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A Chapter 7 Bankruptcy "Liquidation" in Arizona is Really Not a Liquidation. Usually.

By Joseph McDaniel, Esq.

When Is a Liquidation not Really a Liquidation? When It's a Chapter 7 Case in Arizona!

So how often does a Chapter 7 bankruptcy get filed in the Bankruptcy Court for the District of Arizona?

Well, the last time I checked, pretty frequently.

About 82% of all cases filed, if I remember my statistics correctly, are Chapter 7 bankruptcy cases.

In a Chapter 7, the bankruptcy discharge is the McGuffen, the thing that is the object of the game.

And the bankruptcy exemptions are sort of the Phase One issue in a Chapter 7 bankruptcy case.

That is, assuming that you've done everything correctly, including passing the means test, filing in the right location, using the correct exemptions (not everybody is entitled to the Arizona Exemptions in the District of Arizona Bankruptcy Court, but that's a story for another day), sending copies of paperwork in response to The Trustee Letter, showing up on the right day in the right room for the First Meeting of Creditors with your social security card and your driver's license, the next two issues that are critical to you are 1)is the trustee going to object to my exemptions, and 2)is anybody going to object to my Bankruptcy Discharge, or the dischargeability of my debts?

Whew. Long paragraph.

But today we are lasering in on one topic: what percentage of Chapter 7 debtors are going to lose assets to a Chapter 7 Bankruptcy Trustee in their cases in Arizona?

And the answer is something in the area of 4%.

That is, 96% of all Chapter 7 cases in Arizona are "no-asset" cases, and the trustee doesn't want to bother with administering those cases.

That means that in about four per cent of cases, a bankruptcy trustee will want your post-petition tax refund, or your non-exempt car, or your non-exempt piece of property in Minnesota, or your Golden Age All American Comics No. 16 (July 1940), or your Rolex Watch.

You filed a Chapter 7 bankruptcy in Arizona and you still owned a Rolex Watch? Did you go to a Document Preparer? Serves you right. They can type your forms, but they can't give you legal advice, dummy!

But in any case, I discuss this topic at a little length in a video, and some people would like to get their information by reading, and some by listening to a video.

Takes all kinds to fill the freeways, you know?

Full post as published by Arizona Bankruptcy Attorney Blog on September 06, 2010 (boomark / email).