In Arizona, consumers file bankruptcy when facing dire financial circumstances. The claims prevent foreclosure and repossession. They also help consumers manage their debts over an extended period of time. Attorneys Chandler AZ can explain the requirements for chapter 13 bankruptcy.
Qualifying for Chapter 13
Eligibility for chapter 13 is based on income levels. The consumer’s income must range above the area’s median. The current median income for Chandler, Arizona is $71,171. The court requires income statements for the last six months to establish eligibility. The attorney adds these balances together and multiplies the sum by two. Any value that is lower than the median is ineligible.
What Happens During Chapter 13 Bankruptcy?
The court reorganizes the consumer’s debts. The judge defines the full duration of the case. Bankruptcy cases expand over a three or five-year plan. The court calculates a monthly payment based on the total value of all outstanding debts. All payments submitted by the consumer are divided among their creditors. The court may garnish the consumer’s wages to collect these payments.
Discharging the Bankruptcy Case
The court must receive all scheduled bankruptcy payments. A consumer who fails to submit timely payments faces a discharge. If the court discharges the case, the consumer is responsible for all debts immediately. This means that the automatic stay is revoked, and creditors can file a legal motion against the consumer to collect outstanding balances. The creditor may also start the foreclosure or repossession process to seize assets connected to the consumer’s loans.
What is Disposable Income and How is It Used?
Disposable income is the value left over after monthly obligations, including the bankruptcy are subtracted from earnings. The plan requires the consumer to use these funds to pay off any debts that weren’t included in the claim.
In Arizona, consumers start a bankruptcy claim to achieve an automatic stay. This benefit prevents lenders from seizing assets connected to consumer loans and mortgages. Chapter 13 provides the highest level of protection against legal action. It provides the consumer with a more structured payment plan to settle debts. Consumers who want to start a bankruptcy claim should contact Attorneys Chandler AZ or Visit the site for more details.