Some debts can’t be wiped out with a Chapter 7, like IRS tax debt, child support and some others. However, most of them can be completely eliminated with Chapter 7 and while it’s a long process, once it’s over, you’ll be able to begin rebuilding your financial future.
Sounds pretty good, doesn’t it? A fresh start and a clean slate?
Well, depending on your situation, it might not be as good as it sounds. In fact, in many cases, Chapter 7 isn’t even a legal option. If this is the case with you, then we may need to talk about a different type of bankruptcy called Chapter 13.
Why Some Denver Residents Should Consider Chapter 13 Bankruptcy
If it turns out that a Chapter 7 bankruptcy filing won’t work for you, we will talk about how a Chapter 13 bankruptcy filing might better suit your circumstances.
Chapter 13 bankruptcy is often referred to as the “catch your breath” bankruptcy. This is because you will keep most or all of your assets and catch up with back payments over time, with the Court’s oversight.
So when is a Chapter 13 filing a better option? There are three primary reasons:
Eligibility — You must make very little or no income to qualify for a Chapter 7 bankruptcy filing. If you make more than the median income in the state Colorado, then you will not be allowed to file for Chapter 7.
Your Home — If you have a home you want to keep but you’re way behind in payments, then Chapter 7 will not meet your needs. This is because with Chapter 7, the Court will require you to give us nearly every asset you own, including your home. With Chapter 13, you can continue making mortgage payments and “catch up” on your past due payments over the life of the payoff plan.
Non-exempt Assets — Certain assets are what is called “exempt property,” meaning the Court will allow you to keep the property after you file for bankruptcy. These types of assets generally fall into a category of what the Court considers “necessary” to lead a productive life, such as a home to live in or a vehicle to drive to work. However, if you have non-exempt assets you want to keep, Chapter 7 will not work for you. Examples of non-exempt assets include:
Musical Instruments (unless you are a professional musician and need the instruments to earn a living)
Collectibles such as coin collections, family heirlooms, etc.
A non-primary residence such as a vacation home
A second vehicle (since you only need one to get to work)
Other assets you own outright
Bank account balances, including investment accounts
Chapter 7 is for people who simply cannot pay their debts or who want to try to keep certain assets. For a list of exempt assets click here.
Contact Me Today to Discuss Denver Bankruptcy Options
When we meet to discuss your case, I’ll need to know everything there is to know about what you own in whole or in part. I’ll need to know all of the information about all of your debts and creditors, your payment histories, income, retirement accounts, pension plans, savings, checking account(s) and possessions.
We’ll look at what you own, what you hope to keep, what you owe and your best course of action for getting a fresh start toward your financial future.
But remember, time is of the essence. Putting off debt problems only makes your situation worse. I can help you but you need to call me or schedule a free bankruptcy consultation as soon as possible. Call me today at 720-605-4347 or click here to schedule a free consultation.