Filing for Arizona Chapter 13 Bankruptcy through the Pew Law Center
At the Pew Law Center, we refer to the Chapter 13 bankruptcy as an individual debt adjustment bankruptcy, but it is also known as a wage earner’s plan. There is still a discharge at the end of the process, but the duration of the Chapter 13 case is three to five years. Attorney Lawrence ‘D’ Pew is providing this information to you in an easy-to-follow format. He wants you to have a much better understanding of the basic steps involved with your discharge of debts in an Arizona Chapter 13 bankruptcy.
We understand that not everyone is comfortable doing this on their own. The United States Bankruptcy Court can be intimidating for some. That is why our law firm offers free consultations to those in need of assistance. If at any time you would like to get help please call us at (480) 745-1770.
10 Steps to Guide You Through an Chapter 13 Bankruptcy
1. Determine Eligibility. An individual debtor can file an Arizona Chapter 13 bankruptcy so long as his or her unsecured debts fall below $360,475; and his or her secured debts fall below $1,081,400.
2. Pre-Bankruptcy Preparation. The Arizona Chapter 13 bankruptcy petition is fact-specific and many pages long. You will need to start gathering the necessary information and documentation before the petition can be drafted. When you meet with Lawrence ‘D’ Pew, you will be given a list of all of the information you must provide for the Pew Law Center to complete your petition, schedules, and declarations. The completed petition provides a financial snapshot of your situation – your assets, debts, living expenses, income. Every aspect of your financial life is thoroughly explored and documented. Your bankruptcy petition will include the following types of disclosures:
- Your full name, previous names if any, address, previous addresses, Social Security Number.
- Your spouse’s identifying information.
- Description of your dependents, if any.
- Whether you’ve filed for bankruptcy in the recent past.
- A complete list of your real property, the market values of those properties and any liens or encumbrances.
- A complete list of all of your personal property, the market values of all of those items, and any liens.
- A complete list of all of your creditors and a description of each creditor’s claim.
- A list of any unexpired leases or executory contracts.
- The name and addresses of any codebtors.
- A schedule of your monthly wages with your employer’s contact information.
- A schedule of your monthly necessary living expenses.
- Financial details of any business operation you have an ownership interest in.
- A report of any income you receive, regardless of the source.
- Disclosure of the details of any lawsuits against you, any foreclosure on real property, attachment or execution on your property, or garnishment of your wages or bank accounts.
- Report of any fire, flood, or theft resulting in a loss to you.
- Your available cash.
- Your safe deposit boxes, if any.
- All of your financial accounts, bank accounts, IRAs, 401Ks, pensions, and any other investment accounts.
- A report of any property that you hold, which belongs to someone else.
- The listing and claiming of all Arizona Chapter 13 bankruptcy exemptions that are available to you.
3. Credit Counseling Course. The bankruptcy petitioner completes a mandatory Credit Counseling Course within 180 days before the petition is filed with the Bankruptcy Court Clerk. When the course is completed, the debtor is issued a certificate of completion which is filed with the petition. (Note: Some debtors who are incapacitated or disabled, or who are on active military duty may be excused from the counseling requirement.)
4. Chapter 13 Plan. Filing a Chapter 13 bankruptcy requires submission of a well-developed repayment plan. How long the plan is in place depends upon your earnings and your debt. When your earnings are above Arizona’s median income (look at the Means Test for this information), then you will be proposing a five-year plan. When your earnings are below Arizona’s median income, then you will be proposing a three-year plan. Here are some of the items that are included in the proposed repayment plan:
- Claims. A complete list of creditors and their claims, the amount to be paid monthly (if anything), the duration of payments, and the interest.
- Payout. The payout by creditor priority, class, payment, interest, principal, and balance.
- Liquidation. This is a comparative analysis to determine what funds would be available to creditors under a Chapter 7 liquidation.
- Split Claims. A breakdown of a secured creditor’s claim when the amount owed is greater than the value of the collateral. The unsecured amount is split from the total claim.
- Petitioner’s Wage Detail. This is the employment income detail necessary to determine whether the debtor can realistically make the payments under the Arizona Chapter 13 bankruptcy plan.
- Chapter 13 Debt Limits. This establishes that the claims against the debtor are under the statutory Chapter 13 debt limits.
5. Filing the Chapter 13 Voluntary Petition and the Automatic Stay. When the petition and filing fee are paid to the Court Clerk along with the Chapter 13 plan, a case number will be assigned. Also at that moment, the Automatic Stay goes into effect to stop creditor collection efforts, protect the petitioner, and protect the bankruptcy estate during the proceedings. When the petition is filed, the Judge and Case Trustee are assigned, and the first § 341 Meeting of Creditors will be scheduled.
6. Creditors’ Proofs of Claim. When an Arizona Chapter 13 bankruptcy petition is filed, all creditors are notified and may submit their Proofs of Claims against the bankruptcy estate.
7. § 341 Meeting of Creditors. After your Arizona Chapter 13 bankruptcy case is filed, you must appear before the Case Trustee at the § 341 Meeting of Creditors.
8. Plan Confirmation Hearing. Within 45 days after the § 341 Meeting of Creditors, the Court will hold a confirmation hearing on the proposed repayment plan. If the plan is confirmed, then the Case Trustee begins implementing it right away. If the plan is not confirmed, then the debtor may file a modified plan or, possibly, convert the case to a Chapter 7 liquidation bankruptcy.
9. Financial Management Course. This is the second course that you must complete in your Arizona Chapter 13 bankruptcy. The Financial Management Course certificate of completion must be filed with the Court Clerk before the Arizona Bankruptcy Court will issue the discharge order.
10. Arizona Chapter 13 Bankruptcy Discharge. The discharge is granted by the Court when the Arizona Chapter 13 bankruptcy plan is completed.
We hope that having this basic information outlining the Arizona Chapter 13 bankruptcy process has relieved some of your anxiety. Here at the Pew Law Center, we’ve been through this process many times before with clients who were just as concerned about their financial future as you are. We’d like to help you through this difficult stage of your life as well. Come visit our offices in Mesa and talk with us. There is no shame or blame at the Pew Law Center.