How To Determine If You Qualify For Arizona Bankruptcy
Bankruptcy is an unpleasant situation to find oneself in. However, in some cases it can be the best solution to a foreboding mountain of debt. It is important that this out be used only as a last resort when all other alternatives have been thoroughly researched and attempted. If an individual thinks he might be one of the hundreds of thousands of Americans forced to file for bankruptcy every year, it is necessary to first determine whether he rightfully qualifies.
Whether or not one qualifies for this debt resolution hinges primarily on two important things – one’s debt and one’s income. If both of these numbers meet the requirements under state law, an individual may proceed with filing to eliminate debt.
If this state law affects property exemptions in a debt resolution case, which differ from state to state. If one files in this state, he may only claim property exemptions that have been given by state law. For example, current exemptions include one’s home (or up to $150,000), equipment used in your line of work up to $2,500, retirement funds, and life insurance up to $20,000. The amounts of these exemptions are subject to change.
The fact is that anyone in Arizona can file for some kind of debt resolution under chapter 7 bankruptcy and chapter 13 bankruptcy. The key, however, is in determining whether or not one should. Hiring a Tucson bankruptcy lawyer can give helpful insight via the professional opinion needed to make the right choice for an individual and his family.
During this process, one’s bankruptcy lawyer will work with them to review their status and financial standings. This begins with a look at the income. In Arizona, an individual’s income must come in at less than the median income in order to qualify for chapter 7 bankruptcy in this state. If these numbers meet the criteria, a person filing for this kind of debt resolution will then have to undergo a complex test called the Means test, which is based on both income and outgoing expenses.
Should one qualify, chapter 7 would eliminate the majority of debt including medical bills, credit cards, real estate foreclosure debt, vehicle repossession debt, and most tax debt more than 3 years old. Because chapter 7 bankruptcy takes care of most forms of debt, it is the most common kind in every state of the U.S., although not everyone is able to qualify.
If a person is unable to qualify for chapter 7, their bankruptcy attorney in the city of Tucson will help them determine whether they meet the requirements for chapter 13 bankruptcy instead. This method allows one to use part of your income to repay debt (either part or all of it), over a period of three to five years. An individual may qualify for chapter 13 bankruptcy if they are able to prove an ability to make regular payments and if their secured debts are under 1.10 million and unsecured debt is under $337,000.
One should consider all of this information, which can begin to help determine whether an individual has any chance of filing for this debt resolution in Arizona. If debt is substantial, chances are that they do qualify either for chapter 7 or 13. If so, the next step is hiring a reputable lawyer who specializes in bankruptcy in order to proceed successfully.