How Much Debt should You have to File Bankruptcy in Arizona?
How much debt should you have to file bankruptcy in Arizona? Is this the best option for you? These are probably the most common questions that people who experience financial difficulties ask themselves.A�Apart from the personal and practical considerations, there are a few legal issues that will also be determining for the filing process in Arizona. If you dona��t know how or when to get started, the following guide will shed some light on the basics.
How do You Qualify for an Arizona Bankruptcy?
Taking a look at the qualification procedure for a Chapter 7 bankruptcy in Arizona will help you understand the process and the specifics of the financial situation that you have to be in.
To file for a Chapter 7 bankruptcy in Arizona, you have to pass the means test. The test is defined under the 2005 Bankruptcy Act. A court will look at the debtora��s average income over the past six months. This income will be compared to the median income in Arizona.
People who have an income below the median in the state will qualify for a Chapter 7 bankruptcy. Alternatively, a person may be advised to file for a Chapter 13 bankruptcy.
In essence, a bankruptcy makes sense for the people who dona��t have the financial means to pay off their debt. For some people, this unpayable debt could be 10,000 dollars, for others, the sum will be 90,000 dollars. The debt to income ratio is the one that matters rather than the debt on its own. Anyone whoa��s struggling with making the payments will be better off visiting a bankruptcy attorney to understand the specifics of this option and the possibilities that ita��s going to bring to the table.
When is it a Good Time to File for Bankruptcy?
If you are wondering whether your debt is too much and whether filing for bankruptcy is the best way to go, you will need to answer a couple of questions.
For a start, have you lost your job recently? Or maybe youa��ve lost another source of income? If this is the case, you will probably experience significant difficulties when it comes to making timely credit payments.
People who are left without an income source for a long period of time should definitely consider an Arizona bankruptcy. The same applies to individuals who:
- Are juggling numerous credit cards and cana��t manage with credit card debt
- Are attempting to resuscitate a small business or a startup thata��s going under
- Have a medical condition or a family member who needs long-term treatment (leading to the accumulation of medical bills)
- Are seeing an increase in their monthly debt, regardless of the fact theya��re attempting to make timely payments
- Are considering taking a risky or a high interest loan for the purpose of paying off some debt
- Are being threatened with legal action on behalf of creditors
The Lesson: Therea��s No Minimum Debt When it Comes to Bankruptcy Filing
The amount of debt you have is going to be a major consideration because filing for bankruptcy is going to have its long-term consequences, however you dona��t have to accumulate a certain amount of debt. If you could avoid it through smart financial planning, you should probably attempt doing so. When the debt keeps on piling, however, you will need to undertake the necessary measures to float to the surface. Filing for bankruptcy will make a lot of sense because a lot of the debt will be discharged.
Do note that to file for a Chapter 13 bankruptcy you should have no more than 1,184,200 dollars in secured debt and no more than 394,725 dollars in unsecured debt. The numbers could change periodically in order to get an inflation adjustment. So, that should clear the doubtA�how much debt should you have to file bankruptcy in Arizona.A