How to File for Bankruptcy in Arizona

Arizona may be one of the most difficult states in which to maintain a solid financial status in these troubled times.  Not only are they 11^th in the nation in bankruptcy filings, their unemployment rate has doubled in the last five years.  Those who have continued to struggle and are just now considering bankruptcy, there are some facts that they must consider before taking that important step.

Finding a Bankruptcy Attorney

First, they do not have to go through the process alone.  Numerous dedicated and qualified bankruptcy attorneys have the best interests of their client at heart and can provide the expertise to guide their client to the best option.  They can also help debtors take advantage of every benefit available under the new bankruptcy laws.  However, it is important to research these choices carefully to find the right attorney with the experience and standards the consumer can work with.

Bankruptcy Options

Chapter 7 bankruptcy is the most common choice, allowing the debtor to write off much of their consumer debt, excluding such items as child support, alimony payments, student loans, and tax debt.  This “liquidation” process may require some debtors to sell some of their assets, although most that make this choice have little or no assets to lose.

Chapter 13 bankruptcy allows those with significant property to protect it by restructuring their assets and debt, allowing them to pay off their creditors under a plan lasting generally five years.

Arizona Exemptions

For those filing Chapter 7 bankruptcy, there are laws to protect a certain amount of their essential assets from liquidation.  Arizona residents may use state exemptions only.

Arizona’s key exemptions include:

Filing the Petition

It is important to choose the form of bankruptcy that takes full advantage of all the benefits the law allows.  Once the debtor and their attorney have created a viable financial plan and the debtor has completed credit counselling, they should follow the steps to bankruptcy:

• After filing a bankruptcy petition, they will receive a stay on all collection processes
• Follow the plan formed by their bankruptcy trustee to write off or repay all eligible debts
• Outline their debt plan with the bankruptcy trustee and their creditors in a required 341 meeting
• Discharge (Chapter 7) or pay off (Chapter 13) eligible debts and start fresh