Dealing with Debt

questions & answers

Question: Should I file for bankruptcy if I cannot pay my debts?

Answer:

There are two types of personal bankruptcy: Chapter 13 and Chapter 7. In general, if you have a steady income, Chapter 13 allows you to stop most debt collection in exchange for a promise to pay your available funds to creditors as part of a three-to-five-year repayment plan. With a repayment plan, you may be able to keep certain property such as your car or home, even if it was used to secure a loan. And if you fulfill your obligation, most remaining debt would be canceled at the end of the repayment period.

Under Chapter 7, however, you ask the bankruptcy court to cancel most of your debts because you do not have enough money or property to pay them off. (To qualify for a Chapter 7 plan, you would have to meet specific criteria related to your income and future ability to pay.) Certain assets would be sold to help pay off your creditors. With this type of bankruptcy, you generally would not be able to keep property that was used as collateral for a loan.

QUESTIONS

  • Should I file for bankruptcy if I cannot pay my debts?

STORIES

  • He told me that I could actually get all the money I needed by using my home as collateral. . .
  • I just helped my mother, age 89, deal with her Medicare HMO. . .
  • If you get a divorce, make sure your date of birth is on the Decree if your name is changing!. . .

LegalLEARN

YOUR FEEDBACK IS NEEDED

  • Welcome to our Newly Redesigned Website! Let us know how we are doing! Please take a couple of minutes to fill out our survey.

FIND LEGAL HELP

  • Please select your county of residence below.

    County:
     

OTHER LEGAL RESOURCES

  • State Bar of Arizona
    www.azbar.org
  • Maricopa County Bar
    www.maricopabar.org
    Referral number 602-257-4434
  • Pima County Bar
    www.pimacountybar.org
    Referral number 520-623-4625
  • National Domestic Violence Hotline
    800-799-7233
  • Bankruptcy Court Self Help Center
    866-553-0893
  • Certified Legal Document Preparer Program
    Link

ORGANIZATIONS