Arizona Bankruptcy Laws should be known by every resident of the state of Arizona. Sometimes you can only take so much. When the going gets tough and you feel you are burdened by your debts, bankruptcy is the solution. Although bankruptcy is a federal matter and has corresponding federal laws, there are still specific laws that apply to each state. Arizona bankruptcy laws follow federal laws, but have slight differences when it comes to the exemption.
Filing for bankruptcy is one of the toughest and most important decisions you are going to make. Don’t make this decision on your own; seek the help of an experienced lawyer who knows the ins and outs of Arizona bankruptcy laws, doing this will help ensure that you have made the right decision. The first thing that a lawyer will talk about during your counseling is explain the difference between Chapter 7 and 13 bankruptcies. He will ask you personal questions pertaining to your finances and will request you to take an intake test to collect data on your debts and financial issues.
You can discuss two options with your lawyer: Chapter 7 or Chapter 13 bankruptcy. Both of these bankruptcies are applicable for individuals, married couples, and families. Chapter 7 bankruptcy is the liquidation of your assets, while Chapter 13 is a reorganization plan. There are advantages and disadvantages to both of these chapters too.
Chapter 7 bankruptcy will give you a fresh start on your finances. The process of filing for this bankruptcy starts by taking a means test. This test will determine if you are qualified for Chapter 7 bankruptcy. Your income will be compared to that of the median level income of other people within your area; an income below the median as set by the Census Bureau will qualify you to this type of bankruptcy. A court-appointed trustee will take hold of your non-exempt assets, then liquidates it, and pays off your debts from the proceeds of your assets’ sales.
If you do not qualify for Chapter 7 or even if you qualify for Chapter 7, but you have a lot of assets you want to protect, you have the option to declare bankruptcy under Chapter 13. In this bankruptcy type, the debtor with the help of the trustee will create a management plan to repay all debts in a 3- or 5-month period. Before this is put into effectivity, the court should approve this repayment plan and the creditors should also be informed. The payment to be made is given to the trustee, and it is the trustee’s duty to monitor that payments are made up to date.
Filing for bankruptcy in Arizona will protect some of your assets from creditors. The state laws are followed instead of the federal laws. These exemptions are specified as follow:
• Real-estate property of up $150,000;
• 75% of weekly wages;
• One vehicle of up to $5,000;
• Personal properties like furniture and appliances up to $4,000; pets and farm animals up to $500; and books, tools, musical instruments, engagement and wedding rings, books, and heirlooms; and
• Other properties like insurance, retirement funds, and up to $150 for personal bank accounts.
Before the court approves your bankruptcy petition, you will be requested to take a complete credit counseling and debt education program to ensure that this is the most appropriate action for you.