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Posted by: Maricopa Lawyers on Jul 10, 2015

While filing for bankruptcy used to be a social stigma, current economic conditions have made it a more common (and if handled correctly, a more viable) option to repairing your financial condition. Federal and state bankruptcy laws are designed to give people in tough circumstances a clean break. If you’re considering filing for bankruptcy, here are a few things you should know before you start the process.

Two Types of Consumer Bankruptcy:

  • Chapter 7. Once filed, Chapter 7 bankruptcy takes effect within a matter of months. Once it does, you will eliminate most unsecured debts, such as credit cards and medical bills. In return, you give up your “non-exempt” property, of which most people don’t have any.
  • Chapter 13. This version takes 3 to 5 years to complete, and instead of giving up non-exempt property, you are required to pay a portion of your debts and live within a budget. Your spending is then closely monitored by a trustee of the court. This is the more commonly used filing when people are behind on mortgages and other secured debts.

Before filing for either type of bankruptcy in Arizona, you must participate in credit counseling within the six months before filing. Here are some other things you can do to prepare:

1. Look at your finances, including expenses, income and total debts.
2. Get your credit report. Go to to get an up-to-date list of your current creditors.
3. Inform all creditors and collection agencies that you’re filing. The law requires all debt collection calls and letters to stop once the petition is filed. When contacting them, tell them the pertinent information about your case, the district in which you’re filing, and the name of the attorney handling your case.
4. Get credit counseling certificate sooner rather than later.
5. Get an attorney. Bankruptcy laws change and become more complex as time moves on. An experienced lawyer can help you file correctly and protect your assets and finances more thoroughly.