Common Bankruptcy Myths
No consumer enjoys filing bankruptcy at any point. We as humans hate admitting defeat, which bankruptcy essentially does. However, there are times when personal injury, sudden health issues and job loss bring our income below our debts.
Perhaps you’ve done research, read stories and became mortified knowing what bankruptcy does. Maybe you’ve been approached with unbelievable debt consolidation offers. Today, we’re going to debunk some myths and misconceptions that swirl when filing Chapter 7 or 13 bankruptcy is imminent.
Bankruptcy rules in Arizona are too strict
Taking the bankruptcy Means Test will determine if you’re eligible to file Chapter 7 or 13 petitions. Provided your income is less than the median income for your household size, you’ll pass that test. And, provided eight years have passed since your last petition filing (or 4 if filing Chapter 13 after 7), you’ll be able to file. Those are primarily the only rules imposed on debtors.
Bear in mind legal obligations such as alimony, child support, criminal restitution and some tax liabilities are non-dischargeable. Student loans, too, cannot be discharged unless paying them would cause undue hardship.
Filing bankruptcy in Arizona yourself is better
Laws are there to protect people, yet commoners aren’t privy of the numerous motions, legal jargon or formalities of approaching judges and other court officials. There are many, many things that could go wrong for pro se litigants in bankruptcy case, including their petition getting rejected due to missing information or incompleteness. You’re more than welcome to file Chapter 7 or 13 petitions without counsel, yet many choose to invest in their future by guaranteeing they’ll be fairly represented at any bankruptcy court in Arizona.
There’s no such thing as a cheap bankruptcy in Arizona. There’s inexpensive ones, but not “cheap”.
I’ll lose my home and car after I file
Although bankruptcy requirements in Arizona require individuals to put all debts owed (even to their parents), some debts can be reaffirmed. If you’re unable to take public transportation or walk to work, you’ll want to reaffirm your car loan unless you’re upside down on your loan. Unless you’re wanting to downsize living arrangements, you’ll want to reaffirm your mortgage. In fact, you can reaffirm any debt you can afford, although many simply keep their car and house. By signing a reaffirmation agreement, and provided it’s approved by the lender, you’ll keep your home and vehicle.
When your attorney goes through bankruptcy exemptions in Arizona, and you’ve passed the means test, discuss reaffirming debt.
The bankruptcy cost in Arizona is too high
Honestly, bankruptcy is an investment into your future. Costs aren’t astronomical unless you’re filing Chapter 11 bankruptcy shortly after a Chapter 7. Attorneys normally charge a nominal fee for their services on top of your filing fee. You’ll need to take two tests and receive two certificates – one after you filed, and one closer to discharge. Both those are taken online, and filed by the company sponsoring the test. Apart from that, you’re excused from thousands in unsecured debt – debt which collectors could rightfully sue you for. Besides, bankruptcy restores your paycheck by virtue of stopped garnishments and bank levies.
Remember, the alternative to bankruptcy is debt consolidation. While I’m sure some people find great success with this type of debt relief, companies offering these services charge way more than bankruptcy attorneys at times. And, of course, bankruptcy wipes away debt.
Don’t believe the hype – bankruptcy isn’t as scary as you’ve heard, and does more good than harm to people drowning in debts they cannot pay. Just make sure you go through an accredited bankruptcy attorney so your petition is filed on time, and with 100% accuracy.
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