Anyone involved in a bankruptcy case understands the intricacies and technicalities involved in the procedures. A Mesa bankruptcy case can be very disheartening for the parties involved, which is why it is essential to learn the basic steps for filing for bankruptcy in Arizona. Knowing the ins and outs not only gives you peace of mind, but it also allows you to prepare adequately as you figure out what you need to do to move forward with your life. Here is the process of filing an Arizona bankruptcy:
Credit counseling
Debtors that have filed for bankruptcy on or after October 17, 2005, are all required to undergo credit counseling within 6 months before making the decision to file for bankruptcy. This is as per the 2005 Bankruptcy Act. Additionally, the individuals are also required to complete and pass a financial management instructional course soon after filing for bankruptcy.
Means Test
The means tests typically gauge and analyze your income and expenditure to resolve if you meet the criteria to file a chapter 13 or a chapter 7. To determine your means, the court looks at your income and expenditure in the past 6 months before filing for bankruptcy upon which they compare your result to the median income of people living in Arizona. If the debtor’s revenue falls below the average, they can file for Chapter 7, however, if the opposite is the case, then chapter 13 is more their speed.
Gathering paperwork
To qualify as a candidate to file for bankruptcy, you must list down all your sources of income and significant financial transactions in the last two years, your living expenses each month, your secured and unsecured debts and all assets and possessions. Additionally, your tax returns over the past two years, deeds and titles to your property and cars, and loans documents are all necessary for this stage.
Filing procedures
At this stage, you need to determine which properties are exempt from seizure based on exemptions and regulations for the state of Arizona. This is the best step to hire an attorney given the intricacies of the law. Your attorney will then file a petition and documents known as schedules with the bankruptcy court.
Automatic stay
Once the proper filing is complete, an automatic stay is put into effect, which prevents creditors from staking claim on your property. It also prevents creditors from contacting you directly and stops any repossessions or foreclosure proceedings that may already be in effect.
§ 341 meeting
The § 341 meeting allows negotiations between the debtor, the creditor and the debtors’ counsel where the parties reach a compromise. If a settlement is not reached, then judicial proceedings may be deemed necessary.
