Arizona bankruptcy filings continue near six-month peak

June 22, 2013 (Press-News.org) Arizona bankruptcy filings continue near six-month peak

As the economy continues its lackluster performance, wages are not keeping up with inflation. The unemployment rate in Arizona is no longer at 10 percent, but has hovered near the 8 percent mark for more than a year.

Arizona bankruptcy filings hit a six-month high in April and the number has held steady into the month of May. According to the U.S. Bankruptcy Court in Phoenix, 2,234 new cases were filed statewide in April. The number decreased slightly in May to 2,197, but was still well above the roughly 1,400 new cases filed each month at the beginning of the year.

Bankruptcy filings are often seasonal and often increase during tax season. Looking at year-to-year averages the number of filings is still down from this time last year by about 17 percent.

For those who are struggling to make ends meet, a Chapter 7 or a Chapter 13 bankruptcy includes the protection of the automatic stay. This is a window when creditors must stop collection activities and an individual has time to determine the amount that can be paid on his or her debts and which assets can be kept.

Increased property exemptions

Filing for Arizona Chapter 7 bankruptcy protection does not mean that an individual losses all of his or her property. Each state generally has its own criteria on what an individual can keep in a bankruptcy - this property is referred to as exempt property.

Recent changes increased exemption amounts. For example, an individual can now keep household goods, including an ipad or other electronic device up to a total value of $6,000. This was an increase from the previous amount of $4,000. Some other changes included:
-A pet, such as a cat or dog up to the value of $800
-A wedding or engagement ring valued up to $2,000
-A computer valued at up to $1,000
-Equity in a vehicle up to $6,000

In addition to the above exemptions, an individual or a married couple residing in Arizona may claim a homestead exemption of $150,000 for a dwelling, such as a single family home, a condominium or a mobile home.

Chapter 7 versus Chapter 13

In a Chapter 7 bankruptcy, the sale proceeds of non-exempt property are distributed among creditors. A discharge of all the remaining debts means that an individual gets a fresh start. But keep in mind that several types of debts often remain after a Chapter 7, such as child support obligations, some federal tax debts and student loans.

Chapter 13 on the other hand involves a three to five year payment plan, but is a way to avoid foreclosure. An individual needs to have a regular income to make monthly payments, but upon plan completion, any remaining debts are discharged.

A job loss and the long struggle to locate a new job often lead to financial difficulties. Medical bills during an extended illness may reach the point you may never be able to pay them back. One way to stop creditor harassment is by utilizing the protections afforded by a bankruptcy filing. Consult a bankruptcy attorney when you have questions to learn which option might provide you the breathing room needed to get back on your feet financially.

Article provided by Charles M. Sabo, P.C.
Visit us at www.charlessabo.com/