Filing Chapter 13 in Arizona

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Chapter 13 in Arizona requires you to make a payment plan to repay the majority of your debts within three to five years. This is in contrast to Chapter 7, or liquidation, in which the only way your creditors are paid back is through the profits from selling most of your assets. Chapter 13 allows you to keep most of your assets, but also tends to cost you more money. Also, it can take up to five years to complete the case if you choose Chapter 13. Arizona residents considering filing this chapter are therefore advised to meet with a lawyer for help deciding if this is the best route, as well as for assistance getting started.

How to Begin Your Case

Just as in any state that allows Chapter 13, Arizona residents are expected to attend credit counseling before filing. This ensures that you know this is the last resort and that you do not take filing for bankruptcy lightly. You need to find an approved credit counseling location, and then take the course within 180 days of filing. A bankruptcy lawyer can help you find a course and may also determine whether this is the best chapter for you. Know that Chapter 13 is usually the ideal plan if you have a lot of assets you wish to keep. You can usually hold onto your house, car and your household items this way since your creditors get their money through your payments, not by a trustee selling your property. In fact, if you are having trouble making mortgage payments, you can often get the amount you owe reduced when you file for Chapter 13. Arizona residents, therefore, often benefit from this route.

Creating a Payment Plan

Once you have completed the credit counseling, you and your lawyer will be expected to meet with your creditors and the court-appointed trustee to determine which debts will be included in your installment payment plan. As long as you make your payments to the trustee every month, any debts included in the bankruptcy will be paid off within three to five years.

Hire a Lawyer

When you file for Chapter 13, Arizona bankruptcy lawyers are available to help until your case is closed, whether it takes the entire five years or just three. Your attorney will help you determine the amount you can afford every month, as well as whether you should leave any debts out of the bankruptcy.