Written by Attorney Andrea Wimmer.
Updated September 3, 2020
If you're not sure whether to buy groceries or make the minimum payment on your credit card, life is no picnic. Even if you're not quite there, everyone knows that money worries impact every single part of your life and your family's overall well-being. You may still be hanging on and making all minimum payments as they come due, but that doesn't mean that you will be able to hang on forever. All it takes is a week out of work due to the flu or something similar and the snowballs you've been carefully juggling above your head turn into an avalanche. You will learn - almost immediately - that it doesn't matter that you've paid your credit card on time every month for the last 4 years. You're a day late! They are going to call you. Not once, not twice, a bunch of times. And the first time it happens, they may even waive your late fee once you explain what happened and make a commitment to pay quickly. But not all creditors are that understanding and none of them like to make accommodations like this more than once. You may have already tried credit counseling to see if you can consolidate your debt, or maybe go through a debt management plan, but that didn't work out. Filing bankruptcy in Tucson may be the answer you've been looking for. There are two main types or chapters of bankruptcy that individuals typically file: Chapter 7 and Chapter 13. Chapter 7 is for folks who have no hope of ever being able to pay their debts. In exchange for a discharge of most of their debts (things like recent taxes, student loans, and child support often can't be discharged) they provide the Arizona Bankruptcy Court with a list of all of their belongings and complete certain minimum requirements set forth in the Bankruptcy Code. If you own anything extravagant and valuable, it may be sold to pay a part of your unsecured debts. If you just have regular "stuff" however, chances are you'll get to keep everything even after filing a Chapter 7 bankruptcy in Tucson. A Chapter 13 on the other hand is a little bit like a debt management plan. A repayment plan is created that has you making a single monthly payment to the Chapter 13 trustee who then uses these funds to pay your creditors. The plan has to be approved by the trustee and the court, but once that's done, and all your payments are complete, you will get a discharge. Keep reading to find out more about how to help yourself - or find help - by filing bankruptcy in Tucson.
Tucson Bankruptcy Lawyers - Estimated Cost
Filing for bankruptcy protection is a federal court proceeding because the Bankruptcy Code is a federal law. But, just because you'll be going to federal court doesn't mean you'll get a lawyer for free. That only works in criminal cases. And, while it's not ideal to be filing bankruptcy in Tucson, it is definitely better than having to fend off criminal charges! While you don't have to hire a lawyer to represent you in bankruptcy court, it makes sense to at least familiarize yourself with what one might cost. Keep in mind, though, that bankruptcy is a pretty specialized area of the law, and bankruptcy lawyer costs are often offset by the amount of money they can save their client through careful pre-bankruptcy planning. The good news is that there are a number of really great bankruptcy lawyers in Tucson and one of them might be right for you. Almost all of them offer free initial consultations, so invest the time and meet with a few of them. You can use this time to learn more about your options, their recommendation, and the process you can expect to go through. They may even be able to show you how you can afford to pay for their fees so you don't have to file without a lawyer ("pro se"). And if not, you can still file your case on your own, having invested nothing but the time it took to meet with them.
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How to File Bankruptcy in Tucson, Arizona for Free
The main cost associated with filing bankruptcy in Tucson is typically legal fees. If you carefully follow guides such as this "how to file bankruptcy in Tucson" you can avoid having to incur this cost by filing pro se (without a lawyer).
Collect Your Tucson Bankruptcy Documents
Preparation is everything in life and that is no different when it comes to a Chapter 7 bankruptcy in Tucson. As mentioned, your part of the bargain is to provide the court and your creditors will full disclosure about your financial circumstances. This means you'll have to know certain facts about yourself, such as your income and expenses, your debts, how many and what kind of assets you have, and other current or past financial information. To ensure proper disclosure, your first step in filing bankruptcy in Tucson should be to collect the supporting documents that will allow you to answer all of these questions. You'll need the last 6 months of your paycheck stubs, your last two tax returns, and at least a couple of months of bank statements. You should also go through your mail and pull out all collection notices, bills or other financial information you've received in the last three months. This, combined with a copy of your credit report will aid you in making sure every single one of your debts is listed and every creditor's address is correct.
Take Credit Counseling
If you've previously tried credit counseling, you may be a little dismayed to hear that you have to go right back. But don't fret. For one, if you took the course in the last 6 months and the provider is approved to offer credit counseling in your district, you may be able to get the necessary certificate of completion to file bankruptcy in Tucson. If not, you'll have to take the course again, from an approved provider, in the 180 days before your Arizona bankruptcy case is filed. The purpose of the course is to ensure that everyone filing bankruptcy first learned what their other options are.
Complete the Bankruptcy Forms
Completing the forms is the first part of the process on how to file bankruptcy in Tucson that you can actually delegate to someone else if you want to. However, whether it's your bankruptcy lawyer or Upsolve that puts together the forms for you, you are still the one who has to provide all of the necessary information for it. Everyone filing a Chapter 7 bankruptcy in Tucson has to complete the same set of forms. All of the forms, and instructions on how to fill the forms out, are available for free online. Be prepared, though, there are a lot of questions. And while it may seem tedious to go through everything and seemingly provide the same information over and over again, keep in mind that you're asking the court for relief, and this is the price you have to pay for it. If that's not enough, then remember you'll be signing everything under penalty of perjury before submitting it to the Arizona Bankruptcy Court.
