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Bankruptcy in Phoenix – You’re not alone.

It’s not hard to imagine that Phoenix chapter 7 and chapter 13 bankruptcy filings have increased over the past 7 years since we entered the recession. The numbers, though, do tell a tale.

According to the United States Bankruptcy Court for the District of Arizona Bankruptcy Filing Statistics, the year over year total bankruptcy numbers in Phoenix look like this:

Unfortunately I was unable to obtain data prior to 2004 to see what bankruptcy filings looked like in our most prosperous years in the 21st century so far, but we can make some inferences based on the data we do have.

In 2005, the Arizona State Bankruptcy Code was slated to change to make it more difficult to file for chapter 7 bankruptcy. How? Well, in 2005 we had the implementation of the means test. Whereas prior to the means test, practically anybody that wanted to could file for Chapter 7 bankruptcy, the means test now limited Chapter 7 filers to those with a household income lower than the state mean, while also considering total household expenses. Basically, if you have enough money to pay off your creditors in a reasonable amount of time, you can no longer file for chapter 7 bankruptcy; but you may still file for chapter 13 bankruptcy which includes a restructuring of debts and a reasonable payment plan.

The chart above shows a high level of chapter 7 bankruptcy filings as well as overall bankruptcy filings in 2004 and 2005, which one could conclude to be an anomaly for such prosperous times, created by a rush to get in before chapter 7 bankruptcy became more difficult. The years following show an increasing trend, which shows a direct correspondence with the recession. The interesting point here is that chapter 7 bankruptcy filings and overall filings are at a higher rate today, even with the means test in place, than they were during the 2004/2005 push to file. This shows organic growth in the need to file bankruptcy in Phoenix.

One thing I would like to point out here is that, if you are considering filing for chapter 7 bankruptcy or chapter 13 bankruptcy, you’re not alone. The trend shows that a lot of people out there are facing difficult times due to the recession. Filing for chapter 7 or chapter 13 bankruptcy doesn’t necessarily mean you’re financially irresponsible; it’s a sign of the times.

If you would like more information on bankruptcy you can look at our Bankruptcy FAQs page or call us with questions at 602-952-3232.

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Life after Bankruptcy

If you’re here at our website, you’re probably thinking about filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy in Arizona.  You might be trying to find the perfect bankruptcy attorney, or just trying to get some reassurance that filing for bankruptcy is the right thing for you and your family.  From experience, I’m guessing you have questions and a lot of fears and apprehension that might be keeping you from taking the plunge.

You’ve come to the right place to help get some answers and alleviate some of your fears.  Our office has put together a list of Frequently Asked Questions that’s a great place to start for answers to questions about who can file for Chapter 7 and Chapter 13 bankruptcy in Arizona, details regarding the process, information on exempt assets and keeping your home, things you can start doing now to prepare, and more.

Many of your fears regarding bankruptcy are probably tied to unknowns and myths about the aftermath: your credit score, the ability to get a mortgage in the future, and thinking nobody will lend money to you ever again.  I found a great article entitled “Life After Bankruptcy: 5 Steps to Rebuilding your Credit, Finances and Emotions.”

What I love about this article is it dispels a few myths about Bankruptcy being the death of your ability to obtain credit, forever!  This is simply not true, and the above article gives advice on how to rebuild your credit after filing for bankruptcy.  I also like that it talks about the shame and guilt one may have about filing; If you read my last blog post “Bankruptcy in Phoenix – You’re Not Alone” you can see real statistics (for the Phoenix-Metro Area) regarding the increase in filings over the past few years and hopefully take away that bankruptcy happens to good people.

Hopefully the above information has been helpful.  If you have any more questions or concerns about filing for Chapter 7 or Chapter 13 bankruptcy in Arizona, please contact our office.  Our experienced legal staff is prepared to take your call and help you get started.

For more information on our Phoenix bankruptcy attorney services, please review our Bankruptcy page.

If you feel you might need our assistance, call us today at (602) 952-3232, or submit our online case-review form.


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