The primary advantage of bankruptcy in Arizona is to discharge your debts. The discharge allows a debtor to get a fresh start. Other advantages include protection of your property and an automatic stay so creditors cannot demand payment from you. A bankruptcy discharge will eliminate any obligation you have to pay your past debts. For most people, filing bankruptcy in Arizona is a quick way to end creditor phone calls and the anxiety and stress that debt can cause on your marriage and your family.
A bankruptcy discharge does not eliminate liens on real estate. The bankruptcy code provides mechanisms however to deal with most secured debt. Most home equity loans or second mortgages can be eliminated based on whether the fair market value of the property is less than the debt owed on the first loan. In a Chapter 13 bankruptcy, debtors can keep their home, car, and furniture that would otherwise be surrendered in a Chapter 7 bankruptcy.
One disadvantage of bankruptcy is that it will be part of a debtor’s credit history for as long as ten years. Your credit will be impacted, and your credit score will decrease by at least 100-200 points. If you are contemplating filing bankruptcy in Arizona, your credit score probably isn’t that great anyway. So the impact probably won’t have much of an effect because you probably could not get credit extended to you with your current credit score.
To some creditors, a bankruptcy that wipes out all debt is an improvement to your credit. You are free of financial obligations and thus, have funds to pay the debt. Furthermore, you will be unable to file bankruptcy on any new debt for at least 8 years. For these reasons some creditors seek out recent bankruptcy debtors to extend them credit.
With bankruptcy in Arizona becoming more common, creditors are not automatically excluding people who have filed for bankruptcy. Even some mortgage lenders are willing to extend loans to customers with a bankruptcy that is only a few years old.
Call me at (480) 833-1113 to schedule a free consultation to learn more about the advantages of filing for bankruptcy in Arizona and different types of bankruptcy available for your particular financial situation.
Attorney Profile: Janet Spears, Bankruptcy Lawyer