Understanding Arizona bankruptcy laws
There are two typical types of individual bankruptcy: Chapter 7 bankruptcy and Chapter 13 bankruptcy. The main difference between the two is that Chapter 7 bankruptcy allows you to eliminate unsecured debts entirely, whereas Chapter 13 bankruptcy reorganizes debts and gives you additional time to pay back your creditors.
The laws surrounding both Chapter 7 and Chapter 13 bankruptcy are complex, and you may not be sure whether you qualify for each option. What's important to understand is that if you are overwhelmed by debt, there is likely a way out, and Mesa bankruptcy lawyer Whitney Coats can help you understand your options during a consultation.
Common misconceptions about bankruptcy
Myth: Bankruptcy will ruin your credit forever. Bankruptcy remains on your credit report for seven years. While this may seem like a long time, the truth is that continuing to struggle with overwhelming debt will likely harm your credit for far longer. Discharging or reorganizing your debt through bankruptcy may be the first step toward eventually rebuilding your credit.
Myth: Bankruptcy is just for lazy people. Nearly one million people declare bankruptcy every year, and most of them are hardworking people. Circumstances beyond the debtor's control, such as medical bills, often lead to bankruptcy. Others are victims of predatory lending schemes. Some people declare bankruptcy because of honest mistakes.
Myth: Bankruptcy will cause you to lose your home, your vehicle or other prize possessions. While you may have to liquidate some assets, depending on the type of bankruptcy, the goal is not to leave you destitute. The goal of bankruptcy is to help you rebuild your life, and taking away your home or your car is not likely to help achieve that goal.
This may be your lifeline. A bankruptcy lawyer can help.
No one expects to end up declaring bankruptcy but we've seen many times that this financial reset can be a key step toward building a happier, financially stable life. If your debt is overwhelming and you're considering declaring bankruptcy, our law firm can help. Contact us today for a consultation.