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When to File For Bankruptcy

When it comes to filing for bankruptcy, timing is everything. While everybody’s situation is different, divorce lawyers in Scottsdale suggest paying attention to the following four signs, which may mean that it’s the right time to file for bankruptcy.

Behind on Bills

Sure, life is certainly unpredictable and, generally speaking, you may not be prepared for a financial crisis. If you are in a tough position and know you won’t be able to pay your bills on time each month, (or have already fallen behind), filing for bankruptcy can really help you get back to where you need to be. For example, a Chapter 7 bankruptcy is deemed a liquidation bankruptcy that is structured to immediately eliminate your debts. Throughout this process, your Trustee will sell your property and use the funds to compensate your creditors. Unless otherwise
specified by you, your automobile can also be included in the sale of your property.

You’re in Debt Through a Collection Agency

If you have debt that’s been building up, there is a chance you may end up being sued if you continue to ignore debt collectors. Filing for bankruptcy can really help if you think you may end up in this position. Filing for bankruptcy puts what’s known as an “automatic stay” against debt collectors and can put an end to any additional collection actions.

Your Wages Are Garnished

In order to pay down a debt, creditors often take extra action to ensure the amount owed is legitimately paid. In doing so, collection agencies obtain a court order to garnish your wages. As soon as this happens, your employer is bound by law to hold back a specified amount from each paycheck, which ultimately goes towards paying down the debt that you owe. Similar to being sued, the automatic stay after filing for bankruptcy can block a company from further garnishing your wages.

You Might Lose Your House or Car

Let’s say you’re behind on payments for your house or car. Bankruptcy might be an effective way to stop repossession or even foreclosure (even if it’s temporarily). Furthermore, this will give you enough time to catch up on payments. Nonetheless, you’ll always want to speak with your lender regarding various options before you take an initial step.
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A great deal of thought should go into the decision to file for bankruptcy. As always, you should seek advice from an attorney if this is something you are considering. The sooner you consult a lawyer, the better, do not wait until the last minute when all of your money is gone and your debts are at their peak levels.

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Reasons for Bankruptcy and How to Avoid Them

When it comes to bankruptcy, there is both good news and bad news. In 2017, bankruptcy filings fell by 3%. Good news, right?

Having said that, there were still over 770,000 bankruptcy filings. This is something upon which we must improve.

In doing so, it’s important to examine the fundamental reasons why people end up in bankruptcy. Bankruptcy lawyers in Scottsdale have assembled the following five reasons in addition to how to avoid ending up in this dismal situation.

#1 – Job Loss

Although we are currently in a period of low unemployment, it was recently very high not too long ago. If you don’t plan correctly and fail to have a financial safe hold in place with sufficient funds, you can easily end up in bankruptcy. Things you’d have to consider in an emergency fund include food, rent, transportation, insurance, child-related expenses, and various asset expenses. Furthermore, you always want to prepare for medical expenses just to be safe.

In terms of your job, focus on being a productive employee with an amicable attitude. In addition, it’s always good to make yourself more marketable over time with additional certifications and skills.

#2 – Decreasing Income

Simply put, with less money and cash flow, the greater the chances are that you’ll end up bankrupt. While you may not be completely unemployed, a change in roles or a reduction in hours can really make it hard to stay afloat.

While this may be hard to avoid, you should prepare for this in the same way that you’d prepare for losing your job. Another option might be to pursue side gigs to augment your income.

#3 – Credit Card Debt

Credit card debt can really be a slippery slope, and if you let it get out of control, you’ll be in trouble quicker than you think. While it may be tempting to simply make the minimum monthly payments, you’ll actually just be dragging things out and losing money in interest over time.

There is a simple solution here – only purchase what you can afford and pay off your credit card every month.

#4 – Medical Expenses

It’s no surprise that one of the leading causes of bankruptcy is, in fact, medical expenses. We understand that medical treatment generally is not optional and also is quite expensive.

To avoid getting into debt because of medical expenses, focus on living a healthy life through clean eating, exercising regularly, and going for annual physician screenings.

#5 – Divorce

Divorce is one of the last major causes of bankruptcy. Outside of legal fees, which can be tremendously expensive, financial assets are not always allocated equally. If and when they are, you must consider the idea of living alone versus living with a spouse. A financial system that supported two people may not successfully support one person.

It’s important to work hard to keep your marriage healthy and strong. This can be achieved through active communication, romantic gestures, and honesty.

