Chapter 13 Reorganization
Chapter 13 Bankruptcy in Arizona involves a repayment plan. You pay all or part of your debts during a three to five year period. You propose a payment plan that has to be approved by the court and creditors won’t bother you as long as you’re paying the payments. This can be a relief and help you live by a budget. A reasonable budget and plan can succeed.
Qualifications for a Chapter 13 bankruptcy in Arizona
You’ll need to take two tests:
- The best-interest test. This test mandates that unsecured creditors be paid at least as much as they would have if you had filed a Chapter 7 bankruptcy.
- The best-efforts test. This test requires that you pay all of your disposable income to the trustee for at least 36 months of your plan. If your monthly income exceeds the median, allowable expenses are based on Internal Revenue Collection Financial Standards, and the plan must run for 5 years. Otherwise, the amount of your payment will be based on your actual expenses, as long as they are reasonable.
When you are done with that creditors won’t get much more from you.
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