To say that this world economy is having difficulties is an understatement. No one is able to escape from the effects of a vulnerable economy, Arizona included. The state ranked thirteenth in the country for personal bankruptcy filings in 2010. Close to ten thousand cases were filed and of that number, eighty-two percent were cited as Chapter 7. These statistics are alarming, and are the reason Chapter 7 bankruptcy attorneys in Phoenix are rising in number. If you're considering filing, it's vital that you learn as much as you'll be able to about the subject.

What is Chapter 7 bankruptcy? Are there other forms?

The Bankruptcy Code of the United States lists down three provisions that people can file: Chapter 7, Chapter 11, and Chapter 13. Chapter 13 requires payment of some or all of the debt over a duration of several years. Chapter 11 is used largely by firms that need reorganization to escape their financial troubles.

Chapter 7 is the most common provision filed in the United States. This provision lets debtors to liquidate all their assets to pay creditors. It can also be used to verify that the debtor has no assets to afford his debts.

What is the procedure that goes into filing for bankruptcy?

The first step is to get hold of a Chapter 7 bankruptcy attorney in Phoenix or your city/town in Arizona. He or she will guide you with the papers that need to be filed in court. In these documents, you need to be able to show you don't have the capacity to deal with a repayment plan. Moreover, you will need to produce a list of all your assets to figure out if there are any items or properties you could be liquidating. These documents will be analyzed by the court and will decide if you are eligble for liquidation. Being qualified for this provision can be a challenging process. Check with your Chapter 7 bankruptcy attorney in Phoenix to obtain additional in-depth information.

The proceedings could take almost half a year to get resolved. Expect to commit to the various processes and inquiries that will occur during this period. If the case is successfully discharged, you'll be compelled to attend credit counseling.

What are the outcomes of filing for bankruptcy?

Individuals who look at this concept as an easy way out of their financial obligations are wrong. It could have numerous negative effects, beginning with your credit rating. Do not forget that it will reflect on your credit history for no less than six to ten years. A poor credit score can prevent you from securing home or car loans down the road.  Your career may also be affected by the filing of this process.

In addition, some people think that it may help prevent foreclosure. Attorneys in Phoenix will confirm otherwise. This process may well buy you some time; but in the end, the prevention of foreclosure depends ultimately on your mortgage company. If there are additional legal ways for you to pay off your debt or prevent foreclosure, do it. Filing for bankruptcy should invariably be your last option.