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You see even though people made good money before and they make it now there are still options for them under bankruptcy. So the answer is absolutely yes.
In fact, think of bankruptcy as an incredible financial tool. Thats really what it is. If your income has determined that you can support a lot of debt, but youve gotten to the point where the debt is too great, then, yes, you can subtract your living expenses from your income in order to qualify you for chapter 7. Chapter 7 is the favorite type of bankruptcy for many people because it literally gives people a fresh start. So with a good Arizona Bankruptcy Lawyer you can get rid of all of your debt. And when going forward, you have just income and no debt.
So lets give you an example. Say the husband and wifetheyre making about $95-100,000 a year. Okay? Thats a lot. And in fact, a family of four can only make about $65,000 a year to qualify for bankruptcy.
But with the $100,000 couple, and the two children. Theyre in daycare, so the daycare costs are subtracted from that $100,000 income. And they also have a first and a second. And lets say that totals about $2800.
And you include the HOA fees in there because they have to pay those. They are required to. Theyre actually obligated, in fact.
So say that payment is about $2800. You get to subtract that from the income, as well. Then you have maybe some outstanding medical issues for the children. You get to subtract those, as well.
So the point is that you can use your daily expenses even for a high-income earner to bring you within a chapter 7 means test, meaning that you qualify under the Arizona bankruptcy code.
So, yes, at this point in our economy and given maybe a bleak outlook, that now, if you feel overwhelmed by debt but are comfortable with your income and are concerned that youll be struggling, you really should consider a chapter 7.
And the reason that is, is because theres a little financial risk with regard to your credit. Its a two-year risk that youre taking. But if you sit down and add up your actual debt to income, maybe people come to realize that, Yeah, I have $100,000 income. But I might have $400-500,000 worth of debt. And that is a really big hurdle to get over even with a six-figure income.
So, yes, people do qualify.
Also people usually want to know, will I need to go to court?
Yes, you will.
In reality it is Court but not as you would think. What youre really attending is a trustee hearing because, in bankruptcy once you file, there will be a trustee thats appointed to your case. And that trustee is there to act as a referee between you and your creditors.
Your Arizona Bankruptcy Lawyer has a couple of roles. To protect you from unscrupulous creditors that may take advantage of you after filing. Meaning collection calls, attempts to contact you to collect the debt. And they also have a responsibility to creditors.
If you have assets that arent protected by bankruptcy, they have an obligation to inquire about them. Find out their value. And if theyre valuable, they have an obligation to ask you for that value back. And they have an obligation to then distribute it to your creditors.
So a meeting of creditors is what youll be going to, thats the court that you may be concerned about.
And what happens in your meeting of creditors is it takes place in the trustees office.
And the hearing itself is really about 5 to 10 minutes in length. And theyll have a couple of questions for you. And they are geared towards looking towards assets.
Two of the biggest questions good attorney will always ask you are, Do you anticipate receiving an inheritance in the next six months? And if so, would you turn it over to the court?
The other question that comes up all the time is, Have you sued someone that owes you money and do you anticipate them paying you? Will they pay you within the next six months?
Those two questions are geared towards, Do you have assets that I dont have here in front of me today?
What your attorney is doing is preparing your case to have as few assets as possible and everything that you do have to be protected. Now when those two areas inheritance or law suit, theres not too much you can control. They are simply yes or no questions.
Other than those two questions, the trustees can ask you some identifying questions. Is this your social security card? Have you resided here in the last 180 days, things of that nature.
Like we said, its usually a 5- to 10-minute hearing at the very most. Thats really your meeting of creditors.
Over the years probably since at least the 80s, the creditors have no longer been coming to hearings any longer. Most individualsin fact most chapter 7sdont have any assets. And thats because if they have a good bankruptcy lawyer, their lawyer will do some really good financial planning for them.
They dont have any assets, so its really not in the creditors interest to spend the time and the money to send a representative to ask questions.
So thats really what you can anticipate, and thats what you hear about on the Internet and the news and amongst your friends and co-workers that say, Oh, theres a court hearing. Thats what thats about.
Its a lot less scary than most people thought it was going to be. So knowing what they want to know takes a lot of the mystery out of it and a lot of the fear.
And now I would like to invite you to take a free online bankruptcy evaluation. Just visit our site at http://arizonalegaladvocacy.com/
With this free evaluation we will be help you decide what option would be best for you.
From Christy Thompson your Arizona Bankruptcy Lawyer
