Bankruptcy in Arizona
If you are thinking of your financial woes when you look up at the beautiful desert or mountain skies in the evening, then you may need this article. Our goal is to help you enjoy the beauty of your surroundings by increasing your peace of mind.
In this article, we'll:
- Show you how Arizona bankruptcy law differs from the laws of other states;
- Discuss whether you should file Chapter 7 or Chapter 13 bankruptcy; and
- Provide good advice on how to select and prepare to work with bankruptcy lawyer, whether you live in Yuma, Tucson, Phoenix, Flagstaff, Winslow, or somewhere in between.
How Arizona Bankruptcy Law Differs from the Laws of Other States
Federal law dictates bankruptcy proceedings procedure so it's the same in every state. However, property rights in the form of bankruptcy exemptions are created by both federal and state law. This means that there is variance among the states.
In Arizona, bankruptcy filers are not entitled to claim federal exemptions, but state exemptions, are available. For example,
You can protect up to $150,000 of equity in a house.
You can protect some personal property, food, books, clothes, insurances, wages, alimony, and child support.
You can protect up to $5,000 of equity in a car (or other motor vehicle).
There are more exemptions available. We've included the main ones people always ask about. These exemptions determine how many assets you can keep if you file Chapter 7 or how much you have to pay back to creditors under Chapter 13.
Filing Bankruptcy in Arizona: Chapter 7 or Chapter 13
The numbers, "7" and "13" refer to sections of the U.S. Bankruptcy Code.
If you qualify for Chapter 7, then most of your unsecured debts are discharged, meaning you never have to pay any of them back. (There are exceptions for taxes, student loans, child support, and alimony. These have to be paid back.)
If you file Chapter 13, your bankruptcy attorney will seek to renegotiate your debts to get more favorable terms, which makes these debts much easier to pay back.
As soon as your bankruptcy petition is accepted by the court (no matter which chapter you file under) creditors are ordered to stop bothering you. That's one of the first things your attorney will do: Get a court order to stop the harassment.
How to Find and Select a Bankruptcy Attorney
Do you know friends or family who have filed bankruptcy? Did they have a good experience? Did they like their attorneys? If you're comfortable asking, that's the way to go.
If not, other places for referrals are your county's bar association and legal and financial professionals you work with. You can also find an appropriate attorney by entering "Find an Arizona Bankruptcy Attorney" into Google or some other search engine.
Be sure to have a conversation with any prospective attorneys and ask questions. If you feel comfortable with the conversation and the attorney's credentials, it may be a good fit.
How to Prepare to Work with Your Bankruptcy Lawyer
Start gathering together your financial life. Your bankruptcy attorney will only be able to successfully guide you through your bankruptcy proceeding if he or she has all of your financial information including assets, expenses, debts, income, and any repayments made. Don't hold anything back. If in doubt, disclose the information.