From the day your bankruptcy lawyer files your petition with the U.S. Bankruptcy Court for the District of Arizona to the day the bankruptcy court judge signs your discharge order, the Chapter 7 bankruptcy process takes around four months.
It can take longer in some situations, but a Chapter 7 bankruptcy timeline will seldom take more than a year to complete.
We can break the Chapter 7 bankruptcy filing process into four parts:
If you’re considering filing Chapter 7 bankruptcy, call Stone Rose Law at (480) 739-2448 for a free consultation.
A Chapter 7 bankruptcy, also known as a liquidation bankruptcy, is a serious federal court matter that has long-term implications for you. So, it is important that you carefully consider your options before declaring bankruptcy. Once you do decide to proceed with a Chapter 7 filing, you will need to do some preparation in advance.
Getting ready to file for Chapter 7 can begin as far as 180 days before your petition filing date.
Before filing for bankruptcy, you must complete a pre-bankruptcy credit counseling course. This course typically takes about 60 minutes and must be taken from an agency approved by the U.S. Department of Justice. Once you finish the course, you will receive a certificate of completion, which must be filed along with your bankruptcy petition. The certificate is valid for 180 days.
This requirement was established under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 to help ensure that individuals considering bankruptcy understand their financial situation and are aware of possible alternatives.
Stone Rose Law includes this course in our bankruptcy services for free.
The preparation stage also involves assembling all the information you will need to complete your bankruptcy petition filing paperwork.
Supporting documentation includes a few of the following:
Once you have completed your preparations, you are now ready to move to the next stage of the bankruptcy case process.
All of the preparation you did in stage one might take you days, weeks, or months to complete. If an attorney represents you, your documents will be used to prepare your petition. The petition is at least sixty-five (65) pages long and can be over one hundred (100) pages. You will have the opportunity to review for accuracy with our experienced attorney and sign the documents for filing
This stage of filing has two parts: this is generally done electronically through the PACER system.
Your bankruptcy petition is a packet of several bankruptcy forms. Some are general, and some are specific to Arizona’s bankruptcy court.
In your petition, you will identify your assets. If you want to exempt personal property from the possibility of a trustee liquidation sale, you will declare these exemptions in the petition.
This is also where you include the information from the preparatory stage above, like your unsecured debts, assets, income, and spending.
If you hire a bankruptcy lawyer, then your attorney will fill out the petition forms for you.
When you file the petition with the court, you must pay the required filing fee under 28 United States Bankruptcy Code Section 1930.
Currently, this fee is $338.
The local rules of the Arizona bankruptcy court allow you to apply to pay the fee in installments or, in some cases, to request a waiver of the filing fee. If your income is less than 150% of the poverty level as defined in the Bankruptcy Code, and you cannot pay the Chapter 7 fees even in installments, then the bankruptcy court may waive the requirement that the fees be paid.
You must provide the bankruptcy court with a list of all your creditors, the individuals you owe money to. These include secured debts—loans that a creditor has attached a security interest to—and unsecured debts. Each type of creditor is identified and listed in its specific schedule section.
Examples of secured debts include mortgages and car loans. Unsecured debts include credit card debt, unsecured personal loans, and medical bills.
Your Trustee can liquidate assets in a Chapter 7 bankruptcy to pay creditors, but most assets are exempt. This means they are protected from liquidation for the benefit of your creditors. In your petition, you will identify debts you intend to exempt from bankruptcy. Examples of exempt property include:
Nonexempt assets may include:
You cannot file under Chapter 7 or any other bankruptcy chapter if, during the preceding 180 days, a bankruptcy court dismissed your prior bankruptcy petition because of a willful failure to appear before the court.
The same is true if you do not comply with bankruptcy court orders or voluntarily dismiss a previous bankruptcy case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.
The bankruptcy “automatic stay” begins when you have filed your petition. This will stop your creditors from any ongoing or planned collection efforts.
Under the automatic stay, creditors cannot engage in collections or seize your assets through wage garnishment, levies, repossession, or foreclosures. They cannot call you, send you letters, or otherwise attempt to get you to pay your debts or threaten you with collections or other actions.
