Dodds Law Firm, PLC
By: Dodds Law Firm, PLC

Arizona Chapter 13 bankruptcies rise while other types are down

Chapter 13

Arizona Chapter 13 bankruptcies rise while other types are down

Overall, bankruptcy filings in Arizona dropped once again last year — the fifth year in a row. There were 10 percent fewer filings in 2016 than in the previous year. There were 14,657 bankruptcies in 2016, compared to 16,313 in 2015. However, the trend did not hold for all types of bankruptcies, and the numbers varied by bankruptcy type.

Chapter 11 bankruptcies are generally used by businesses to protect themselves from legal action by creditors while they work out a repayment plan. This type saw the greatest drop throughout the state, at almost 40 percent.

One high-profile Chapter 11 filing was by SynCardia Systems, which makes artificial hearts. Its assets were sold to an investor who is reportedly planning to recapitalize the company. Another was filed by the operators of the Tucson boutique hotel Lodge on the Desert.

Filings for Chapter 7 bankruptcies were down 12.6 percent overall. The drop was even higher in Phoenix at almost 14 percent and in Tucson, with more than 28 percent.

Interestingly, 2016 saw a rise in Chapter 13 bankruptcies throughout Arizona. Statewide, they rose 7.3 percent. In some cities they rose even more. In Tucson, for example, Chapter 13 filings rose by 18.5 percent.

Personal and business bankruptcy rates often vary throughout a state, just as economic conditions and other factors that impact both household and business income do. It’s not certain why Chapter 13 bankruptcies rose while Chapter 7 filings fell. Not everyone can qualify for Chapter 7. Even if they do, many people prefer Chapter 13 because it lets them develop repayment plans to handle their debts rather than liquidate assets, as they would in Chapter 7. An experienced Arizona bankruptcy attorney can provide information and guidance to help you determine which route is best for your specific situation.

Source:, “Arizona bankruptcy filings fell 10% in 2016,” David Wichner Arizona Daily Star, accessed Feb. 15, 2017