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Rebuilding Credit After Bankruptcy

Your life doesn’t end when you file for bankruptcy. There are many positives to this, such as having unsecured credit card debt discharged. There are also some negatives, mainly a major blow to your credit score. It’s not impossible to improve a bad credit score once your bankruptcy lawsuit is final.

Here is the good news.  Once your bankruptcy case concludes, you should take a hard look at the current state of your finances. Even if the court discharged some debt, you may have to still repay secured loans under a new payment plan. There may be tax issues to discuss with your bankruptcy lawyer in Scottsdale. More importantly, you should focus on your current credit score. Here are several tips for bringing it back up to what it once was:

Don’t Make the Mistake of Avoiding Credit Cards

Once you have undergone one bankruptcy, it’s easy to think that you will never use another credit card again. But this is usually noted feasible. You will likely need a credit card to improve your credit score. Not having a credit card is similar to having bad credit. A credit score reflects your reliability as a borrower. You can earn it back by proving that you are a responsible borrower to the bank. Therefore, you should keep your credit card or open a new account. However, do make payments on time. Once you keep making payments over time, your credit score would naturally improve.

Focus on Your Credit Utilization Ratio

Credit utilization ratio (CUR) is sometimes called the balance-to-limit ratio. It refers to how much credit you use as opposed to how much is left unused at the end of the month. This little number plays a major role in how fast and effectively your credit score improves. If you have a high utilization rate, this would negatively affect your credit score. If you have a $1,000 limit on your credit card, and if you use all $1,000 to buy things each month, then your CUR would be extremely high, reflected in a bad credit score. Ideally, you should keep your CRU in the 50 to 60 percent range. For the aforementioned credit card, if you were to spend only $500 or $600 a month, you would have a roughly balanced ratio that would work to your advantage.

Pay Off Majority of Credit Card Balances Each Month

Pay at least 75 percent of credit card balances each month. Ideally, you should repay it all back. Maintain your CUR with payments on time. Keep in mind to never max out the credit limit.

Use a Secured Credit Card

A secured credit card is similar to a regular credit card, but there’s a cash collateral required to obtain one. You will receive one of these after making a security deposit. These cards are designed to help those with bad credit gain positive credit scores. Unlike with regular credit cards, banks typically make payment information about secured credit cards available to credit agencies without delay. Therefore, you can rebuild your credit faster with a secured credit card.

It’s also advisable not to borrow money, such as for a loan, until your credit score is at an ideal level. And don’t rush to increase your credit score either, as it can bac-kfire. Develop an actionable strategy that works best for you to gradually improve your credit score after bankruptcy.

Bankruptcy is a bridge to your new future.  Let Canterbury Law Group take you there and create your future!

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Managing Money and Avoiding New Debt During the Holiday Season

The holiday season generates months of heavier spending. While it can be reasonable to buy gifts for friends and relatives who visit on Christmas or Thanksgiving, the pressure can be high to spend a lot and buy really nice gifts. This year, American gift-givers will spend an average of $660 on gifts, according to CBS News. Although this number doesn’t seem terribly high, debt among holiday gift givers is on the rise, according to NerdWallet research.

Why Holiday Debt Can Become a Problem

Holiday spenders say that they only plan on spending roughly the same amount as they did the previous year. However, over 50 percent overspend or spend randomly without any sort of budget. Even holiday budgeters end up overspending because people don’t really limit spending during the holiday season. When there are so many “holiday discounts” being offered by retailers, it can be really hard to stop spending because you feel like you are saving money.

What all this spending leads towards is more debt, especially at the start of the New Year. In 2016, a large number of holiday spenders took on debt to finance purchases. The older generations are highly likely to borrow for gifts. Even about 40 percent of millennials borrowed cash to buy gifts during the previous holiday season. All these people then incur debt the following year.

For example, in 2016, about 24 percent of millennials who used credit cards to make purchases had yet to pay off the debt in 2017. Most people take longer than a month to fully pay off credit card debt acquired during holiday seasons.  Every month with a carried credit card balance causes interest, which adds to the debt, and the cycle continues.

Could Holiday Spending Lead to Bankruptcy?

If holiday spenders take on too much debt, especially credit card debt, it could snowball during the following year, leading to possibilities like bankruptcy. Now, a bankruptcy attorney in Scottsdale will advise that not all those in debt are eligible for Chapter 7 bankruptcy, which eliminates most unsecured debt like credit card debt. If credit card debt takes more than four to six months to pay off, the situation could end up becoming problematic.

