Colorado Bankruptcy Defense Lawyers
Navigating the complex world of bankruptcy can be daunting, but with the right legal guidance, it can also be a path to financial recovery and stability. At Delancey Street, we understand the emotional and financial strain that leads individuals and businesses to consider bankruptcy. Our experienced team of Colorado bankruptcy defense lawyers is here to provide empathetic, professional, and comprehensive support through every step of the process.
Understanding Bankruptcy in Colorado
Bankruptcy is a legal process designed to help individuals and businesses eliminate or repay their debts under the protection of the bankruptcy court. In Colorado, the most common types of bankruptcy filings are Chapter 7 and Chapter 13.
Chapter 7 Bankruptcy
Chapter 7, often referred to as “liquidation bankruptcy,” involves the sale of a debtor’s non-exempt assets to pay off creditors. This type of bankruptcy is typically suited for individuals with limited income who cannot repay their debts. To qualify, you must pass the Means Test, which compares your income to the median income for Colorado. If your income is below the median, you may qualify for Chapter 7. If it’s above, further calculations determine eligibility.
Chapter 13 Bankruptcy
Chapter 13, known as “reorganization bankruptcy,” allows individuals with a regular income to develop a plan to repay all or part of their debts over three to five years. This type of bankruptcy is ideal for those who have significant assets they want to keep, such as a home or car, and can afford to make monthly payments under a court-approved plan.
The Bankruptcy Process in Colorado
Filing for bankruptcy involves several critical steps, and understanding these can help alleviate some of the stress associated with the process.
Pre-Filing Requirements
Before filing, debtors must complete credit counseling from an approved agency within six months of filing. This requirement is part of the 2005 Bankruptcy Act, which aims to ensure that individuals explore all possible alternatives before opting for bankruptcy.
Filing the Petition
The actual filing begins with submitting a two-page petition along with several other forms collectively known as “schedules.” These documents detail your current financial status, including income, expenses, assets, and debts. It’s crucial to provide accurate and comprehensive information, as any discrepancies can jeopardize your case.
Automatic Stay
Once your bankruptcy petition is filed, an automatic stay goes into effect. This legal provision halts all collection activities, including foreclosure, repossession, and wage garnishments, providing immediate relief from creditor harassment.
Meeting of Creditors
Approximately a month after filing, you will attend a “341 meeting” or “meeting of creditors.” During this meeting, a trustee appointed by the court will review your case and ask questions about your financial situation. Creditors may also attend and ask questions, although this is more common in Chapter 13 cases.
Common Concerns and Misconceptions
Bankruptcy is often surrounded by myths and misconceptions that can deter individuals from seeking the help they need. Let’s address some of these:
Will I Lose Everything?
One of the most common fears is losing all personal property. However, Colorado law provides several exemptions that protect certain assets from being liquidated. These exemptions include equity in your home, vehicle, personal belongings, and retirement accounts.
Will Bankruptcy Ruin My Credit Forever?
While bankruptcy will impact your credit score, it is not a permanent black mark. Many individuals find that their credit begins to improve shortly after their debts are discharged, as they are able to rebuild their financial standing without the burden of overwhelming debt.
The Importance of Professional Guidance
Filing for bankruptcy without an attorney can be risky. The process is complex, and any mistakes can lead to delays, additional costs, or even dismissal of your case. Our team at Delancey Street is dedicated to ensuring that your bankruptcy filing is handled correctly and efficiently, helping you achieve the best possible outcome.
Case Study: Avoiding Common Pitfalls
Consider the case of a client who attempted to file for Chapter 7 bankruptcy on their own. They underestimated the value of their assets, leading to complications that required converting their case to Chapter 13. This mistake not only delayed the process but also put their home and car at risk. With our expert guidance, we were able to rectify the situation and protect their assets.
Legal Citations and Case Law
Understanding the legal framework and precedents in bankruptcy law is essential for a successful defense. Here are some notable cases and statutes relevant to bankruptcy in Colorado:
- Law v. Siegel, 571 U.S. 415 (2014): The Supreme Court ruled that bankruptcy courts cannot use a debtor’s exempt assets to pay for administrative expenses incurred due to the debtor’s misconduct.
- Brown v. Felsen, 442 U.S. 127 (1979): This case established that bankruptcy courts are not confined to the record of prior state court proceedings when determining the dischargeability of debts.
- Cohen v. de la Cruz, 523 U.S. 213 (1998): The Court held that debts incurred through fraud are not dischargeable under the bankruptcy code, including any associated penalties.
Conclusion
Bankruptcy can be a lifeline for those drowning in debt, but navigating the process requires expertise and careful planning. At Delancey Street, we are committed to providing compassionate and knowledgeable legal support to help you regain control of your financial future. If you’re considering bankruptcy, don’t go it alone. Contact us today for a free consultation and let us guide you through this challenging time.Ready to take the first step towards financial freedom? Call us now or leave a comment below to schedule your consultation. We’re here to help you every step of the way.