​​​Chapter 7 Bankruptcy​

Most people naturally tend toward a Chapter 7 bankruptcy, which is a liquidation of their unsecured debt.  Debts that are normally secured are mortgages (secured by your home) and car loans (secured by your car).   One of the factors that are looked at to determine if you qualify for a Chapter 7 filing is whether your income is lower than the median family income for your household size. Generally speaking, when most of your debt is consumer debt, you must compare your income to the median family income for your household size to find out if you qualify for a chapter 7 filing.  This is known as the “means test”.   

A list of Arizona’s median family income statistics can be found here: Census Bureau Median Family Income - Effective 05-15-2021 .pdf​

If your assets exceed the Arizona property exemptions then we must discuss what will happen to those assets, and we should talk about a Chapter 13 which allows you to keep more, and maybe all, of your assets which exceed the exemption limits.  Several years ago, a number of bankruptcy attorneys, including Mr. Luccitti, registered their position with the State legislature to increase the assets debtors could keep. Fortunately, the legislators agreed and the law was changed to allow the property exemptions to increase, allowing you to keep more of your assets. 

A list of Arizona’s Property Exemptions can be found here.

Most chapter 7 bankruptcies eliminate the following debts:

• Credit Card Debt
  
• Personal loans
  
• Medical Bills
  
• Deficiency debts from a home foreclosure or repossessed vehicle
  
• Money owed under lease agreements
  
• Lawsuits or civil judgments
  
• Tax debts that satisfy certain criteria.
  

Chapter 13 Bankruptcy

This is a bankruptcy that allows the filer to pay off a portion of his/her debt over the course of three to five years, by paying a monthly amount that represents their monthly disposable income (money left over each month after your reasonable living expenses are taken into account).   Almost all persons eligible for a Chapter 7 will file a chapter 7; however, there are some benefits to a Chapter 13 that make it the more attractive choice –i.e. If you have a second lien on your home and that second lien is fully unsecured (no value in the home beyond the first mortgage), then a chapter 13 allows you to strip off that second lien and have it treated the same as a credit card or other unsecured debt.

Contact Us to learn about other benefits of filing a chapter 13 instead of a chapter 7.  

If you are ineligible for a Chapter 7, then a Chapter 13 is the usual alternative. The benefits offered by a Chapter 13 make it a good choice for many.  For example, if you have assets that are not exempt (see list of Arizona Exemptions here), a Chapter 13 will probably allow you to keep those assets whereas a chapter 7 would not. “Cramming down” your car loan is also a benefit of a chapter 13 case –you cac cram down the amount you owe to the amount of the value of the car.    

Another benefit of the chapter 13 case is that it is available to those who previously filed a chapter 7 and cannot yet file another chapter 7 because not enough time has gone by. Even if you meet the Chapter 7 “means test”, if you filed a chapter 7 bankruptcy in the preceding 8 years and received a discharge, you are not eligible to file another chapter 7, but you can still file a chapter 13 if at least 4 years have elapsed.  

The Bankruptcy Process: 

After collecting your financial data with your assistance, we will draft your bankruptcy papers, review them with you, and then file them for you. We will then represent you at the meeting of the creditors, where the court-appointed trustee reviews the information you have provided and will ask questions regarding your case.  Creditors have the right to appear at this meeting and ask questions.   

When we file your Chapter 7 or Chapter 13 case, an automatic stay takes effect automatically and immediately, which prohibits any of your creditors from contacting you or taking any action to collect your debt.  This is an important benefit that will end creditor harassment and stop a civil action and judicial wage garnishment. If a creditor is belligerent, we can remind them of the Bankruptcy Stay and their violation of it, and then seek punishment against them for knowingly and willingly violating federal law.   

We prefer to handle all legal matters during the pendency of your bankruptcy --whether it’s during the 4–6 months of a usual Chapter 7 case or the 3-5 years of a Chapter 13 case.       

Avoiding Foreclosure

If you are behind on your home mortgage payments, and want to keep your home, filing a Chapter 13 bankruptcy can immediately stop the foreclosure of your home. You can then pay off the arrearage over the duration of the chapter 13 plan (3 to 5 years).   

