If you have debts that you can’t pay, it may be time to consider filing for Chapter 7 bankruptcy. While this isn’t an easy process, it can be a good way to get your finances back in order and help you start fresh. However, it can also have some serious negative consequences on your creditworthiness in the long run. To make sure you’re making the right decision, it’s important to meet with a Phoenix bankruptcy attorney and weigh all your options.
A good Chapter 7 Bankruptcy Attorney will guide you through every step of the process, from deciding if you should file to helping you discharge your debts once and for all. This will ensure that you avoid common mistakes and make the most of your situation.
First, you’ll need to fill out some basic forms about your income, expenses and assets. You’ll also need to submit recent tax returns and pay stubs. Once this is completed, you’ll appear before a trustee for your 341 Meeting of Creditors. This is where creditors will come to learn more about your financial situation and ask you questions.
Next, your lawyer will review the information you submitted and prepare a plan for your case. This plan can involve settling debts, liquidating certain assets or working with your creditors to develop a payment schedule that is fair to everyone involved.
Your lawyer will also prepare a budget to make sure that your expenses are reasonable and will give you a realistic picture of what the future holds for your finances. He will also provide you with information about the various debt relief programs that are available to you and advise you on whether those will be appropriate for your specific needs.
If you qualify for Chapter 7 and are confident that it’s the right decision for you, the next step is to file a petition in your court. This will involve filling out more forms and submitting them to the court clerk.
Once this is done, you’ll then need to wait for a judge’s approval. This can take several weeks. During this time, your creditors can’t attempt to collect any of your property or money.
Then, your lawyer will review the information that you submitted to see if you are eligible for Chapter 7. This is known as the “Means Test.” If your income and expenses fall below the federal guidelines, you’ll be approved to file for bankruptcy.
Another important consideration is whether or not you can afford the costs of a bankruptcy. Depending on your situation, you might qualify for a fee waiver or be able to pay it in up to four installments.
You might be able to exempt property from being sold or turned over to your creditors, and this will vary by state. It’s always a good idea to discuss your assets with your Phoenix bankruptcy lawyer, especially if you have significant property that might not be exempt.
It is also a good idea to disclose any new debts you might have before filing for bankruptcy, so that your lawyer can assess how likely it is that you’ll qualify. This could mean not applying for new loans or maxing out credit cards before filing.