Many individuals incorrectly believe that anyone in the Prescott, Arizona area who wishes to file for and be approved for a Chapter 7 Bankruptcy is able to do so. Unfortunately, this is not true. Many people in the Prescott area and throughout the United States in general are often ineligible for this type of bankruptcy. This is why it is so important to do your research ahead of time and to be aware of what type of bankruptcy you qualify for and which type is the best for your particular situation. Doing so will save you a lot of time and money in the long run. If you’re unsure of where to start, it can be a good idea to purchase a bankruptcy kit specifically made for the state of Arizona. This kit will provide detailed information the bankruptcy process as a whole and on special rules that pertain only to your state of residence.

Many Prescott residents find out they are ineligible for Chapter 7 Bankruptcy due to their disposal income being too high. To decide whether or not your income falls into this category, you will need to know your currently monthly income. Once you know this information, compare it to the average current monthly income of a family of the same size. If your income falls above this figure, you are not eligible for Chapter 7 Bankruptcy, though you may be eligible for a Chapter 13 Bankruptcy. Keep in mind that the average current monthly income you will need for this comparison exercise will be grouped by state and not by the city in which you live. You can find this information online or by talking to your bank or any other financial institution. Just be sure that the figures you are looking at are current and up to date.

Another common reason for Chapter 7 Bankruptcy ineligibility is the defrauding of creditors. Fraud can include actions such as lying on a credit card application, spending in large amounts shortly before filing for bankruptcy, or reporting any false information. You may also be deemed ineligible if you have filed for any type of bankruptcy in the past or if you still have a bankruptcy case pending. Under these circumstances, you will most likely need to hire a financial advisor or an attorney to help you find other solutions to your debt.

No one wants to hear that they are ineligible for a Chapter 7 Bankruptcy. This is the most common form of bankruptcy in the United States, and if you are deemed ineligible, it probably will not seem fair. However, do not give up if you are unable to file for Chapter 7 Bankruptcy. There are many options for you to consider such as a Chapter 13 Bankruptcy, debt settlement, credit counseling, loan modifications, and others. Each form of financial help comes with its own pros and cons, just as Chapter 7 Bankruptcy does, and it’s really all about finding the best and most viable option for your particular situation.