To qualify automatically for protection under Chapter 7 guidelines, your annual income must be at or below the state's median income. If so, then your case will be handled accordingly. However, if your income is greater, you will require a substantial amount of additional paperwork and investigation, which will necessitate the assistance of an attorney.
If your application for Chapter 7 is denied, the court will order you to file a Chapter 13 petition, which will legally require you to participate in a court-administered debt counseling program. In addition to being required to participate, the court will closely monitor your progress at every stage.
That means you will now have a representative of Uncle Sam watching over your shoulder at all times while you negotiate with your creditors, watching over your shoulder at all times to ensure you honor those arrangements, and if you miss a single payment, your creditors will be legally permitted to pursue you immediately to collect on your debt.
Thus, while the thought of filing for Chapter 7 bankruptcy protection may seem like an easy solution to all of your problems, once you start down that path, you're stuck until your debts are paid off, no matter what. Uncle Sam has sufficient control over your finances. Do you want him constantly breathing down your neck to ensure that you pay your creditors first?
Filing for Chapter 7 may be the best solution to your problem, but you can avoid all government involvement if you consult with a Phoenix debt counseling service first. These professionals are skilled negotiators who can work with your creditors to establish a repayment plan that will benefit all parties, including the government.
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