What is Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy in Arizona

Chapter 7 bankruptcy is probably the most frequently filed chapter of bankruptcy in the District of Arizona. An individual or entity filing for chapter 7 or the “Debtor” is usually seeking a discharge order from the court, which essentially bars any creditor from attempting to collect on qualified debt. The chapter 7 discharge applies to Unsecured debt. Which is most credit card debt, medical debt, personal loans, some tax debt, payday loans, etc which are not secured by property.

Chapter 7 bankruptcy is often referred to as straight forward or simple. It’s not. There is no such thing. The fact is, it can one of the most complicated chapters of bankruptcy in, especially if there are assets involved, there is a business involved, or if the individual’s income level is too high or possibly too high to receive a discharge.

There are many things to be careful about when filing a chapter 7 case. For example, you are only exempt a certain amount of equity in your home, in your car, and other personal items you may own. Your income is a major factor in determining whether or not you can qualify for chapter 7 bankruptcy. Your retirement accounts must qualify if they are exempt. If you have a potential law suit, it could become property of your creditors. You’re only allowed to have certain amount of cash on hand on the day you file. The list goes on.

In any event, Chapter 7 is more complicated than one may think. It absolutely essential to use an attorney when filing chapter 7 bankruptcy, or any chapter of bankruptcy.

If you have questions about bankruptcy or the bankruptcy laws in the state of Arizona, please feel free to contact us: 480-355-1377