Do I Qualify for AZ Bankruptcy?

Many people who are suffering through serious financial problems consider filing bankruptcy in Arizona as an option for relief. While bankruptcy protection will provide an end-point in the short-term to the collection efforts that make every phone call a traumatic event and every trip to the mailbox something those with financial problems dread, new bankruptcy laws passed in 2005 have led many people to question whether they qualify for AZ bankruptcy. Overall, the best step to take if you have any questions regarding Arizona bankruptcy is to contact an Phoenix bankruptcy lawyer to obtain a specific set of answers relative to your specific financial situation. In the meantime, below is an overview of these ‘qualifications’ for bankruptcy.

Arizona Bankruptcy Qualifications

The 2005 bankruptcy law, entitled the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, put some additional steps in place for those seeking bankruptcy help as compared to what was required prior to the passage of this law. These steps/qualifications include:

1. Taking a financial counseling course approved by the bankruptcy court and
2. Satisfying the ‘means’ test if your income is above the median income level of your state

While the first step/qualification is simple even if critics of this law find it unnecessary, the income/means test issue can be extremely complicated.

What the AZ Bankruptcy Requirements Mean

However, despite the fact that new steps are in place, failure to meet the income requirement does not mean that you are not allowed to file for bankruptcy protection in Arizona. Instead, you will be required to file for protection under Chapter 13 instead of Chapter 7 of the United States Bankruptcy Code. There are differences between these types of filings, including the fact that you will need to make monthly payments that you can afford to your creditors for a period of time. However, the remaining debts are discharged when this schedule of payments is complete, much like a Chapter 7 filing.

Basically, those who are experiencing severe financial distress should not be concerned with ‘qualifying’ for Arizona bankruptcy protection. Instead, those in this situation should contact an experienced Phoenix bankruptcy lawyer to schedule an initial consultation so that a course can be plotted that leads to financial freedom. Contact the Phillips Law Group today to get this process started.