Arizona Bankruptcy FAQs
If you have questions about bankruptcy in Arizona, speak to a Phoenix lawyer at Hilltop Law Firm to get answers.
Affordable Phoenix Debt Relief and Bankruptcy Lawyers Answer Your Questions
When you have too much debt, it can feel like you’re on a never-ending treadmill. But you don’t have to face it alone. At Hilltop Law Firm, Cy T. Hainey and Samantha Hainey have dedicated our practice to finding affordable ways to solve your debt problems.
When you sit down with our team for a FREE consultation, we’ll go over your options and help you choose the debt relief plan that’s best for you. If you decide that either Chapter 7 or Chapter 13 is the right option, we’ll do everything we can to make the process as painless and affordable as possible. We even offer zero-down payment plans for Chapter 7 bankruptcy filings.
At Hilltop Law Firm, we’re happy to meet with you in our office, over the phone, or using an internet Zoom conference.
Call (602) 466-9631 to learn more today.
Chapter 7 and Chapter 13 Bankruptcy FAQs
We love to hear from people and answer your question. Even if you’re not already a client, we’re always just a phone call away. To make it even easier for you to begin your journey on the road to financial freedom, our team has put together this list of FAQs that we hear from our clients:
What Is Bankruptcy?
Bankruptcy is a legal process that provides a fresh start for people who can no longer pay their debts. The bankruptcy process was established by federal law, but each state administers these programs in its own way.
There are two major types of bankruptcy, Chapter 7 and Chapter 13. They have separate rules, but Chapter 7 and Chapter 13 bankruptcy both provide relief by allowing debtors to discharge or renegotiate certain types of debt.
Filing for bankruptcy provides immediate benefits to debtors, including:
- Halting evictions and home foreclosure
- Ending wage garnishments
- Preventing creditors from harassing you
- Getting your utilities turned back on
What’s the Difference Between Chapter 7 and Chapter 13 Bankruptcy?
Chapter 7 provides relief for people who are unable to pay their debts. Your debts will be assigned to a trustee who will sell off a portion of your assets and distribute the proceeds among your creditors. Most dischargeable debts will be eliminated with Chapter 7, including medical bills, credit cards, some types of taxes, personal loans, and unpaid utility bills.
Chapter 13 is ideal if you’re earning a steady wage but you’re still having trouble paying your bills. Under Chapter 13, your lawyer will create a three-to-five-year repayment plan. Any remaining debt will be discharged at the end of your payment period. Chapter 13 has several advantages, including allowing you to protect your home from foreclosure, getting rid of a second mortgage, catching up on past due balances, and rescheduling secured debt.
Can I Pay Off My Debts Without Declaring Bankruptcy?
Yes. At Hilltop Law Firm, we offer debt relief solutions that don’t involve bankruptcy. For example, we may be able to negotiate directly with your creditors to get you better repayment terms. We also protect consumers against fraudulent and illegal business practices. When you talk to our team, we will review all your options, including:
How Will Bankruptcy Affect My Credit Score?
Bankruptcy will reduce your credit score, and this reduction is generally larger under Chapter 7 than under Chapter 13. Chapter 7 stays on your report for up to ten years, but most negative accounts fall off your report after seven years.
Despite the immediate dip that your credit score will take, both Chapter 7 and Chapter 13 will enhance your long-term credit rating more than continuing to wallow in debt without a workable plan to resolve it.
Can All Types of Debt Be Discharged Through Bankruptcy?
No. Under bankruptcy law, certain types are non-dischargeable. This includes:
- Unpaid child support and alimony
- Government-backed or funded student loans
- Many types of taxes
- Debts owed due to a personal injury lawsuit
- Attorney’s fees for child custody or support
- Criminal restitution
- Unfiled federal income taxes
- Debts owed as part of a divorce proceeding
- Legal fines and court penalties
There are some circumstances where you can discharge money owed for unpaid taxes. But if you owe fines and penalties to the federal government, your best strategy may be to have your attorney negotiate a deal with the IRS.
Will I Get To Keep My Home?
Both Chapter 7 and Chapter 13 have provisions that allow you to keep your home. With Chapter 13, even if you’re behind on your payments, you can stop foreclosures and hold onto your home. By allowing you to discharge other types of debt, Chapter 7 may provide the money you need to continue paying your mortgage. But under Chapter 7, the court may require you to sell off your home to pay your debts if the equity is above a certain threshold.
How Much Property and Assets Am I Allowed to Keep?
The rules for Chapter 7 and Chapter 13 differ on how much of your property you will be allowed to keep. Under Chapter 7, you are permitted to hold onto a certain level of equity for each of the following: cash, vehicle, household goods, personal items, and tools needed for your work. Under Chapter 13, your lawyer will negotiate a deal that allows you to keep as much property as possible.
You will be allowed to keep the following under Chapter 7:
- Veteran’s benefits
- Social Security benefits
- Unemployment compensation
- Public assistance
Schedule Your FREE Consultation Today
Our team at Hilltop Law Firm has decades of experience in the financial and legal fields. We would love to meet you and find out more about the types of services you’re looking for. We’re confident we can help, and we offer a FREE 30-minute consultation.
Call an Phoenix, AZ bankruptcy lawyer at (602) 466-9631 to learn more today. Or fill out the form, and we’ll get right back to you.
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