Holiday spending on credit can pose serious risks to younger buyers in particular. Millennials are still building up credit, which means holiday spending could lead to more ill-advised purchases in the future which then creates a cycle of debt.

Avoiding the Holiday Spending Debt Trap

There are several recommended ways to control holiday spending so consumers do not end up severely overburdened. The first step is making a realistic budget that spenders can reasonably stick to. It’s recommended to keep gift purchases at about 30 percent of the monthly income. However, spenders can give themselves a break and increase the threshold just a bit, but only so as the limit is still at comfortable levels.

Then, avoiding impulsive purchases is the next step. Don’t fall prey to the holiday season advertising. Shop with a list and buy only items you need. Compare prices online to make sure you are not overspending. If it’s a good idea today, it’s a good idea tomorrow.  Don’t rush your spending.

And lastly, pay off credit card debt the following January without holding it off for longer, which will increase the interest fees on the existing debt.  Take your medicine, pay off the card, and tighten the belt in the first quarter each year, if you choose to spend during the holidays.

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How Many Times Can I File for Bankruptcy?

If you have filed for bankruptcy under Chapter 7 or Chapter 13 before, can you do the same again? Can a debtor in Arizona file for bankruptcy multiple times? It’s not uncommon for Arizonians to fall into hard times and become severely indebted once or twice. Technically, it is possible to file for bankruptcy more than once under Arizona law and the applicable federal laws. However, the law specifies certain circumstances under which a debtor can actually do that.

BAPCPA and Multiple Bankruptcy Filings

In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) went into to effect. The law made it less easy for debtors to file for Chapter 7 bankruptcy. The idea is to prevent unwarranted practices by higher income individuals who file for Chapter 7 bankruptcy to take advantage of its debt discharge clauses. BAPCPA aimed to force rich debtors to file for Chapter 13 instead and to pay back what they owe under a court-mandated payment plan.

As a result of BAPCPA, there are now several significant limitations for multiple Chapter 7 or Chapter 13 bankruptcy filings in Arizona.

What are the Limits on Multiple Bankruptcy Filings?

Here is a list of the most significant limitations to multiple bankruptcies that debtors should be aware of:

  • Debtors must wait for at least 8 years before filing for another Chapter 7 bankruptcy. The days are counted from the day the debtor filed the first Chapter 7 bankruptcy case. From then on, the debtor must wait exactly 8 years before filing for bankruptcy under the same chapter once again.
  • Debt discharges during the second bankruptcy could be more impaired based on discharges offered during the earlier bankruptcy filings. For example, if you are filing for a Chapter 13 bankruptcy, you cannot obtain a debt discharge if you were granted an earlier Chapter 13 debt discharge in the previous two years. If you have obtained a debt discharge under Chapter 7 in the previous 4 years, then you can’t get a Chapter 13 discharge for a new case. However, this doesn’t prevent you from being able to file for a Chapter 13 bankruptcy.
  • You can file for Chapter 13 bankruptcy regardless of how many bankruptcies you have filed before. There are certain circumstances, such as owning too much mortgage debt, that allow debtors to do this. Chapter 13 filings are accepted even for issues like needing a payment plan to pay off taxes owed.
  • Filing for Chapter 13 bankruptcy, regardless of precious bankruptcy history, enables automatic stay on a current debt between three to five years. However, the court must be specifically requested to enforce the automatic stay if you have had a bankruptcy dismissed by the court during the previous 12 months.

The above limitations are not too restrictive when it comes to filing for another bankruptcy. If your case is complicated, you must consult with an experienced Arizona bankruptcy attorney. Keep in mind that you may not be able to keep filing for Chapter 7 bankruptcy in rapid succession as per the recently amended rules and regulations.

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Do I Become Ineligible for a Home Loan After Filing for Bankruptcy?

Filing for bankruptcy could affect your life in both positive and negative ways. The main negative in declaring bankruptcy is that the debtor’s credit score will take a major hit. While it’s very much possible to restore a bad credit score, many consumers do wonder what it means for immediate financial assistance requirements. For example, if you don’t own a home and have filed for bankruptcy, does that mean you are ineligible for a mortgage now and for how long?

The question is not easy to answer. Personal circumstances and specific situations can matter. It’s best to first get advice from a qualified bankruptcy lawyer in Scottsdale. However, consumers can also get a general idea of obtaining a home loan following bankruptcy by reading this article.

Qualifying for a Home Loan Following Bankruptcy

There are no legal barriers to qualifying for a home loan following a bankruptcy declaration. A lender cannot deny you a mortgage based solely on the fact that you have filed for bankruptcy once. Lenders will use other underwriting factors to determine your eligibility.

