How do I Know if I should File for Bankruptcy in Arizona?

how do i know if i should file for bankruptcy

How do I Know if I should File for Bankruptcy in Arizona?

how do i know if i should file for bankruptcyWhen you are staring at a mountain of debt and little to no way to pay it off, your options can seem bleak. The feeling can be overwhelming for you and your family and you may wonder what your next steps are.

  • Do you do nothing?
  • Do you consider bankruptcy?
  • Do you continue to pay your debts as best as you can?

Please know that you do not have to figure all of this out on your own. Today, we want to discuss a few routes you can take if you are facing major debts. When you need help, contact an Arizona bankruptcy attorney who can discuss all of this in detail in a confidential setting.

Do You Need Bankruptcy?

Bankruptcy can be a great way for people to get back on track financially, but not everyone needs to file. When we asked the question about whether or not doing nothing is an option, we were being serious. We know that doing nothing sounds like an easy way to get into further financial trouble, but the fact is that you may be better of doing nothing – at least for now.

  • What do you have that creditors could take?
    • The main concern people have when they get into debt trouble is that they might lose something valuable to them. Think about what you have that a creditor can get a judgment
      • Real estate equity
      • Your place of residence
      • A vehicle
    • Do you have a low-paying job or are you out of work altogether?
    • Is your financial situation unlikely to improve any time soon?

If you do not have anything of value that can be taken and do not have a well-paying job, you may be better not filing for bankruptcy. Just remember that those collections phone calls are still going to come in every day.

Will Your Debts Be Wiped Out In Bankruptcy?

You really need to look at what kind of debt you have that is overwhelming your life. There are certain types of debt that will not be eliminated, including the dreaded student loans. Only under very limited circumstances will student loans go away. You can also not make past income taxes go away or anything you own in past child support.

For all of these debts, you can face a range of consequences, including:

  • Wage garnishments
  • Reduction or loss of tax returns
  • Reduction in Social Security or disability benefits
  • A lien against your real estate

Keep in mind that child support non-payment is also punishable by jail time.

  • Not all debt will be eliminated in bankruptcy proceedings.

We do want to take a moment and point out that, while some debts cannot be wiped out in Chapter 7 bankruptcy, you may find some relief in Chapter 13 bankruptcy proceedings if you do have an income that meets the requirement for that level of filing. Chapter 13 will allow you to make payments on your income taxes and catch up on back child support over a period of three to five years on a scheduled payment plan with all of your creditors.

How An Attorney Can Help You Now

Regardless of what route you choose to take when you are facing tremendous debt, please seek advice from an Arizona bankruptcy attorney. Each option available to you has pros and cons that should be discussed with an expert who will analyze your financial situation. Remember, bankruptcy is available to help get people back on their feet. The sooner you make a decision, the sooner you can get your financial livelihood rebuilt.

Find out about bankruptcy for business debt in Arizona.