For most people, Chapter 7 bankruptcy is the fastest and simplest way to discharge debts and get a fresh financial start. From start to finish, filing Chapter 7 bankruptcy usually takes about six months. Upon filing bankruptcy, an automatic stay enters. The automatic stay is the law that stops all collection efforts such as harassment from debt collectors, garnishment, repossession, litigation and foreclosures. At the end of the process, your unsecured debts, such as credit card bills and medical bills that are not secured by property, will be discharged.
We offer a free initial phone consultation to discuss your financial situation and determine if filing Chapter 7 bankruptcy is the best option for you.
Can I File Chapter 7 Bankruptcy?
The biggest change for individuals brought by the 2005 amendments to the Bankruptcy Code is that now individual debtors with mostly consumer debt must qualify by passing a financial means test to file a Chapter 7 bankruptcy. If you do not qualify to file bankruptcy under Chapter 7, you may still file bankruptcy under Chapter 13 of the Bankruptcy Code.
A debtor whose household income falls below the median income for Arizona automatically qualifies to file a Chapter 7 bankruptcy. If your household income is less than the median income for Arizona for a family of your size, you can file Chapter 7 bankruptcy. The median income for a family of your size as well as all of the means testing information can be found at the following web site: http://www.usdoj.gov/ust/eo/bapcpa/20090315/meanstesting.htm.
If your household income is more than the median income for Arizona, you must complete a second part of the test which deducts your allowable expenses from your income. In general terms, if your available income after expenses allows you to pay $10,950 to your creditors over a 5 year period you may not qualify for Chapter 7. Additionally, you must not have had a bankruptcy discharge in the last eight years. Most people with serious debt problems are eligible for filing Chapter 7 bankruptcy.
Credit Counseling and Financial Management Course
The 2005 amendments to the Bankruptcy Code require that individual (non-corporate) debtors take a credit counseling course with an approved agency prior to filing bankruptcy, as well as a financial management course after your case has been filed. The certificates of completion must be filed with the Bankruptcy Court as a condition of filing your bankruptcy case and for getting your bankruptcy discharge. Joint debtors must each take the courses and file their individual certificates.
Required Legal Notice: We are a Debt Relief Agency as it’s defined in 18 U.S.C. Section 101 of the U.S. Bankruptcy Code. We assist people who file for bankruptcy protection.