Helping Clients Find Financial Relief through Chapter 7 Bankruptcy in Tucson, Arizona

Every day, there are more and more people coming to live in and around the Tucson area, enjoying all the city has to offer. With numerous major employers and home values quickly rising, there can be an air of financial success for many in the area. However, the reality is that numerous households throughout Tucson and the State of Arizona are struggling to cover their bills and expenses each month.

If you are in over your head financially, know that there are options for relief available. You do not simply have to dodge collection notices and hope something will change – you can take the matter in your own hands and exercise your rights under the law. The United States Bankruptcy Code exists to provide relief for consumers and businesses who have debts they cannot afford, and many households in the Tucson area benefit from bankruptcy cases each year – specifically, Chapter 7 bankruptcy.

If you would like to discuss whether a bankruptcy case is right for you, contact an experienced Tucson Chapter 7 bankruptcy attorney for a free consultation. At Yusufov Law Firm PLLC, we can review your situation and advise you of your debt relief options and the possibility of a Chapter 7 case. Call today.

Chapter 7 Bankruptcy Overview

Chapter 7 bankruptcy is the most commonly used type of bankruptcy in the United States. The goal of a Chapter 7 bankruptcy is to eliminate debt while trying to preserve enough property and assets for debtors to rebuild their financial lives.

A Chapter 7 bankruptcy is known as liquidation bankruptcy because it involves the gathering up of the debtor’s non-exempt assets by the bankruptcy trustee, who then sells or liquidates them to pay the creditors. While the sale of one’s assets may sound scary, in fact, in most consumer bankruptcy situations, most – if not all – of the debtor’s property will

be exempt, allowing the debtor to keep it. One important exception is that the debtor can only keep property that secures a voluntary debt (e.g., a house with a mortgage) if the debtor continues to pay the debt (i.e., the mortgage).

An experienced Chapter 7 bankruptcy lawyer in Tucson can evaluate your property and assets and apply exemptions under the law in the most beneficial manner possible. In many situations, the liquidation aspect of a Chapter 7 case will have no impact on the person filing for bankruptcy.

Is Chapter 7 Right for You?

While Chapter 7 is the most common bankruptcy case for consumers, it is not the right option for everyone. Your attorney will consider which option is most beneficial and appropriate in each specific case.

For example, the law requires you to qualify for Chapter 7 by showing you do not have enough income to pay your debts. If your income is over a certain threshold, you will not pass the means test, and you will not be eligible for a Chapter 7 discharge.

In addition, if you are delinquent on secured debt like a mortgage, but want to keep the property, a Chapter 7 bankruptcy is likely not the right option. Instead, a Chapter 13 bankruptcy, or non-bankruptcy debt restructuring, might be a better alternative. Likewise, if it turns out that you have significant non-exempt property, then Chapter 7 is likely not the right debt relief procedure for your household, and your Tucson bankruptcy lawyer can advise you of other options.

The Chapter 7 Bankruptcy Process

A Chapter 7 bankruptcy is initiated by the filing of a petition with the proper bankruptcy court in Tucson, accompanied by a filing fee and statements listing information about your financial affairs. These documents include the complete breakdown of your assets, liabilities (debts), income, and expenses. The filing of the petition automatically stops most collection actions against you and your property due to a court order called the “automatic stay.” This can provide immediate relief from phone calls, letters, lawsuits, levies, wage garnishments, foreclosure or repossession, and more.

Twenty to sixty days after the filing of the petition, you will need to attend a meeting of creditors, where the case trustee and the creditors will have an opportunity to ask you questions. However, in most cases, the creditors do not attend the meeting, and only the trustee is present and asks questions to verify the information in your bankruptcy petition and supporting documents (click here for a list of questions the trustee may ask). Normally, the meeting of creditors is the only time in a Chapter 7 case you will have to come to court, and you will likely never have to appear before a judge. It is important to have legal representation during your creditor meeting.

If any property is to be distributed to creditors, the trustee will do this subsequent to the meeting of creditors. Once the trustee completes a review of the file, the court will order a discharge, releasing you from personal liability for most debts and preventing the creditors owed those debts from taking any collection actions against you at any time in the future. Absent unusual circumstances, the entire Chapter 7 process takes approximately four to six months.

