Most Arizona residents keep their homes and cars when filing a bankruptcy. In an Arizona bankruptcy, the single petitioner is allowed to exempt up to $150,000 of equity in his or her home and up to $5,000 of equity in a vehicle. A married couple may keep up to $10,000 of equity in one or two vehicles.
Most people are allowed to retain these assets in filing an Arizona Chapter 7 bankruptcy if they’re current and remain current on monthly payments. If the petitioner is filing a Chapter 13 bankruptcy, his or her auto loan is typically paid through the bankruptcy plan. Mortgage arrears are usually paid through the plan as well. The petitioner resumes monthly mortgage payments after filing a bankruptcy in Arizona. Pew Law Center helps clients to obtain financial protection under federal and state bankruptcy laws.
Common Financial Concerns about Bankruptcy in Arizona
The decision to file bankruptcy is usually the last resort for many people. It’s stressful. Here are some of the common concerns petitioners express about bankruptcy:
• Typically, no one will come to your house or place of business after you file a bankruptcy petition. Under normal circumstances, the court doesn’t get involved in taking an inventory of your possessions. The petitioner lists his or her possessions on the bankruptcy schedules after taking an oath.
• Bankruptcy is the financial equivalent of a fresh start. Many petitioners delay filing bankruptcy in Arizona because of credit concerns. If the petitioner needs a new car, it’s common to have concerns that lenders won’t approve a car loan. In reality, many people find it’s easier to get financing after their Chapter 7 bankruptcy is discharged. That’s because the borrower’s debt-to-income ratio is improved and lenders realize that he or she can’t file a new bankruptcy for a minimum of six years.
• Most petitioners can get new credit cards after discharge of a Chapter 7 bankruptcy in Arizona. That’s good news because many individuals need a credit card for work, to rent a car, or to make travel reservations. Secured card issuers are good prospects for people who want to rebuild credit after bankruptcy.
Discharging debts in bankruptcy can help you build a better financial future, but it’s not the right next step for everyone. Consult an experienced Arizona bankruptcy attorney for a complimentary case review.
Realities about Bankruptcy in Arizona
Most people realize that bankruptcy is a complex process. However, some people believe that filing for bankruptcy is Arizona is a simple process.
It’s essential to recognize that some creditors don’t give up without a fight. If you’re considering filing bankruptcy, you need experienced counsel to guide you through the bankruptcy system maze. Bankruptcy isn’t a DIY process.
Don’t assume that all of your debts will be erased in an Arizona bankruptcy. Some debts, such as student loan debt, child support payments, or penalties you owe in a criminal or civil matter, probably won’t get discharged. It may be difficult or impossible to discharge some tax payments. An experienced bankruptcy attorney can help you assess the full financial picture if you must continue paying secured debts such as a home mortgage or car loan.
