Bankruptcy Attorney in Denver
There are times when you just can’t catch a break. You have considerable debt and your income isn’t going to be able to cover your incoming bills. You know it’s only a matter of time before the repossessions and a foreclosure comes. To make matters worse, credit collectors are calling your home or office on a daily basis. If you’re in a situation like this, Chapter 7 or Chapter 13 bankruptcy may be your best option. Attorney Ryan Peterson is a Denver CO bankruptcy lawyer who helps his clients free themselves from the advances of aggressive creditors. Contact him today.
Chapter 7 vs. Chapter 13 Bankruptcy
While there are appealing aspects to both Chapter 7 and Chapter 13 bankruptcy, you may not have a choice. There is an income test for Chapter 7 bankruptcy, and if you aren’t under the threshold, Chapter 13 may be your only option.
Chapter 7 Bankruptcies in Colorado
Certain rules regarding how bankruptcy affects your property do vary from state to state. So, if you don’t live in Colorado, seek the advice of an attorney who practices bankruptcy in your state.
When you file for Chapter 7 bankruptcy, the courts will place an automatic stay on your debts. That means that your creditors cannot pursue claims against your assets. Any non-exempt property is placed in the custody of a court-appointed trustee. The trustee will review the debts against you and the assets that you own. The trustee will liquidate any non-exempt assets and make arrangements to pay your creditors. However, as a practical matter in most cases, the huge majority of your property will normally be protected as long as the bankruptcy paperwork is done properly. When you emerge from Chapter 7 bankruptcy, you have a “clean slate.” You can begin reestablishing your credit.
The filing requirements for Chapter 7 bankruptcy vary from state to state. These requirements are for Colorado. In order to qualify for Chapter 7:
- You must complete a Statement of Current Monthly Income and Means Test Calculation
- Your income may not exceed the state’s median income or you will be presumed not to qualify for Chapter 7. In some cases, however, you may be able to overcome that presumption depending on what kinds of expenses you have.
- You must complete an approved credit counseling course prior to your filing date
If your income is higher than the median income for the state, you may still be able to receive bankruptcy relief under Chapter 13.
Colorado does not allow you to choose between the state’s exemptions and the federal exemptions. You will have to follow the state’s guidelines. For instance, you can exempt:
- Up to $75,000 in real estate
- Up to $7,500 for bicycles or motor vehicles
- Up to $2,000 in clothing
- Up to $3,000 in household items
There are, of course, other exemptions and these limits are subject to change under certain circumstances. Contact a Denver Chapter 7 bankruptcy lawyer for a more detailed list of exemptions.
Chapter 13 Bankruptcies in Colorado
If you have a steady flow of income and you have assets that you’d prefer not to liquidate, a Chapter 13 may be a better solution for you.
If you qualify for Chapter 13 bankruptcy you will present a three-year to five-year plan to the bankruptcy court. If approved, you will have a payment schedule. The proceeds of those payments will go towards paying your creditors. The good news for many filers is that under Chapter 13, as long as you comply with your Chapter 13 plan, you can keep your car and your home, even if you have a lot of equity. If you make over the median income for the state of Colorado, you may not be eligible for Chapter 7, and Chapter 13 may be your only option.
In addition to being able to show sufficient income, Chapter 13 requires the following:
- There is a ceiling on the amount of unsecured debts (no-collateral debts like credit cards) that you can have.
- There is a maximum amount of secured debts.
- You must have proof that you’ve filed your state and federal income taxes over the past four years, or be able to file your last 4 years of tax returns very soon after filing Chapter 13 Bankruptcy.
Because of the complexity of Chapter 13 cases and the requirement of filing a payment plan, it’s recommended that you retain the services of a qualified bankruptcy lawyer.
The Automatic Stay
One of the more attractive features in both Chapter 7 and Chapter 13 bankruptcy for individuals being pursued by banks and creditors is the automatic stay. This is a court order that goes into effect immediately upon filing your case that prevents creditors from pursuing their claims. This means they can’t call, send letters, garnish wages, freeze bank accounts, or take any other action to try to collect their debt.
While most types of debt are dischargeable in bankruptcy, there are some categories that are exempt and you may still have to pay during and/or after your bankruptcy case:
- Most taxes
- Child support or spousal support
- Government fines or penalties
- Student loan debt
- Personal injury obligations due to a DUI accident
- HOA fees
- Criminal restitution
This is not a complete list. For a more detailed list of non-dischargeable debt, contact a bankruptcy attorney.
Denver Colorado Bankruptcy Lawyer
From his office in Denver, attorney Ryan Peterson represents individuals in Chapter 7 and Chapter 13 bankruptcy. With bankruptcy, timing is paramount. Don’t wait until it’s too late. Call today.