When hard times befall you, bankruptcy may be part of a solution to getting back on your own two feet. It could have been a bad business venture or a marriage falling apart. Whatever it is, there's one thing to keep in mind: you have no reason to feel embarrassed about it. In fact, it is your constitutional right. The U.S. Constitution, Article 1, Section 8, Clause 4, empowered Congress to enact a bankruptcy law to help U.S. citizens get a new start. Bankruptcy is designed to help people like you or businesses like yours to recover and start again.
That's where The Law Offices of Shawn B. Hamp come in. We know you have lots of questions about bankruptcy. We understand the pain you are going through and are here to help you move forward. Here, we provide an overview of bankruptcy. Explore our bankruptcy pages and then contact our office at (928) 753-6868to schedule a consultation and get answers to your specific questions.
Bankruptcy: You Are Not Alone in Arizona
In Arizona, bankruptcy has seen its ups and downs. According to the University of Arizona Economic and Business Research Center, there's been a spike in bankruptcies throughout the years, for instance:
- in 2005, Arizona experience a significant spike because the state changed its bankruptcy laws, making bankruptcy more difficult; and then
- in 2008-2009, there was another smaller spike as a result of the national recession; and now
- in 2020, bankruptcies are on the rise again due to coronavirus-related stay-at-home orders.
Northern Arizona counties have and continue to experience the most bankruptcy filings. Chapter 7 filings make up the bulk of bankruptcy filings while Chapter 13 filings are less than 25% of all Chapter 7 filings. Chapter 11 filings are insignificant and could have been counted on two hands. That said, Chapter 11 filings are increasing rapidly, and they are filed by corporations, partnerships, and limited liability companies – so when a Chapter 7 bankruptcy is filed, it is not one person or one family affected but multiple people.
Suffice it to say, you are not alone. And now that you are thinking about filing for bankruptcy, you should understand what its goals are.
Understanding the Goals of Bankruptcy in Northern Arizona
The goal of bankruptcy is not clearing all your debts as a consumer or business owner, but to give you a fresh start. Sometimes, this means clearing all your debts while other times it means restructuring them.
But the main takeaway here is this: filing for bankruptcy is a lifeline to a second chance or fresh start. That's important for you, your business, and/or your family.
Understanding the Chapters of Bankruptcy available in Arizona
There are three main types of bankruptcies but only one is right for you. The three types include:
- Chapter 7 bankruptcy requires you to liquidate or sell any nonexempt assets to reimburse creditors, but you will not be put on a repayment plan.
- Chapter 11 bankruptcy, as mentioned, is primarily used by businesses and is a reorganization plan allowing the business to both stay alive and repay creditors.
- Chapter 13 bankruptcy requires a repayment plan to allow you to pay back the debt over time, usually a three- or five-year period.
All three Chapter bankruptcies will impact your credit and not all debts may be cleared regardless of which chapter of bankruptcy is filed.
Filing for bankruptcy, however, is a complex process. The laws are extensive and specific and the process is very time-consuming. Some people don't know whether Chapter 7 is better than Chapter 13 or not. Some people give up before they even begin. Don't let that be you. You deserve a new start.
Contact a Resourceful Bankruptcy Attorney in Northern Arizona Today
If you find yourself struggling financially and need a new start but unsure of what to do or where to go, contact us at The Law Offices of Shawn B. Hamp. We represent clients in Kingman, Flagstaff, Prescott, Lake Havasu, Bullhead City, and surrounding areas. We will guide you through the entire bankruptcy process, giving you a moment to breathe and reboot.