Bankruptcy can be tough but you don’t have to go it alone. Our bankruptcy lawyers in Colorado Springs at Maceau Law have more than 30 years experience helping clients get back on their feet. Below is useful information about receiving legal representation for bankruptcy in Colorado Springs, Pueblo, and Castle Rock areas:
Bankruptcy is a tool designed by the government to aid businesses and individuals who have become overwhelmed by debt. The process allows businesses and debtors to regain control of their finances by the reorganization and elimination of debt. Bankruptcy comes in many forms, and the differing types of bankruptcy are referred to by their place, or chapter, in the bankruptcy code. The types of bankruptcy most commonly filed are Chapter 7, Chapter 13 and Chapter 11.
What debts are considered inadmissible under bankruptcy law?
This means the following debts will rarely be forgiven through the bankruptcy process.
- Student loans
- Back taxes
- Child support
Chapter 7 bankruptcy means that debts belonging to an individual or business are cancelled either completely or reduced. Chapter 7 bankruptcies are the most common form of bankruptcy filed by small business owners, couples and individuals. It is the best type of bankruptcy for individuals to file who have little or no income remaining once their normal expenses are paid each month.
Process of filing Chapter 7:
During the bankruptcy process, a debtor’s unsecured property can be liquidated in order to pay debts. However, many items are considered exempt under the federal and state bankruptcy laws. These items could include household furnishings, cars or clothing. Many debtors find that most of their property is exempt.
Other terms used to describe Chapter 7 bankruptcy include liquidation bankruptcy or straight bankruptcy. Chapter 7 bankruptcy is in the liquidation category because the bankruptcy trustee, or the person assigned to administer the bankruptcy case, liquidates a debtor’s assets to pay some of their debt.
A bankruptcy trustee will look over the debts and assets of the debtor determining if any property is admissible to be sold. If there is property available, the property is liquidated, and the funds are used to pay down the individual’s debt. If there is any remaining debt after the liquidation of all available properties and assets, it is discharged. The whole process of Chapter 7 bankruptcy is usually completed within 60 to 90 days.
Who can file Chapter 7?
- An individual who does not have the monetary means to complete a Chapter 13 repayment plan
- An individual with many expenses and limited income
- An individual that has filed for bankruptcy within the last six to eight years
Cost of filing Chapter 7:
The cost of filing Chapter 7 bankruptcy is $299. However, this number does not include attorney’s fees.
Chapter 13 bankruptcy is the restructuring of an individual’s debts. This means that some debts are not considered important and are discharged in part or in full while others are repaid via a repayment plan. The choice of which debts will be repaid and which will not depends greatly on many circumstances including a person’s available disposable income. Chapter 13 is not as common as Chapter 7 bankruptcy.
What is the advantage or disadvantage or Chapter 13?
Although there are some disadvantages to Chapter 13, mainly the fact that some debts do have to be repaid, it does have its advantages. For example, in Chapter 13 bankruptcy, valuable property and assets are protected. However, the court issued monthly payment plan can last from three to five years and can become burdensome.
Who can file for Chapter 13?
- An individual who has enough money leftover after paying bills to pay the agreed upon monthly payments set up by the court
- An individual who has a large amount of debt that is not pardonable under Chapter 7 laws
- An individual who has a large income
- An individual who is behind on their car payments or mortgage
- An individual who has more assets than the state allows for Chapter 7 bankruptcy
Debt limit of Chapter 13:
An individual can owe no more than $1,010,650 in secured debt and no more than $336,900 in unsecured debt to file Chapter 13 bankruptcy.
Cost of Chapter 13:
The filing cost for Chapter 13 bankruptcy is $274. However, that does not include attorney’s fees.
This type of bankruptcy is usually used by struggling businesses in an effort to reorganize their affairs. It is available to individuals. However, it is more expensive and time-consuming than other types of bankruptcy, making it an unpopular choice. In most cases, it is only used by individuals when their debts exceed Chapter 13 debt limits or whose nonexempt assets are substantial.
The act of filing for bankruptcy is rarely avoidable when a debtor is crushed by debt. However, any individual considering bankruptcy should know that it negatively affects their long-term credit rating. Most bankruptcies are visible on a credit report for seven to 10 years. Moreover, the emotional strain that bankruptcy causes debtors who have to watch their assets being liquidated can be overwhelming. However, when a debtor is over their head in debt, bankruptcy can be their only lifeline.
How to get the best legal help for bankruptcy in Colorado Springs, Pueblo, and Castle Rock areas
If you’re facing a Chapter 7 bankruptcy situation that requires legal assistance, call us at Maceau Law at 719-633-2222 to schedule a consultation to discuss your legal options.
Please note: At this time, we do not offer legal services for Chapter 11 and 13 bankruptcies. For Chapter 11 and Chapter 13 bankruptcies, we can refer you to a trusted business bankruptcy attorney.