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Chapter 13 bankruptcy in Arizona – What You Need to Know


If you’re considering filing for Chapter 13 bankruptcy in Arizona, there are some things you need to know. Chapter 13 is an especially good option if you have to decide between bankruptcy or foreclosure. In Tucson, bankruptcy, when filed under Chapter 13, has some particularly good options.

 

If you are facing foreclosure on your home and want to live in your home while settling your debts, Chapter 13 is one of your best options—assuming that your monthly income is not high enough to pay all your debts but high enough to make your house payment. When you file for Chapter 13, all foreclosure actions and collection actions by creditors must stop.

 

Keep in mind that secured creditors, like your mortgage lender and car loan company who hold your property in collateral, can ask the court to restart those foreclosure/collection efforts if you don’t catch up on what you are behind in. In a Chapter 13 case, a payment plan can be implemented during your case to give you an opportunity to catch up on delinquent payments and prevent your creditors from taking your property.

 

Another thing you should know about Chapter 13 bankruptcy in Arizona is that bankruptcy stays on your credit rating for eight years. So when deciding between bankruptcy or foreclosure, you should consider that bankruptcy remains on your record for eight years, while a foreclosure remains for only seven years.

 

 

How to Qualify for Chapter 13 Bankruptcy in Arizona

 

If you live in or near Tucson, and bankruptcy is likely to be in your future, the best way to find out if you qualify for Chapter 13 is to contact a lawyer who is experienced in bankruptcy, like Jeffrey P. Judge. It can be very difficult to determine your eligibility for Chapter 13 bankruptcy in Arizona on your own.

 

Generally speaking, however, any individual without enough income to pay back a portion of their debts can qualify for Chapter 13 if their unsecured debts are less than $360,475 and secured debts total less than $1,081,400. An additional stipulation is that creditors must be able to receive at least as much from the proposed Chapter 13 payment plan as they would under a Chapter 7 liquidation. If this is not the case, then you’ll have to file for Chapter 7 bankruptcy.

 

You should also know that Tucson bankruptcy court also requires you to appear at a meeting of your creditors and answer questions about your financial situation under oath. This ensures against fraudulent filings and helps creditors understand the truth of your situation.

 

To find out how to file for Chapter 13 bankruptcy, please click here to read our next article.

 

Get a free consultation on filing Chapter 13 bankruptcy in Arizona by clicking here.
Or call us today at 520-745-1500.