There are two main types of personal bankruptcy that you’ll want to become familiar with in understanding your options when it comes to filing personal bankruptcy.
Which one may be right for you will depend on your situation, the types of debt you have, whether or not you are able to pay any of it back, your earning situation, and other factors. Our legal team is here to help you through this trying time and can answer your questions, reach out to us at any time.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the most well-known type of bankruptcy and is likely what you are already familiar with. With a Chapter 7 bankruptcy, all non-exempt assets will be sold off by a court-appointed trustee, and the monies from these sales will pay back your creditors. Anything still owed beyond that is discharged when the bankruptcy is complete.
With Chapter 7, you are likely to lose much of your property (though many assets are exempt, such as basic household items and work-related tools or vehicles).
However, there are types of debts that are not forgiven under Chapter 7, including taxes, alimony payments, and even student loans.
If you get into financial trouble again in the future, you would not be able to file for Chapter 7 again for a period of eight years.
Still, if you are not in a position to pay back what is owed and are in crippling debt, Chapter 7 may be a good option for you. If you are still earning an income and may be able to make payments at a lower amount, Chapter 13 may be a better option for you.
Chapter 13 Bankruptcy
With Chapter 13 bankruptcy, a repayment plan is worked out between your attorney and the court to take place over the next three to five years. This may pay back some of what is owed, or all of it, depending on your circumstances. If the plan only repays part of the full amount owed, at the end of the term, the remaining debt is discharged.
This option allows you to keep more of your assets and properties, as you aren’t liquidating your assets to repay the debts. Chapter 13 also falls off of your credit report faster than Chapter 7, and it can be filed for again in as little as two years if needed. This can be a great option for those who are buried too deep to make their current payments but are in a capacity to pay it back over time.
Benefits of Bankruptcy
Regardless of which type of bankruptcy you file for, there are benefits that apply to those undergoing either type.
- Halt foreclosure
- Stop debt collection attempts
- Stop utilities being turned off
- Fight wage garnishments
- Get out of debt
There are qualifications that need to be met in order to file for bankruptcy, such as being able to show that you cannot meet your financial obligations and repay your debts, among others.
Our legal team focuses exclusively on helping clients get out of debt once and for all, and we can help you find the best option for your situation.
If you are considering filing personal bankruptcy in Denver, Colorado contact us at (303) 623-4357.