Frequently Asked Questions About Bankruptcy in Arizona
Our experienced bankruptcy attorney in Tucson, Eric Ollason, knows how uncomfortable it can be to talk to friends or family members about debt. No one wants to expose the fact that they have fallen behind or are having any type of financial trouble — especially when they do not have a solution in place to tackle the stress of their situation.
The reality is a single hiccup in most household’s financial outlook — including unexpected bills, injuries, divorce, layoffs or job losses — can irreversibly turn their finances upside down.
From a physical and emotional standpoint, overwhelming debt can cause stress, anxiety, and even trouble with personal and professional relationships. Our Arizona bankruptcy law firm fully believes that it is time to have a real conversation about debt and have compiled some of the most frequently asked questions we receive each day, to help our clients focus on financial solutions.
How Many People Are in Debt in the United States?
Last year, United States consumer debt was listed at $14 trillion.
That includes debt from:
- Auto Loans
- Credit Cards
- Student Loans
Over 189 million Americans have credit cards, averaging four cards each, and a household credit card debt of nearly $8,400.
How Many People File for Bankruptcy Each Year?
At last count, the United States Courts reported 767,721 non-businesses across the country filed for bankruptcy over a single year.
The United States Bankruptcy Court in Arizona listed 16,243 bankruptcies across the state over the same time; 3,925 of which were filed in the court’s Tucson division.
What Can Bankruptcy Do for My Financial Standing?
Bankruptcy provides solutions for those who are overwhelmed by debt. In the State of Arizona, your bankruptcy options are unique to your financial circumstances but can provide a fresh start, so you can get your life back on track.
Bankruptcy solutions may:
- End harassing collection calls and letters
- Halt home foreclosures
- Prevent wage garnishments
- Stop vehicle repossessions
- Wipe away unsecured debt
During the bankruptcy process, a judge will review your circumstances and determine whether you qualify for:
- Chapter 7 bankruptcy, which wipes out most debts
- Chapter 13 bankruptcy, which determines how much a debtor must pay back to creditors
Before presenting your case to the courts, our skilled Tucson bankruptcy attorney will outline each of your options to ensure you have all the tools you need to make an informed decision regarding your financial future.
Can Bankruptcy Help Me if I Own a Business?
The short answer is, yes – if the bankruptcy laws apply to your circumstances.
If you own a Corporation, LLC, Partnership, or even an individual business you may be eligible to file for Chapter 11 bankruptcy protection.
This is a complex area of bankruptcy law and requires a consultation to determine your eligibility.
What is the Cause of Most Bankruptcies?
There is a stigma surrounding bankruptcy that makes most people reluctant to talk about it as a real option for debt relief.
The assumption is that someone who files bankruptcy made poor spending decisions and recklessly racked up debt they knew they could not pay.
Nothing could be further from the truth.
Major changes that can lead to bankruptcy in Arizona include:
- Medical bills from injuries, serious, or rare diseases account for 62% of all bankruptcies in the U.S.
- Job loss
- Natural disasters
A Modern Wealth Survey, conducted by Charles Schwab last year outlined:
- 59% of Americans are living paycheck-to-paycheck
- Nearly half of the respondents say they have credit card debt and can hardly keep up with the minimum payments
- Only 38% of people in the U.S. have an emergency financial fund
Combine those statistics with sluggish wage growth, and ANY unexpected expense can send an entire household reeling financially.
Will Bankruptcy Wipe Out All of My Debts?
Another important truth about bankruptcy is that it does not eliminate all types of debt.
Bankruptcy will not eliminate:
- Alimony payments
- Back taxes
- Child support payments
- Government fines, penalties, or restitution
- Judgments issued by the courts
- Property liens
- Student loans
Bankruptcy is designed to eliminate overwhelming debt caused by:
- Credit card debt
- Medical bills
- Unsecured loans
The financial forgiveness associated with the expenses that can be discharged by bankruptcy will go a long way toward helping you become financially stable.
What Are the Consequences of Filing for Bankruptcy in Arizona?
Your creditors will become aware that you have filed for bankruptcy and it will remain on your credit report for up to 10 years.
After your bankruptcy is discharged, it could take a few years before you qualify for certain types of loans, including a mortgage.
Do not let these possible effects dissuade you from exploring your Arizona bankruptcy options.
The goal of bankruptcy is to provide you and your family with a fresh financial start, making it a responsible solution for those who are eligible.
If you are overwhelmed by debt, contact our Pima County bankruptcy attorney, Eric Ollason, at (520) 791-2707 to determine which financial bankruptcy solutions are right for you, so you can get your life back.