Once an Arizona resident has determined that they are eligible to file for bankruptcy under Chapter 13, the filer has to start getting their documents in order and ensure that they are an accurate representation of the filer's financial situation. In addition to filing the petition with the court, it is also essential to file schedules of assets and liabilities, current income and expenditures, executory contracts and unexpired leases and a statement of financial affairs. Since attending credit counseling is a mandatory step before filing for bankruptcy, submitting a certificate attesting attendance is essential as well.
Tax returns or tax transcripts for previous years also need to be provided to the trustee and documentation about property, nature of creditor's claims, living expenses and frequency and source of income needs to be gathered. Getting all this paperwork together and filing the petition as soon as possible is always a good idea, because once the petition is filed, it automatically stays most collection actions against the debtor.
As long as the stay is in place, creditors cannot begin and even continue lawsuits, wage garnishment and even harassing telephone calls. This automatic stay also extends to co-debtors. Perhaps the most important proceedings that are stayed once the petition is filed are foreclosure proceedings.
As soon as the Chapter 13 petition is filed, foreclosure proceedings are stayed. In fact, a debtor can then make the past due payments current over a reasonable period of time. Unfortunately, if the foreclosure sale is completed before the petition is filed, it may not be possible to stay the proceedings.
Having all the paperwork ready and ensuring its accuracy will ensure the petition is not unnecessarily delayed and the automatic stay is granted as soon as possible. Since the stay granted in some cases is for a short period of time, Arizona residents may want to consider consulting an experienced attorney about what steps to take.
Source: United States Courts, "Chapter 13-Bankruptcy Basics," Accessed on Oct. 20, 2015
