Ten Misconceptions about Filing Bankruptcy in Arizona

I will lose my house and car if I file bankruptcy in Arizona.

Most people keep their house and cars when they file bankruptcy in Arizona. When Filing Bankruptcy in Arizona, you are allowed an exemption of up to $150,000 of equity in your house and up to $5000 of equity in one car for a single person or equity in one (or two) cars up to $10,000 for married couples. You can usually keep these assets in a Chapter 7 Bankruptcy in Arizona if you are current and remain current on your monthly payments. In Filing a Chapter 13 Bankruptcy in Arizona, automobile loans are usually paid through the plan. Mortgage arrearages are paid through the plan, and you resume your regular monthly mortgage payments after the bankruptcy is filed.


When I file bankruptcy in Arizona, someone from the court will come to my house and go through my possessions.

Generally no one will come out to your house. You simply list your possessions on your bankruptcy schedules under oath.


If I file bankruptcy in Arizona, I will never be able to finance a car again.

Many clients actually find it easier to get financed for a car after they receive a Chapter 7 Discharge in Arizona. This is because their debt to income ratio has improved and the car lender knows that the individual cannot file bankruptcy in Arizona again for at least 6 years.


If I file bankruptcy in Arizona, I will never be able to get another credit card.

Some clients inform me that they receive new credit card offers once they received their Chapter 7 Discharge in Arizona. This is important because many people need credit cards for work or booking reservations. You may also be able to obtain a “secured” credit card and begin to rebuild your credit.


Filing a bankruptcy in Arizona is easy. All I need to do is go down to the court and file a couple of papers.

The legal system is a complex maze of rules, laws, and regulations. The creditors have aggressive legal counsel to fight you. If you want to be successful in this process, then you ought to get the best possible legal counsel to guide you through the system. In my experience, most clients who represent themselves do not make it through the process, particularly in Chapter 13 bankruptcies in Arizona.


When I file bankruptcy in Arizona all my debts get erased.

Not necessarily. Student loans, Child support obligations, criminal or civil penalties do not get wiped out, along with some types of taxes, and you must keep paying on secured debt that you want to keep such as a house or car.


To file bankruptcy in Arizona, I must be delinquent on all my debts.

I often have clients that file bankruptcy in Arizona who are current on all their debts. However, they can see the writing on the wall. Often they have been transferring debts from one credit card to another and want to end the vicious cycle of debt. Or, a change in income forces a measure to eliminate debt.


If I file bankruptcy in Arizona I will have to go to court where my creditors and a judge will rake me over the coals.

Although you do need to attend what is called a “meeting of creditors”, creditors rarely actually show up. I attend the meeting with you and the court appointed trustee has only simple, straightforward questions for you. We provide you with a list of the questions which you will be asked.


If I filed a previous bankruptcy in Arizona, I cannot file again.

While you are prohibited from filng a new Chapter 7 Bankruptcy in Arizona for 8 years after you receive a Chapter 7 Discharge, the time requirement for filing Chapter 13 Bankruptcy in Arizona depends upon whether you have filed a Chapter 7 or Chapter 13 previously.


I will lose my job if I file bankruptcy in Arizona.

This is simply not true. Under the bankruptcy code, an employer cannot discriminate because you filed Bankruptcy in Arizona.