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Bankruptcy

Chapter 7
Here’s a general overview of Chapter 7 Bankruptcy. We cannot cover every aspect of Bankruptcy in this section and we ask that you meet us for a free consultation to get a full understanding of your Bankruptcy case.

For the individual:
There are different types of individual Bankruptcy, but the most common are Chapter 7, 11, and 13.

Chapter 7:
Chapter 7 is the bankruptcy that we typically think about when we think about bankruptcy. It is basically an elimination of your unsecured nonpriority debts. Here are some commonly asked questions and answers:

Q: Will I be able to keep my house if I file Chapter 7 Bankruptcy?
A: Arizona provides a Homestead exemption up to a certain amount in equity for your house. So, if you are able to make the payments on your house and if it doesn’t have more than the allowed equity, you will be able to keep it.

Q: Do I have to pay something back to my creditors?
A: No. In Chapter 7 you don’t pay any of your unsecured nonpriority debts but there is a provision that if you have assets that are not exempt, those assets could be taken from you and sold and applied to those creditors.

Q: Am I eligible to file a Chapter 7?
A: That depends on your income and the amount of people in your household and also if and when you filed a previous bankruptcy. There are also exceptions to the income rule that we can explain in person.

Chapter 13
Here’s a general overview of Chapter 13 Bankruptcy. We cannot cover every aspect of Bankruptcy in this section and we ask that you meet us for a free consultation to get a full understanding of your Bankruptcy case.

For the individual:
There are different types of individual Bankruptcy, but the most common are Chapter 7, 11, and 13.

Chapter 13 is the bankruptcy where you pay a certain amount back every month to your creditors. Often our clients will choose Chapter 13 because it offers them a better way to deal with their secured debts. For example, someone who is a couple of months behind on their mortgage payment might select a Chapter 13 because it puts those arrears into a payment plan and gets the mortgage current – often times our clients face foreclosure in the near future and this is the only way to save their home from that sale.

In addition, Chapter 13 offers a way to eliminate 2nd and/or 3rd mortgages. If the 1st mortgage exceeds the value of the house, then 2nd and/or 3rd mortgages can be eliminated.

Further, Chapter 13 can also reduce the amount owed on your vehicle by ‘cramming down’ the amount owed to the actual value. We also reduce interest rates on that vehicle to about 7%.

What happens to all that credit card or hospital debt? Well, they get paid a certain amount depending on your disposable monthly income and unexempt assets. Often times we see clients pay a very small percentage back to their credit cards and other unsecured nonpriority debts because there’s just not enough to give them.

 

 

 

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Christos Agra, plc
One East Camelback Rd. Suite 300
Phoenix, Arizona 85012

Tel: 602.264.9800
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