Two notable exceptions to the automatic stay are if you have support payment obligations or owe money from a criminal conviction.
Chapter 7 bankruptcy is not available to everyone in all situations.
To qualify for relief under Chapter 7 of the U.S. Bankruptcy Code, you must either be exempt from passing a “means test” or, if you are not exempt from it, pass it.
If your current monthly income exceeds the Arizona state median income, then you are subject to a means test to determine whether a Chapter 7 filing is abusive. If you earn less than the median, you should be eligible for Chapter 7.
In Arizona, for Chapter 7 petitions filed after November 1, 2024, the median annual income is:
| Annual Median Income | Median Monthly Income |
| $70,919 for one person | $5,909.92 |
| $85,476 for a two-person household | $7,123.00 |
| $102,909 for a family of three | $8,575.75 |
| $113,286 for a family of four | $9,440.50 |
For each additional family member after four, add $11,100 to the family of four amount above.
For example, for a family of five, $113,286 plus $11,100 equals $124,386. Dividing this by 12 gives a median monthly income of $10,365.50.
The bankruptcy court will consider your average monthly income for the six months before you file your Chapter 7 petition.
If your monthly gross income during this period is below the median income level, then you do not need to pass the means test.
If your monthly income is above the state median, then you must take the means test using Bankruptcy Form 122-A. This form takes into account your current monthly income, assets, and expenses to calculate whether you have enough money to pay your creditors.
If your monthly expenses are higher than your monthly income, then you will likely qualify for Chapter 7.
As long as you pass the means test, Chapter 7 relief is available no matter how much you owe. There is no minimum debt to file nor a debit limit.
If you do not pass the means test, then you will be ineligible to use Chapter 7 but you may still be eligible to file for Chapter 13 bankruptcy.
Once your case is filed, there is a more defined timeline. Stage three is what most bankruptcy lawyers refer to when they say that bankruptcy usually takes about four months to complete.
The bankruptcy process has two main parts: meeting with creditors and discharging debts.
Once you file the Chapter 7 bankruptcy petition and pay the required fee, the bankruptcy court automatically sets a meeting with creditors, also known as a 341 Meeting. Your court-appointed Chapter 7 Trustee conducts this mandatory meeting, and is an opportunity for your creditors to appear.
This meeting usually happens 30 to 45 days after the petition filing date. During this period, many petitioners take the opportunity to complete another required financial management course.
After the meeting of creditors, a waiting period applies during which:
This at least 60 days.
If no creditor objects to the petition, the court can take up to another 15 days to discharge your debts and close your case.
When you add up the time periods above, the ordinary process takes 120 days, or the equivalent of four months.
Most consumer debt can be discharged in a Chapter 7 bankruptcy filing. Examples include:
Some debts cannot be discharged:
If you have many kinds of assets that need to be sorted out to identify those that can be liquidated and those exempt from liquidation, this can delay the timeline.
Other factors that can contribute to delays in processing a Chapter 7 bankruptcy case includ
In most cases, once you make it through the third stage of the Chapter 7 bankruptcy process, you are finished. Your eligible debts are discharged, and you can go on with a fresh start in life, subject to any remaining liens on secured debts that have been discharged.
Liens stay on your affected property until the underlying debt gets paid.
Although a secured debt on property can be discharged, if the creditor has a lien on the property, it will remain in place.
For example, if you file for Chapter 7 bankruptcy, you discharge a home mortgage loan, but the lender’s lien will remain on the property. Once the automatic stay protection ends, the lender can exercise its lien right to foreclose on the house.
Most people find bankruptcy daunting, but it does not have to be with an experienced Scottsdale bankruptcy attorney to guide you through it.
To find out how quickly you can complete the process of Chapter 7 bankruptcy in Arizona, call Stone Rose Law at (480) 739-2448 or use our contact form.
In a free consultation, we can help you assess your debts and decide which bankruptcy chapter is right for you.
