The private individual or family need not deem filing bankruptcy as a bad deal because debts are paid or satisfied in the bankruptcy court. A family overwhelmed with credit card debt for an example has two options in bankruptcy court to come out better after filing than before. The family needs to seek bankruptcy information from a bankruptcy lawyer to seek protection from overdue creditors and collection agencies by liquidating their assets to pay off debt or rehabilitating the debt and pay off creditors as ordered with the bankruptcy court as the overseer.

The bankruptcy lawyer files a bankruptcy petition to begin the credit card bankruptcy filing. The bankruptcy file either consists of the liquidation assets or the rehabilitation of credit card debt in bankruptcy court. To come out after bankruptcy better than before, the family got to choose a bankruptcy lawyer with expertise and knowledge of the new bankruptcy laws. The bankruptcy law changes as most laws do and the bankruptcy lawyer needs to be knowledgeable of the new bankruptcy laws to answer questions the client have on how to file bankruptcy.

According to the bankruptcy lawyer, the family chooses one of the two options to file bankruptcy; that is, liquidating all assets or rehabilitating debt with payments monitored by the bankruptcy court. Bankruptcy, however, do not dissolve all of the debt owed. The private citizen still has the responsibility to pay taxes, student loans, alimony and child support payments. These payments mentioned are not included in the protection of the bankruptcy court.

In the liquidation form of filing bankruptcy, all assets are sold except those needed for a reasonable lifestyle and for work purposes. Assets are property of ownership. The assets that cannot be used to pay off debt in the bankruptcy court include social security benefits, work tools and a reasonable car to get to and from work. The bankruptcy filing post pones any pending lawsuits on unpaid bills. The creditor must meet with the bankruptcy lawyer and his client to show entitlement to any sale of the assets. A bankruptcy trustee handles the sale of assets and determines that the creditors receive their fair share of the proceeds from the liquidated assets.

The rehabilitation form of bankruptcy seeks to pay on the bills owed to the creditors if the client has a job. Contrary to the liquidation form of bankruptcy, assets do not have to be sold in the rehabilitation form of bankruptcy. An agreement, however, has to be reached with guidance from the bankruptcy lawyer on how the creditors are to be paid. The court supervises the rehabilitation bankruptcy to determine that promises to pay are kept by the client to the creditor and a bankruptcy trustee is assigned to the bankruptcy filing at that time.

Filing bankruptcy can have an outcome of making a family better off after bankruptcy proceedings. Collections phone calls will stop and creditors will cease mailing credit card bills that cannot be paid. The most important aspect of filing bankruptcy is that the family hires a lawyer who has the expertise of handling bankruptcy filings to a successful conclusion. The two types of bankruptcy filings are the liquidation and the rehabilitation. The family needs to consult with a bankruptcy lawyer to determine the appropriate bankruptcy filing process for a fresh financial start better after entering bankruptcy court.

Deciding to file for bankruptcy is a hard choice, but sometimes it is the best one. In the state of Arizona, you may be able to file for bankruptcy if you have gone for an extended period of time without finding employment, have a large amount of past due medical bills, or have gotten in over your head in debt. Before making the decision to file for bankruptcy, however, you should be sure that you have exhausted all other repayment options. Once you are sure that bankruptcy is the best possible course of action for you and your family, you will need to fill out the forms for what is known as a Chapter 7 Bankruptcy. These forms can be a bit confusing, and many find it helpful to seek out the assistance of a Phoenix area bankruptcy lawyer or to purchase a bankruptcy kit with step by step instructions on filling out the forms. You will need to be sure that the kit you purchase is specifically designed to be used in the state of Arizona.

Since this can be a long and arduous process, it is strongly advised that you seek out the help of an attorney. Fortunately, in the Phoenix area, there are many free (pro bono) or reduced costs attorneys that can help you if you do not have adequate funds to pay for a full priced attorney. After all, the last thing you want to do during the bankruptcy process is to acquire more debt.

Going through the bankruptcy process is hard enough. Do not make it harder by falling for the potential pitfalls. What are some of the pitfalls? For instance, unhelpful credit counselors. Often for-profit or non- credentialed counseling organizations make promises that they cannot or do not keep. Be especially careful when asked for a large sum of money in advance. To check the organization’s reputation, contact your state Attorney General, consumer protection agency, or Better Business Bureau. “Credit repair” clinics and “credit doctors” have been frequently criticized for promising that they can remove negative information from your credit report. But accurate information cannot be changed. If information is old or inaccurate, you can contact a credit bureau yourself and ask that it be removed. Risky refinancing options. When already in financial trouble, second mortgages greatly increase the risk that you may lose your home. Be wary of any loan consolidations or other refinancing that actually increase interest owed or require payments of points or large fees. A Final Word: Don’t lose hope, even if you despair of ever recovering financially. You can regain financial health if you act.

