Russ Wiles of the Arizona Republic reports today that bankruptcies for those in the Phoenix Metro area are up 82% when compared to total bankruptcy filings in 2008. Chapter 7 filings accounted for about 81% of all filings, while Chapter 13 cases accounted for the remainder. I was able to provide information for the Republic article and you can read it here: http://www.azcentral.com/business/articles/2010/01/11/20100111biz-Bankruptcy0112.html .
This mirrors what I am seeing in my practice –specifically that more families are opting for Chapter 7 bankruptcy. A chapter 7 bankruptcy will help you to wipe out most if not all unsecured credit-card type debts, including medical bills and judgments. Another big reason people are filing Chapter 7 cases is to rid themselves of second mortgages that survive either a short sale or foreclosure. These types of debts are discharged 100% — no payback required.
Chapter 13 on the other hand is available for those who don’t qualify for a Chapter 7 bankruptcy case because they make too much money or have significant property that would be at risk of seizure in a Chapter 7 bankruptcy case. Many are filing Chapter 13 bankruptcy cases for the sole reason of getting rid of their second mortgage. In short, if the value of your home has depreciated to the point that it is now worth less than what you owe on your first mortgage, we can get rid of your second mortgage and allow you to stay in your home through the Chapter 13 bankruptcy process.
If you would like more information on the Chapter 7 or Chapter 13 bankruptcy process, I offer a free consultation where we can discuss your individual situation and prepare a plan to help you out of your financial difficulties. JacksonWhite can be reached at (480) 464-1111.