When you are considering bankruptcy as a solution for addressing debt, there are numerous factors you must review. You are already working to reduce expenses and make minimum payments to creditors, but finances are extremely tight. As such, one important factor to know is how much does it cost to file Chapter 7 bankruptcy in Arizona.
Fortunately, there are strategies to minimize filing fees and other costs. To benefit from an efficient, productive process, it is essential to retain an Arizona bankruptcy lawyer who will help you navigate a Chapter 7 case. Plus, an overview of costs gives you an idea of what to expect.
Filing Fees for Chapter 7 Bankruptcy Cases
Except criminal cases brought by the government, all cases in Arizona courts require filing fees. These amounts are dedicated to paying expenses related to the proceedings and helping the judicial system run smoothly. The person taking the legal action is responsible for paying the filing fees, so you will have to pay them as the filer in a bankruptcy case.
The cost to file Chapter 7 bankruptcy under current laws of the US Bankruptcy Court for the District of Arizona include the basic case, without accounting for complexities. For Chapter 7, you will have to pay $338 to file your bankruptcy petition. Keep in mind that you may need multiple copies of your petition, so there could be additional costs for copying. Plus, depending on your case, there may be a need to update information regarding creditors or file motions during the process. These will increase the costs you pay either to the court or other parties.
Summary of Chapter 7 Rules
A Chapter 7 case is termed discharge bankruptcy because you are able to eliminate qualifying debts through the process. There are strict rules to qualify, and they are based upon your income. You are automatically eligible if you have earnings below the state median income level. Alternatively, you could file Chapter 7 if your earnings pass the Means Test that assesses your monthly expenses along with income. Another important qualification is that you cannot have a recent history of filing bankruptcy. Before filing another Chapter 7 petition, you must wait at least 6 years after Chapter 13 or 8 years after Chapter 7.
It is important to note that Chapter 7 may also involve liquidation of your assets. The bankruptcy trustee appointed to take control over your real estate and personal property can sell items to pay creditors. However, this process does not always make sense if the sale will not generate a reasonable profit. The trustee may decline to liquidate in a so-called “no asset” case, so you may be allowed to keep some items.
Guidance from an Experienced Bankruptcy Lawyer
Filing fees for Chapter 7 are an important cost, but it is also wise to consider retaining an attorney as part of your investment. Your Arizona bankruptcy lawyer will tackle the essential tasks at each step of the case, including:
- Gathering and organizing paperwork related to your debt, assets, income, and expenses;
- Preparing the Chapter 7 bankruptcy petition, along with all necessary schedules;
- Attending the meeting of creditors with you, where you will be asked about your finances and the information provided on your petition; and,
- Handling all matters related to concluding your bankruptcy case, such as obtaining the discharge order from the court.
Comparing Chapter 7 to Chapter 13
The difference in cost between filing Chapter 7 and Chapter 13 bankruptcy in Arizona is nominal, so it should not be the only determining factor. You will need to better understand the basics of Chapter 7 and Chapter 13 before you can decide which type of bankruptcy might be a better fit.
- The eligibility rules for Chapter 7 and Chapter 13 are a major difference between the cases, and they are rigid in terms of income. However, even if you qualify for Chapter 7, you might opt for Chapter 13 if you do not want to put assets at risk of liquidation. The bankruptcy trustee does not sell items in Chapter 13 because you are paying creditors through a debt repayment plan.
- A Chapter 7 case may be wrapped up in around 2 to 3 months, while Chapter 13 bankruptcy takes at least 3 to 5 years. The debt repayment plan must be complete before the case is over.
- When you go through Chapter 7 bankruptcy, the case remains on your credit record for 10 years. A Chapter 13 case is part of your credit history for 7 years.
Our Arizona Bankruptcy Attorneys Will Guide You Through the Process
To learn how DebtBusters can assist with your Chapter 7 case, please contact our offices in Scottsdale, AZ. You can call (866) 223-4395 or go online to schedule a no-cost consultation with a skilled bankruptcy lawyer.
Related Content: Can I File for Bankruptcy if I Have a Job in Arizona?