Get Your Filing Fee
It's unfortunate, but true. There is a court fee to file a Chapter 7 bankruptcy in Tucson. It's $338 and goes towards paying the court administration as well as the Chapter 7 trustee that will be handling your case. If you've been planning the filing for a while, hopefully you've been able to set aside this amount and purchase a money order or cashier's check. If not, and you need to file before you have the ability to get the filing fee, you have a couple of options. If you make less than 150% of the federal poverty guidelines, you're eligible to ask the court to waive your fee for filing bankruptcy in Tucson. If you're not eligible to ask for a waiver, you can instead ask the court to make payments on the fee after your case has been filed. This gets you the protections that come from filing a Chapter 7 bankruptcy in Tucson right away, and gives you up to 4 months to come up with the fees.
Print Your Bankruptcy Forms
While you don't have to have a lawyer to file bankruptcy in Tucson, you have to be a lawyer to file anything with the court's Electronic Case Filing system. Everyone else has to submit their paperwork to the court the old-fashioned way, in paper. This inevitably means that you'll have to print everything out. The good news is that even though this is a legal proceeding, you don’t have to print anything on legal sized paper. Good old-fashioned 8.5" x 11" paper is perfect and can be found in any home or office printer. Don't print any of the forms double-sided, the court does not like that. It's best to either print (or make) a second copy of everything for your files.
Go to Court to File Your Forms
At this time, only attorneys are allowed to submit documents to the court electronically. Everyone else still has to submit everything in paper format. You can file your Tucson bankruptcy by mailing everything to the courthouse, but there is a courthouse right downtown where you can file your case in person. It's generally a little less stressful to file everything in person because when you're done, you know your Chapter 7 bankruptcy in Tucson is on its way. If you mail everything in, on the other hand, you might not know whether everything was accepted until you receive a notice in the mail. When you head to the courthouse, make sure to bring change for parking and remember to bring all of your signed forms along with the court filing fee (or application to have it waived).
Mail Documents to Your Trustee
Once your case is filed, the court will appoint a Chapter 7 trustee for the case. The trustee is the one who does most of the legwork on behalf of your unsecured creditors. As part of their due diligence, they have to review certain information that is not typically filed with the court, such as your income tax returns. You should receive a letter from your trustee within a couple of weeks of filing bankruptcy in Tucson. This letter will tell you everything your trustee wants from you in preparation or your creditors' meeting and how to best get it to them. While you are protected from the automatic stay as soon as your case is filed with the court, you do have to work with the trustee in your case or you won't get your bankruptcy discharge. So keep an eye out from correspondence from your trustee and be prepared to send them a copy of certain documents such as recent tax returns, paystubs or bank statements.
Take Bankruptcy Course 2
As you may have noticed while looking for a credit counseling provider as you were getting ready to file bankruptcy in Tucson, there is also something called the "pre-discharge course" often referred to as "debtor education" or "financial management." The Bankruptcy Code requires every individual seeking to have their debts eliminated through bankruptcy to complete this debtor education course after their case is filed. The course is intended to provide filers with tips, tricks, and tools to handle their finances going forward and make the most out of their fresh start. The course has to be taken from an approved provider and, as before, you'll get a certificate of completion that will have to be submitted to the court.
Attend Your 341 Meeting
Your 341 - or creditors' - meeting is your proverbial day in court. Since a Chapter 7 bankruptcy in Tucson is a set procedure, a filer's day in court amounts to nothing more than a question and answer session with their trustee and, possibly, some of their creditors. The 341 will take place about 20 - 40 days after your Tucson bankruptcy case is filed with the court. Creditors are invited to attend and ask you questions (that's why it's called a "creditors' meeting"), but that rarely happens. Usually it's just the trustee and the filer, and the whole thing typically takes no more than 10 minutes. There are certain questions the trustee has to ask everyone filing bankruptcy in Tucson, and this will be your turn to answer them. Make sure you bring your picture ID and proof of social security number and you'll be done and on your way to your discharge before you know it.
Dealing with Your Car
If you own a car, you're probably wondering how a Chapter 7 bankruptcy in Tucson affects that. If your car is paid off, then as long as it’s worth less than $6,000, the Arizona motor vehicle exemption. If you are still making payments on it, then you can decide what you want to do with the car. A lot of people need their car and - having managed to stay current with their payments so far - feel that keeping up with the monthly payments going forward won't be a problem either. If that's you, then you're likely looking to enter into a reaffirmation agreement with your car lender. This basically keeps everything the same it was before your case was filed, including your personal liability on the loan. Since you'll be responsible for the full amount of the loan no matter what, seriously think about whether the car payments are really manageable before signing one. If not, then surrendering the car after filing bankruptcy in Tucson gets you out from the expensive monthly payments and protects you from the balance left owing on the loan after the car is sold at auction.
Arizona Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Tucson
Arizona Means Test
Not everyone filing bankruptcy in Tucson can do so under Chapter 7 of the Bankruptcy Code. To prevent people from taking unfair advantage of the bankruptcy laws, only those who pass the Arizona bankruptcy means test are eligible for a Chapter 7 discharge. The first part of the test compares your household income to the median household income in Arizona. If you make more than that, you may still pass the Arizona bankruptcy means test if you can show the court that you can't afford to pay your creditors even a little bit once you account for allowed expenses.
Median Income Levels for Arizona
Arizona Median Income Standards for Means Test for Cases Filed On or After May 1, 2021
|Household Size||Monthly Income||Annual Income|
Poverty Levels for Arizona
Arizona Fee Waiver Eligibility for Cases Filed On or After May 1, 2021
Eligible for fee waiver when under 150% the poverty level.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
Arizona Bankruptcy Forms
In addition to the official federal forms, Arizona has created a few district-specific Arizona bankruptcy forms. For example, every individual filing bankruptcy in Tucson has to file this declaration concerning payment advices with the court as part of their Arizona bankruptcy forms package.
Exemptions are laws that protect property your property from your creditors even after filing bankruptcy in Tucson. If you've lived in Arizona for at least two years when your case is filed, you have to use the Arizona bankruptcy exemptions.