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

There are many people living 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.

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