Chapter 7 bankruptcy is intended for people who earn less than the median state income. Most property in a Chapter 7 bankruptcy is exempt, which simply means that it’s protected from creditors. In most cases, a debtor whose income is above the median Colorado income will need to file a Chapter 13 Bankruptcy. In a Chapter 13 Bankruptcy, you are required to repay your creditors over a three-to-five-year period.
Chapter 13 bankruptcy may be ideal for homeowners as it can help to protect property that would have otherwise been lost in a Chapter 7 bankruptcy. It may also be optimal for a debtor who needs to catch up on past-due mortgage payments.
Yes, the bankruptcy process can halt the foreclosure process, as it supersedes state foreclosure laws.
When filing for Chapter 7 bankruptcy, you can eliminate most, if not all, of your unsecured debt.
When filing for Chapter 7 bankruptcy, you can keep any property that falls within an exemption. While most property falls within an exemption, if your property does not, then a Trustee may sell the property and use the proceeds to pay your creditors.
In most cases, a debtor whose income is above the state median income needs to file a Chapter 13 Bankruptcy in Colorado and does not have the option of filing for Chapter 7.
Yes – as part of the filing process, two credit counseling classes are required, one prior to filing and one after filing.
The Chapter 7 filing process takes about four to six months. The Chapter 13 bankruptcy process can take 3 to 5 years depending on whether the debtor is above or below the state median income.
Debt may need to be repaid depending on the type of bankruptcy a person qualifies for. In a Chapter 7 bankruptcy, a person may no longer owe certain types of debt owed to creditors or their debt may be discharged. A Chapter 13 bankruptcy requires certain debts to be repaid over a period of three to five years.
A Chapter 13 repayment plan can be modified on the basis of hardship. Any remaining unsecured debt will be eliminated after the payment plan is completed as long as you have completed payments for child support and/or alimony obligations and as long as you have completed a budget counseling course with an approved agency.
If a person does not have income from sources that can be garnished or attached and does not have assets to protect, like a house with equity, bankruptcy might not be the right option because there is nothing to protect that the law does not already protect.