A consumer’s ability to get a home loan following bankruptcy is determined largely by the credit score, monthly income, down payment levels and the remaining savings. Keep in mind that mortgage lenders require a down payment on the loan. If you have no trouble paying for the down payment, then you can quite often also qualify for the loan. If not, you should at least be able to pay 20 percent of the down payment right away. The higher the down-payment one can offer a lender, the higher the chance that your mortgage loan will close and fund on the date of purchase.

How Bankruptcy Affects Credit Scores and Eligibility for Home Loans

You should expect your credit to plummet by at least 120 points if you file for bankruptcy. All of the credit monitoring companies scan the bankruptcy dockets every day to watch consumers.  After you are discharged from your bankruptcy case, you will need to soon start rebuilding credit to prevent going into the negatives. If you start repaying remaining debts that survived your bankruptcy, your credit score will rise without a problem. Rehabilitating credit in this manner is the best option you have for being qualified for a subsequent home loan. Even if your credit score is low, if you can show the lenders that it has been improving, then your mortgage application may receive more favorable treatment during the loan application process.

How to Improve Your Chances of Obtaining a Home Loan Following Bankruptcy

First of all, you should take steps to get your credit score back up. If you filed for Chapter 13 bankruptcy, sticking to the monthly court-approved payment plan should do it. Otherwise, you can get a credit card and make timely payments without missing a single payment due.  Pay on time, each and every month.

Start saving. You should certainly expect to spend some time-saving money before you can apply for a mortgage. Let your savings accumulate so you have enough to at least partially cover a down payment. The more savings you have, the better your application will look.   You can get friends or family to help you accumulate down payment funds as well, so long as they are willing to sign off and release those funds to you in writing.

Don’t forget to repay existing loans such as student loans, taxes owned, or child support. Always continue to timely pay your regular bills on time as well.

What matters is that you maintain a good financial profile by not falling back into the previous circumstances that caused you to file for bankruptcy.  Time is your friend.  After a bankruptcy, the longer you have come through and demonstrated a strong credit history and ability to pay—the mortgage lenders will start to consider you again for home mortgage loan qualifications.

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How to Cope with the Stress of Fighting a Bankruptcy Case

No one really wants to be in a situation where they have to file for bankruptcy. It can be immensely stressful to go through with the proceedings. If you have trouble managing stress while you are petitioning for bankruptcy, here are several tips to help you reduce the mental burden:

Don’t Hesitate to Ask Your Lawyer the Tough Questions

Bankruptcy cases can be particularly stressful because the law involved in these cases can be quite complicated. Don’t be confused and or angered about the issues raised. If you have questions, ask your bankruptcy attorney in Scottsdale. A good lawyer will be more than happy to help you with whatever questions you have. Your attorney is also the best person to explain how the law applies to your unique situation. You will feel much better after you have spoken to your attorney regarding the tough parts of your case.

Think About Positive Aspects of Bankruptcy

Yes, it may seem impossible to look on the bright side of filing for bankruptcy, but there really is one. Bankruptcy can actually be good for you. Think about all the good things happening. For starters, your creditors can no longer harass you with never-ending phone calls. You are no longer avoiding debt issues. Some of the debt you have, like credit card debt, can be dismissed by the court depending on under which chapter you file.

Chapter 7 bankruptcy is considered the “best plan for debt elimination” because the court discharges most types of unsecured debt under this law.  The court will order a credit plan to pay back whatever remaining debt you have. So when the court proceedings are done, you will mostly be debt free!

Sleep Properly

Do not stay up late worrying about your case; let your attorney handle that part. Try to get at least 7 hours of sleep each night when the case is proceeding. If you are sleep deprived, you will feel even more stressed out. A good night’s sleep can clear your head and prepare you mentally to navigate your case.

Educate Yourself about Issues Involved

Your attorney may not have time to explain every little thing about your case to you. In this situation, you can always go online and read about the basics of filing for bankruptcy litigation. If you don’t understand what Chapter 7 or Chapter 11 bankruptcy is, there are plenty of resources online (and also on this blog) that will help you understand the process involved. Don’t hesitate to do your research. When you are educated about the laws involved, the case will seem a lot less complicated to you. That should relieve most of your stress issues.

You can also read blogs about people who have overcome debt after filing for bankruptcy. Reading about the experiences of others will help you overcome yours better.

What’s more stressful than going through with a bankruptcy case? Crushing debt. Once the case is over, your debt will be largely be gone too. So think about the positives and don’t dwell on the negatives until your case concludes and you are fully discharged.  This too shall pass.  

