Bankruptcy Relief Colorado
Meurer Law Offices, PC
5347 S. Valentia Way Suite 220
Greenwood Village, CO 80111
720-895-3045
Welcome to our Bankruptcy 101 page. We know that you have questions about bankruptcy and this page is a great place to start if you are considering filing for bankruptcy. Please read through some of these basic questions and answers that we've prepared for you and when you are ready to discuss your legal situation call a bankruptcy attorney or specialist at 720.895.3045 We look foward to helping you solve your debt problems. Call Mike or Sharon today and meet with real people who have helped thousands of families and regular people just like you who need relief from their financial situation. We look forward to speaking with you.
What is a chapter 7 bankruptcy?
Chapter 7 is designed as an orderly, court-supervised procedure by which a trustee collects the non-exempt assets of the debtor’s estate, reduces them to cash, and makes distributions to creditors. The person filing the bankruptcy (“debtor”) has the right to retain certain exempt property. (Visit your state bankruptcy page listed below to learn your specific exemptions.) Because there is usually little or no nonexempt property in most chapter 7 cases, there may not be an actual liquidation of the debtor’s assets. These cases are called “no-asset cases.” Usually debtors with assets that they wish to keep and that are not covered by exemptions file chapter 13 bankruptcy.
A creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court. In most chapter 7 cases, the debtor receives a discharge that releases the debtor from personal liability for certain dischargeable debts. The debtor normally receives a discharge three to four months after the petition is filed. Not all debts are discharged in a chapter 7.
What is the difference between Chapter 7 & Chapter 13 ?
Chapter 7 is called a liquidation bankruptcy. It is designed as an orderly, court-supervised procedure by which a trustee collects the assets of the debtor’s estate, reduces them to cash, and makes distributions to creditors, subject to the debtor’s right to retain certain exempt property and the rights of secured creditors. Usually debtors with assets that they wish to keep and that are not covered by exemptions file chapter 13 bankruptcy.
In a chapter 13 case you file a plan showing how you will pay off some of your past-due and current debts over a period of three to five years. The most important thing about a chapter 13 case is that it will allow you to keep valuable property, like your home or car, even if you are behind on payments or you have equity not covered by your exemptions. Your payments on these secured debts will generally be your regular monthly payments plus some extra amount if you need to get caught up because you are behind when you file.
Why do people file a chapter 7 bankruptcy?
Generally people file chapter 7 bankruptcy if they have a large amount of unsecured debt such as credit card debt or medical expenses that they are no longer able to pay. Often unemployment, unexpected medical expenses, or divorce prompt the cause the debtor to seek protection from creditors by filing chapter 7 bankruptcy.
What is chapter 13 bankruptcy?
In a chapter 13 case you file a plan showing how you will pay off some of your past-due and current debts over a period of three to five years. The most important thing about a chapter 13 case is that it will allow you to keep valuable property, like your home or car, even if you are behind on payments or you have equity not covered by your exemptions. Your payments on these secured debts will generally be your regular monthly payments plus some extra amount if you need to get caught up because you are behind when you file.
How often can I file bankruptcy?
You can file for Chapter 7 bankruptcy again after eight years has passed from the date of your last filing. A Chapter 13 bankruptcy can be filed at any time but a debtor only receives a discharge every 2 years if they filed a prior 13 and 4 years if they filed a prior chapter 7.
What property can I keep after I file bankruptcy?
In a chapter 7 case, you can keep all the property which is exempt from the claims of creditors. In determining whether property is exempt, you must keep a few things in mind. The value of property is not the amount you paid for it, but what it is worth now. Generally the trustee is interested in the resale value of your property so for most personal effects this is the garage sale value of your property.
You also only need to look at your equity in property. This means that you count your exemptions against the full value minus any money that you owe on mortgages or liens. For example, if you own a $50,000 house with a $40,000 mortgage, you count your exemptions against the $10,000 equity you have in the home. While your exemptions allow you to keep property even in a chapter 7 case, your exemptions do not make any difference to the right of a mortgage holder or car loan creditor to take the property to cover the debt if you are behind. If you are behind in payments and can afford to make the loan payment and to make the amount you are behind over a period of three to five years you should consider a chapter 13 bankruptcy.
In a chapter 13 case, you can keep all of your property if your plan meets the requirements of the bankruptcy law. In most cases you will have to pay the mortgages or liens as you would if you didn't file bankruptcy. You may also strip off a second mortgage in a chapter 13 in some circumstances.
Can I keep my home and/or car after I file bankruptcy?
You will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt. Even if your property is not fully exempt you may still be able to keep your property by filing a chapter 13 bankruptcy instead of a chapter 7 bankruptcy. In a chapter 13 plan you will be required to pay at least the equivalent of the non-exempt equity you have in your home or car and any amount you are behind on your home or car loan over the course of the three to five plan. You also will be required to continue making the regular monthly payments.
Can I get a credit card after filing bankruptcy?
Yes, there are several options available. While technically not a credit card you could use a bank or debit card to perform activities for which you normally would use a credit card. You also may be able to keep the credit card you already have if the creditor grants approval. If these options do not work you can get secured credit card which is backed by your own bank account.
Can a married debtor file without the other spouse?
Yes, but your spouse will still be liable for any joint debts. Your spouse’s income is also included in determining if you qualify under the income test. If you file together you will be able to double your exemptions. In some cases where only one spouse has debts, or one spouse has debts that are not dischargeable then it might be advisable to have only one spouse file. If the spouses have joint debts, the fact that one spouse discharged the debt may show on the other spouses credit report.
How long after filing bankruptcy will the creditors stop calling?
Once a creditor or bill collector becomes aware of a filing for bankruptcy protection, it must immediately stop all collection efforts. After you file the bankruptcy petition, the court mails a notice to all the creditors listed in your bankruptcy schedules. This usually takes a couple of weeks. Creditors will also stop calling if you inform them that you filed the bankruptcy petition, and supply them with your case number. In some cases, you or your attorney should contact the creditor immediately upon filing the bankruptcy petition, especially if a law suit is pending. If a creditor continues to use collection tactics once informed of the bankruptcy they may be liable for court sanctions and attorney fees for this conduct.
What Is A Discharge In Bankruptcy?
Under the federal bankruptcy statute, a discharge is a release of the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer required by law to pay any debts that are discharged. The discharge operates as a permanent order directed to the creditors of the debtor that they refrain from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts. Although a debtor is relieved of personal liability for all debts that are discharged, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.
Do I qualify to file a chapter 7?
There are two basic qualifications for a chapter 7. First, you may not have received a discharge in a prior bankruptcy filed within the last 8 years. Second you must be under the income limit as established by national standards which change regularly. These national standards are based on where you live, the number of dependents and various allowed expenses. This office will do a qualification analysis for $250 which counts towards your fees if you file.
What debts are not dischargeable?
The most common debts that are not dischargeable include most taxes, spousal and child support, debts from willful misconduct, debts from a DUI, student loans and criminal fines and penalties. There are other non-dischargeable debts but these are the most common.
What taxes are dischargeable?
Income taxes that meet 5 criteria may be discharged. The criteria are: (1) Due date for filing tax return is at least 3 years ago; (2) The tax return was actually filed at least 2 years ago; (3) The tax assessment is at least 240 days (8 months) ago; (4) tax return was not fraudulent; and (5) taxpayer is not guilty of tax evasion.
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5347 S. Valentia Way Suite 220
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