Arizona bankruptcy myths!

Filing for Bankruptcy may seem like a complex process. The average person probably knows very little about bankruptcy. But the process doesn’t have to be scary. There are certified Arizona  Bankruptcy Attorneys who can help you through this process. However, whether you are thinking about filing for bankruptcy or are in the process of filing bankruptcy there are certain things you should now. Here we explore a variety of Bankruptcy myths that are just plain false!

Myth #1:  I will lose all of my property in bankruptcy.

This is completely false! Although it is possible that you may lose some of your property, the vast majority of most people’s property is protected by law. Bankruptcy law provides you with various exemptions which allow you exempt a certain amount of your property from being sold. Although the amount of exemptions vary by state, most people are able to keep their homes, at least one vehicle, and various household items. Although the amount of property which may be sold in bankruptcy depends on your own individual wealth, most people are able to keep a majority of their property.

Myth #2: Once I file for bankruptcy in Arizona I’ll never be able to do it again.

This is also completely false! Although there are rules that limit that amount of times you can file for bankruptcy, you are not limited to one bankruptcy over your lifetime. Although no one wants to file bankruptcy twice, there may be situations where it is necessary. Overall, the amount of time you must wait to file bankruptcy again depends on the “chapter” of your first or last bankruptcy. Under the current law if you filed in Chapter 7, you must wait 8 years to file in Chapter 7 again. However, if you filed in Chapter 13, you only have to wait 6 years to file in Chapter 7. Even if you have filed for bankruptcy before there is a good chance you will be able to file again. An Arizona Attorney will be able to let you know if you are eligible to file.

Myth #3: I will lose my home if I file for bankruptcy.

While this is possible, it is unlikely to happen in most cases. The only way this can happen is if you have MORE equity in your home than you state exemption allows. For example, in Arizona you have a $150,000 exemption in your home. This means that the bankruptcy trustee can only sell your home if you have MORE than $150,000 in equity. An example of when the trustee could sell your home would be if the value of your home is $400,000 and your mortgage is only $200,000. With $200,000 in equity there would be $50,00 that would not be exempt. In this case the trustee would sell your home unless you paid the trustee $50,000. However, this situation is relatively rare in bankruptcy and does not apply to most people.

Overall, if you are considering filing for bankruptcy, you will likely have many questions about the process. Don’t despair! There are certified Arizona bankruptcy attorneys that can give you accurate information about bankruptcy. Don’t be fooled by myths floating around on the internet. Contact our firm today for more information about filing for bankruptcy. We will be happy to answer any  questions you have about the process.