Bankruptcy Attorney Serving Clients in Phoenix, Arizona

For many Phoenix residents who are contending with insurmountable debt, it can be difficult to think about filing for bankruptcy. However, many debtors who make the decision to file for Chapter 7 or Chapter 13 bankruptcy learn that consumer bankruptcy can be one of the best ways to get a fresh start financially and get an opportunity to begin rebuilding your financial profile. There are many myths about personal bankruptcy, including the myth that Phoenix residents who file for bankruptcy will never be able to obtain credit again or buy a house.

While it can take some time to rebuild your credit, bankruptcy may be the best option for getting back on track. An Arizona bankruptcy attorney can help.

Should I File for Chapter 7 or Chapter 13 Bankruptcy?

Typically, individuals in Phoenix will file for either Chapter 7 or Chapter 13 bankruptcy. The United States Bankruptcy Court for the District of Arizona has an FAQ sheet that helps explain the differences between these types of bankruptcy. and how you can qualify for each:

  •  Chapter 7 bankruptcy: This is a form of bankruptcy that is also known as “liquidation bankruptcy.” For you to receive a discharge of your debts, your assets will need to be liquidated (aside from assets that are exempt) to repay your creditors. Liquidation bankruptcy allows consumers to get a fresh start right away. To be eligible to file for Chapter 7 bankruptcy, you must meet the “means test” that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) requires. If you cannot meet the means test, you may be eligible to file for Chapter 13 bankruptcy.
  • Chapter 13 bankruptcy: This form of bankruptcy requires the debtor to develop a “repayment plan.” Over the course of five of fewer years, the debtor will follow the terms of the repayment plan to repay creditors. Once the repayment plan has been completed, the debtor can begin rebuilding his or her credit without worrying about debts owed.

Learning More About Bankruptcy Exemptions in Phoenix, Arizona

If you file for bankruptcy, certain property is exempt, which means you can retain this property and it cannot be subject to liquidation. Under Arizona law, there are numerous bankruptcy exemptions, including but not limited to the following:

  •  Homestead exemption: The homestead exemption allows a debtor to exempt interest in real property (which typically means the debtor’s house). In Arizona, there is a generous homestead exemption of $150,000.
  • Personal property exemption: Personal property, such as household goods and furnishings, can be exempt up to $6,000. If both a husband and wife file for bankruptcy, the personal property exemption can be doubled.
  • Proceeds, money, and benefits: For instance, life insurance benefits, child support received, and certain other proceeds and benefits may be exempt.

Contact a Phoenix Bankruptcy Attorney

Bankruptcy law is complicated. Your lawyer can help you determine whether you are eligible for Chapter 7 or Chapter 13 bankruptcy as well as what property may be exempt. It is important to work with an experienced Phoenix bankruptcy attorney on your case.