There are two major misconceptions about bankruptcy and the property of the person filing bankruptcy. One line of thinking is that when you file bankruptcy you lose all of your property. The competing idea is that when you file you get to keep everything you own. Neither of these statements is exactly true, and the level of validity of each of these statements depends on what chapter of bankruptcy you file.
In a chapter 7 bankruptcy in Arizona, a consumer filing bankruptcy is allowed to keep specific property that constitutes the basic living essentials, including a vehicle and a home. Many people who file chapter 7 bankruptcy in Arizona end up keeping all of their property because of the protections provided by Arizona law. It is important to note that the statutes that protect property in an Arizona bankruptcy are specific to those bankruptcy cases filed in Arizona as opposed to any other state. Therefore, it is important to talk to an Arizona Bankruptcy Attorney to determine what property you may protect.
In a chapter 13 bankruptcy, it is possible to keep all the property you own regardless of what property Arizona law does or does not protect. However, you must be willing and able to pay for all unprotected property in a payment plan. Those who end up filing a chapter 13 bankruptcy do so in an effort to save specific property, such as a business, or because they cannot qualify for a chapter 7.
If you have questions about what property you could keep in a bankruptcy, contact an experienced Arizona Bankruptcy Attorney at Riggs, Ellsworth, & Porter.
