Articles Posted in Divorce and Bankruptcy

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As an Arizona Bankruptcy Attorney, it really breaks my heart to see people come into my office wearing a scarlet letter that is both self imposed and imposed upon them by the judgments of their peers. Society tends to attach this scarlet letter to a bankruptcy filer that, more often than not in these financial times, need not be so attached. While society ought to realize that, often, circumstances beyond an individual’s direct control can lead that person down the road of bankruptcy, for the most part, even in 2011 it often does not. For some reason, even in present times with all the reports of job loss and the downturn in the economy, there is still something about bankruptcy that causes many to make snap judgments and to stay behind walls of ignorant bias.

There is no doubt that there is an argument that some people in the past have run up large credit card bills all the while just planning to do a Chapter 7 liquidation bankruptcy to wipe out all their unsuspecting creditors. Additionally, there is no doubt that this is not laudable behavior. However, the danger comes when members of society assume this is what ALL people who file bankruptcy do. This stigma often prevents good people who find themselves in circumstances which are beyond their control, circumstances where bankruptcy could definitely save their financial present and future, from seeking out bankruptcy at all, to their great personal and financial detriment. The truth is that any one of us could easily be one divorce, one illness, one job loss, or one judgment away from finding ourselves staring at a potential bankruptcy. That being the case, it is imperative that we let go of stereotypes a bit and embrace reality.

In order to get past the stigma and stereotypes associated with bankruptcy it can be useful to really break down the circumstances that might lead a smart, capable, and responsible individual to look to the Bankruptcy Court for relief from debt. I will even use an extreme example by selecting Sonja Morgan, New York socialite and member of the cast of Bravo TV’s Real Housewives of New York City to make my point. sonja-morgan-getty-250.jpg

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These are the types of debts that are discharged in a chapter 13 bankruptcy that are NOT dischargeable in a chapter 7 bankruptcy:

1. Debts that weren’t or couldn’t be discharged in a previous case.

2. Court Fees

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The following are two lists. The first is a list of the most common reasons I encounter in representing clients with debt that force them to use a chapter 13 bankruptcy instead of chapter 7 bankruptcy. The second list are the most common reasons I see people choose to file chapter 13 bankruptcy as opposed to chapter 7.

Must File Chapter 13 Bankruptcy – Most Common Reasons

1. Filed a recent bankruptcy case. (8 years for from chapter 7 to chapter 7)