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An Overview of Starting the Bankruptcy Process

Deciding to file for bankruptcy is not an easy step to take. There is a lot to consider and many questions you might find yourself asking, like: “Where do I go for help?” “Is bankruptcy my only option?” “How long is the process?” or “What happens to my credit?” While the terminology and steps may seem overwhelming, with the right guidance, filing for chapter 7 bankruptcy can be a relatively streamlined process that allows you to start over financially. With chapter 7, all debts are wiped clean with the exception of child support, taxes, and student loans.

Making the decision to move forward with filing for bankruptcy is the 1st of 7 basic steps you will need to follow to help make the process a smoother one. Let’s take a look at the next 6…

  • Find a Good Attorney : Finding an attorney is fairly easy, but you want to be sure that you find a good attorney who is experienced with bankruptcy law. The bar association in your specific state, as well as the National Association of Consumer Bankruptcy Attorneys and the American Board of Certification should offer a directory listing information regarding bankruptcy attorneys. Be sure to choose an attorney that you feel confident with handling your case all the way through.
  • Bankruptcy Counseling : There are 2 credit counseling sessions that are mandatory when filing for bankruptcy and must be completed through a U.S. Justice Department approved agency. The first session will take place before you file the paperwork with the courts where a discussion of your budget and the pros and cons of bankruptcy and alternate options will take place. The second session will happen later during the 5th step.
  • File with the Court : Once you have completed your first counseling session, you will file with the Court. This is where the bankruptcy will begin to appear on your credit report requiring all creditors to cease collection attempts for your debt.
  • Repayment or Liquidation : Liquidation of assets with value may be necessary to repay creditors if filing for Chapter 7, whereas repaying a portion of your debt may be required if filing for Chapter 13. When filing for Chapter 7, if you do not have any assets of substantial value, you will have a “No Asset Case” which means the courts will not sell your property, but bare in mind that if you have a house or car that you still owe money on and wish to keep, you will need to continue to make on-time payments and be sure to inform your attorney of such items.
  • Complete Course : The next step is to complete a required education course which must be done before your debts can be discharged.
  • Discharge : The final step is discharging all eligible debts. Your obligation to pay the creditors included in your bankruptcy is over and your debts have been removed. You may experience a weight lifted during this step but remember, you will have to work hard to rebuild your credit. A bankruptcy can stay on your credit report for up to 10 years and cause your credit score to drop.

If you are in the Denver, CO area and wondering if bankruptcy is the right choice for you or have already made the decision to move forward, call our offices today at (303) 623-4357 to find out how we can guide you through each step. Our attorneys at Berken Cloyes have committed the last 35 years to helping individuals and small business owners in Colorado find financial freedom from overwhelming debt.