Having debts and worrying about how you’re going to pay them off can be a very overwhelming problem. It makes it hard to move on, reach a financially stable state, or save money to plan for your future. You’re constantly crunching the numbers and thinking of how to make your debt and your income break-even while still being able to afford your daily necessities and support your lifestyle.

Filing for bankruptcy gives you a chance to start fresh. A bankruptcy discharge offers you a clean financially slate, with most, if not all, your debt eliminated. Some debts that can be discharged in a Chapter 7 bankruptcy include:

• Bank loans
• Court judgments
• Credit card debt
• Medical bills
• Personal debts
• Tax obligations

Some debts, however, are not dischargeable under a Chapter 7 bankruptcy. But with all your other debt being eliminated, you’re able to make more room to settle your non-dischargeable debts, such as child support, federal income taxes, student loans, and the like.

Obtaining a bankruptcy discharge in Denver, however, is not as simple as it sounds. The bankruptcy process can be confusing and it’s important that you are aware of your rights and what to expect in a bankruptcy case. Things like how your debts are going to be paid off, the liquidation of your assets, etc. are considerations that you need to be aware of so that you don’t get caught off-guard during a bankruptcy case.

This is where a Denver Co bankruptcy lawyer comes in. A professional bankruptcy attorney who specializes in the field can help businesses and people file for bankruptcy and increase the chances of you getting a discharge. Our Denver Co bankruptcy attorneys are backed by the experience, expertise, and knowledge to guide you through your bankruptcy cases.

WHO CAN FILE FOR CHAPTER 7 BANKRUPTCY?

If you are thinking about filing a Chapter 7 bankruptcy, you first need to determine if you are eligible. Those who can file for Chapter 7 bankruptcy are those living, doing business in, or own a property in the United States.

Further, you must pass the means test if you are a high income filer, which helps the bankruptcy court determine if you need the relief of a Chapter 7 discharge or you are capable of paying your debt even without it. Not passing the means test can also convert your case from Chapter 7 to Chapter 13 Bankruptcy, which binds you to a payment plan wherein you need to pay your debts in arrears within 3-5 years.

The means test takes a look at all your financial records, including, but not limited to:

• Income
• Expenses
• Secured and unsecured debt

The means test has two parts to help determine if you are eligible for Chapter 7. The first part measures your income and whether it is below the median income in your State. If your income for the last 6 months prior to your filing is less than the median income, then you are eligible for a Chapter 7.

However, if you don’t pass the first part of the test, you will need to take the second part. In phase 2, you will document your financial transactions when it comes to allowable expenses. It includes essentials for living, such as clothes, food, medical bills, and mortgage or rent.

Then your discretionary income will be inspected, which includes the money you spend on non-essentials that can be used to settle your outstanding debts. This is where your financial records will really be investigated to determine if your spending is excessive. But if your disposable income is deemed low enough to be eligible for a Chapter 7 bankruptcy, you can move on to filing a Chapter 7.

Aside from the aforementioned eligibility requirements, you also need to make sure that you did not have a prior bankruptcy case that you deliberately dismissed within the last 180 days. If this is the case, you have to wait for the time limit to lapse before you can file another Chapter 7 bankruptcy. If you need help with your bankruptcy case, contact a Burnham Law Firm attorney for a detailed, free consultation.

WHAT CAN YOU KEEP IF YOU FILE FOR CHAPTER 7 BANKRUPTCY IN DENVER, CO?

Filing for bankruptcy has quite a reputation. Some people think that it’s an easy way out of all their debts. But filing for consumer bankruptcy does not just eliminate your debt. There’s a trade-off — your debts will be eliminated but some of your property will be liquidated, and the money from that is what your trustee uses to send payments to your creditors.

At first glance, it’s easy to assume that filing for bankruptcy in Denver will cause you to lose everything so that enough money can be liquidated to settle your debts. But the system is not that cruel. In fact, there are many exemptions and considerations in place to protect you and your assets. You can either choose to claim federal exemptions or state exemptions and talk to a Denver Colorado bankruptcy attorney for advice.

FEDERAL EXEMPTIONS

A good bankruptcy attorney will offer you all the information you need before filing for bankruptcy but you can take a look at below information regarding the federal exemptions to get an idea.

Your properties and assets that can be exempted under federal exemptions include:

• Homestead exemption or equity in your primary residence – $25,150
• Household goods and furnishings, animals, appliances, books, clothing, crops with each item worth no more than $675 – $13,400 in aggregate
• Motor vehicle – $4,000
• Personal injury recovery – $25,150
• Wildcard exemption that can be applied to any type of property – $1,325 plus up to $12,525 of unused amounts in your homestead exemption.

STATE EXEMPTIONS

On the other hand, you can exempt the following properties and assets under State exemptions:

• Equity on your home – $45,000
• Household goods – up to $3,000
• Income received within 60 days before filing – 90% of the income
• Jewelry – $1,000
• Motor vehicle – $3,000
• Tools for trade – $10,000
• Collectibles – $1,500
• Wildcard exemption – $1,150 of any personal property of your choice.

WILL I EVER GET CREDIT AGAIN IF I FILE FOR BANKRUPTCY?

Bankruptcy is meant to become a means to help you move forward with your life, financially. By filing a Chapter 7 bankruptcy and getting a discharge, you have a clean slate where you can restructure and rebuild your finances. Bankruptcy is not the end of your ability to get credit.  A good bankruptcy law attorney in Denver on your side can make this process much easier and help you start fresh.

