Ideally, there are many ways to get financial freedom when one faces financial challenges like debts. One of the best and most preferred is the filing for Chapter 7 bankruptcy, which in essence works to liquidate non-exempt assets and to use them to pay off creditors. In such cases, the debtor will not be obligated to clear the debt since the creditors discharge leftover debts.
Many at times, someone may feel like filing for Chapter 7 bankruptcy is embarrassing. But the truth is that it is not, and often, it comes with loads of benefits. One of the reasons someone may feel pulled off from going this route is the fear of losing their home and other financial incapacities. Chapter 7 bankruptcy, by all means, is only there to help people solve their financial problems by getting a fresh financial start when under debts. Actually, during these unprecedented times of Covid-19, more and more people are filing for bankruptcy, and no one should feel embarrassed to do so.
Usually, people can either choose to file for chapter 7 bankruptcy by themselves or use lawyers. Someone who decides to do this will definitely face challenges because, essentially, the whole process is marred with complex demands, which can be hard to tackle individually. Usually, if not all the time, the recommended step to take is to hire expert lawyers in the field of bankruptcy. Most importantly is hiring a lawyer with experience and a reputed track record of dealing with chapter 7 bankruptcy.
Importance of Hiring a Lawyer
As aforementioned, filing for chapter 7, bankruptcy is never an easy process. If deadlines are not posing a challenge to meet, then the paperwork is getting troublesome to handle. And the clauses guiding the process can be hard bones to chew for someone with no experience in this field. Hiring a lawyer with experience handling such cases is an assured way to maneuver some of these obstacles while benefiting in the following ways.
Expert Assistance
A lawyer with experience in chapter 7 bankruptcy has the expert knowledge to help clients in many ways. When it comes to litigation, lawyers can guide the debtor filing for chapter 7 bankruptcy on the right steps to file for their case and everything to include for consideration. Plus, not every time is an excellent moment to file for chapter 7 bankruptcy. At some point, other people have lost more than they gain from going this route, and hiring a lawyer can help someone decide whether they should file for chapter 7 bankruptcy or not.
Lawyers Handle Everything
The process of filing for Chapter 7 bankruptcy can be a challenge to anyone, especially someone with no experience. From the paperwork to the documentation, the whole process will need expert knowledge on filling in the forms and filing the papers. When someone hires a lawyer, they can rest easy knowing professionals are handling the process. One of the crucial areas where a lawyer will come a long way to be of significant help is in Chapter 7 means test in Arizona. The means test determines whether or not a debtor is entitled to a chapter 7 bankruptcy discharge.
Understanding the Chapter 7 Bankruptcy Means Test
By comparing a debtor's household income to the median household income, chapter 7 bankruptcy means the test in Arizona is what will determine whether one is eligible to file or not. This process usually involves many ifs, and if not, for example, if the debtor makes less, he or she will qualify for chapter 7. If the income is higher than that, the process will use means test calculation to determine if one qualifies based on how much money is left after paying for mortgage, child support payment, car payments, and other living expenses. Failing the means test means someone is better off financially, and filing for Chapter 7, bankruptcy is not the best option for them. Even still, there is the need to follow the following process for a successful chapter 7 filing process through a lawyer's help.
Collect Bankruptcy Documents
Whether someone is working with an attorney or going this route by himself, the first step to pursue is to collect certain documents before filing for Chapter 7 bankruptcy in Arizona. Getting a free credit report from each of the available credit reporting agencies is one of the important documentation to have. After that, there is a need to check the collection letters and add them to the credit report. That is not enough; some other documents to include are the federal income tax returns for the last two years, a copy of a divorce decree if any, and bank statements for all accounts.
Take Credit Counseling
The federal law requires all filers for chapter 7 bankruptcy to have credit counseling before submitting the suit to the court. People can take the courses online, in person, or through a phone, and one should do so from an approved provider.
Complete the Bankruptcy Form
Before starting the bankruptcy case, it is a requirement that the filer files with the bankruptcy court. Ideally, there are many forms, including national and local forms, to fill in as required. Someone can download them online or get one at the court, use chapter 7 assistance agencies, or get help from their lawyers to prepare the bankruptcy forms on their behalf.
Get Ready with the Filing Fee
Generally, the amount for filing for chapter 7 is $338, and the filer can pay through his or her money order, cashier check but not with a credit card. Usually, the Arizona bankruptcy court accepts down-payment to people who cannot pay the full fee at the time of filing for bankruptcy. Also important to note is the need to file the required attorney fee disclosure to those with a lawyer.
Filing the Forms
When someone decides to file himself, they will have to bring the documents to the court. Otherwise, in cases where someone uses a lawyer, the attorney will take care of everything and file using the court's electronic filing system. In Arizona, people can file in Phoenix, Tucson, or Yuma. Getting the assistance of a lawyer when someone doesn’t know where to go will be of great value.
What You Get after Filing for Chapter 7 Bankruptcy
Ideally, passing the chapter 7 means test in Arizona is one of the challenges to this process. Fortunately, upon this step's success, someone can follow the above process to file while getting the assurance of gaining in the following ways.
Debt Forgiveness
Chapter 7 bankruptcy helps people pay off creditors or discharge some of their debt. The debtor will not have any obligation to repay qualifying debts, which are usually wiped off completely. This way, the debtor will not have to worry about settling any debt through any compelling means from collectors.
Relief from Credit Collectors Harassment
Another important and beneficial attribute of filing for Chapter 7 bankruptcy is that it keeps the debt collectors off the debtors' back. Through the judge's automatic stay on creditors, the debtor will rest easy knowing they have no worry about the agency's many phone calls and emails.
Get Home and Property Exemptions
Through chapter 7, homeowners do not have the stress of losing their belongings. The exemption law will allow such a person to keep things that matter to them, such as cars, household goods, and many other items. Indeed, this is one of the most important gains of filing for chapter 7 bankruptcy to just anyone outside there.
