In the last decade, many people in Arizona have seen their finances do a sharp 180 in reaction to the real estate disaster, job instability, and rising fuel prices. As the economy has struggled to regain its footing, many people throughout the Valley and the state have turned to bankruptcy to alleviate their debt.
Arizona Chapter 7 Bankruptcies: Liquidate and Ease Your Debt
If you are considering filing for bankruptcy as an individual, you are likely going to choose between a Chapter 7 or Chapter 13 bankruptcy. A Chapter 13 bankruptcy typically creates a repayment plan for your debts, and is often a good option for a person with a steady income with manageable debt. A Chapter 7 bankruptcy eliminates much of your debt, and may liquidate a portion of your assets to repay your creditors.
If you have not filed for a bankruptcy in the last six or eight years, and may not have the income to allow for a Chapter 13 bankruptcy repayment, a Chapter 7 bankruptcy may be a good option for you. The process generally takes about six months, and can help you get a fresh start financially by wiping out a large portion of your debt.
Order for Relief: A Chance to Catch Your Breath Financially
When you file for a Chapter 7 bankruptcy, your creditors are temporarily barred from garnishing your wages, cutting off your utilities, or otherwise seizing your property. This is known as an Order for Relief, and while it is temporary, it helps ensure that your home and life are protected from aggressive creditors.
During this time, your debt and your property become the bankruptcy court’s to manage, meaning that you cannot make any changes—including making payments on your debt or selling your pre-existing property—without the consent of the bankruptcy court.
The Nuts and Bolts
During your bankruptcy, a court-appointed trustee will examine your property to determine which property is exempt (typically things like equity in your home, furniture, clothing, and other necessities) or non-exempt, meaning that these items may be liquidated to pay off your debt. Property used as collateral for a loan, like cars or homes, may be repossessed or foreclosed on—if you are current on your payments, however, you may be able to keep the property and continue making payments. Often, most property is determined to be exempt or simply too difficult to sell, so you may end up keeping many of your assets.
Chapter 7 bankruptcies will generally discharge all of your debt, with the exception of:
Debt from Fraudulent Activity
Filing for bankruptcy and protecting your assets and property can be very tricky, and requires a knowledgeable professional to ensure that your best interest is represented. The Phoenix bankruptcy lawyers at Curry, Pearson & Wooten, PLC have helped individuals and families throughout Arizona get a fresh financial start, and can help you reclaim your future. Call today at 602-258-1000 or toll free at 888-929-5292 for a complimentary consultation.