If you are struggling financially in Littleton, Centennial, or Aurora, you may be considering filing for bankruptcy. You may also know there are a few different types of bankruptcy: Chapter 7, Chapter 13, and Chapter 11. You may not know which type of bankruptcy is right for your situation. To begin with, as a consumer you only have two options, because Chapter 11 bankruptcy is not typically used by individuals. Therefore, the choice lies between Chapter 7 and Chapter 13. Both end with the discharge of your debt, but the process is much different. Let’s look at each one and how your specific situation will help determine which type of bankruptcy is right for you.
Chapter 7 Bankruptcy in Littleton and Aurora
A Brief Overview:
In Chapter 7, the bankruptcy court appoints a trustee who will handle selling any of your non-exempt property or assets and putting the proceeds towards paying for your debt. This is a scary thought. But, thankfully, almost all of my clients filing for Chapter 7 do not have any non-exempt or unencumbered assets which are sold. Once the entire process of bankruptcy is complete, most of your debts will be liquidated (discharged).
The Advantages:Is it Right for Me?It is Right for You If:
One of the biggest advantages of filing for Chapter 7 bankruptcy is the quick process. In some cases, people have received their discharge in only 3 months after filing.
Chapter 7 bankruptcy requires liquidation of your assets, so it is best not to file for Chapter 7 if you are facing foreclosure of a house or car. Sometimes, the Chapter 7 bankruptcy process can delay the foreclosure process, but it doesn’t stop it completely (unless you keep current on your mortgage payment during the bankruptcy process).
Chapter 7 bankruptcy may be right for you if: You have few nonexempt assets, your house or car are not in foreclosure, and your disposable income isn’t too high (you must pass a means test in order to qualify)
Chapter 13 Bankruptcy in Littleton and Aurora
A Brief Overview:
As opposed to Chapter 7, there is not threat of losing assets by filing for Chapter 13. This is because the bankruptcy trustee doesn’t sell your nonexempt assets to pay your debts. Instead, all your debts are added together, and a repayment plan is proposed to the court. When it is approved, you will make monthly payments over a three to five year time period. While it sounds like you’ll be paying back all your debt, this isn’t the case. In most situations, you only have to pay back a small amount (if any at all) of your unsecured debt, such as credit card debt or medical bills. At the end of the repayment plan, you will receive a discharge of the remaining debt and get to keep your assets.
The Advantages:Is it Right for Me?It Is Right for You If:
The biggest advantage to filing for Chapter 13 bankruptcy is that your assets will be protected. Chapter 13 halts any foreclosures or repossessions, allowing you to catch up on your secured debt payments over the 3-5 repayment time period. As long as you make payments, creditors won’t be able to repossess your property or foreclose on your home.
In order to qualify for Chapter 13 bankruptcy, you must meet a certain income requirement which shows you have sufficient and regular income to make payments on your repayment plan
Chapter 13 bankruptcy may be right for you if: You meet the required income amount, you have assets you wish to protect, and you have 3-5 years to spend in the process
Why You Need a Knowledgeable Bankruptcy Lawyer
If you are considering whether bankruptcy is the right option for your financial situation, don’t hesitate to contact a competent bankruptcy lawyer. There are many different facets and laws regarding the bankruptcy process. The bankruptcy code is complex and confusing. And, if you fail to correctly file, your case could be dismissed altogether. In fact, the United States Bankruptcy Court stresses the importance of filing with the help of an attorney to ensure a smooth bankruptcy process. Get the best fresh start possible by filing for your legal right to bankruptcy.
If you are wondering which type of bankruptcy is right for you, don’t hesitate to contact experienced bankruptcy attorney Barry Arrington for a free bankruptcy consultation at 303-205-7870.
He can help you get the best fresh start possible.