With so many facing job loss, foreclosure and shrinking income, accurate information about your rights and options is key. We frequently hear radio ads and see media that claim to inform us about bankruptcy. These sources of information are not always accurate and are sometimes purposely misleading.

Let's face the facts about bankruptcy:


- Myth - You must pay back your debts in bankruptcy.

Truth - Under Chapter 7 bankruptcy you are not required to repay debts, except for taxes, student loans and child support, generally. Chapter 13 bankruptcy will require a three- to five-year payment plan. The goal isn't necessarily to pay 100 percent of the debt - it may be to pay only as much as you can afford, which in many cases is very little.

- Myth - You will lose your belongings if you file bankruptcy.

Truth - Arizona law allows you to protect the following assets, within the prescribed values: equity in your home and vehicles, furniture, a watch, wedding set, clothing, tools used in your job and 100 percent of your qualified retirement plan or pension. (This is not a complete list.)

- Myth - You can't buy a house after a bankruptcy.

Truth - You will have a difficult time qualifying for a mortgage for a short time after your bankruptcy discharge. However, before the current crisis, I could tell my clients that two years after their bankruptcy discharge, assuming they kept their credit on track in the meantime, they should be able to qualify without a problem. Because of new lending regulations, this timeframe may be extended.

- Myth - You don't need to hire an attorney to file bankruptcy.

Truth - The truth is that you are not prohibited from filing on your own or paying a non-attorney a nominal fee to prepare the documents for you. However, it is not recommended. You may think the forms are easy enough to fill out, but bankruptcy is not always the most logical area of law. There is a lot of legal analysis that goes into preparing the documents (legal analysis that a document preparer is not qualified to do). There can be harsh implications for innocent mistakes. It's not just as simple as asking the court to dismiss your case when things start to go south.


Attorney Denise K. Aguilar is an Ahwatukee Foothills resident and has recently moved her practice to Ahwatukee. She can be reached at (480) 455-1881. Additional information regarding the Aguilar Law Firm, P.C. is accessible at www.aguilarlawonline.com.

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