You will still be able to get credit after filing for bankruptcy and getting a discharge. Some debtors can do it immediately after their discharge, but it can take longer for others. Most Denver bankruptcy clients are able to get credit and purchase a new house or new car a few years after their discharge.

It won’t be instantaneous, but you will be able to recover and get real estate credit again. It may take a few weeks or months for your credit reports to reflect that your debts have been discharged. But afterward, you have a clean, fresh opportunity to start over with better financial management.

It’s advisable, though, to be more careful and diligent with your credit after bankruptcy. Only take out credit you can afford and pay your debts completely and on time.

SHOULD I TRY DEBT SETTLEMENT FIRST?

People are often second-guessing whether or not they should file for bankruptcy. Admittedly, it’s a scary option, with many legal procedures involved. So they opt to try debt settlement first and considering a Chapter 7 bankruptcy as a last resort.

Debt settlement is the process of negotiating with your creditors and asking them to allow you to pay off your debt in a lump sum that is less than the total amount of your debt. So if you have a loan that’s worth, for example, $50,000, through debt settlement, you are negotiating with your creditor to accept full payment of the money that you have and are able to pay, which is less than the total debt.

It might seem easier, quicker, and less costly considering the additional expenses such as attorney fees and filing fees compared to a bankruptcy case in Denver, CO. But we don’t recommend our clients to try debt relief options or settlement before filing for bankruptcy. This has its own hidden risks that can end up harming you and your credit. It’s not a legal process, and the success rate is not very high. Consider getting in touch with a consumer bankruptcy attorney from Burnham Law Firm in Denver before making a decision.

HOW LONG DOES THE PROCESS TAKE IN DENVER?

Bankruptcy cases are not all the same. Some may take longer than others because of complications in financial records, the types of assets to be liquidated, etc. Your case might have unique situations that require more time to resolve. But on average, the entire process of a liquidation bankruptcy can be completed in four to six months with the help of an attorney.

It begins with you filing your bankruptcy case in Denver by giving the court a bankruptcy petition either yourself or through an attorney where your debts, assets, and information about your creditors are listed. After filing, you will be assigned a trustee who will take charge of the liquidation. Your trustee will set a meeting with you to verify and compile all your financial records.

If the process goes smoothly, a Chapter 7 bankruptcy can be completed in a few months. But should there be any issue, such as when your creditors object or if your trustee needs more information about your financial records, then the process could be delayed. A Denver bankruptcy attorney can help you with every step of the process. At Burnham Law, we have years of experience helping individuals and small business owners under the U.S Bankruptcy Code.

CAN I FILE FOR BANKRUPTCY IF I OWN A HOME?

Remember, your assets will be liquidated to settle your debts in a Chapter 7 bankruptcy. So perhaps the biggest fear that people have about filing for bankruptcy is losing their homes. You spent a whole lot of time, effort, and resources to finally buy that home for you and your family. And you don’t want to risk losing it.

However, there is not much to fear, as filing for bankruptcy does not automatically mean that you will lose your house. This is one of the assets that you can protect and exempt, thanks to the homestead exemption. In Denver, Colorado, you have the capacity to exempt up to $75,000 in equity in your home — as long as it’s what you use as a primary residence. If you, your spouse, or dependents are 60 years old and above, you can exempt up to $105,000.

If your primary concern is protecting your home, our bankruptcy lawyers can help make sure of it. Contact a Burnham Law attorney in Denver to learn more about the Chapter 7 bankruptcy process, what it means for your properties and assets, and how you can protect them.

WHAT IF I MAKE A LOT OF MONEY AFTER I FILE CHAPTER 7 BANKRUPTCY?

Considering that all your financial records and debts have been laid out for your trustee and the court, many people become concerned about how they move on financially after a Chapter 7 discharge. They fear that the money they make after the completion of their bankruptcy case can be taken by the court to settle the discrepancies in their past debt. But a good attorney will explain to you why is not true.

After your discharge, your bankruptcy case is closed. Any money you make after your Chapter 7 discharge is yours and will no longer be taken by your trustee or the court. You have the freedom to move on and make money as you please.

But there is one exception — if you receive money from the estate of a deceased within 6 months after your bankruptcy filing. In Denver, Colorado, this money may be considered as part of the bankruptcy estate if you received it within 180 days following the date you filed for bankruptcy. So if this happens, you should tell your Denver bankruptcy attorney or your trustee about it.

CONTACT OUR BANKRUPTCY ATTORNEYS TODAY

Our philosophy is to protect our clients, their families, and their assets through adversity. We understand how burdening your debt can be and we know that you might have fears or reservations about filing for bankruptcy, especially if you don’t know about the process and what to expect.

Our Bankruptcy lawyers here at Burnham Law Office are backed by the experience, expertise, and knowledge needed to help you navigate your case. With our shared philosophy and dedication to helping you move on and recover financially, we can be your partners through this overwhelming endeavor. Set up a free consultation with a Denver attorney experienced in Colorado bankruptcy law to get help and legal advice.

Bankruptcy is not the end of your reputation and your life. Instead, it’s a window of opportunity that helps pave the way to a fresh start. By hiring a Burnham Law bankruptcy attorney in Denver, you can be sure that your assets will be protected and you will come out of bankruptcy with a changed life and a clean financial slate. If you or a family member have a hard time paying your debts, give us a phone call or fill in the form on our website to schedule a free initial meeting with a professional Denver bankruptcy lawyer.