If you are are a Phoenix resident interested in filing personal bankruptcy via either Chapter 7 or Chapter 13, you should first find out if you’re eligible. Once you figure out eligibility, you can take the next important steps in successfully filing and getting a fresh start. This post shows you how, specifically for Phoenix, Arizona residents.
The median income for all states is the basis for Chapter 7 bankruptcy eligibility. With changes in bankruptcy, if you make more than the median income you often have to file under chapter 13 bankruptcy.
Chapter 13 bankruptcy does have clear advantages, but first let’s go over eligibility for Phoenix Chapter 7 bankruptcy.
Eligibility for Chapter 7
As stated, eligibility is different in all 50 states. For Phoenix and all residents of Arizona, here are the numbers.
Phoenix Family of 1, Annual Income Limit $43,397
Phoenix Family of 2, Annual Income Limit $57,620
Phoenix Family of 3, Annual Income of 62,002
Phoenix Family of 4, Annual Income of $71,867
And it increases for each additional family member
Why File Chapter 7 Bankruptcy in Phoenix Arizona?
Chapter 7 bankruptcy has many advantages for Phoenix residents. The median income is about average in Arizona to all other states, noting a lower number than in past years because of the rise in unemployment.
Unemployment is one of the leading reasons to file bankruptcy. If you’ve lost your job, have a lot of assets and little income, Chapter 7 bankruptcy may be good. It can clear credit debt for one, and can be finished in a matter of months.
There are of course other reasons to file for bankruptcy, beyond simply unemployment and credit card debt. You may have high medical bills, for example. Or you may be in danger of losing all your assets and want to cut your losses and eliminate debt. Chapter 7 bankruptcy can do this. Chapter 13 bankruptcy is also an option.
How Can Chapter 13 Bankruptcy Help Phoenix Arizona Residents?
Chapter 13 bankruptcy is very different, but more important now than ever for Arizona residents and residents in other states. Because of the median income law where if you make too much you are not eligible, Chapter 7 is off the table for many. This isn’t necessarily bad.
For one, Chapter 7 bankruptcy means you can lose major nonexempt assets, such as your home and car. If you are still employed, have an income, but fear foreclosure or the repo-man, you might want to talk to a bankruptcy attorney about Chapter 13 bankruptcy.
There are some eligibility laws for Chapter 13 bankruptcy too, which includes Arizona and all other states. You, as an individual or a family, must have less than $336,900 in unsecured debt such as credit cards, medical debts, and taxes. You must also have less than $1,010,650 in secured debt such as mortgages and car loans. Most people fit into this criteria.
What’s the First Step for Phoenix Arizona Bankruptcy?
The first step is to hire a professional Phoenix bankruptcy attorney who can help you figure out 1) what you’re eligible for and 2) what’s best for you.