Chapter 7 bankruptcy in Arizona, step by step.

What happens

The process starts with a consultation, and we offer the first meeting for free. The attorney looks at your debts, your income, and what you own, and tells you whether Chapter 7 is the right fit or whether another option would serve you better.

If you decide to move forward, you sign a representation agreement and pay the attorney's fee, often through a down payment and a short payment plan. Once that is in place, the attorney's office opens your file and gives you a list of everything they need from you.

What you need to do

• Bring a rough list of your debts, your income, and your major assets to the consultation.
• Ask what the total cost will be and what it covers.
• Sign the agreement and set up your payments.
• Read everything the office sends you. It is your to-do list for the next few weeks.

What happens

This step usually takes two to six weeks, and it sets the pace for the whole case. Your attorney's office will give you a checklist and work with you until every item is in. Everything in your bankruptcy paperwork is sworn under penalty of perjury, so it has to be built from real records, not estimates.

Missing documents are the number one reason a case is not filed yet. People who send everything in the first week are usually filed within a few weeks. People who send things one at a time can take months.

What you need to do

• Six months of pay stubs or other proof of income
• Two years of federal tax returns
• Several months of statements for every bank and credit union account
• Retirement and investment account statements
• Vehicle titles, registrations, and loan statements
• Mortgage statement and deed, if you own a home
• A list of every creditor with address and balance, plus any collection letters, lawsuits, or garnishment papers
• Your photo ID and Social Security card

What happens

Federal law requires everyone who files bankruptcy to complete a short credit counseling session from an approved provider before the case is filed. It takes about 60 to 90 minutes, online or by phone, and usually costs under $50. It is not a test. You answer some questions about your income and expenses and receive a certificate.

The certificate is only good for 180 days. Your attorney will tell you which provider to use and when to take it so it is still valid on filing day.

What you need to do

• Complete the course when your attorney tells you to.
• Send the certificate to your attorney as soon as you finish.
• Remember there is a second, different course after filing (Step 7).

What happens

Once your documents are in, your attorney's office prepares the petition, schedules, and statements. This is the full picture of your finances: what you own, what you owe, your income, your monthly expenses, and your recent financial history. The attorney reviews everything before it comes to you.

You then review and sign it. You are swearing that it is true and complete, so take your time.

What you need to do

• Check five things carefully: your assets, your monthly expenses, your creditor list, your recent financial transactions, and anything your attorney flagged as not fully protected.
• Tell your attorney right away if anything has changed since you sent documents: a new job, a car, a lawsuit, an inheritance, or a large purchase.
• Ask questions. If something looks wrong, say so before you sign.

What happens

Your attorney files the case electronically with the United States Bankruptcy Court for the District of Arizona. The moment it is filed, the automatic stay goes into effect. Creditors must stop calling, stop lawsuits, stop wage garnishments, and stop repossessions and foreclosure sales. No court hearing is needed. It is automatic.

The court assigns a trustee to your case and sets the date for your 341 meeting, usually 21 to 40 days out. Your attorney will tell you the date and time as soon as the notice arrives.

What you need to do

• If a creditor contacts you after filing, do not argue. Give them your case number and your attorney's phone number, then let your attorney know.
• Keep paying your mortgage and car loan if you plan to keep the house or car.
• Keep your bank statements and pay stubs. The trustee will ask for some of them.

What happens

This is the one appearance you have to make, usually three to six weeks after filing. It is not a court hearing and there is no judge. In Arizona these meetings are currently held by video.

The trustee swears you in, checks your ID, and asks a short list of questions: did you read your paperwork before signing, is it true and complete, have you listed everything you own and everyone you owe, and has anything changed. Creditors are allowed to attend but almost never do.

Most meetings last five to ten minutes. Your attorney attends with you and will usually call you a day or two before to walk you through it.

What you need to do

• Before the meeting, send your attorney anything the trustee asks for. Your most recent tax return is always required at least 7 days before.
• Have your photo ID and Social Security card ready to show on camera.
• Join early, from a quiet place, with a working camera and microphone.
• Two rules: answer only the question asked, and if you do not know, say you do not know.

What happens

Two things happen in the 60 days after your 341 meeting. First, you take the second course, called debtor education or financial management. It is different from the first course and takes about two hours. Federal law says no certificate, no discharge.

Second, if you have a car or house loan, you decide what to do with it. A Chapter 7 wipes out your personal responsibility for a loan, but it does not remove the lender's lien. So for each loan you choose one of the four options below. Your attorney will go over which one makes sense for you.

What you need to do

• Take the debtor education course and send the certificate to your attorney within 60 days of your 341 meeting. Sooner is better.
• Decide what to do with each car or house loan and let your attorney know.
• If you are keeping a car or house, stay current on the payments.

What happens

After the 341 meeting, there is a 60 day waiting period in which creditors or the trustee could object. In a normal case nobody does. Once that window closes and your course 2 certificate is on file, the judge signs your discharge order. This usually happens about three to four months after filing.

The discharge is a permanent federal court order. Every debt covered by your case is wiped out. No one can ever sue you, garnish you, or collect from you on those debts again.

What you need to do

• Save the discharge order somewhere safe. It is your proof for the rest of your life.
• If a creditor ever contacts you about a discharged debt, do not pay. Send them a copy of the order and tell your attorney.

What happens

In most cases the trustee files a report that there is nothing to distribute, and the court closes the case shortly after the discharge, about four to five months after filing. That is the end. There is nothing more to do.

Your credit will start to recover faster than most people expect. The debts that were dragging your score down should now show a zero balance. Many people see their score go up within a year of the discharge.

What you need to do

• Wait about 60 days, then pull your free credit reports. Every discharged debt should show a zero balance with a bankruptcy notation. If one still shows a balance, dispute it with the credit bureau and tell your attorney.
• Build a small emergency fund and pay every bill on time. A secured credit card is a safe way to start rebuilding.
• Keep your attorney's number. If a discharged creditor ever comes back, your attorney can handle it.