Are you considering filing for bankruptcy relief to get out of debt? If so, Allegiant Law can help. Our Anthem bankruptcy lawyers can help explain your options, review the pros and cons of bankruptcy, and discuss non-bankruptcy options to get rid of debt during a
no-obligation, free consultation.
Should I File Bankruptcy in Anthem?
Deciding to file bankruptcy is a serious matter. While bankruptcy provides an affordable means of dealing with debt problems, there could be issues for some individuals. Discussing your financial situation with an attorney allows you to learn more about bankruptcy and get advice from a lawyer who has experience handling bankruptcy cases.
In most situations, if you cannot afford to pay your debts, a Chapter 7 case might be the best option for getting rid of debt. However, if you can pay some of your debts by reorganizing your debts into a monthly plan, a Chapter 13 bankruptcy filing might be best for you.
Chapter 7 and Chapter 13 cases serve different purposes, even though both bankruptcy chapters allow you to resolve debt problems. Let’s look at each bankruptcy chapter individual to gain a better understanding of the benefits and risks of each bankruptcy chapter.
Anthem Practice Areas
Filing Chapter 7 Bankruptcy in Anthem
Your property becomes part of your bankruptcy estate when you file a bankruptcy case. The Chapter 7 trustee has the authority to sell your property to pay your unsecured debts. However, that does not mean that the trustee is going to seize all your assets.
Arizona bankruptcy exemptions protect a certain amount of equity in various items. The equity that is protected by exemptions cannot be used to repay your debts without your consent. Therefore, the Chapter 7 trustee carefully analyzes your property values to calculate whether the property has any value for the estate once the bankruptcy exemption, costs of sale, and any liens are subtracted from the value.
In most Chapter 7 cases filed in Arizona, the debtors keep all their property because there is no value or very little value for the bankruptcy estate after deducting liens and exemptions from the value of the asset.
Chapter 7 bankruptcy has an income requirement. If you earn too much money, you cannot receive a bankruptcy discharge (debt forgiveness) in Chapter 7. You would need to file under Chapter 13. Our Anthem Chapter 7 bankruptcy attorney meticulously calculates your income and subtracts every allowable expense to help you “pass” the Chapter 7 income test.
If you meet the income qualifications and your assets do not appear to be at risk, a Chapter 7 bankruptcy case could help you get out of debt in four to six months.
Filing Chapter 13 Bankruptcy in Anthem
A case filed under Chapter 13 is often referred to as a wage-earner plan. That is because you must have a steady income to file Chapter 13. When you file your Chapter 13 case, you also file a proposed bankruptcy repayment plan. The plan describes how you are going to reorganize your debts based on your current resources.
Most Chapter 13 plans are for 60-month terms. Therefore, you will be in bankruptcy under Chapter 13 for a little over five years. During that time, you must pay all Chapter 13 plan payments to the Chapter 13 trustee on time. The trustee uses the funds to pay your creditors according to your plan.
The benefits of filing under Chapter 13 include:
- Prevent foreclosure of your home;
- Include car payments in the plan;
- Catch up past due domestic support obligations;
- Spread back taxes out over several years; and,
- Pay a percentage of your unsecured debts to discharge the entire amount owed to the creditor.