Bankruptcy petitions are detailed legal documents that are often well over 50 pages long, so drafting and filing one is no easy task. At the same time, there are several other steps that must be completed before a debtor can confidently file a bankruptcy petition that will result in a successful case. When a bankruptcy case is filed incorrectly, it could be dismissed, assets could be seized, debts could be excluded from discharge, and more. Don’t risk any of those outcomes- retain a qualified attorney to handle your Arizona bankruptcy case. Before declaring bankruptcy in Phoenix, read this final checklist and confirm that you are ready to file. To schedule your free consultation with a skilled bankruptcy professional from our Zero Down law firm, call 602-509-0955. 

Prior Bankruptcy Filings?

This step is only relevant if you have filed for bankruptcy in the past. Bankruptcy law limits how frequently a debtor can discharge their obligations with either chapter 7 or chapter 13. Make sure you have satisfied the applicable waiting period if you are seeking to file for bankruptcy a second time. Chapter 7 debtors must wait eight years to file another chapter 7 case, or four years to file a chapter 13 bankruptcy. Chapter 13 debtors must wait two years to file another chapter 13 case, or six years to file a chapter 7 bankruptcy. 

Are Your Assets Protected? 

Especially in chapter 7 bankruptcy, protecting assets with exemptions is a huge concern for debtors. In chapter 7 bankruptcy, the trustee can take and sell non-exempt assets to pay off debts and receive payment. In chapter 13 bankruptcy, non-exempt assets could increase how much a debtor must pay into their plan. In Arizona, there are exemptions for common assets like the homestead exemption, motor vehicle exemption, and household goods and furnishings provision. But Arizona does not allow debtors to use federal bankruptcy exemptions, nor does it offer a wildcard exemption for the debtor to use on any asset of their choosing. Don’t forget to review savings and investment accounts and other intangible assets when reviewing your assets for bankruptcy purposes. 

Credit Card Spending Within Limits?

Most debtors who file for bankruptcy have at least some credit card debt to discharge. But bankruptcy’s ability to clear credit card debt isn’t infinite. There are limits to both luxury spending and cash advances on credit cards in the months leading up to a bankruptcy petition filing. Exceeding these limits may result in those debts being excluded from the bankruptcy process and remaining after other debts have been cleared. 

Do You Have Your ID’s Ready?

It would be concerning if verifying your identity with valid forms of government ID weren’t a part of the bankruptcy process. You need two to obtain a bankruptcy discharge- a photo ID and a SSN ID. Examples of photo ID’s include a driver’s license, state identification card, or passport. The most common SSN ID is a Social Security card, but you can also use a W-2 if you don’t have that form of ID available. It isn’t uncommon to lose an ID, and it can take a while to get a replacement if you have to request one, so take care of this now rather than later if you plan to declare bankruptcy in the near future. 

Have You Taken the Credit Counseling Course?

Whether you file for chapter 7 bankruptcy or chapter 13 bankruptcy, you must take an online credit counseling class before filing your petition if you wish to achieve a debt discharge. This course doesn’t cost much to enroll in or take long to complete, but failure to do so will result in your case being dismissed. This class must be taken before filing. You (or your attorney) will be provided with a completion certificate that should included with the petition at filing. Keep in mind that you will have to complete a chat with a counselor about your financial situation, which many people find uncomfortable. You will need to complete a second course as part of the bankruptcy process, but this doesn’t come until after the 341 Meeting of Creditors. Your course completion certificate is valid for up to 6 months before your petition is filed. 

Have You Confirmed Your Income Eligibility?

Proving income eligibility for bankruptcy is easier in some cases than others. If you have variable income or are right on the border of qualifying, it’s best to conduct these calculations with guidance from an experienced attorney. There are two ways to qualify for chapter 7 bankruptcy; the means test and by comparing household income to the state median. Using the household income comparison is simpler if you can use it to prove your eligibility- just compare your average monthly income from the past 6 months to the applicable amount in this table. The means test is a bit more complicated, but it is a necessary step to qualifying and filing for chapter 13 bankruptcy. A debtor with a negative or small figure reached in the means test may also qualify for chapter 7 bankruptcy. To complete the means test, a debtor should deduct each of their mandatory expenses from their average monthly income. That number must be enough to pay off certain types of debts in either 3 or 5 years to qualify for chapter 13 bankruptcy. 

Are Your Bank Account Levels Low?

An annoying aspect of filing for bankruptcy is the low exemption to protect cash on hand or funds in a bank account. If the trustee reviews your bank account statements and finds that you had non-exempt funds in your account on the day you filed for bankruptcy, it could cause issues, e.g., being required to pay that amount towards your bankruptcy estate. The exemption is only $300 for an individual and $600 for a married couple in Arizona. Therefore, we recommend avoiding filing on payday if possible. 

Can You Pay Your Filing Fee?

To file for chapter 7 bankruptcy, the filing fee is $338, and it is $313 for chapter 13 bankruptcy. You should request a filing fee installment plan or waiver if you believe that paying it will be an issue for you. Failure to pay filing fee installments is a major reason that bankruptcy cases end up dismissed. You may need to start saving up now for your filing fee if funds are tight, like they are for most bankruptcy debtors. 

Review Your Potential Bankruptcy Case in Depth with an Experienced Arizona Bankruptcy Professional

Filing for bankruptcy with an attorney means having someone who is knowledgeable about the process to guide you through each step of the way. This makes it more likely for your case to successfully end via discharge, and for you to get the absolute most out of your filing. When you file with Phoenix Bankruptcy Attorneys, you file with a team you can trust with rates and payment options that you can afford. If you’re feeling overwhelmed by all that is required to file for chapter 7 or chapter 13 bankruptcy in Arizona, you don’t have to approach this challenge alone. We make getting started easy with free case evaluations by phone. Schedule yours today at 602-509-0955 for more information.