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The Benefits of Filing for Bankruptcy

Most people perceive bankruptcy as a dreadful thing, like a complete end to financial stability and future prospects. This is a rather misguided notion of bankruptcy. Filing for personal bankruptcy does have its benefits other than reaching a legal solution to overwhelming debt. Don’t believe it? Read below to find out:

Stop the Never-Ending Collection Calls

One of the major positive aspects that follow declaring personal bankruptcy is the definitive end to collection calls. In Arizona, creditors are legally obligated to stop attempting to collect the debt when a debtor has filed for personal bankruptcy. Your creditor won’t be able to call you, try to foreclose your home, notify your employers, or do anything else to attempt to collect your prior debt. If the creditor harassment continues, you will have a good case for your bankruptcy proceedings. You should contact a bankruptcy lawyer in Scottsdale to find out what your options are if credit harassment continues.

Keep Your Home

Arizona law allows exemptions for homesteads or the primary residence owned by a debtor. The court will not make you homeless and take away your shelter when you file for personal bankruptcy. So it’s a sensible way to try to save your home from debtors. This exemption has a dollar and equity limits and certain exceptions that you should clarify with a lawyer. But filing for bankruptcy will stop a creditor from foreclosing your home.

Protect Personal Assets

The Arizona bankruptcy law allows many personal property exemptions when filing for bankruptcy. That means you would be able to keep valuable assets like books, furniture, cheap motor vehicles, various electronic gadgets, family antiques, clothing, pets and so on in your possession. Creditors will not be able to claim these as collateral.  They are prohibited from taking your things.

Stay in Control of Business

Chapter 11 bankruptcy allows business owners control of their company even after filing for business bankruptcy. So it’s a good way to keep a business afloat when the debts threaten to run your company to the ground. The Chapter 11 bankruptcy also facilitates business owners to reduce debt gradually over time.  Chapter 11 can also aid in getting rid of high-stakes litigation by discharging the pending litigation claims that were previously being waged against your company.

Retain Your Pension Fund and Retirement Assets

You can retain your considerable IRA or other types of qualified retirement plans or pensions when you file for bankruptcy. It’s one another valuable personal asset that will be kept away from the debtors. Put another way, you will exit bankruptcy with virtually identical retirement assets as when you went into bankruptcy.

Start Improving Your Financial Status

When you file for bankruptcy, your credit score would hit rock bottom. But afterward, it will start to climb up again, sometimes rapidly. Filing for bankruptcy is sort of the last step towards regaining financial footing and security. After that, it only gets better. When you start to make debt payments, your credit score would start rising again.  Many creditors are attracted to persons coming out of bankruptcy and offer them credit because they know that the person cannot file another bankruptcy for many many years.

Have a Trustee Oversee Your Monetary Affairs

During your bankruptcy, the court appoints a Trustee between you and the creditors to oversee how the discharge on your bankruptcy filing is being carried out. This spells only good things for your future financial dealings. If pursuing a chapter 11 or 13, you will get a handcrafted debt repayment plan to get back on your feet after the declaring.   If pursuing Chapter 7, most if not all of your debts will be canceled.

Above all, you will feel less stressed. Your money matters will be taken care of, and the creditors will finally go away.  Consider speaking with competent bankruptcy legal counsel today.

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Who Can File for Chapter 12 Bankruptcy?

Most people are familiar with Chapter 7 and Chapter 13 bankruptcy. Chapter 12 is a special type of bankruptcy clause that allows a specific group of financially “distressed” debtors to file for bankruptcy.

Unlike Chapters 7, 11, or 13 bankruptcies, which most individuals or businesses in debt can apply for, Chapter 12 bankruptcy is specifically reserved for family farmers or family fishermen under the Bankruptcy Code, which the state of Arizona adheres to. The eligible parties can propose a repayment plan for the debt to pay off creditors in five years or less. In this sense, Chapter 12 bankruptcy is similar to Chapter 13.

Chapter 12 doesn’t allow for the automatic discharge of some debts like Chapter 7. However, a judge will review all debts and determine if any are eligible for a legal discharge. Let’s look at who is eligible to file for this type of bankruptcy:

Only Fishermen and Farmers with Regular Income are Eligible

The Bankruptcy Code specifically states that the fishermen or farmers who qualify for Chapter 12 bankruptcy must have what is termed as “regular annual income.” This clause exists because debtors who file a petition must agree to a repayment plan that requires some sort of income. However, income for some farmers and fishermen is almost always seasonal. The law takes this into consideration and does allow relief if needed. You will need a competent bankruptcy attorney in Phoenix or in your local area to ask for a regular income reprieve.

