Facing bankruptcy can be a frightening thing, especially if you are not informed of the bankruptcy process and how bankruptcy works. In the current economic downturn, many individuals are facing financial straits and virtually given up on ever getting back on top. If you are feeling this way, know that there is hope for a fresh start. Our knowledgeable Arizona bankruptcy attorneys are qualified to help guide you through filing for bankruptcy. Facing bankruptcy can be less traumatizing when you sit down with a bankruptcy attorney that is concerned for you and will fight for you and your families needs.

There are two basic bankruptcies for which individuals may file, Chapter 7 and Chapter 13:

• Key Traits of Chapter 7:
  - Those who file for Chapter 7 must liquidate all unexempt assets and use the proceeds to pay creditors.
  - Exempt assets which filers may retain include many of life’s necessities, such as equity in a primary residence, equity in a reasonably priced car and home furnishings.
  - Creditors collect on loans according to the type of loan they made; secured debt is repaid first, and any remaining money is divided among creditors with unsecured loans.
• Key Traits of Chapter 13:
  - Those who file for Chapter 13 are afforded an opportunity to reorganize their debt to improve their financial status.
  - Rather than absolve the debt, as in Chapter 7, those who file for Chapter 13 must contact creditors and restructure the terms of the loans.
  - Those who file for Chapter 13 are expected to continue with business as usual, except operating under the newly restructured repayment program. If filers of Chapter 13 are unsuccessful at abiding by the new terms, they may file for Chapter 7 and liquidate their assets.

Many individuals facing bankruptcy are concerned about the effects that filing for bankruptcy can have on their credit score. For a more detailed explanation on this, visit our “Bankruptcy and Credit Score” page.

You may also be asking yourself, “How can I repair my credit after filing for bankruptcy?” Follow this link to learn more about how to help rebuild your credit after obtaining your fresh start in filing for bankruptcy.

Generally speaking, filing for bankruptcy will always have a negative impact on the filer’s credit score. The question lies not in whether bankruptcy will show up on a credit report, but rather in how big of an effect the bankruptcy will have. Here are some things to examine when considering whether to file for bankruptcy:

• What is the credit score prior to filing for bankruptcy?
  - Those with relatively good credit will notice a significant drop in their credit rating.
  - Those with poor credit may only notice a small drop in their credit score.
• How many lines of credit are included in the filing?
  - Those with numerous credit accounts will see a more significant drop in their credit score.
  - Those with fewer credit accounts may realize a smaller impact from filing for bankruptcy.
• The bankruptcy will affect the filers credit for up to seven years, possibly even ten years, is it still advantageous to file?
  - Until credit is repaired, individuals who file for bankruptcy will have difficulty purchasing anything on credit, be it a home, a car or other goods.

Don’t let facing bankruptcy keep you from living the live you’ve always wanted. While it can be disheartening to face the realty of starting over, the relief and joy that bankruptcy can offer is definitely worth the effort. We are here to help and will walk you through the process step-by-step. We will handle your case with complete confidentiality and sensitivity.

Contact Jackson White Law Today to Learn More!