Types

• In Arizona, bankruptcy petitions may be filed for Chapter 7, 9, 11, 12, 13 and 15. The most common petitions for individual debtors are Chapter 7 and Chapter 13. A Chapter 7 bankruptcy erases your debts, regardless of the amount. A Chapter 13 filing is designed to help you restructure your debt and repay it over a three- to five-year period. Businesses that want to restructure typically file under Chapter 11.
  
  

Filing

• You may file your bankruptcy petition in one of the district court offices located in Tucson, Yuma or Phoenix. You must submit the $299 filing fee for Chapter 7 or $274 for Chapter 13; these fees are as of October 2010. Arizona doesn't require you to be represented by an attorney to file. Your petition must include a list of your assets and liabilities, a statement of financial affairs and a statement certifying that you've completed credit counseling at least 180 days prior to filing. In Arizona, you're also required to complete a financial management course no later than 45 days after filing.
  
  

Exemptions

• If you're filing bankruptcy in Arizona, you're allowed to claim a certain amount of your assets as exempt. According to the U.S. Bankruptcy Court, District of Arizona, you're allowed to claim a homestead exemption of up to $150,000, depending on which county you live in; up to $4,000 in personal property; clothing up to $500; wedding rings up to $1,000; and vehicle equity up to $5,000, as of October 2010.
  
  

Benefits

• The benefits of filing bankruptcy depend on which chapter you file. A Chapter 7 filing will eliminate your debts and give you a financial fresh start. A Chapter 13 filing can help you to restructure your debt so you're able to repay it over time. If you're an Arizona resident who's facing foreclosure, a Chapter 13 filing can potentially help you to save your home. Both individuals and businesses who file for bankruptcy in Arizona also enjoy the protection of an automatic stay, which shields debtors against collection actions by creditors, including lawsuits.
  
  

Considerations

• Filing bankruptcy should only be considered as an option of last resort, primarily because of the negative impact it has on your credit. A Chapter 7 filing remains on your credit for 10 years, while a Chapter 13 filing remains for seven years. Regardless of the chapter you file for, a bankruptcy can limit your ability to obtain new loans or credit and cause you to pay a much higher interest rate and fees.