What You Need To Know When Filing For Bankruptcy

According to the United States Bankruptcy Court, more than 25,000 people filed for bankruptcy across Arizona in 2016 alone. Many people who choose bankruptcy, Chapter 7 or Chapter 13, make unnecessary mistakes or do not understand the process itself. Bankruptcy in Arizona does not need to be a confusing or frightening process, especially with the right bankruptcy lawyers on your side.

What is Bankruptcy?

Arizona bankruptcy court is where debtors go to be absolved of their debts or to have their debts restructured. In some cases, if your debt cannot be feasibly managed, you may want it completely eliminated. In other cases, bankruptcy can help you to restructure your debts to make them more manageable. This can help turn a crushing debt into a more viable experience, and allow you to maintain your assets.

Bankruptcy is a Negotiating Tool

Your debts may be out of control, but they do not have to stay that way. While bankruptcy should not be the first step you take, it is worth discussing alongside your other legal options so that you aren’t trapped in a financial downward spiral. Much like with any legal situation, negotiation is possible. Naturally, you may have to give up something positive in order to reduce the negatives of your debts. A bankruptcy attorney can help you benefit from these negotiations, both before and after filing.

Chapter 13

In Chapter 13 bankruptcy, you are often able to keep the majority of, or even all of, your assets. You can avoid foreclosure on your home. This bankruptcy is based on your ability to pay, and, in most cases, you are able to keep all your assets and, at the end of the case, receive a Chapter 13 discharge.  To file for Chapter 13, you must earn wages and adhere to a repayment plan. You are still responsible for a certain amount of repayment to keep assets such as a car or a house, but creditors can no longer send your outstanding bills to collection agencies for the duration of the repayment plan, and at the end of the case, all dischargeable debts are eliminated by order of the court.

Chapter 7

In a Chapter 7 bankruptcy, your debts are generally discharged altogether, with exceptions (including, in most cases, student loans and other debts that cannot be discharged by law). Provided you are able to make your previously agreed-upon debt payments on your primary vehicle and home, you may keep them. Other assets, however, are generally seized and applied toward your debts.

Do not be afraid of filing for bankruptcy. Starting over can be the best option available to you. Call us to discuss your options today. Your bankruptcy will be as unique as your situation.

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