Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is usually considered as an option of last resort, because while it can stave off financial disaster, it has some significant 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 Eloy, Arizona before filing.
Chapter 7 Bankruptcy in Eloy, Arizona
There are 2 common types of bankruptcy in Eloy, 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 essential 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 excused. 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 Eloy, Arizona is not dischargeable, you might want to consider other options besides bankruptcy.
Chapter 13 Bankruptcy in Eloy, Arizona
In Eloy, Arizona, Chapter 13 is quite different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your particular situation. Chapter 13 does not eliminate any debt, but it creates a new payment plan that should give the debtor some breathing room. Usually, all of the debts are consolidated into 1 periodic payment. While this might make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.
Which Type of Consumer Bankruptcy Should I File in Eloy, Arizona
The answer to this question depends heavily on your individual situation. If you have enough steady income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 might be a good option. If you don't have much steady income, and most of your property is exempt, Chapter 7 might be better.
Whatever your situation, you should speak with a local Eloy, Arizona bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely consequences, which will help you make a more educated decision.