Recently, the economy has experienced an historic downturn. While few regions have been spared, Tempe and the surrounding area have been hit especially hard. Business and individuals alike are saddled with debts that are by any reasonable estimation unable to be repaid. For those in Tempe facing this difficult position, filing for bankruptcy may be the most viable solution to mitigating the burdens that result from unpaid debt. Bankruptcy allows for outstanding debts that do not fall under certain exemption categories to be discharged, provided the person filing is willing to have some or all of their assets liquidated and proceeds turned over to creditors. Filing for bankruptcy allows a person who has insurmountable debts to get a “fresh start”, and regain a foothold in their personal and/or professional finances.
There are two common categories of personal bankruptcy filings available to individuals residing in Tempe – Chapter 7 and Chapter 13. Chapter 7 is usually filed by individuals with relatively little in the way of liquid assets. Once the petition is granted by a Tempe area bankruptcy court, outstanding non-exempt debts are eliminated within a few months. It should be noted that certain debts including unpaid income taxes, child support, civil judgments for damages resulting from personal negligence or misconduct, and student loans will still need to be repaid. Filing for bankruptcy generally remains on an individual’s publicly available credit history for a minimum of ten years. This could hinder or prevent them from securing credit for loans, mortgages, or credit cards. Recently passed laws prevent Chapter 7 bankruptcy from approaching anything that might be seen as an “easy way out” for people who owe a lot of money. Careful consideration, including the consultation of a qualified and reputable bankruptcy attorney in Tempe, should be taken before making the decision to file for bankruptcy.
If you are in serious debt in Tempe, then there are a lot of resources that can help you before you come to the point that you have to declare bankruptcy. Indeed, bankruptcy might seem like an easy option for a lot of people that have more debt than they think they will ever be able to pay back, but really, it should be people’s last resort. If you declare bankruptcy, then you will have a bad reputation that will last you for many years even after you have adopted better spending and budgeting habits. Credit companies will not think they can trust you if you have declared bankruptcy before because they will think that if you were so irresponsbile before, then they would rather take their crediting chances on someone else who has not had so serious a mark on their record.
There are a lot of temptations for spending in the Tempe area, and if this situation has caused you to think that your finances are beyond repair, then you might want to try communicating with the crediting companies. Usually, if banruptcy is your only alternative, they will be willing to work with you for give you more time to pay back a debt. This way they will be able to get at least some of their money back, which is more than if they did not try to work with you and you went to declare bankruptcy on your own. Some companies in Tempe will be especially lenient if you demonstrate a concerted effort to change your budgeting habits and if you try to be more responsible about what you buy. For example, just because you see a lot of expensive cars in the Tempe area does not mean that you need to get the fanciest version.
If you have been extra extravagant in Tempe, then you might have fallen into a deep enough hole that declaring bankruptcy is your only option to get out of debt. This happens quite frequently in Tempe because many people in Tempe try to keep up with the outrageous and opulent lifestyles of people who have moved to Arizona that have a lot of money. Even though you do not think you are spending a lot of money, all of those small experiences build up and once you start acquiring debt, it is very difficult to get out of. Part of this has to do with a psychological inability to change one’s Tempe lifestyle habits in the absence of an immediate threat (as if those debt collector phone calls are not immediate enough), and part of it has to do with the financial consequences that quickly grow once the debt starts. In some cases, people should try to work with their money lenders to establish a more gradual, more manageable payback plan, but when this is not possible, it might be necessary to declare bankruptcy.
Bankruptcy is a bad idea for all parties involved because it ruins an individual’s credit for years, where they will be unable to find anyone to trust them with expensive purchases, regardless of how necessary they are. On the lender’s side, if you win your bankruptcy case, they will not get the money they originally lent you back, which is a worse case for them than working with you to pay it back at a slower pace. Additionally, the laws and regulations surrounding bankruptcy have changed and it is becoming increasingly difficult to use this as a solution to your debt problems.
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