What is Bankruptcy
Bankruptcy is a legal process where a person (or a business) attempts to relieve himself/herself or restructure his/her debts. In Arizona, this can be achieved for an individual through filing Chapter 7 Bankruptcy or Chapter 13 Bankruptcy.
Depending on a person’s situation, they may not be able to file a Chapter 7 Bankrupcty. This bankruptcy can enable a person to start over by wiping out most or all debts. There are restrictions for this form of bankruptcy. One restriction for filing Chapter 7 Bankruptcy is that the person filing cannot have a lot of assets. In addition, certain assets may be forced to be liquidated in order for a person to successfully go through this process.
When a person is unable to file Chapter 7 or would like to simply restructure his/her debts, Chapter 13 bankruptcy is used. Both bankruptcies involve negotiated payment plans with creditors and have certain time limits. Filing a Chapter 13 can enable a person to keep their assets and resolve a troubled situation.