To qualify for a Chapter 7 bankruptcy in Arizona you will need to take the Arizona Means Test, during which your income is compared to the median income for a household of your size. You’ll want to work with a phoenix chapter 7 bankruptcy lawyer that is familiar with Arizona’s specific laws regarding bankruptcy.
The means text compares Arizona state annual median income to your household “annual” income. Your “annual” income will be based on an average of the 6 months before you file your bankruptcy petition. If it is determined that your income is below the state median income, you will qualify for a Chapter 7 bankruptcy.
Here are the annual income limits for filing a Chapter 7 bankruptcy in Arizona (these are as of November 1, 2015):
Single Person Household: $45,933
Two Person Household: $56,351
Three Person Household $60,392
Four Person Household $71,195
Based on the size of your household, your annual income will need to be less than these figures to qualify to file Chapter 7.
More Than Annual Median Income
You might still be able to qualify for Chapter 7 even if your income is above Arizona’s median income. You will need to go through another means test, during which your disposable income is included in the calculation. Disposable income is the income left over after certain monthly expenses are deducted, including: mortgage payments, taxes you pay, medical bills, and child care.
If your disposable income meets certain state-set thresholds, you will still be able to file a Chapter 7 bankruptcy.
Settling Debt If You Don’t Qualify
If you still do not qualify for Chapter 7 after the means test, there are still options for you to help deal with your debt. You might be eligible for debt settlement, or even Chapter 13 bankruptcy, which requires you to set up a repayment plan to pay off debt within 3 to 5 years.
Working with a Bankruptcy Attorney
Bankruptcy can be an overwhelming process. That’s why we advise that you work with a phoenix chapter 7 bankruptcy lawyer that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.
668 N. 44th St., Ste 320, Phoenix, AZ 85008