Good news for Arizona -- bankruptcy filings are low this year. In fact, 2013 marks the lowest number of filings since May 2008.
This year 16,425 Arizonians filed for bankruptcy, compared to the 20,156 filings in 2012, according to AZCentral. Specifically in the Phoenix metro area, bankruptcy filings were down 19.1 percent this year.
While the drop in bankruptcy filings may be a sign of better financial times ahead, it's still important to know what to do if you ever need to file.
When Should I File?
With bankruptcy filings low this year, you may need a refresher on when your debt qualifies for bankruptcy. Bankruptcy allows people to minimize their debt by having some of the debt repaid or discharged. However, bankruptcy status will only be granted in severe situations when managing debt on your own becomes unfeasible.
Courts won't automatically grant bankruptcy. You must demonstrate that you've tried to pay off your debts or organized repayment plans but those options were dead ends.
Alternatives to Bankruptcy
Since bankruptcy cases go through federal courts and are public records, there are some alternative routes you can take if you want a more private method of resolving your debt:
- Get a debt consolidation loan. Debt consolidation loans pool all of your debts into a single amount and may lower your monthly payment.
- Negotiate with your lenders. Lenders need to get paid and may be willing to adjust the amount you owe them, so they can get paid faster. However, negotiating with lenders can be a bit tricky, so you may want to consult a bankruptcy lawyer in the Phoenix area first.
What Documents Do I Need to File?
There are some essential documents you need to disclose when filing for bankruptcy. In general, you'll need copies of:
- your tax returns,
- pay stubs,
- bank account or asset information, and
- any other payment obligations you have (child support or student loans.)
Pursuing alternative methods to bankruptcy or working with your lenders and an attorney may help ensure that bankruptcy filings in Arizona are even lower next year.
- Commercial Bankruptcy Filings Down 24% in 2013 (MonitorDaily)
- What Documents Are Needed for a Basic Bankruptcy Case? (FindLaw's Phoenix Bankruptcy Law News)
- Getting a Tax Refund? Now's the Time to File for Bankruptcy (FindLaw's Phoenix Bankruptcy Law News)
- The Debt Discharge in Bankruptcy FAQ (FindLaw)