Chapter 7 is the most common form of bankruptcy in Arizona and throughout the U.S. It wipes out most forms of debt, such as credit cards, medical bills, and most tax debt over three years old.  It also eliminates debt stemming from vehicle repossessions and real estate foreclosures.  Not everyone qualifies for Chapter 7 Bankruptcy.

In order to be eligible to file this type of bankruptcy, your income must be less than Arizona’s median income for your family size or you must pass the Means Test, which is a complicated test based on your income and expenses.  Alternatively, a person may qualify for Chapter 7 based on the types of debt they have.  If more than half of one’s debt is investment or business related, they may still be able to file Chapter 7 irrespective of their income.

You cannot receive a discharge in a Chapter 7 if you previously completed a Chapter 7 Bankruptcy within the last eight years.