Bankruptcy is a legal means of eliminating or repaying debts through the federal court system. Bankruptcy cases are exclusively handled in federal courts, and never take place within the state court system.
Individuals most commonly file for either Chapter 7 or Chapter 13 bankruptcy. In a Chapter 7 bankruptcy, the debtor is required to sell all or some of their assets to back pay their creditors. After this is done, they are relieved from their debts. In Chapter 13 bankruptcies the debtor arranges a payment plan through the bankruptcy court in order to pay off some of all of their debts.
Bankruptcy proceedings are initiated by filing a petition with the U.S. Bankruptcy Court. The debtor is then required to complete several forms and provide detailed documentation regarding their income and debts. For the bankruptcy to be approved, the bankruptcy court will need to determine that the debtor’s income is insufficient to pay your debts (this is called the “means test.“) You will also need to attend a credit counseling class.
Filing for bankruptcy is very complex, and even a small mistake or oversight could result in major delays or problems. If you are considering filing for bankruptcy in Arizona, it’s best to consult an experienced Glendale bankruptcy lawyer. An attorney who concentrates their practice on bankruptcy can answer your questions and guide you through the process. Although there are can be some downsides to choosing to file for bankruptcy, the impact of bankruptcy may not be as bad as you think. Bankruptcy is the best choice for many people who are drowning in debt. Don’t hesitate to contact a Glendale, Arizona, bankruptcy lawyer to discuss if it’s the right decision for you.