Owing a significant amount of debt can be stressful and overwhelming for the average Arizona consumer. Having a heavy debt burden often results in difficult consequences that may include phone calls from creditors, contact from debt collectors, threats of wage garnishment and much more. To make these threats stop and to seek a better financial future, many choose the protection of consumer bankruptcy.
What is bankruptcy?
Bankruptcy is the legal process of dealing with past-due balances through reorganization and repayment, or through discharge. The ideal bankruptcy option typically depends on the details of the individual financial situation, such as the type of debt owed by the consumer and his or her income. Chapter 7 and Chapter 13 are the two most common chapters of bankruptcy, and they provide overwhelmed individuals with a way to seek the protection of their long-term interests.
Before filing for bankruptcy, it is helpful to first learn about which chapter is ideal for the specific situation. With Chapter 7 bankruptcy, the applicant may have to liquidate some personal assets in order to repay some debts. With Chapter 13, there will be a reorganization of balances, and the applicant will pay off balances over time.
The goal of bankruptcy
Regardless of the specific chapter of bankruptcy one seeks, the intent is to deal with debt effectively and in an organized manner. There are many misconceptions about bankruptcy, but it is often a reasonable way to seek a better future. It could be helpful to seek the guidance and support of an experienced bankruptcy attorney before proceeding.