Our Phoenix bankruptcy attorneys are concerned about your future.
The Phoenix bankruptcy attorneys who sponsor Total Bankruptcy believe that in today's economy consumers need to be protected by fair bankruptcy laws more than ever before. Through their experience and work with many clients, these experienced Phoenix bankruptcy attorneys understand that many people who file are forced to do so because of divorce, job loss, enormous uninsured medical bills and other tragic, unforeseen reasons.
If you have recently found yourself wondering if filing would be a good option for you, call our Phoenix bankruptcy attorneys today. You can simply dial our toll-free number, 1 (877) 349-1309, or fill out our online case evaluation form. One of our Phoenix bankruptcy attorneys will return your call to answer your questions and arrange for a free meeting.
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Filing under Chapter 7 or 13
The most important advantage to filing under Chapter 7 or 13 is that you may be able to obtain a fresh financial start. Consumers who file for Chapter 7 may be forgiven (discharged from) many unsecured debts. A secured debt is one in which the creditor is entitled to collect by seizing and selling certain assets of the debtor if payments are missed, such as a home mortgage or car loan. With those two major exceptions, most consumer debts are unsecured. You may be able to keep (that is, exempt) many of your assets, although state laws vary widely in defining which assets you may keep.
As soon as your petition is filed, an automatic stay might be issued, which would prohibit most collection activity. If a creditor continues to try to collect the debt, the creditor may be cited for contempt of court or ordered to pay damages. If you continue to make payments, it is unlikely that your creditor will do anything. However, if you miss payments your creditor will probably petition to have the stay lifted in order either to repossess the car or to renegotiate the loan.
Bankruptcy laws do have some restrictions including:
A strict financial means test that prohibits many debtors from filing a liquidation under Chapter 7.
A requirement that all debtors must receive a briefing from an approved credit counseling agency at least six months before they can file their case.
A requirement that debtors take an approved class on debt management techniques before they receive their discharge.
A provision making it easy for a court to dismiss a case outright or to convert a Chapter 7 case to a Chapter 13 case.
A provision permitting a court to impose sanctions on lawyers, or even on debtors, for filing a Chapter 7 case that is dismissed or converted to a Chapter 13 case.
The means test excludes many debtors from the protections of Chapter 7
Essentially, the means test provides that if your income is above a specified level, then you are not permitted to file your case under Chapter 7 and must instead use Chapter 13, which requires that you enter into a repayment plan rather than simply liquidating your debts.
Under the means test, the court will first determine whether, after the deduction of certain essential living expenses from your income, you can afford to pay 25 percent of your non priority unsecured debt -- such as credit cards. Next, your income will be compared to your state's median income. You won't be allowed to file for Chapter 7 if your income is above your state's median income and you can afford to pay 25 percent of your unsecured debt. Even if your median income is below the state's median, but you can pay 25 percent of your unsecured debt, the court can require you to file under Chapter 13 if it believes that you would abuse the system by filing for a Chapter 7.
Click Here For a Free Bankruptcy Evaluation
The purpose of this web site is to help you learn everything you need to know about bankruptcy, the process, your bankruptcy attorney and your legal rights. The best place to start is with the U.S. Bankruptcy Code. It delivers protection to people in financial jeopardy who are suffering under mountains of debt. Bankruptcy is your legal right.