Bankruptcy in Chandler, AZ

Businesses and individuals in Chandler have seen significant challenges during economic downturns. For example, local retailer Tuesday Morning filed for Chapter 11 bankruptcy in February 2023.

These burdens are often not the fault of hardworking individuals. Sometimes circumstances align against you, and you find yourself in a bind.

You may have options to avoid liquidating assets or harming your credit. But there are also times when you have no choice but to start over again. Having an essential understanding of state and federal law is necessary to make this decision. This article will teach you about your options and allow you to connect with a local attorney that can advise you.

Types of Bankruptcy in Chandler, Arizona

Bankruptcy can assist individuals and businesses in absolving part or all of their debts. To receive approval in Chandler, AZ, individuals must prove that they are experiencing hardships.

However, it’s important to note that not all debts qualify. Child support arrears, delinquent taxes, alimony, and student loans are not eligible.

Individuals struggling with debt can choose Chapter 7, 11, or 13 bankruptcy. But first, you want to evaluate your assets, income, and objectives to determine which option is suitable. This process should involve a knowledgeable bankruptcy attorney to avoid making critical mistakes.

The nearest judiciary to handle a case from Chandler is the U.S. Bankruptcy Court in Phoenix. But you will want to confirm who has jurisdiction with your attorney.

Chapter 7 Bankruptcy

For many individuals, Chapter 7 bankruptcy is a fitting choice as it allows them to start fresh. However, before filing, you should evaluate your income and ability to pay off outstanding debts. It’s also advisable to seek the guidance of a bankruptcy lawyer in Chandler to determine if a liquidation plan is the best course of action.

Individuals who receive approval for Chapter 7 bankruptcy tend to have unstable income. Alternatively, they could have had changes in circumstances that made them unable to manage their debts.

While Chapter 7 can wipe out deficits, the drawback is that you may need to surrender specific possessions. You may lose your home, car, or other assets.

Nevertheless, an automatic stay takes effect after submitting your petition. This action halts all collection activities against you temporarily, such as foreclosures and garnishments.

It’s important to note that the automatic stay does not prevent all collection efforts. For instance, if you owe child support or restitution for a criminal case, you are still responsible for making those payments.

However, there are several reasons why someone from Chandler may consider a different type of bankruptcy. Some of the most common reasons are:

  • Ineligibility: If your income does not pass means testing, you may not have eligibility for Chapter 7 bankruptcy.
  • Non-Exempt Assets: Your non-exempt assets may get sold to pay debts. As such, you may want to file for Chapter 13.
  • Repayment Plans: If you have regular income and want to repay over time, Chapter 13 may be a better fit.
  • Business Debt: If you need to restructure or eliminate business debt, it is worth looking at Chapter 11 or 13.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is a more intricate legal action for businesses and some individuals. It offers a reorganization plan that allows filers to restructure their debts in a way they can manage. The courts often grant a specific period, typically 4 to 18 months.

The primary advantage of Chapter 11 bankruptcy is that it doesn’t mandate filers to sell off or liquidate their assets. Instead, it enables debtors to negotiate a reorganization plan with their creditors. This arrangement allows them to keep up with their financial responsibilities going forward.

Chapter 11 bankruptcy is a complex process primarily designed for businesses. As such, debtors from Chandler must meet these requirements:

  • File a petition for relief
  • Submit a disclosure statement
  • Develop a reorganization plan
  • Receive approval from creditors and the court
  • Attend a meeting of creditors
  • Provide regular financial reports
  • Obtain court approval before taking actions like selling assets or terminating contracts

Chapter 13 Bankruptcy

You may have seen Chapter 13 referred to as the “wage earners plan” because it allows individuals to restructure their debts.

Once you file for Chapter 13 bankruptcy in Chandler, AZ, the court will assign a trustee. This individual evaluates your assets, liabilities, and ability to pay outstanding bills.

Unlike other forms of bankruptcy, Chapter 13 entails creating a three to a five-year repayment plan to restructure your debt. The flexibility of the repayment plan will hinge on the assets you wish to keep and the stability of your income. Additionally, it may offer the opportunity to discharge some or most of your debts.

To file for Chapter 13 bankruptcy in Chandler, you must complete and file several forms with the bankruptcy court. The necessary paperwork includes these items:

  • Petition for Chapter 13: This form initiates the bankruptcy process.
  • Schedules: These forms provide a detailed accounting of assets and liabilities.
  • Statement of Financial Affairs: This form discloses more information about your financial history.
  • Chapter 13 Plan: This form outlines how to repay debts over three to five years.
  • Proof of Income: Documentation of income, including pay stubs or tax returns.

The Bankruptcy Process in Chandler, Arizona

Filing for bankruptcy is never an optimal situation. But if you cannot repay your debts within five years, it can help minimize the adverse effects. You can recover your financial state and move forward.

The filing process in Chandler starts by collecting all relevant financial documents. You must demonstrate your monthly expenses, debts, assets, and annual income. This information is crucial in providing the court with an accurate understanding of your financial situation. Failing to provide all necessary information may lead to a rejection of your petition.

Individuals who file for bankruptcy in Chandler can use either federal or state exemptions. Here are some exemptions available under Arizona state law:

  • Homestead Exemption: protects up to $150,000 in equity in your primary residence.
  • Personal Property Exemption: protects the debtor’s personal property, such as clothing or furniture, up to $6,000.
  • Vehicle Exemption: protects up to $6,000 of your motor vehicle.
  • Tools of the Trade Exemption: protects the debtor’s tools, equipment, and materials used in their profession, up to $5,000.
  • Wages Exemption: protects up to 75% of disposable earnings or 30 times the federal minimum wage, whichever is greater.

Avoid excessive spending and refrain from increasing the balances on your accounts at least six months before filing. Additionally, completing an approved credit counseling course is a requirement.

Credit counseling assists in enhancing your financial literacy and acquiring improved financial habits. After completing the course, you’ll receive a certificate of completion. This document must be in your filing. The court cannot accept your bankruptcy petition without it.

Work With an Experienced Chandler, Arizona Lawyer

Hiring a bankruptcy lawyer in Knik-Fairview can minimize costly risks. A proficient attorney understands how state and federal laws can assist you. They will apply regulations for your specific case, such as which debts qualify. Legal counsel in Arizona can also provide valuable guidance to enhance the outcome of your case.

It’s crucial to remember there are debt management options that might be more advantageous. While bankruptcy can be appealing, it’s typically best as a last resort.

Our skilled lawyers in Chandler can offer guidance. We can even help you find an attorney across Arizona lines. Request legal help online or call us today at (866) 345-6784!

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