Chapter 7 Bankruptcy

~ Personal Bankruptcy Attorney in Gilbert ~

What is a Chapter 7 Bankruptcy?

When D.M Bankruptcy Law Group, LLC meets with clients in Gilbert about filing bankruptcy, they discuss their financial circumstances in detail. This helps determine the correct course of action.  In short, A Chapter 7 bankruptcy is the kind of bankruptcy you think about even if you know nothing about bankruptcy. 

By filing a Chapter 7 bankruptcy, you can stop wage garnishments, stop lawsuits, discharge credit card debt, debt from an eviction, debt from a repossession, older tax debt, pay day loan debt, and other debts. Below are some of the most common questions we receive about filing Chapter 7 bankruptcy in Arizona.

~ Common Questions On Filing a Personal Chapter 7 Bankruptcy ~

Chapter 7 Bankruptcy in Arizona

What is a Discharge?

When you obtain a bankruptcy discharge in Chapter 7, it means you no longer owe the debt you listed on your bankruptcy paperwork, as long as it was dischargeable. You should always consult an attorney prior to filing bankruptcy to ensure the debt you are listing is dischargeable.

What are some debts that are not usually dischargeable?

  1. Usually, recent tax debts are not dischargeable. There is a very specific set of factors that must be analyzed to understand whether your income tax debt can be dischargeable.  Chris Dutkiewicz from the D.M. Bankruptcy Law Group, LLC can help you understand whether your specific income tax debt would be dischargeable in your Chapter 7 bankruptcy.

  2. Student loans are also not usually dischargeable.  However, it is wrong to just assume a student loan is not dischargeable.  Certain factors may exist in your case, such as your current financial situation, the status of the school you went to, and the kind of loan you received.  Student loans are a topic of great interest in the Chapter 7 bankruptcy world because legislation and case law are evolving.

  3. Child support and spousal support is generally not the kind of debt you can discharge in a Chapter 7 bankruptcy.  Chapter 13 can offer relief on back payments though and also help make a distinction between actual support and money owed in relationship to the support, such as attorney’s fees and other costs.

What assets could I lose if I file Chapter 7 bankruptcy?

Losing assets in a Chapter 7 is a major risk, especially for individuals and couples who file bankruptcy without hiring an attorney.  In bankruptcy, assets are protected by state and federal statutes called “exemptions”.  Therefore, in bankruptcy language, if an asset is “exempt”, that is a good thing and if it is not “exempt”, that is a bad thing. 

Any non-exempt asset you own when you file bankruptcy can be taken from you.  When you file a Chapter 7 bankruptcy, if the creditors or trustee try to take a non-exempt asset away from you, you do not have the right to stop or cancel your Chapter 7.  Once you file, you are committed.  So it is important to get solid legal advice from Chris Dutkiewicz, the Chapter 7 bankruptcy attorney at D.M. Bankruptcy Law Group, LLC.

Under Arizona bankruptcy exemption laws, up to $150,000 of equity in your home is exempt.  This amount is the same whether you are married or single.

Under Arizona bankruptcy exemption laws, up to $6,000 of each debtor’s vehicle is exempt. 

Under Arizona bankruptcy exemption laws, household goods and furnishings are also exempt (up to $12,000 for a married couple and $6,000 for an individual).

Federal bankruptcy laws protect retirement accounts and social security deposits.

There are many other bankruptcy exemption laws that should be discussed prior to the filing of a Chapter 7 bankruptcy. 

Assets that are never exempt in Arizona under Arizona bankruptcy exemption laws: tax refunds owed to a bankruptcy filer, cash on hand, money owed from a personal injury claim, and money owed from someone who has died.  Chris, the Chapter 7 bankruptcy attorney from D.M. Bankruptcy Law Group, LLC can help you understand the right time to file Chapter 7 bankruptcy so that your loss of these assets is minimal.

What is a Bankruptcy Trustee and a “Meeting of Creditors”?

In every Chapter bankruptcy filed in Arizona, the debtor must attend a “meeting of creditors”.  This meeting is also called a “341 meeting” (named after the section of the bankruptcy code which requires it).  This meeting is conducted by a bankruptcy Trustee.  The Trustee is the person assigned to review paperwork filed by the Debtor (the petition, schedules, and statements) and ensure that it is all true and correct.  The Trustee will review your paperwork and discover whether assets need to be taken from you and sold for the benefit of your creditors.  If there are such assets, then a Trustee has the right to aggressively pursue the assets that are now “property of the estate”. 

The “meeting of creditors” is a time where a person filing for Chapter 7 bankruptcy swears under oath that certain information is true and correct.  The person who has filed for bankruptcy then answers various questions about their bankruptcy status.  This meeting can be intimidating for folks who have had little legal interactions during their life.  Having Chris Dutkiewicz from D.M. Bankruptcy Law Group, LLC by your side is good idea to ensure this meeting goes smoothly.  Occasionally, creditors do show up and ask additional questions.  It is called, after all, a “meeting of creditors”.

Will I get my garnished wages back after I file bankruptcy?

Generally, you will not get the wages that were garnished before you filed for bankruptcy back.  However, upon filing for Chapter 7 bankruptcy, the wage garnishment is immediately stopped by a bankruptcy law called “the automatic stay”.

What is the automatic stay?

The automatic stay is one of the most powerful parts of a bankruptcy.  Once a bankruptcy is filed, creditors are “stayed” or stopped from doing all sorts of things, at least while the bankruptcy is pending and sometimes forever.  Creditors cannot repossess a car while the automatic stay is in place.  Creditors cannot evict a person without specific permission from the bankruptcy court while the automatic stay is in place. Creditors cannot foreclose on a house while the automatic stay is in place.  Attorney Chris Dutkiewicz can educate you on the automatic stay and its benefits to you if and when you filed Chapter 7 bankruptcy.   

Most importantly, you could lose the automatic stay and its benefits if you file and dismiss cases that do not end up getting discharged.  The common mistake is a person will file bankruptcy urgently and without representation, perhaps to stop a garnishment.  Then, the case will not be completed and get dismissed.  The person is not worried because they feel they can just “file again”.  But those multiple bankruptcy filings end up causing you to lose the benefits of the automatic stay.  Get it right the first time by calling D.M. Bankruptcy Law Group, LLC for a free consultation.

How much does it cost to file Chapter 7 Bankruptcy?

Quoting a legal fee on a website without discussing the case with the client is difficult.  A thorough review of the client’s situation usually yields the best fee quote.  However, Chapter 7 fees usually range from as low as $1200 to $2000.  Some cases are higher, if they have very complicated situations, such as the owning of a business or significant asset concerns or a previous history of filing multiple bankruptcies.

When are payments due?

D.M. Bankruptcy Law Group, LLC prefers to take payments prior to the filing of the Chapter 7 bankruptcy, but we do have options where you can file your bankruptcy for no up front attorney’s fees, also known as the “zero down” bankruptcy..  This is based on each situation and a thorough discussion with your attorney should take place prior to this agreement.

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