Stopping Wage Garnishment

As most of you know, creditors in Arizona can commence a lawsuit and get a judgment against you for what you owe them.  They usually follow-up with a Writ of Garnishment, which is sent to your employer, and which must be respected by your employer.  This may lead to as much as 25% of every paycheck being garnished –which usually takes away money from what you need to pay your everyday living expenses. The creditors may also garnish money from your bank accounts.  Filing a Chapter 7 or chapter 13 bankruptcy will immediately stop these garnishments.   

Bankruptcy and Divorce

If you are contemplating both a bankruptcy and a divorce, then you should consult with The Luccitti Law Firm to discuss how you should proceed.  Mr. Luccitti is experienced in both family law and bankruptcy and can handle these matters for you.  

In the situation where the married couple are not amicable with one another, one spouse may be concerned about the other spouse running up additional debt before a divorce case is commenced.  In that situation, it may be wise to file for divorce immediately in order to prevent the other spouse from creating debt that will be considered a community debt.  Once you file for divorce and serve your spouse, your spouse’s subsequent debts will no longer be considered a presumptively community debt.    

Some couples, who are contemplating an amicable divorce and who also qualify for a Chapter 7 bankruptcy, choose to file bankruptcy first in order to get rid of all their unsecured debt (both separate and community) before filing for divorce.  The limited time it takes for the Chapter 7 case to be completed does not bother them and their subsequent divorce case becomes simpler since a determination of the amount of their community debt and the apportionment thereof (who gets what debt) are no longer an issue.  The divorce case has been streamlined.       

One last thought

The bankruptcy law is a powerful law designed to help you resolve your financial distress and get a fresh start. Unfortunately, about one-fourth of all bankruptcies filed without an attorney are dismissed. When that occurs, not only does one lose his or her chance at a clean financial slate, but a bankruptcy filing still shows up on a credit report. Also, if you do not complete your bankruptcy forms accurately, you could be subject to criminal liability. Retaining a knowledgeable attorney to represent your interests is advisable. The Luccitti Law Firm will take the steps necessary to protect your interests.

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Please feel free to 

Bankruptcy

Filing for Bankruptcy

While filing for bankruptcy is not to be taken lightly, it is often the last resort for those who are overwhelmed by the demands of their high debt.  Bankruptcy is an unfortunate reality of today's economy.  Here at The Luccitti Law Firm, we are experienced in helping people successfully negotiate personal bankruptcy. 

If you find yourself in this position, we can help you!​​​

Please feel free to view a brief introductory video below about some benefits of bankruptcy.

Learn to Protect Yourself!

We are a debt relief agency.  We help people file for bankruptcy relief under the Bankruptcy Code.

We are a debt relief agency.  We help people file for bankruptcy relief under the Bankruptcy Code.

​​​​​​​How We Can Help You?

You will meet for a one-on-one consultation with the attorney. There are four chapters of bankruptcy code available to individual consumer debtors, and your attorney will review your situation and recommend the best course of action available to you.  If you have a a business, we can discuss with you the benefits of a Chapter 11 business reorganization.

We will ensure that the documents to be filed are accurate and in the proper form. We will file the documents and represent you in all court appearances including the meeting with your creditors, as well as any hearings concerning motions made by any of your creditors. 

We feel that open communication with our clients is extremely important.  Your phone calls will be returned promptly, and you will be kept informed about the status of your case.  We will treat you with the respect that you deserve.  Our goal is to make this time of your life as stress-free as possible.   

We offer a free telephone consultation to review your financial situation and to determine whether a bankruptcy filing is best for you –not everybody needs to file.  We can then discuss the different bankruptcy chapters to decide which one is best for you and your family.

The Benefits of Filing For Bankruptcy

There are few things more frustrating than out of control debt.  People employed for years may find themselves at the receiving end of a layoff or termination, causing a major shift in their ability to meet their debt obligations.  You have the right to the protections of the bankruptcy laws, and we will make sure that we do all we can to give you the protection you are entitled to.  Harassing phone calls from creditors, lawsuits, visits from process servers, judgments, and garnishments are all matters that we can help you eliminate so that you can get the “fresh start” that you deserve.      

There are many filings each year in all 50 states and many of those are businesses (some of them quite big) that found themselves with mounting debt that exceeded their disposable income.  All debtors, from unemployed and modest income individuals to big corporations are entitled to the protections afforded by the Laws of this country, and that includes the United States Bankruptcy Code which understands that people and businesses may need a fresh start.

Contact us today to receive immediate help filing for bankruptcy.

Text Anytime! 623.882.6313