Bankruptcy in Tucson, AZ
Are you contemplating bankruptcy or hiring a bankruptcy attorney in Tucson, Arizona? Are you tired of creditors calling for payments you can’t make? Maybe looking for a way to get out of debt and have you exhausted all other options? Then bankruptcy might be the solution you seek. It is a legal option that can erase a portion or all of your debts.
Types of Bankruptcy in Tucson, Arizona
Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. In Tucson, AZ to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11 or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. You should also consider working with an experienced bankruptcy attorney.
Chapter 7 Bankruptcy
Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in Tucson who can help you to decide if a liquidation plan is right for you.
Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car or some other assets. However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.
According to the U.S. Bankruptcy Court of the District of Arizona, most consumers that file lack the assets or cash to reimburse creditors. There are usually no objections to discharging debts as a result, but litigation also becomes more likely.
It’s worth the time for an individual or business from Tucson to consider alternatives. One of the approved organizations that provides this service is Summit Financial Education. This non-profit alone has given over 500,000 bankruptcies since 2005.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is more complex than other types of bankruptcy. It is often used by businesses and certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, usually four to 18 months. The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.
Individuals can qualify for this type of debt relief in Tucson, but it more often applies to a small business owner or sole proprietorship.
Operating guidelines from the U.S. Department of Justice break down the expectations for each week of a Chapter 11 bankruptcy. The first step in Week 1 is to close the books and records of the business. By the time this process concludes, you will need to obtain an appropriate amount of insurance coverage for the following:
- Fire and Theft
- Product Liability
- Professional Liability
- Worker’s Compensation
- General Comprehensive Public Liability
- Any other coverage customary for the business
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Tucson, AZ after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also give you the opportunity to have some or most of your debts discharged.
According to the IRS, Chapter 13 is only available to the self-employed, sole proprietors, and wage earners. In other terms, a debtor from Tucson needs to have a regular income to use for repayments and a record of filing taxes for the last 4 years. If you cannot qualify, other types of legal debt relief can still be an option to consider.
The Bankruptcy Process in Tucson, Arizona
There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.
In Tucson to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.
Tucson residents have the opportunity to choose between state or federal exemptions for their property. A great comparison to consider at first is the homestead exemption provided under Arizona law and U.S. Code. The State of Arizona enables you to keep up to $150,000 in equity at the time of writing. However, the federal privilege only allows up to $25,150. While the choice may seem obvious, this decision depends on your circumstances. You may find that you have more advantages using one over the other after digging into the finer details with your attorney.
At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course, usually online or over the phone. Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate of completion from the credit counseling course that you took, the courts will reject your bankruptcy petition.
Work With an Experienced Tucson, Arizona Lawyer
Hiring a local bankruptcy lawyer in Tucson during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case, especially which debts that can be discharged or can’t be discharged. An experienced Arizona attorney can also offer you guidance to improve the outcome of your case.
Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy, such as debt consolidation. Though bankruptcy is an attractive solution, it is best as a last resort. Do you need immediate help? Then one of our experienced lawyers in Tucson can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Arizona state lines.
Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!