Bankruptcy Issues in Arizona
While a bankruptcy filing may seem like the best option for addressing your financial troubles, it’s not always going to be possible. You have to meet certain Arizona bankruptcy requirements in order to be granted a debt discharge.
If you are considering bankruptcy filing, you will need to gain some insight into the factors that could lead to a court denial.
A Previous Bankruptcy Filing
There is a certain amount of time you have to wait after getting a bankruptcy discharge in order to file again.
If you have previously completed the Chapter 7 process successfully, you will have to wait eight years in order to file again. It’s not possible to file for a Chapter 7 discharge earlier than that and get the request approved by court.
When making the switch from Chapter 7 to Chapter 13, you will still have to wait. The period is four years. The shortest amount of time you’ll have to wait is if you’ve filed Chapter 13 and you’re looking for the same filing. In Arizona, this waiting period is going to be two years.
A Suspicious Transfer of Assets
Transferring assets shortly before a bankruptcy filing occurs is going to arise some suspicion. Very often, people will think they can transfer assets to a friend or a relative for the purpose of keeping those. Such transfers, however, will be considered bankruptcy fraud.
It is not permissible to transfer assets, file bankruptcy, get your debt discharged and get your assets back upon the completion of the process. People who try to hide assets will potentially get their discharge request denied and they may also be facing a federal lawsuit.
Inability to Pass the Means Test
In order to get a Chapter 7 debt discharge, you will have to pass the Arizona means test.
Through the test, your income will be compared to the median for the state. If your income is higher than the median, you will not qualify for a Chapter 7 discharge. The test will show that you have too much income for the purpose of benefiting from a complete bankruptcy discharge.
People who do not pass the means test are still entitled to certain debt relief possibilities. A Chapter 13 filing will be the typical approach. Chapter 13, unlike Chapter 7 is not a liquidation bankruptcy. In it, you will get to keep your assets but you’ll have to commit to paying creditors a certain amount on a monthly basis for the coming three to five years.
A Failure to Provide the Required Documents
The bankruptcy filing process is legally defined and you will have to pass through certain steps in order to be approved. These steps necessitate the provision of documents about your financial situation, your assets, debts and taxes.
An inability to provide all of the documents that the court has required will lead to the dismissal of your bankruptcy case.
This rule applies to both Chapter 7 and Chapter 13 filings. If you don’t supply the court with tax records for a certain number of years, for example, your Chapter 13 filing will be rejected.
Bankruptcy Request Challenges
On occasions, it may be possible for a third party to challenge your bankruptcy filing.
Both a creditor and a bankruptcy trustee can challenge the upcoming discharge. in this instance, the entity will be responsible for proving that you’re not eligible for a discharge. Usually, suspicions of bankruptcy fraud will contribute to such bankruptcy request challenges.
To avoid most of these scenarios, you have to be honest and thorough during the bankruptcy process. Hiring an attorney to guide you during every step of the way is one of the best options in terms of doing what’s right and what’s mandated by court for the purpose of getting a bankruptcy request approved.
Click here for more information on misconceptions about filing bankruptcy in Arizona.