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Bankruptcy Laws in Arizona

Are you overwhelmed with debts? Are you afraid your finances may be irreparably damaged?

In cases like these, it's important to understand bankruptcy and what each chapter type means. Even more  importantly, get the advice of a knowledgeable and experienced Arizona bankruptcy attorney who can help walk you through the different types of bankruptcy and what may or may not work for you.

• Chapter 7, the liquidation chapter, is used by individuals, partnerships, or corporations who are unable to resolve a serious financial situation. The debtor's assets are liquidated.  The debtor's non-exempt property is sold by a trustee, and the cash obtained and distributed to creditors as per liquidation process.

• Chapter 9 is a form of reorganization, and not liquidation. This chapter of bankruptcy law is available only to municipalities and not individuals or organizations.

• Chapter 11 is referred to as  the reorganization chapter. This form of bankruptcy allows firms, partnerships, and individuals to reorganize their financial conditions—without liquidating their assets.  When filing for Chapter 11 bankruptcy, a plan is presented by the debtors to creditors which, on acceptance by the creditors and Court, will permit the debtors to reorganize their financial structure and become monetarily productive once again.

• Chapter 12 is a reorganization type of bankruptcy reserved exclusively for "Family Farmers" and "Family Fishermen." It is similar to Chapter 13.

• Chapter 13 bankruptcy is filed by an individual with a regular monthly income. Debts may be out of reasonalbe control, but there is a belief that they can be repaid within a realistic time span. Under Chapter 13, the debtor may file a plan in which he/she agrees to pay a percentage of future income to the Bankruptcy Court as payment to creditors. On approval of the plan by the Court, the debtor will be given the Court's protection during the repayment term.

• Chapter 15 of bankruptcy code allows reorganization specific to cross-border insolvency—foreign organizations with debts in the United States.

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