Chapter 7 Bankruptcy – An Overview

When you visit my office for the first time, I will discuss which type of bankruptcy offers the best protection of your assets while discharging all of your eligible debts. In most cases, I will discuss the benefits of filing under chapter 7 bankruptcy. If you do not qualify for a chapter 7 or a chapter 13 is more appropriate I will discuss a chapter 13 bankruptcy filing instead. Most individuals file under chapter 7 bankruptcy because it is the most affordable and offers immediate relief.

To get a more comprehensive overview of chapter 7, visit my chapter 7 frequently asked questions page.

When you elect to retain my firm to represent your bankruptcy petition, you will be provided:

* Easy-to-follow instructions explaining how to gather and submit the documents and information I will need to complete your bankruptcy petition. This page has a list of required documents needed for filing.

* As your attorney I will be available to answer any questions you may have throughout the entire process.

* There will be no long paper questionnaires to complete. Everything is handled during the bankruptcy interview and simple online questionnaire.

If you have unmanageable debt, you may be qualified to file a Chapter 7 bankruptcy. The benefit of a chapter 7 bankruptcy is that is allows consumers to discharge their debt without making payments. In 2005 the United States Bankruptcy Code changed the filing requirements for individuals seeking to file for a chapter 7 bankruptcy.

Means Test

If your income for the last six months does NOT exceed a certain level based on your family size, you will not be required to take the Means Test for eligibility. If your income exceeds a certain level and you are required to undergo means testing, your attorney will explain how to proceed.

Credit Counseling

Consumers filing under chapter 7 of the bankruptcy code must have attended and completed a debt counseling course within the six months preceding the filing date of their petition. In addition, you will be required to complete a financial education course prior to discharge of your debts.

Certain Nonexempt property converted to cash

In most cases, a debtor will have few, if any, nonexempt assets. Nonexempt assets are those assets which are not protected by the State exemption statutes (note that Colorado has opted out of the Federal Exemptions). If the client has nonexempt assets (unprotected assets) he/she must relinquish those assets to the bankruptcy trustee, who will then sell the property, and use the proceeds to pay the debtor’s creditors. In return, the debtor receives a Chapter 7 discharge of certain eligible debts, pays the filing fee, completes financial management courses and obeys the court’s directives.

Colorado has very generous exemption statutes, and in most cases, a consumer will be allowed to keep all or most of his/her assets.

Exemptions are protected allowances for the value in certain assets. For example, a homestead exemption protects the equity you have in your home, up to a certain value. It is not unusual for someone who is representing their own bankruptcy filing to lose significant assets because they were unaware of how to proceed under the bankruptcy code.