Categories of Farmers and Fishermen

The family farmers and fishermen are specified in the law under several categories. A “family farmer” or a “family fisherman” could be an individual or a spouse of en eligible individual, or a business entity like a partnership. The individuals must have a professional in commercial fishing or farming to be eligible. The total debt the petitioner is seeking relief from should not exceed $3,237,000 for farmers or $1,500,000 for fishermen.

A majority of the debt in question should be related to farming or fishing. For fishermen, this is least 80 percent, and for farmers, the threshold is at least 50 percent. Also, a majority of more than 50 percent of the income of the petitioner must come from farming for fishing operations for the preceding tax year. For farmers, this must be true for two or three preceding tax years.

Filing as a Corporation

Fishing and farming corporations or partnerships are eligible for Chapter 12 bankruptcy too. There are, however, stringent considerations that determine which types of business entities are eligible. The businesses must be family owned, and more than one-half of the equity or stock in the business must be owned by a single family or its blood relatives.

The corporation or the partnership must be run by family members and relatives. A majority of 80 percent or more of the value of the entity must come from farming or fishing related activities. There are limits to indebtedness levels as well just like for individuals. Also, the business cannot publicly trade stocks after filing for bankruptcy.

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Consulting with a Bankruptcy Attorney

Before you file a bankruptcy petition, you must consult with a competent bankruptcy attorney. In fact, you should do this while even contemplating bankruptcy. The attorney would be able to tell you whether bankruptcy is the best option for your financial situation and the best timing to file. When you are consulting with a bankruptcy attorney, here is what you should ask and seek answers for:

Tell the Lawyer Briefly about Your Financial Situation

When you meet up with your bankruptcy lawyer in Scottsdale, be 100% honest with them regarding your financial situation. Do NOT withhold the truth for any reason.  If you haven’t hired the lawyer, you don’t have to give details of your debts. However, a brief overview will be necessary. Tell the lawyer what type of debt you have, your income situation, and why you think you are unable to repay your loans on time. The lawyer should be able to tell you then whether bankruptcy is the suitable next step for your financial situation.  If you lie to your lawyer, you could face criminal prosecution in your underlying bankruptcy case later because he or she would be defrauding the court.  The truth the truth and nothing but the truth, because your bankruptcy is filed under penalty of perjury.

Ask the Lawyer if He or She is willing to be a Negotiator

Before you file for bankruptcy, you can try negotiating with creditors. Bankruptcy is not the ideal scenario for either debtors or creditors. Some creditors may be willing to cut down the interest rate or extend the repayment plan. If you are worried about your credit score, negotiating is better than going to court. You can inquire about the pros and cons of bankruptcy from your attorney. It’s important to make sure it’s the best solution for your financial problems before proceeding.

Inquire about Different Types of Bankruptcy

The Bankruptcy Code allows for different types of bankruptcy petitions. You may have heard of some of these already, like Chapter 7. While Chapter 7 is the most common type of petition for individual debtors, it may not be the only one. If you belong to a higher income category, you may have to file for Chapter 13. If you have a family business in fishing or farming, you may be eligible for Chapter 12 bankruptcy. Ask your lawyer about which type of bankruptcy petition best suits your situation.

Check Your Eligibility to File a Petition

If you have filed for bankruptcy before, you may not be eligible to file again. For example, if you have declared Chapter 7 bankruptcy in the past, you will not be eligible for the same type of petition for about 6 to 8 years depending on what state you file in. There could be other factors, like income and alimony that make you ineligible to file for bankruptcy or at least the type of debt relief you seek. Therefore, you will need to ask the attorney to find out if you are eligible to file a petition and which chapter might get you the best debt relief.

Learn about Fees and the Process

Filing for bankruptcy is not expensive, but there will be court fees involved. Learn about these fees from the lawyer. Also, ask the lawyer to explain the general process of filing in your local jurisdiction. You will have to discuss representation fees and consultation fees as well. Bankruptcy attorneys are limited in how much they can charge as per Arizona law.  You typically get what you pay for.  The $99 down bankruptcy ads on TV are usually highly misleading.  Most bankruptcy filings, no matter who you hire, require several thousand dollars to file and complete.

If your consultation goes successfully, you will be able to proceed with your petition.  Consider contacting us to consult to discuss your needs.

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