When you cannot stay current on bills and dread the phone calls from creditors, you might start to look into legal options to clear the slate with debt. Bankruptcy may suit your circumstances, and many individuals and married couples choose Chapter 13 because of the benefits. However, like you, some debtors have concerns about how the process works. One of the most common questions is whether you will have to go to court when filing for Chapter 13 bankruptcy in Arizona.
As with any legal matter, the answer is not simple. However, with most Chapter 13 cases, an official appearance in court is not necessary. There are still important proceedings that require your presence, though they may not occur in an actual courtroom. It is wise to retain legal help with filings, hearings, and other aspects of the case. You can rely on an Arizona Chapter 13 bankruptcy attorney to help you navigate the process, but some basics are useful as an overview.
How Chapter 13 Bankruptcy Works
Before determining whether you will have to go to court, you will need to know if Chapter 13 bankruptcy offers the best opportunity to address your debt. This type of bankruptcy does enable you to discharge all qualifying debt, as long as you meet the eligibility criteria and satisfy legal requirements.
- To qualify, you need to have a job, which is why Chapter 13 is sometimes called the wage earner’s bankruptcy.
- The key requirement for Chapter 13 is that you need to complete the terms of a debt repayment plan to satisfy your debt to creditors. Your debts are reorganized and reduced into an amount you can afford to pay monthly. This is the reason you must be employed for Chapter 13. You pay the debt repayment plan for 3 to 5 years, at which point your case concludes and debt is discharged.
Steps to a Chapter 13 Case
One of the first considerations for your case is determining whether Chapter 13 is the right fit for your goals. There is no liquidation for this type of bankruptcy, so your assets will not be sold by the bankruptcy trustee. Plus, Chapter 13 is a wise option for those who do not qualify under the strict rules for Chapter 7. When the time is right to move forward, the steps for your case include:
- Gathering and organizing financial documents;
- Preparing and filing your bankruptcy petition with the US Bankruptcy Court for the District of Arizona;
- Developing the debt repayment plan, which the court and creditors must accept before it will become effective;
- Attending the 341 creditors’ meeting with you;
- Coordinating with you on completing the debt repayment plan; and,
- Wrapping up your case and getting the final debt discharge order from the court.
How an Arizona Chapter 13 Lawyer Helps
Your attorney will be at your side to assist with all steps in bankruptcy, but there is one aspect of your case that involves court. The 341 meeting of creditors is a session that you are required to attend. It does not proceed in a courtroom, so you will go to a designated conference-style room at the federal bankruptcy courthouse. You, your attorney, the bankruptcy trustee, and creditors will be in attendance.
Creditors will use the 341 meeting to ask questions and confirm details about your Chapter 13 bankruptcy petition. They want to review your financial circumstances, and creditors will need assurance that you will be able to complete the debt repayment plan to satisfy debt.
Benefits of Filing Bankruptcy in Arizona
One of the biggest changes to your life after Chapter 13 is that creditors will stop harassing you for payment. This is because the court imposes an automatic stay on creditor activities to collect your debt. They cannot call, threaten lawsuits, file a case, or garnish your wages. There are also additional benefits of Chapter 13 to consider:
- You are able to wipe out all qualifying debt, such as credit cards, medical debt, personal loans, and lines of credit.
- Without the weight of debt on your shoulders, you can stay current on your mortgage and keep your home.
- You can begin rebuilding credit right away by making payments for bills, in full and on time.
Contact an Arizona Bankruptcy Attorney About Chapter 13 Cases
Even though you may not have to go to court if you file for Chapter 13 bankruptcy in Arizona, legal help is still crucial for all other steps in the case. Discharging debt could have major positive impacts on your life, so you need assistance to ensure you enjoy the benefits. For more information about Chapter 13, please contact DebtBusters. You can reach our offices in Scottsdale, AZ by calling (866) 223-4395 or going online. We are happy to set up a free consultation with a skilled Arizona bankruptcy lawyer.
