In most cases you can keep your home when filing for Chapter 7 bankruptcy in Arizona, especially if the mortgage is current. Arizona has a homestead exeption that allows debtors to protect up to $150,000 in equity through bankruptcy. If debtors are behind on their mortgage or have excess equity in their home, chapter 13 bankruptcy might be a better option. Chapter 13 allows debtors to keep their home if they are behind and repay mortgage arrearages over a three to five year payment plan.

If you filed for bankruptcy in the past, you may still be able to file again depending on how quickly you want to file again. If you filed a chapter 7 bankruptcy previously, you have to wait 8 years from the previous filing date to file another chapter 7. If the court granted a previous chapter 7 discharge, you must wait 4 years from the chapter 7 filing date to file a chapter 13. If you have previously filed a chapter 13 bankruptcy, you must wait two years to recieve another discharge. If you previously recieved a chapter 13 discharge, you must wait 6 years before filing a chapter 7 petition. There are exceptions if you paid unsecured creditors in full, or if you paid 70% of the claims, the plan was proposed in good faith, and represented your best effort.

In a chapter 7 filing, your car is protected by the automatic stay and Arizona has an auto exemption that allows for up to $6,000 in equity in a vehicle to be protected. If you are behind in your car payment, the loan lender cannot repossess your car without first getting permission from the court. In these types of cases you can cure the deficiency with the lender or negotiate to try to keep the vehicle. In instances where there is excess equity in a vehicle and you would like to keep it, you can redeem the vehicle with the lender by buying back the excess equity in the chapter 7 proceedings for the fair market value.

Social Security benefits are exempt and therefore protected in bankruptcy. When filing for bankruptcy it is a good idea to keep the benefits in a seperate account and not commingle the funds with any other money you may receive. This makes it easy to prove the source of the social security income and the amount that is protected in bankruptcy.

There are no restrictions that prevent anyone from filing bankruptcy while unemployed. Although bankruptcy rules don’t specify that you must be employed, your past and present income can affect your ability to qualify for both chapter 7 and chapter 13 bankruptcy for completely different reasons. There are look back periods for income in Arizona (6 months) in which your income is averaged to determine elgibility, so if you just recently lost a high-paying job you may not immediately qualify for chapter 7. Loss of income can also impact your ability to qualify for a chapter 13, as this type of filing requires current income to qualify.