The first step in the Chapter 13 Bankruptcy process, after determining eligibility, will be to sit down and fill out what is known as a Chapter 13 Plan. This plan will have to meet many strict requirements, all of which a knowledgeable bankruptcy attorney will be aware of. Some of these requirements will be based on the state of residence alone, so it is always wise to work with a local attorney who is familiar with Arizona bankruptcy laws. The plan will have to prove that all unsecured creditors will receive just as much money as they would have had you chosen to file for Chapter 7 Bankruptcy. Furthermore, the plan also must show that you will repay all of your creditors and that you have enough disposable income to make payments as outlined in the Chapter 13 Plan.

Once the plan is complete, it will have to be approved by a bankruptcy court. Most bankruptcy lawyers will handle this process for you. In fact, you might not even have to make an actual appearance in court. However, you should be aware of what will go on during the court proceedings, and your attorney should alert you to the outcome of the proceedings or to any changes that must be made to the bankruptcy plan immediately. If all goes well, however, you can begin living your new, debt free life. The bankruptcy will remain on your credit report for a period of seven years, but once you have paid off your debtors, you will likely find it much easier to rebuild credit and secure loans and other methods of financing.

Obviously, filing for Chapter 13 Bankruptcy is not a “quick fix,” by any means. It is actually a long and very complex process that should only be entered into after serious consideration. Bankruptcy should not be thought of as a first choice, but rather as a last resort; it should only be used when all other options have been exhausted. What is most important, however, is that you hire a lawyer to help you with the bankruptcy process. Unless you’re a financial expert, you really can’t afford to take the chance of going it alone. The smallest of mistakes can cost you time and money that you simply do not have to waste. The small expense of a lawyer will be very well worth it in the end.

The first and simplest tip is to go with a lawyer who’s not a jack of all trades. This means that you will not want to choose a lawyer who practices bankruptcy law in addition to other types of law. Bankruptcy is a serious matter, and you’ll want to choose a real specialist who works exclusively in bankruptcy law and knows the ins and outs of this complex process. The best way to find these professionals is by paging through the phone book, looking online, or, better yet, asking a friend or trusted financial advisor for a personal recommendation.

The second tip to keep in mind is that you’ll want to shop around for a lawyer. Don’t just go with the first attorney that you meet. Instead set up consultations with any lawyers who sound promising. A good way of weeding out the bad lawyers is to automatically disregard anyone who does not offer a free consultation with you. The consultation is an important process that allows you to assess the lawyer’s skill level and your own comfort level with him or her. Lawyers who don’t offer a consultation at no cost to you are often unreachable, inaccessible to their clients and often overpriced. If a lawyer isn’t willing to give you a few minutes out of his or her day, then you should not be willing to give this individual your business.

Finally, do take the time to look around for reduced price lawyers or lawyers who are willing to work pro bono. Since bankruptcy is usually filed due to a lack of money, the last thing you will want to do is to spend more than you have to on a bankruptcy lawyer. Of course, you should never sacrifice quality for price, but with a little work, you can find resources in the Phoenix area that will help you to find lower cost legal services. Usually, you have to prove some kind of financial need, but this is not difficult to do. At the very least, try to find a lawyer who is willing to accept partial payment up front and who will only charge you full price in the event of a successful bankruptcy proceeding.

As a general rule, if you have absolutely no assets and no (or a very small) income, filing pro se might be a viable option for you. Most of the mistakes that people make when filing by themselves either leave some property open to creditors seeking repayment or fail to include some creditors and outstanding bills in the entire process, meaning they are exempt from the courts power. However, if you have no assets that the creditors can go after and you have no income that they can garnish, then there is very little danger of failing to exempt property or failing to list creditors.

However, if you do have property that your creditors can go after in court and/or if you have a stable income that your creditors can have garnished by a court; then having an attorney is probably the right decision. People with no assets and no income basically have nothing to lose if they make a mistake in the filing, whereas someone that does have something to lose should be far more careful. This is even truer if you have complex assets like real estate, which can be pursued by creditors in many different ways. Further, the creditors frequently look at the financial position of people filing for bankruptcy protection before determining whether or not to actively fight the case or to simply go through the motions. When the creditors see someone with tangible assets and an income filing for bankruptcy protection without an attorney, they almost always actively engage the case since it is an almost sure win for them.

