Chapter 13 bankruptcy is a legal process that allows individuals with regular income to reorganize their debts and create a repayment plan. Unlike Chapter 7, Chapter 13 focuses on debt repayment over three to five years. Chapter 13 bankruptcy allows you to use such a payment plan to pay off mortgage arrearages. Essentially, Chapter 13 stops foreclosures.
People file bankruptcy in Arizona to discharge most debts. The Arizona bankruptcy exemptions allow a debtor to retain certain property. This is called exempt property, and it is protected. Debtors must understand the Arizona bankruptcy exemptions to know which assets they may retain.
Potential clients frequently ask whether filing bankruptcy in Arizona is their best option. Before filing, you also must understand the differences between Chapter 7 and Chapter 13. If you are considering bankruptcy, always consult with an experienced Arizona bankruptcy lawyer prior to making any decisions. Every person’s situation is different.
A debtor may discharge taxes in bankruptcy under certain conditions. Bankruptcy can discharge some income taxes. Taxes such as payroll taxes, sales taxes, or property taxes are not dischargeable. Discharging taxes in bankruptcy is possible by meeting specific criteria and following certain procedures.
A bankruptcy discharge gets rid of a debtor’s personal liability. But the general rule is liens still survive a bankruptcy discharge. Normally a recorded judgment impairs your ability to sell or take out a loan on your house. However, if you file bankruptcy, a debtor can use Section 522(f) of the Bankruptcy Code to avoid a judgment lien.