When you are struggling under the weight of debt, bankruptcy is a solution that can help you take control over your financial future. With Chapter 7 and Chapter 13, there are strategies to wipe out debt as you go through the process. These cases are very different, however, and you will need to determine the type of bankruptcy that best suits your situation. One way to get a grasp of how the proceedings work is to review some details on the stages of bankruptcy in Arizona.
As with any legal process, there are some preparations to handle in advance of filing your case. Plus, you should be aware of what happens during your case and the end result of bankruptcy, which vary according to Chapter 7 and Chapter 13 rules. You can trust an Arizona bankruptcy attorney to take care of the requirements every step of the way, and read on for a few facts.
Summary of the Steps in Bankruptcy
A bankruptcy case will typically begin months before you actually file your petition, and there is one key requirement imposed by the court. You must complete a credit counseling course, approved under US bankruptcy rules, within 180 days before you file. It is also necessary to determine which type of case to file, and the course will help you understand the basics of Chapter 7 and Chapter 13. Because your bankruptcy petition requires significant information about your finances, you should also gather and organize documents related to your assets, debts, expenses, and income.
When it is time to start the process, the stages include:
- Prepare and file your bankruptcy petition with the US Bankruptcy Court for the District of Arizona, along with relevant schedules;
- Attend the 341 meeting of creditors;
- Complete the requirements for Chapter 7 and Chapter 13 proceedings; and,
- Obtain the final bankruptcy discharge order.
Comparing Stages for Chapter 7 and Chapter 13
The basic steps for bankruptcy are important to know, but you should also review the aspects of the case that are different for Chapter 7 and Chapter 13. Both discharge qualifying debt, and each type of bankruptcy aims to pay at least some debt back to creditors. As a comparison:
- When you file a bankruptcy case, the court will impose an automatic stay on creditor efforts to collect on your debt. This stage is critical, because it means you will no longer fear a lawsuit, wage garnishment, or foreclosure on your home.
- With Chapter 7, you wipe out debt after liquidation. The bankruptcy will sell nonexempt assets and use the proceeds to pay creditors, so liquidation is a crucial stage of the case. The Chapter 7 process will take roughly 4 to 6 months.
- Under Chapter 13, you satisfy debt to creditors through a debt repayment plan. Your debts are restructured and reduced, and you make a monthly payment for 3 to 5 years. Therefore the debt payment period is one of the most important stages of Chapter 13. These cases proceed until you complete the debt repayment plan, plus a few weeks of court processing.
- There is a meeting of creditors with both types of bankruptcy, but the subject matter to be covered in the session will be different. In a Chapter 7 case, you may be asked questions about your assets and information about your financial status. With Chapter 13, creditors will want to confirm the details of your petition to assess your ability to complete the debt repayment plan.
- The stage after the conclusion of your case is also critical, as post-bankruptcy gives you a clean slate and opportunity to start building credit.
Legal Help with Stages of Bankruptcy
During each step for your Chapter 7 or Chapter 13 case, you gain an advantage when you have an Arizona bankruptcy attorney to assist with the process. You will need knowledgeable advice as you prepare to file your case, along with advice on which type of bankruptcy best suits your objectives. Though starting the proceedings may seem as simple as filling out forms, preparing the petition and schedules is challenging.
An attorney’s help is also useful during the case, particularly with the creditors’ meeting. You also need support with any court appearances and completing the requirements of your case, so you can obtain the final discharge order.
Discuss the Timeline with an Arizona Bankruptcy Lawyer
This overview should help you understand the stages of bankruptcy in Arizona, but you can see that legal help is crucial to achieving your financial goals. Your decisions have a profound impact on your life from the very beginning of your case, and guidance is essential. Our team at DebtBusters is ready to serve your needs with Chapter 7 and Chapter 13 cases, so please contact us to set up a free consultation. You can speak to a bankruptcy attorney by calling our Scottsdale, AZ offices at (866) 223-4395 or going online.
