Of the two common types of bankruptcy in Arizona used by individuals, chapter 13 is broader and allows for more flexibility in retaining assets. Because the goal of Chapter 13 bankruptcy is to repay debt – rather than eliminate debt – this bankruptcy filing allows for a greater range of debt to be included and may allow a debtor to keep more assets.
When filing for chapter 13 bankruptcy, the debtor submits a plan to repay debt over 3-5 years. The plan must be approved by the court at a confirmation hearing. If approved, the debtor will retain the assets during the repayment period. However, any debts that are not to be repaid are not discharged until the payment plan is complete. During the repayment period, the debtor is protected from legal action by all creditors, whether included in the repayment plan or scheduled for discharge.
In Arizona, the decision to file for chapter 13 bankruptcy should be made with legal advice from experienced bankruptcy lawyers such as The Frutkin Law Firm, PLC in Phoenix and Scottsdale, AZ. There are a number of details and factors that weigh on this decision, and the Frutkin bankruptcy attorneys have decades of experience helping Arizona residents file for bankruptcy.
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