Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is normally considered as an option of last resort, because while it can stave off financial disaster, it has some considerable long-term consequences warranting careful consideration of the costs and benefits. Bankruptcy is governed by federal law, and proceeds in federal courts. So, the procedure for filing for bankruptcy in Arizona will be very similar to the procedure anywhere else in the U.S. However, individual bankruptcy courts have different rules for exemptions, so it might be a good idea to consult with a local attorney in Chandler, Arizona before filing.
Chapter 7 Bankruptcy in Chandler, Arizona
There are 2 main types of bankruptcy in Chandler, Arizona. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 liquidates some of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many types of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and basic personal items, like clothing. These assets are not available to creditors.
Once eligible assets are sold, and the proceeds turned over to the creditors, most remaining debt is cleared. However, some types of debt cannot be discharged in bankruptcy, including student loans, taxes, child support, personal injury awards, and fines. If most of your debt in Chandler, Arizona is not dischargeable, you might want to consider other options besides bankruptcy.
Chapter 13 Bankruptcy in Chandler, Arizona
In Chandler, Arizona, chapter 13 is very different from Chapter 7, and may or may not be the best option for you, depending on your situation. Chapter 13 Bankruptcy involves a court setting up a modified payment plan, which allows the debtor to pay off most or all of his debts over a prolonged period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.
Which Type of Consumer Bankruptcy Should I File in Chandler, Arizona
Chapter 13 is normally a good option for people who have a steady income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a steady income, Chapter 7 might be more beneficial.
Whatever your situation, you should speak with a local Chandler, Arizona bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely outcomes, which will help you make a more educated decision.