A change in family circumstances, such as job loss, pay cuts, or excessive medical bills, can cause debts to accumulate faster than you can handle. You may find at some point that your debt seems to be spiraling out of control. Although the new bankruptcy law does make it harder for some people to find debt relief (under Chapter 7), bankruptcy is still available to many people and in particular, to those who have experienced a severe permanent loss of income.How Bankruptcy Works
There are two basic types of personal bankruptcy: liquidation of debt in Chapter 7 (also called “fresh start” or “straight” bankruptcy) and reorganization of debt in Chapter 13.
Chapter 7: When the amount of debt far exceeds the ability to repay, most debts can be discharged under Chapter 7 bankruptcy. This is frequently used to eliminate credit card debt, repossession deficiencies, and medical bills. Some property that you cannot afford will be sold or returned to the creditor. An experienced bankruptcy attorney can negotiate with secured creditors to allow you to redeem property for fair market value on terms you can afford. In Chapter 7 bankruptcy, debt elimination is typically complete in less than six months.
Chapter 13: Chapter 13 debt reorganization can reduce monthly payments on secured debts, such as cars and appliances, and can virtually eliminate payments on unsecured consumer debt such as credit cards. Except in rare circumstances, Chapter 13 can sometimes reduce your mortgage payments or mortgage balance.
In Chapter 13, you keep your assets, keep your car, keep your house, and pay what can be paid to your creditors over a period of time, generally 36 and 60 months. An experienced and knowledgeable bankruptcy attorney at Platt & Westby, P.C., can propose an appropriate plan and negotiate its acceptance with creditors, many of whom might object to the court’s confirmation of the Chapter 13 bankruptcy plan.Debts That Must Be Paid
Current tax obligations cannot be discharged in bankruptcy. Student loans may be discharged under a very limited set of circumstances. Child support and alimony must be paid. Some types of debts are not dischargeable in Chapter 7, but may be dischargeable in Chapter 13. Knowing when to negotiate dischargeability, litigate, or convert to Chapter 13 requires experience and knowledge of the bankruptcy code and bankruptcy case law.Choosing An Attorney
Bankruptcy should only be considered after speaking with a knowledgeable attorney because individual circumstances and strategy do come into play.
The Arizona bankruptcy attorneys at Platt & Westby, P.C., have provided bankruptcy help over the last 40 years to thousands of families to stop creditor harassment, stop foreclosure, stop wage garnishment, and help them get out of debt. Platt & Westby, P.C., has been so effective that clients voted naming them "Best Bankruptcy Law Firm" for 2013 by Arizona Foothills Magazine!
For more bankruptcy information, feel free to review the information provided on our bankruptcy website, and please contact our office or call 602-277-4441 to speak with an qualified Phoenix debt relief lawyer at Platt & Westby, P.C., about your bankruptcy questions and filing for bankruptcy.
Platt & Westby, P.C., is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The information provided here is general and should not substitute for the advice and counsel of an attorney.