For most individuals there are two common types of bankruptcy, Chapter 7 and Chapter 13. In rare cases, an individual would consider filing a Chapter 11 or Chapter 12. A Chapter 7 bankruptcy eliminates most debts, and most people who file a Chapter 7 keep many of their assets and personal belongings. Some people have too much income or non-exempt assets to file Chapter 7. Those people may choose to file a Chapter 13 which involves making regular monthly payments for 3-5 years to pay back a portion of debts owed.
Filing Chapter 7 Bankruptcy
A Chapter 7 bankruptcy eliminates away most debts, including credit cards, payday loans, repossession deficiency balances, most judgments, some tax obligations, and personal loans. Most people who file Chapter 7 keep many of their assets and personal possessions after filing chapter 7.
State and Federal law dictate what assets are exempt from creditors and the Bankruptcy Trustee. Catalyst attorneys will advise clients what property you get to keep and what property may be at risk. Typically, debtors keep their homes, cars, clothes, furniture, wedding rings, 401(k), IRA cash value life insurance policies, and annuities. Also, you can view a list of Arizona Bankruptcy Exemptions for more information.
Filing Chapter 13 Bankruptcy
Some people have too much income or too many non-exempt assets to use a Chapter 7. Those people may choose to file a Chapter 13. A Chapter 13 does not immediately give a person a fresh start, rather a Chapter 13 typically lasts from 3 to 5 years and consists of a person making regular monthly payments to a Bankruptcy Trustee assigned to the case. Typically, your payment to the Trustee will not exceed the amount of income that is left over each month after you pay your bills. If a person makes all scheduled payments to the Trustee, at the end of the Chapter 13 term (3 to 5 years) any unsecured debts that remain are discharged and you are free from the obligation to pay any unpaid debt–just like in a Chapter 7.
Working with Catalyst is Easy
- Learn more about a CATALYST bankruptcy
- Email us to set up a free consultation to discuss your personal situation. Our attorneys will craft a proposed solution that will meet your individual needs.
- Schedule a free consultation.
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