Although you can file without an attorney and if you have nothing much to lose it is probably the right decision to make, you should still take the time to become familiar with the process and have at least some idea of what you are doing. The bankruptcy courts are notorious for having little patience for mistakes and some mistakes – if they appear to directly benefit you – will likely be interpreted as a deliberate deception and treated as such by the court. The old adage that “He who represents himself has a fool for a client” is very much applicable to the bankruptcy courts, though if there is nothing to lose it does not really matter.

A 2009 study published in the American Journal of Medicine [Am J Med. 2009 Aug;122(8):699.] confirmed that medical expenses were the single largest cause of bankruptcy debt in the United States based on data from 2007. The study concluded from its sample group that some 62.1 percent of bankruptcies in the United States were medical in the sense that medical debt either constituted the largest portion of their debt or triggered the bankruptcy once combined with pre-existing debt. Three quarters of these “medical bankruptcies” had health insurance and most were well educated, had successful careers and owned real estate. Comparing against information collected in a similar study in 2001, the researchers concluded that there was an almost fifty percent increase in the number of bankruptcies that were directly linked to, or caused by, medical debt.

Luckily for the debtors, most medical debt can be discharged through Chapter 7 bankruptcy, which means this is frequently a better option than undergoing the Chapter 13 debt restructuring process. Although there are some claims that the courts treat medical debt more leniently – ostensibly because it was accumulated through no fault of the debtor – realistically it is just another form of debt and how it is handled as such. There is no evidence suggesting that the courts are more willing to discharge medical debt than any other form of debt that can be discharged through the Chapter 7 bankruptcy process.

Recent developments, such as the passing of the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 will likely have some impact on the concept of medical bankruptcy in the United States, though it is not likely to result in any immediate changes. With some 70 million Americans still carrying heavy debt burdens – largely tied to medical bills – the concept of medical bankruptcy will continue to be a problem in the United States for the foreseeable future. There are, at present, no proposals on offer that would cancel outstanding medical debt or prevent the insurance companies from continuing to ruthlessly squeeze Americans for every penny under the new health reform measures, so the idea that medical bankruptcy will go away seems unlikely.

In fact, the Bankruptcy Code is so complex and the courts so unforgiving of mistakes that bankruptcy law has become its own legal specialization. In general, merely being an attorney does not make one qualified to file a bankruptcy case. Further, a lot of the companies out there hawking bankruptcy representation are largely composed of non-experts and/or the ubiquitous “filing services” that are not legal representatives at all, though they sometimes try to portray themselves as such to dupe people into paying them to fill out forms. If you are considering filing for bankruptcy and you still have at least some income and assets – especially more complicated assets like real estate – then it is very much in your best interests to take the time to find a proper bankruptcy attorney to represent your case.

One of the more traditional ways of finding a proper bankruptcy attorney is to simply visit your local bankruptcy court, which in Phoenix is located at 230 N. First Ave, Suite 101 (1-866-553-0893; www.azb.uscourts.gov). Here you can get the opportunity to watch attorneys in action and find one that has a good relationship with the court. There are also a number of subsidiary bodies that work with the court and are staffed by respected bankruptcy attorneys, such as those invited to sit on the courts panels or the creditor/debtor committees. The information about these bodies and the associated attorneys can be obtained from the court’s clerk.

Another good way to find a proper bankruptcy attorney – or to check into the credentials of one you have already found – is to contact the national associations of bankruptcy attorneys. The National Association of Consumer Bankruptcy Attorneys (NACBA, www.nacba.com) and the American Bankruptcy Institute (ABI, www.abiworld.org) are two of the leading national level organizations that might be able to help. Closer to home, the State Bar of Arizona (www.myazbar.org) provides a comprehensive list of bankruptcy specialists via their “Board of Legal Specialization: Bankruptcy Law Certified Specialists”. Or, if you happen to be friends with a practicing attorney, he or she may be able to make a responsible recommendation for you, though you should not solicit recommendations from people that are not familiar with the legal process, even if they have gone through a bankruptcy.

Phoenix is the centre of the legal profession in Arizona and with a little shopping around it should not be too difficult to find a proper bankruptcy attorney in the area. Further, as the seat of the district’s bankruptcy court, it is very easy to visit and to see precisely what all is involved in filing for bankruptcy.