Bankruptcy offers a liberating solution to financial distress for many debtors who are overwhelmed by bills they cannot repay. Bankruptcy provides the opportunity for a fresh financial start. Through bankruptcy, debts can be substantially reduced or discharged, and foreclosure can often be stopped or delayed. A successful bankruptcy can return the bankrupt debtor to his or her position before the person ever overused credit. The relieved debtor will be free of debt and able to use this month's income for this month's expenses and ideally, savings.
Bankruptcy Options in Arizona
A Chapter 7 bankruptcy discharge is designed to relieve you from the burdens of your unsecured debt, to give you a fresh start, and put you on the path to rebuilding your credit. When you complete your bankruptcy, you will be free from many if not all of your unsecured debts. When you combine that fact with the quick timeline of completing a Chapter 7 bankruptcy, a process that can take as little as three to five months, it is easy to see why it is the most desirable form of bankruptcy for many consumers.
Once you have received your discharge, you will have what you have been hoping for and wanting: a chance to start over and rebuild your credit. In the near future, you will have the opportunity to establish a good credit rating.
What Bankruptcy Can Do
A Chapter 7 bankruptcy can wipe out most or all consumer debt, including the following:
- Credit card debt
- Installment payments of any kind
- Car loans (although the debtor can reaffirm a car loan)
- Medical bills
- Unpaid contracted services, such as remodeling obtained through home improvement contracts
A Chapter 13 can stop foreclosure in the short run through the automatic stay. If a Chapter 13 filer wants to keep his or her home, unpaid back mortgage payments may be included in the debt reorganization plan of a Chapter 13 bankruptcy. The repayment plan can dramatically reduce debts such as these and allow the debtor to repay a portion over three to five years time. At the end of the repayment period, a bankruptcy judge will likely discharge any debt that remains.
A Chapter 11 bankruptcy provides a business with the opportunity to keep assets and equipment while reorganizing and restructuring debts.
What Bankruptcy Cannot Do
Bankruptcy does not necessarily wipe out all debt. It also may not save a person's home if there is not enough income to make modified mortgage payments. Bankruptcy will ordinarily not eliminate any of the following loans or liabilities:
- Child support
- Student loans
- Most taxes
- Some types of judgments
- Criminal restitution
- Spousal maintenance/alimony
Contact an Arizona Bankruptcy Attorney
To learn more about what bankruptcy can and cannot do, please contact us today to set up a free consultation with a lawyer. We look forward to discussing with you how Chapter 7, Chapter 13, or Chapter 11 bankruptcy or debt negotiation can help you put an end to your worries. Contact our law office online or call 866-603-1533 to schedule a consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
