Why Are More Arizonans Filing for Chapter 13 Bankruptcy Over Chapter 7?
A recent article in the Tucson Daily Star confirmed that filings for Chapter 13 personal bankruptcies rose in Arizona last year while those for Chapter 7 plunged. What’s behind the trends? We’ll talk about it in this issue.
The Chapter 13 and Chapter 7 Personal Bankruptcy Trends in Arizona
Using information obtained from the U.S. Bankruptcy Court, Tucson Daily Star reporters were able to confirm that filings for Chapter 13 personal bankruptcy increased 7.3% last year in Arizona. During the same stretch, Chapter 7 filings dropped by 12.6%.
What’s The Difference Between Chapter 7 and Chapter 13 Bankruptcies?
The difference between these two forms of personal bankruptcies may shed light on what’s behind the trends,
- Chapter 7 can be seen as a sort of liquidation of assets to wipe out unsecured debts, like medical bills or credit card debt.
- Chapter 13, however, is more of a restructuring of your debt that enables you to keep your assets while catching up on repaying your debt.
So Why Are More People Choosing Chapter 13 Over Chapter 7?
You can thank a re-emerging economy coupled with steady job growth for the rise in Chapter 13 bankruptcies over Chapter 7. With steady paychecks coming in, more Arizonans with high debt are choosing to hang onto their assets (house, car, etc.) as they work out repayment plans to pay down their debt. A recent report in the Arizona Republic spotlighted the momentum clearly on the side of Arizona’s economy. A key component of that is a continued decline in the state’s unemployment rate and growing rate of relocations and expansions of businesses.
To Get Out From Under Crippling Debt, Call The Oswalt Law Group
As you can tell from the information above, more people are choosing to take advantage of the opportunities they have to restructure the way they pay down their debts while being able to hang onto their assets. You can do the same. For a free consultation, call us here at The Oswalt Law Group; our number is 602-225-2222.