At The Law Center P.C., we understand the stress and pressure that comes with financial difficulties. In some circumstances, individuals are left with little option but to avail themselves to the protections provided for in bankruptcy. The benefits and protections of bankruptcy can include:
- A discharge of debts, providing the individual with a fresh start
- Stopping or postponing a foreclosure action
- Prevent the repossession of a car or other property
- Stop wage garnishments
- Lower your monthly payments on debts
Our Colorado bankruptcy attorneys and staff are equipped to handle your bankruptcy case from start to finish. In bankruptcy, our job begins before the case is filed. In fact, a large part of our job is pre-petition planning, which includes making critical decisions about what property to keep, in what form the property should be kept, when to file for bankruptcy, and what chapter to file under. These determinations are based on a variety of factors, including the client's earning history, the client's assets, the exemptions available, and the pressure from creditors.
Chapter 7 Bankruptcy
For many debtors, a Chapter 7 bankruptcy is the best option. An advantage of a Chapter 7 bankruptcy is that the process is relatively short in duration, providing the debtor with a more immediate fresh start.
Chapter 7 bankruptcy is sometimes referred to as "liquidation bankruptcy" because debtors may be required to surrender property or make payments to the bankruptcy estate. When this happens, the property will be split among the debtor's creditors. Although some individuals surrender property in Chapter 7 bankruptcies, many are "no asset" cases where the individual receives a discharge without surrendering any property or making a single payment to the bankruptcy estate. The reason that many cases are "no asset" is because individuals are entitled to claim certain items of property as exempt from the bankruptcy estate. When property is exempt, the debtor is allowed to keep such property through the bankruptcy process without any form of payment. This aspect of bankruptcy can be complex and may require pre-petition planning on the part of the debtor. Therefore, it is important that individuals receive professional assistance when filing bankruptcy to take full advantage of the bankruptcy protections and to increase the likelihood of success.
Chapter 13 Bankruptcy
For some individuals, a Chapter 13 bankruptcy is a more suitable. Determining the appropriate chapter of bankruptcy is an important decision that should be made by the debtor with the assistance of a skilled professional. In some instances Chapter 7 bankruptcy is not an option, leaving Chapter 13 as the most appropriate option for the debtor. In other instances the debtor qualifies for a Chapter 7 bankruptcy, but Chapter 13 is more appropriate because it allows the debtor to keep assets that would be surrendered in a Chapter 7 bankruptcy.
Once a debtor enters a Chapter 13 bankruptcy, they will submit a Chapter 13 plan to the Bankruptcy Court. In this plan the debtor will propose to make a monthly payment for 36 to 60 months. Both the duration and the payment amount are dependent upon the debtor's income and expenses. The debtor is required to pay their discretionary income for the duration of the Chapter 13 Plan. Ordinarily, at the end of the Chapter 13 Plan, all or most of the individual's debts are discharged. In fact, a Chapter 13 discharge has the potential to discharge debts that would not have been discharged in a Chapter 7 bankruptcy.