You may have heard claims from credit card companies that people only go bankrupt when they lose control over their spending and end up misusing their credit cards. This is absolutely false. Bankruptcy lawyers can tell you that many people have filed bankruptcy cases with bankruptcy courts for reasons other than overspending.

Debtors come from all walks of life and have filed bankruptcy for various financial problems. Many people who find themselves in debt file for bankruptcy because of unfortunate and unforeseen circumstances like losing their job, closing their business, going through a divorce, being in an accident, or suffering an illness.  They usually declare bankruptcy as a last resort in getting out of debt.

Bankruptcy Law

Arizona BankruptcyThe Bankruptcy Act involves federal law providing bankruptcies to people and businesses as a means to start anew by reducing or eliminating debt. The bankruptcy process starts with a bankruptcy petition and, if successful, ends with a bankruptcy discharge. It must be noted, though, that certain debts, like child support, aren’t dischargeable.

People must refer to the bankruptcy code in declaring bankruptcy. There are different types of bankruptcy to choose from, but for personal bankruptcy, filers have two bankruptcy chapter options: 7 and 13.

Chapter 7 is often called a “Big Eraser.” It involves a shorter process of liquidation, but a debtor must pass a means test to be eligible for it. A Chapter 13 bankruptcy case, on the other hand, is a much longer process of debt reorganization. In effect, it’s a forced repayment plan. Chapter 13 filings generally lead to a super discharge and allow debtors to hold on to their property, but filers have to pay back their debts in a span of three to five years. They make payments based on what they can afford to pay and not on the actual amount they owe.

Bankruptcy Proceedings

A part of what bankruptcy protection debtors count on is the automatic stay. When a debtor files for bankruptcy court protection, creditors and collection agencies are forced to stop all debt collection attempts. This means that a creditor may no longer pursue plans of wage garnishment, tax levy, foreclosure, or other forms of collection.

Filing for bankruptcy involves many details. These are considerations that guide the filer’s choices. For instance, it’s important to note that those with a secured debt tied with collateral property, like in the case of a mortgage or a car loan, must continue to pay or the property will be turned over following a court order. Bankruptcy exemptions are another consideration. These, along with bankruptcy laws, differ from state to state, so it’s important to consult a local Arizona bankruptcy lawyer.

Considering Bankruptcy? Consult an Arizona Bankruptcy Attorney Today!

For correct bankruptcy information and legal advice, talk to one of your area’s experienced bankruptcy lawyers. Legal assistance in filling out bankruptcy forms and other preparations before filing is really useful. In fact, legal guidance would be invaluable throughout the experience even up to the time after bankruptcy. If you want help in your bankruptcy filing or any other debt relief solution to wipe out your financial woes, call us at Zolman Law to speak with one of our bankruptcy attorneys.