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When is the Right Time to File for Bankruptcy in Arizona?

Eric Ollason, our bankruptcy attorney in Tucson, helps individuals and families in our community discover the bankruptcy options that are right for their unique needs after suffering financial collapse due to job loss, divorce, and medical requirements, so they can seek a clean slate.

Assisting our Pima County residents with debt relief or reorganization allows them to gain confidence in their personal and professional lives — instead of facing the consistent fear of pressuring phone calls, harassing letters, and the real possibility of losing their homes.

If you are wondering when is the right time to file for bankruptcy, we will walk you through the eligibility requirements and the complete legal process, so you can make informed decisions about your financial future.

How Will I Know When to File for Bankruptcy?

Chances are, if you are considering financial relief through bankruptcy, you are already struggling with paying your debts — and your creditors are no longer providing viable options for you to regain your financial footing.

While the answer to when the right time to file for bankruptcy is in Arizona will be different for everyone, the immense pressure you are feeling from your creditors — especially if you are in a position of losing your vehicle or home — may be the motivation you need to sit down with our Tucson bankruptcy lawyer to learn about your legal options for financial relief.

Depending on your unique circumstances, you may have options that free you from the pressures that come with having unpaid debts, including the most common solutions:

Examining the pros and cons of filing for bankruptcy will help you determine if the significant impact it has on your current and future finances deliver the relief you need. Our Tucson bankruptcy attorney will help you understand each aspect of your decision, so no detail is left to chance in your pursuit to become debt free.

When is Chapter 7 Bankruptcy the Right Financial Relief Option?

Chapter 7 Bankruptcy is one of the most common forms of financial relief and is often referred to as liquidation bankruptcy.

In short, the trustees’ office will liquidate all assets to repay your debts, except a vehicle and/or home that falls within a designated equity cap.

Chapter 7 Bankruptcy is typically reserved for those who have an overwhelming amount of unsecured debt, and very little assets to repay them, including:

  • Credit card debt
  • Medical bills
  • Memberships
  • Unsecured loans

When eligible, this form of bankruptcy will wipe away most debts, so you can start over with the proper guidance of a Tucson bankruptcy attorney.

When is Chapter 13 Bankruptcy the Right Financial Relief Option?

Chapter 13 is a reorganization bankruptcy that does not necessarily wipe away your debts but adjusts the payments and the amount of time you must satisfy them, so it is easier for you to pay them back.

This type of bankruptcy is reserved for those with incomes that can feasibly repay the debts, once they are reorganized into a more flexible agreement.

While your debts will not be discharged, as they may be during Chapter 7 bankruptcy, filers will get to keep all their assets — like their home or vehicle — while adjusting and extending the timeline to accommodate an agreed-upon amount to repay your creditors.

How Long Will the Bankruptcy Remain on My Credit Report? 

One of the most frequently asked questions about bankruptcy is, how long will it stay on my credit report?

As a matter of public record, the time depends on the type of bankruptcy you are eligible for:

  • Chapter 7: Ten years
  • Chapter13: Seven years

While lenders may impose tighter approval restrictions on individuals who underwent bankruptcy, there are ways to begin improving your credit after the filing is completed, so you can get ahead while the filing remains on your credit report.

When Will I Know it is Time to File for Bankruptcy in Arizona?

While there is technically no definitive “right” time to file for bankruptcy in Arizona, there may be signs that point to the fact that it is time to thoroughly assess your financial situation by contacting an experienced bankruptcy attorney in Tucson.

Filing for bankruptcy may be beneficial when:

  • You are using credit cards to pay monthly expenses/other debts, thereby deepening your overall financial liability
  • Negotiating with your creditors has failed to produce an affordable repayment plan
  • You do not have the necessary assets to cover your liabilities
  • Your debts — and the amount necessary to repay them, partially or in full — far exceeds your income

If your income has been compromised by the COVID-19 pandemic, if you simply cannot keep up with the overwhelming monthly payments associated with your debt, or if you are in danger of losing your home or vehicle, you may be able to pursue financial relief through an applicable bankruptcy option.

Contact our experienced bankruptcy attorney in Tucson to learn about your rights and options for seeking financial relief by calling (520) 791-2707 today to schedule a free consultation.

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