Sometimes, those in Arizona are so far in debt that they just want to wipe everything out and start over again, and these people often turn to Chapter 7 bankruptcy. However, what if you don't want to liquidate your assets to get rid of all of your debt at once? Is there an option for you if you just want a new way to pay back what you owe?
A recent Supreme Court decision regarding Chapter 13 bankruptcy may affect debtors in Arizona who want to appeal their bankruptcy plans. The justices ruled that a Massachusetts debtor who owed $387,000 on his home did not have the right to appeal the bankruptcy court's decision to refuse to ratify his plan.
In a Chapter 13 bankruptcy, a debtor works with the court to develop a debt repayment plan that lasts anywhere from 3 to 5 years. At the end of the repayment plan, most remaining debts are eliminated by the court. However, some debts will not be discharged. While the debtor will make manageable payments on these debts during the repayment period, once the judge orders the discharge, the client will still be obligated to pay off the amounts.
Many Arizona residents have found it difficult to keep up with their mortgage payments in the aftermath of the 2008 financial crisis, and this has led to a sharp increase in the number of foreclosures. If you are in this situation, there are steps that you can take which may allow you to keep your home and also reduce some of your other debts. However, you may wish to consider taking action swiftly if you wish to protect your rights and avoid long-term negative consequences.
Many people in Arizona have real concerns about what will happen to their home in the event they file for bankruptcy. Like most homeowners, filers may have one or more mortgages on their homes. Those mortgages may be seriously delinquent or they may have already received a foreclosure notice but the home has not yet been auctioned.
Arizona residents may be interested in some information on Chapter 13 bankruptcy in general and how it deals with discharging federal taxes. The tax issues involved depend greatly on the particular circumstances of the person filing for bankruptcy and looking to discharge the debts.
At the beginning of the bankruptcy process, people in Arizona can look forward to having their debts discharged and getting a fresh start. With Chapter 13 bankruptcy, people need to complete a series of steps before earning the discharge. There are a few exceptions to the discharge rule, but Chapter 13 bankruptcy gives debtors release from a wider range of debts than chapter 7.
Arizona residents might be interested in knowing more about when a bankruptcy actually takes effect. A recent article discusses the discharge date for both Chapter 7 and Chapter 13 bankruptcy. The discharge date is when a debtor is no longer required to make payments to creditors and certain debts are discharged entirely. The article suggests that the date depends on which type of bankruptcy the petitioner filed.
Arizona homeowners and those struggling with mortgage payments might be interested in the power bankruptcy can have in protecting a home from foreclosure. According to a study by the Center for Community Capital at the University of North Carolina, lower-income debtors who filed for bankruptcy following the initiation of a foreclosure action were 70 percent less likely to see their homes sold at foreclosure auction.
Arizona residents may wonder whether it is possible to file for divorce after filing for bankruptcy or whether they should wait until the bankruptcy is discharged. With a Chapter 13 bankruptcy, spouses have two options. They can choose to convert to a Chapter 7 bankruptcy, or they can seek to convert their joint payment plan into two separate plans to reflect their change to two separate households.