Chapter 7 Bankruptcy in Colorado
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The average chapter 7 bankruptcy in colorado can be an uncomplicated process that takes approximately five to six months. A chapter 7 bankruptcy is a liquidation process and every case is assigned to a chapter 7 bankruptcy Trustee for administration. Certain real and personal property is exempt under state and federal law - an experienced Colorado bankruptcy attorney can advise you on which exemptions apply to your assets. Any non-exempt assets can be liquidated in order to raise money which will be distributed to creditors. It is important to consult with a Colorado bankruptcy attorney as soon as you face financial hardship in order to properly plan and protect your property. Hiring a bankruptcy attorney in a timely manner could potentially save you thousands of dollars.
Once it is determined that chapter 7 bankruptcy is your best option, you will need to gather information regarding your financial situation in order to prepare the bankruptcy Petition and Schedules. You will need to disclose all information regarding your income, assets and debts. An experienced Colorado bankruptcy attorney can help you prepare your bankruptcy Petition and Schedules.
Once the chapter 7 bankruptcy Petition and Schedules are prepared, you will review and sign the documents and your Colorado bankruptcy attorney will file them with the Bankruptcy Court. On the day that a bankruptcy is filed, an automatic stay takes effect and prevents almost all collection efforts by creditors. This means that creditors cannot sue, garnish or even demand payment after you have filed for bankruptcy protection. Your Colorado bankruptcy attorney can advise you on exactly what creditors can and cannot do once the Automatic Stay is in place.
The next major step in the bankruptcy process is the 341 Meeting of Creditors. At the Meeting of Creditors, the chapter 7 bankruptcy Trustee appointed to your case will ask you questions regarding your Petition and Schedules. The questions asked will depend on the facts of each case, but the bankrutpcy Trustee is generally confirming that everything listed in the Petition and Schedules is true and accurate. Although creditors have the right to show up and ask questions, it is rare for them to do so. If you believe a particularly aggressive creditor will show up at your Meeting of Creditors, it is important to have a bankruptcy Attorney who will provide full representation and can prepare you for the 341 Meeting of Creditors.
After the 341 Meeting of Creditors, there is a 60 day objection period during which time creditors could object to the discharge of your debts. Creditors must have a specific basis for objecting such as theft or fraud. While objections are rare, they can cause major complications in a Chapter 7 bankruptcy and should always be handled by an experienced Colorado bankruptcy attorney. Assuming there are no objections in a case, you will receive the Order discharging your debts shortly after the objection period ends. After the Discharge Order enters, your bankruptcy case will still be open while the liquidation process is completed. It is important to be responsive and cooperate with the bankruptcy Trustee until your bankruptcy case is closed by the Bankruptcy Court. Our experienced Colorado bankruptcy attorneys can make sure your dealings with the bankruptcy Trustee go as smooth as possible.
Chapter 13 Bankruptcy
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Chapter 13 Bankruptcy in Colorado enables individuals with regular income to develop a debt repayment plan. Debtors propose monthly payments to the Chapter 13 Bankruptcy Trustee who distributes the payments to creditors. Generally, individual’s whose income is greater than the median income for their same household size must complete a five-year repayment plan. Chapter 13 Bankruptcy plans range from three years to five years for individuals whose income is less than the applicable income median. Individuals whose income is higher than the median income generally have to file a five-year plan. To be eligible for a Chapter 13 Bankruptcy, an individual’s unsecured debt must be less than $360,475 and secured debts are less than $1,081,400 (these figures may be close but not exact as they change periodically).
Most individual’s file Chapter 13 Bankruptcy because their income is too high to file for Chapter 7 Bankruptcyprotection. However, some people choose to file Chapter 13 Bankruptcy because it offers certain advantages over a Chapter 7 Bankruptcy. For instance, Chapter 13 Bankruptcy allows some individuals to save their homes from foreclosures. The filing of a Chapter 13 Bankruptcy can stop foreclosure sales and individuals can catch-up on mortgage delinquencies through their Chapter 13 Bankruptcy Plan. Chapter 13 Bankruptcy also offers certain protection to co-borrowers that a Chapter 7 Bankruptcy does not.
In addition to the proposed repayment plan, Chapter 13 Bankruptcy debtor must file Petitions and Schedules listing their debts, assets, income and expenditures, and other financial information. The debtor must also file, evidence payments from employers received in the 60 days prior to filing, a certificate of credit counseling from an approved non-profit budget and credit counseling agency.
Spouses may file together or individually. However, even when filing individually, debtors must provide information regarding their spouse’s income and expenses for analysis by the Chapter 13 Bankruptcy Trustee.
When an individual files a Chapter 13 Bankruptcy, an automatic stay goes into effect. The automatic stay prevents most collection efforts against a Chapter 13 Bankruptcy debtor including the initiation or continuation of lawsuits and wage garnishments. The Chapter 13 Bankruptcy automatic stay also protects co-signers in certain circumstances. Unless authorized by the Bankruptcy Court, a creditor may not make collection efforts against co-signers for consumer debt.
Approximately 30-45 days after filing of the Chapter 13 Bankruptcy case, the debtor must appear at the Chapter 13 Bankruptcy Meeting of Creditors. At the Meeting of Creditors, the Trustee will ask the debtor about the information listed in their schedules and the proposed terms of their Chapter 13 Bankruptcy Plan. Creditors are also given an opportunity to question the debtor, although, creditors rarely attend these meetings. A hearing with the Bankruptcy Judge assigned to your case will be scheduled for roughly three weeks after the Meeting of Creditors. If the debtor and Trustee have not agreed to the terms of the Chapter 13 Bankruptcy Plan then the parties must update the Judge on the status of the case. Although debtors may attend, it is common for attorneys to represent debtors at these hearings without the debtor being present.
Once the terms of the Chapter 13 Bankruptcy Plan are accepted by the Trustee and creditors, the Bankruptcy Judge should approve the plan. When a debtor and the Trustee cannot agree on the terms of the plan, a hearing must be held and the Judge will settle the dispute.
The provisions of a confirmed Chapter 13 Bankruptcy Plan are binding on debtors and creditors. The debtor must make monthly payment in accordance with the plan and must notify the Chapter 13 Bankruptcy Trustee before incurring new debt during the repayment period. If a debtor fails to make the monthly payments, the Court may dismiss their case or convert it to a liquidation under Chapter 7 Bankruptcy.