Chapter 7 is typically called the “Liquidation Bankruptcy” because in it the Bankruptcy Trustee takes all of the debtor’s non-exempt assets and ‘liquidates’ them – i.e. sells them for the benefit of the creditors.  THE TRUSTEE DOES NOT TAKE ALL OF YOUR ‘STUFF’ IN A CHAPTER 7.  The key word is ‘non-exempt’ assets – essentially everything the Arizona legislature has deemed not absolutely necessary in order to lead a productive live.  Arizona has pretty generous exemptions, and most of my clients find that they do not anything that is ‘not exempt’ – therefore, the trustee does not take anything from them.  See the Arizona Exemption Booklet available on the bottom of this page.
Chapter 7 bankruptcy is a quick process and at the end all of your dischargeable debt is discharged.  However, Chapter 7 is not for everyone…. if you have the ability to pay back some of your debts, the law may find that you do not qualify for Chapter 7 relief.
Whether one qualifies for Chapter 7 relief is determined by the means test… Now, this sounds like a simple test, and I know there are some websites out there that lead you to believe that once you fill out their online questionnaire you will find out whether or not you qualify.   Let me warn you – it is not that simple!  Sure, the first step is simple enough: You take your last 6 months of income times two, and compare it with the median household income for a household of your size, in your county, as determined by the IRS.
Yes, that was the simple first step…. it only gets more complicated from there.   Too many mistakes are made in this important first part of a bankruptcy filing, and I recommend that even if you decide not to hire Marco | Wimmer PLLC for whatever reason, do hire a knowledgeable attorney to walk you through the process.