How do you know when it's time to file for Chapter 7 bankruptcy in Arizona?

I am a bankruptcy attorney in Arizona ($995 Chapter 7) and often get asked when should someone consider bankruptcy. Generally the rule of thumb is when you can no longer afford your bills, and are accumulating more debt than you are paying off. If you have more than $10,000 in credit card debt, medical bills, etc. and find yourself in this situation, you should consult with a bankruptcy attorney. The longer you put it off, the more money you lose. For example, if you are trying to make $800 payments on your debt each month, that is $800 each month you will never see again. Whereas if you file for bankruptcy now, you can stop the payments now. For most people, there is no good reason to put it off.

Another factor to take into consideration is your home and car. If you file for bankruptcy, an automatic stay goes into effect which protects creditors from seizing your home or car even if you are a couple of payments late (provided you do not have over the legal limit of equity in each). As long as you keep current on your payments, you will be able to keep your home and car. But if you start getting behind on your payments now, there is nothing to stop your auto lender or home lender from seizing your property in the near future. After you miss three months of payments on your home, many lenders will start foreclosure proceedings immediately. If you are in that situation, it is best to file bankruptcy ASAP to protect your home and/or car.