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Bankruptcy Lawyer in Arizona

Are you considering bankruptcy as a way to take back control of your financial situation? Thousands of Arizonians file bankruptcy every year, both Chapter 7 and Chapter 13 offer tons of benefits! But, you need to understand the differences between the two so that you can make and educated decision best suited to your financial situation.

Our experienced Arizona bankruptcy attorneys can assess your current circumstances to aid a decision in choosing the right chapter. Call Arizona Debt Solutions today to enlist our educated guidance for your bankruptcy case!

Chapter 7 vs. Chapter 13

Chapter 7 is most commonly known as “liquidation bankruptcy”, as it involves the liquidation of nonexempt assets to pay back creditors. In order to qualify for a chapter 7 you need to pass the “means test”. If and when you pass this test, the court will assign you a bankruptcy trustee to go over your nonexempt assets to liquidate them and repay your creditors. Once this is complete, you will not be responsible for the remaining balance of most unsecured debt. A chapter 7 usually takes 6 months to a year to finish. The benefits of this particular chapter are:

  • Quickest debt relief
  • Most all unsecured debt will be gone once process is complete
  • You don’t have to worry about future wages or earnings
  • You don’t have to worry about future monthly payments

Chapter 13 is best described as the reorganization of your debt. For this chapter, a means test is not needed, which means you will be working with a court-appointed bankruptcy trustee to form a repayment plan over the next 3 to 5 years. Once the repayment plan is completed, you will only make single monthly payments that go towards the remainder of your debt.At the end of that term (once debt is paid off) most of your unsecured debts will be eliminated.

Here are some of the benefits of this chapter:

  • Longer period of time to repay
  • Less impact on your credit
  • Home will be protected from foreclosure
  • You aren’t risking possession forfeiture to liquidation

Here Are Some Questions To Ask Yourself Before Filing

No that you know the benefits of both chapters, it is very important to know which is best for your situation. Here you can gain a better understanding by asking yourself these questions:

Will I pass the means test?

The bankruptcy means test lets the court know if you fall within Arizona’s median income. If you do not pass, you can STILL file for a chapter 13.

Can I risk losing my assets?

If you are worried about the idea of losing some of your possessions to repay debt, filing a chapter 13 will be a better option because you will not lose your assets.
Are my debts dischargeable?

A lot of clients file for bankruptcy because they want to eliminate all of their remaining debts. However, it is important to know that not ALL debts will qualify for discharge once the bankruptcy case is complete.

How quickly do I want to rid my debt?

If it’s just a matter of eliminating your debt quickly, regardless of credit impact, then a chapter 7 would be the right choice. If time is on your side and you can pay over time with little impact to your credit, then a chapter 13 will be the best option.

Am I really ready to file for bankruptcy?

If it still worries you or you feel uncomfortable about filing afterconsidering your options you should wait. Arizona Debt Solutions will be standing by to help you explore alternatives while finding you a solution that is more comfortable.

CONTACT US today for a Free Consultation!

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***The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.
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