- Personal Finance
When to Call an Arizona Bankruptcy Lawyer
If you are in serious financial trouble and are laden with debts you cannot pay, there seems to be no end to your problems. However, there is an escape route in the form of bankruptcy, but in order to benefit from the fresh start this can bring, you’ll need the help of a knowledgeable bankruptcy lawyer. In the state of Arizona, there are three main forms of bankruptcy; read on for a brief overview of each to determine if you are a candidate.
Chapter 7 Bankruptcy
This is the most commonly filed form of bankruptcy and is the option chosen by individuals looking to leave their debt troubles behind. It is also known as liquidation, because you need to sell resources that are not exempt and give the proceeds to your creditors. One of the main reasons why people (and businesses) file Chapter 7 bankruptcy is to ensure certain assets are protected.
Chapter 7 bankruptcy is not ideal for businesses but is a realistic option for individuals with significant debts. You need the help of an attorney to evaluate your debt, expenses, assets, and income. The size of the debt is not as important as your ability (or inability) to repay it.
You should get in touch with an Arizona bankruptcy lawyer if the majority of your debts are medical expenses, credit card debts, and unsecured loans. These forms of debt are dischargeable, which means a Chapter 7 bankruptcy helps you restart with a clean slate. If your debts are mainly child support, alimony, student loans, secured loans, or unpaid taxes, Chapter 7 is not ideal, as the above debts are not dischargeable.
Chapter 11 Bankruptcy
You need the help of a reputable bankruptcy attorney if you own a business that’s in need of reorganization but is deep in debt. Chapter 11 involves restructuring the debt and creating a new repayment plan. It is also possible for certain assets to be forfeited, with the proceeds given to your creditors.
While Chapter 11 allows businesses to continue operating after filing for bankruptcy (unlike Chapter 7, which requires liquidation), your assets are treated differently depending on the business entity. This means you need an Arizona bankruptcy lawyer to help navigate the ensuing maze.
Chapter 13 Bankruptcy
This is a different form of bankruptcy than Chapter 7, as it involves you paying some or even all of your debt via a restructuring plan that offers you better terms, such as lower interest. You need to have a regular income to be eligible for Chapter 13, and repayment normally begins within 30 days of filing. You can expect to receive three to five years in which to repay the debt; it is a viable choice for those looking to avoid actions such as home foreclosure and repossession.
If you are in debt and are looking for a way to start fresh, get in touch with a team of specialists, like the Gilbert, Arizona, bankruptcy lawyers at Cholewka Law. Such firms consist of attorneys with years of experience when it comes to Chapter 7, Chapter 11, and Chapter 13 bankruptcies in the state of Arizona.