This March in the Phoenix metro area, the number of bankruptcy filings rose to the highest level so far in 2013. While the economy is improving, many Arizona residents are still facing unmanageable debt loads after going through the recession and the housing crisis. For these Arizonans, bankruptcy can provide a much needed fresh start financially – and now may be a particularly attractive time to file for bankruptcy in Arizona.
Tax season typically corresponds with swell in bankruptcy filings
In Phoenix, there were 1,529 bankruptcy filings in March of 2013, a significant portion of the 2,093 filings throughout the state. This is the highest monthly total so far this year for the Grand Canyon State.
Even though bankruptcies are down compared to the same time period last year, the annual trend of a bump in filings during March, April and May has continued into 2013. For most Americans, tax season means a nice bonus in the form of a refund. A tax refund can be nicely put to use as an investment to cover the initial costs of filing for bankruptcy, like court costs and the cost of hiring a lawyer. It is also important for bankruptcy filers to use tax refunds wisely and at the proper time before filing; a tax refund owed to a bankruptcy filer when they initiate their case will usually be designated to partially repay creditors.
The tax season bankruptcy trend is a nationwide phenomenon, but it has been particularly pronounced in areas of Arizona that were hit hard by the down economy. Typically, the tax season spike in bankruptcy filings begins to ebb in May.
New exemptions further protect Arizona bankruptcy filers
Even beyond considerations involving a tax refund, now may be an especially good time to consider filing for bankruptcy in Arizona. Every state has exemptions that determine how much of a filer’s property is shielded from liquidation during the Chapter 7 bankruptcy process. For most Chapter 7 filers, these exemptions mean that they do not have to surrender any property. Under a new Arizona law signed by the governor in April, the exemption amount is going up in several categories.
The household goods exemption, formerly set at $4,000, will be raised to $6,000, and this exemption now also includes “consumer electronic devices” like iPods and similar items. An additional exemption of $1,000 has been added for computers. Exemptions for cars and wedding rings are both going up by $1,000 apiece, to $6,000 and $2,000, respectively. And, under the new law, animals – including pets as well as agricultural stock – will be safe from creditors in bankruptcy if they are valued at $800 or less, up from the previous exemption amount of $500.
Get your financial life bank on track with help from an Arizona bankruptcy attorney
If debt is a problem in your life, bankruptcy may be a good solution. With an initial investment to cover costs, you can eliminate thousands owed to creditors while hanging on to your cherished personal property thanks to Arizona’s generous bankruptcy exemptions. Contact an Arizona bankruptcy attorney to learn more about what bankruptcy can do for you and to begin building your case.