Arizona bankruptcy laws: What are the Laws Regarding Bankruptcies in the State of Arizona
Bankruptcy laws in Arizona are incredibly complex. There are several facts you have to be aware of before filing for bankruptcy. There are several examples of this like are you aware of how frequently you may register for bankruptcy under Chapter 7? Do you know the distinction between Chapter 11 and Chapter 7 bankruptcy? The article aims to answer some of such queries.
Over 1.4 million individuals declared themselves bankrupt in 2009. Out of these more than 1 million of such bankruptcy cases were reported under Chapter 7. A majority of the bankruptcies occur due to significant changes to the expenses or income of an individual like a medical ailment without any medical coverage or loss of a job.
The legal right for bankruptcy filing according to Arizona bankruptcy law
In case your debts are considerably more than what you can pay back within your earning after deducting all your living expenses, you enjoy a legal right of filing for bankruptcy so that there is freedom from such burdensome debt.
The frequency for filing bankruptcy under Chapter 7
One has to wait for eight years from the day when an earlier bankruptcy was filed under Chapter 7 before filing for bankruptcy under Chapter 7 once again. One should wait for six years after filing bankruptcy under Chapter 13 before declaring himself/herself bankrupt under Chapter 7.
The distinction between bankruptcy under Chapter 7 & Chapter 11
Bankruptcy declared under Chapter 7 is a liquidation bankruptcy. According to bankruptcy law in Arizona, all the assets of the filers under Chapter 7 will be sold first, and the proceeds from that will be distributed to the creditors. If there are any unsecured debts after that, they will be discharged. Individuals mostly use Chapter 7 for filing their bankruptcy. On the contrary, businesses use Chapter 13 most frequently when they wish to continue having control over their companies while restructuring and also finding a solution to repay the debts.
On many occasions, it is preferable to declare bankruptcy under Chapter 13 rather than opt for Chapter 7. Bankruptcy under Chapter 13 is the sole option left when you are unable to make your business or mortgage payments but wish to retain your property at the same time in any state including Arizona after the bankruptcy process ends. Usually, in case your valuable property does not fall within the scope of bankruptcy exceptions in Arizona, which you desire to retain, it is better to file bankruptcy under Chapter 13. Additionally, many people also file for Chapter 13 bankruptcy as their income is too huge to file for a Chapter 7 bankruptcy. Alternatively, they prefer Chapter 13 as their debt is non-dischargeable according to Chapter 7.
Appearing before a judge may not be compulsory
If someone does not raise any kind of objection, you might not have to be present in front of a bankruptcy judge when you declare bankruptcy under Chapter 7. When you file bankruptcy under Chapter 13, being present in front of a judge could be probable while the meeting on plan confirmation takes place.
All debts may not be discharged when you file bankruptcy under Chapter 7
You need to remember that just unsecured debts can be discharged by opting for the Chapter 7 bankruptcy. Secured debts like a car loan or a mortgage can be discharged only when you agree to give back the property. According to bankruptcy law in Arizona, in case the payment of your secured debts are not made in full, your creditors have the freedom to go ahead with repossession or foreclosure procedures to settle their debts.