Chapter 7 Pros and Cons

Some of the most common benefits of a Chapter 7 case in Tucson include:

  • A speedy fresh financial start
  • No repayment plans (most unsecured debts are discharged)
  • A debtor does not need regular income

Some possible drawbacks might include:

  • Is not designed to deal with delinquencies on secured debt (e.g., a mortgage)
  • Individuals must qualify for Chapter 7 based on income
  • Some property might be at risk

Learn More From a Tucson Chapter 7 Bankruptcy Attorney Today

To learn whether Chapter 7 bankruptcy is advisable in your situation, please contact a Tucson Chapter 7 bankruptcy attorney at Yusufov Law Firm PLLC online or by calling (520) 745-4429 in Tucson, or (480) 788-0098 in Mesa and Phoenix for a free consultation. You do not need to live with the stress of overwhelming debt – contact us today for help.

When to File Chapter 7 Bankruptcy?

When you have tried to negotiate with your creditors, consult a credit counselor, or consolidate your debt but still struggle to handle your debt, your last option may be Chapter 7 Bankruptcy Attorney Tucson. Chapter 7 Bankruptcy will benefit by treating all its debts as a “pause” button. When you file your claim, you will temporarily stop your creditors from taking any action against you or your properties.

Preparing for Chapter 7 Bankruptcy

Some essential factors you should consider in preparing for Chapter 7 bankruptcy:

  • Evaluate the advantages and disadvantages of Chapter 7.
  • Examine the bankruptcy option.
  • Assess property- Once a person files Chapter 7 bankruptcy, the bankruptcy court controls almost all of the assets that the debtor owns. As a result, a bankruptcy court may sell the debtor’s debtless property to pay to creditors.
  • Collect relevant documents and file paperwork about income, debt, and assets.
  • A debtor must attend a credit consultation with a recognized institution at least 180 days before filing for bankruptcy.
  • Hire the best Bankruptcy lawyer in Tucson to deal with Chapter 7 Bankruptcy. Legal counsel will alert you to the possibilities of securing your property and may negotiate the best possible terms.

Note: Hire an experienced Tucson Chapter 7 Attorneys, who can clarify questions related to your bankruptcy and assist you through bankruptcy proceedings.

How to file Chapter 7 bankruptcy in Tucson, Arizona?

The following steps will lead you from the beginning to the end of the process:

  • Study the basics of bankruptcy
  • Find out you qualify or not for bankruptcy (Determine Eligibility)
  • Attend a Credit Counseling Class
  • Fill Out Bankruptcy Paperwork
  • File your petition in bankruptcy court
  • Attend 341 hearings (Attend a Creditors’ Meeting)
  • Complete the “personal financial management” class
  • Discharge your debts
  • Go ahead with your life

Who Qualifies For Chapter 7 Bankruptcy?

There are several early signs that you should consider in Chapter 7 bankruptcy. Five preliminary indications suggesting for Chapter 7 filing may be the correct approach, including:

  • If your debts are more than half of your total annual income.
  • It will take five years (or more) to pay off your debt, even if you have taken extreme measures.
  • Your debt causes stress in essential aspects of your life, such as your personal, business relationships, and sleeping habits.

You do not have any disposable income to repay some Debt.

  • Your monthly income in your state is below the average level.

What Debts Are Discharged in Chapter 7 Bankruptcy?

The most common dischargeable debts are listed below:

  • Credit card charges (including overdue and late fees)
  • Tax penalties and unpaid taxes past a certain number of years
  • Repossession deficiency balances
  • Medical bills
  • Personal loans from friends, family, and employers
  • Student loans
  • Utility bills (past due amounts only)
  • Civil court judgments (unless based on fraud)
  • Dishonored checks (unless based on fraud)
  • Auto accident claims (except those involving drunk driving)
  • Business debts
  • Money owed under lease agreements
  • Attorney fees (except child support and alimony awards)
  • Revolving charge accounts (except luxury purchases shortly before bankruptcy)
  • Cash advances

For additional information, please read our article on Common Questions About Chapter 7 Bankruptcy.

Free Consultation

To discuss your financial situation and learn more about your
debt relief options, give us a

call at (520) 745-4429 or (480) 788-0098