Bankruptcy is not a decision that many look forward to making. In most cases they are forced into a situation where they must file bankruptcy. Bankruptcy, for a majority of people, can be the recommended resolution for debt that does not seem to have an end.
You will hear two arguments regarding bankruptcy. First that it is recommended, that bankruptcy is the best option and can give you a fresh start. Others will advise that bankruptcy should never be filed, that it goes against basic economics and hurts all parties involved.
Determining if bankruptcy in Arizona is the correct choice to make depends on many scenarios. It depends on the ability to pay, the time frame and budgeting it would take to get out of debt and if the decision is out of your control, if it is the only option.
When researching information regarding bankruptcy court and how to make it happen, keep these things in mind, there are many debts that Bankruptcy cannot remove through a bankruptcy court. Student loans, back taxes, alimony and child support are some examples.
Other debt that will not be forgiven in bankruptcy are: Any Cash advances for $825 or more taken within 70 days of filing, fraudulent debts, any purchase of $550 or more for luxury items purchased within 90 days of filing and amounts owed to government agencies.
There are two ways to file for bankruptcy in Arizona. Bankruptcy in Arizona can be filed as either Chapter 7, straight bankruptcy or chapter 13, wage earner bankruptcy. Chapter 7 bankruptcy is designed to eliminate all debts immediately, excluding those listed above. Chapter 13 bankruptcy is set up to allow the borrower to repay the debt. Chapter 13 works to set up payment arrangements over several years.
Bankruptcies have become more common as many people get into far too much debt without having a worst case scenario plan. There are many who have used bankruptcy as a way out of mistakes made. The Bankruptcy Abuse Prevention and Consumer Protection Act was signed in 2005 to limit individual access to the United States bankruptcy courts. This made it harder to file bankruptcy by increasing payments needed for Chapter 13 bankruptcy, created new bans for Chapter 7 bankruptcy and increasing penalties.
Each state has separate rules regarding what a person can keep after bankruptcy. Filing bankruptcy in Arizona court means you are able to keep only certain items according to the state code. Arizona bankruptcy laws state that you may keep specific amounts of what is owned. Some examples are: Furniture and appliances up to $4,000, a motor vehicle no more than $5,000 and up to $10,000 if disabled, retirement funds and no more than $150 in a single bank account. The complete list can be found in the Arizona State Code regarding bankruptcy court.
There are a few things that are recommended to keep in mind when working with the Arizona bankruptcy courts according to the State Code of Judicial Administration. Arizona bankruptcy courts prohibit a bankruptcy petition preparer from engaging in any activities that are prohibited by law. The Supreme Court of the State of Arizona enacted to Rule 31 that governing the general rule that to practice law in the State, they must be an active member of the State Bar of Arizona.
Debtors should know many things about the Arizona Bankruptcy Court. In depth research should be done on the type of bankruptcy to file, Chapter 7 or 13. After that has been decided, it is important to conduct a thorough review of the Arizona State Code on what can be kept after bankruptcy and a complete review of the debts that will not be forgiven in bankruptcy.
If there is no way out of the debt, then bankruptcy would be the option. If with a strong budget, the debts can be overcome, this is highly recommended. Each individual knows what choice is right for them and what can be done, but don’t go into bankruptcy blind. Know your rights, know the effects it will have on your credit and future, know which debts you can eliminate or not. By doing this you will be in a better position to make the right choice, with a clear future.
John Skiba is an Arizona bankruptcy attorney who helps individuals and companies file for bankruptcy relief under the bankruptcy code. John works out of the JacksonWhite Law firm in Mesa Arizona and has helped hundreds over the years receive their fresh start through filing for bankruptcy. You can read more about John and his practice at http://www.jacksonwhitelaw.com/arizona-bankruptcy/.