Q: Will a person lose all of his property if he files under Chapter 7?
Some assets are protected in a bankruptcy filing. Each state varies on what type of assets have exemptions, and how high the exemption amount is. Unless you have been in one state for your entire life, you should consult with an attorney to determine which states’ exemptions you will use. Some exemptions are also job-specific, such as pensions for government employees like police officers and firefighters. If your total equity doesn’t exceed your state’s exemption amount, you can keep assets like your house and car.
Your trustee can seize certain property for up to 6 months after you file bankruptcy. These include your tax return, inheritance, settlement payouts, gambling winnings, and security deposits.
Q: If I file for bankruptcy, will I lose my home?
If you are current on your payments, you will be able to keep your home if it falls under your applicable state’s homestead exemption. In Arizona, the homestead exemption is $150,000. This is the maximum amount of equity you can have in your home. If you subtract the mortgage balance from the value of your home, you should have an idea of if you’re in the range of $150,000. However, you should check with an attorney to see which state’s exemptions you will use, and if your home qualifies under those exemptions.
If you are renting your home, you should keep paying your rent as you will not lose your lease in the bankruptcy. Your landlord will not be notified of your filing. You should let your attorney know about any security deposits or similar funds owed to you.
Q: What is a Bankruptcy Means Test?
The Bankruptcy Means Test is a calculation used by the court to determine if you have extra disposable income each month to pay some of your debts. If you make above a certain income limit, your attorney will deduct certain expenses from your income. If your income varies, your attorney will be able to calculate your current monthly income if your provide them with 6 months of paystubs. They will also determine which state’s exemptions you will use. If your attorney finds your income to be above your applicable state’s income level, they can assess your means by deducting reasonable expenses from your income to prove that you don’t have enough money left to pay debts.
If you don’t pass this test, you will be disqualified from filing a Chapter 7 bankruptcy. A Chapter 13 bankruptcy is a 3 to 5 year repayment of some of your debts, which is available for those who don’t qualify for a Chapter 7 bankruptcy.
Q: Who presides over the Bankruptcy Court in Arizona?
There are judges that oversee the bankruptcy court, but you will have more interaction with your bankruptcy trustee. In a Chapter 7, the trustee has the authority to seize and sell any non-exempt assets to settle your debts, and their pay comes from a portion of these transactions. The trustee may also ask you questions about your case both before, during, and after your 341 Meeting of Creditors.
Q: What is a 341 Hearing in Bankruptcy?
A 341 Hearing is your Meeting of Creditors. It will occur 30-45 days after you file your bankruptcy. This is your creditor’s opportunity to appear and object to your debts being discharged. Your trustee may also have additional questions about your case not covered in your petition. If you hire an attorney to represent you in your bankruptcy, they should be able to prepare you for the types of questions your trustee will ask. Your case will be eligible for discharge 60 days after your 341 hearing.
Q: Will I have to go to court if I Decide to File Bankruptcy in Gilbert?
If you file a Chapter 7 bankruptcy, the only mandatory court appearance will be your 341 Hearing. Your hearing may be continued if you miss it, but your case will be dismissed if you continue to fail to appear. If you choose to pursue a reaffirmation agreement for any of your assets, you will need to attend an additional hearing.
Q: May a husband and wife file jointly under Chapter 7 in Gilbert, Arizona?
Q: What is an “Automatic Stay”?
An automatic stay is a protection that goes into effect once your bankruptcy is filed. When the automatic stay is in effect, your wages can’t be garnished and your home can’t be sold through foreclosure. The automatic stay will be active until your case is discharged or dismissed. After that, garnishments on non-dischargeable debts will continue. Therefore, garnishments on dischargeable debts such as credit cards, medical bills, repossessions, and registration and personal loans will be stopped permanently. Contact your Gilbert bankruptcy attorneys for more information.
Q: WHAT IS BANKRUPTCY?