What is Bankruptcy?
- Bankruptcy is a form of debt relief provided under title 11 of the U.S. Code.
- There are two forms of consumer bankruptcy including chapter 7 and chapter 13.
- Chapter 7 is a liquidation bankruptcy. There is no payment plan.
- Chapter 13 reorganization is a three to five year full or partial repayment plan.
- Above median income debtors may not qualify for chapter 7 relief. Such individuals must file under chapter 13.
- The amount you pay in chapter 13 is determined by your income and expenses.
Overview – Chapter 7 and Chapter 13
In a chapter 7 bankruptcy, a trustee liquidates non-exempt assets and uses the proceeds to pay down debts. Exempt assets are assets you can keep as determined by State Law. Each state has its own exemption statutes. Non-exempt assets include but are not limited to valuable artwork, large tax refunds, coin collections, second vehicles with equity, rental properties with equity, stocks, bonds, and CDs. Many cases filed by this firm are no-asset cases meaning the debtor retained all their property after filing bankruptcy.
A chapter 13 bankruptcy is a reorganization plan that is available to individuals with regular income whose unsecured debt does not exceed $394,725. The debtor proposes a plan to which a trustee and/or creditors may object if they believe the debtor is not paying all disposable income into the plan. The payment is based on the debtor’s income and expenses. The trustee may object to certain expenses if they are unreasonably high or unnecessary.
To file bankruptcy, a debtor must complete and file official forms with the court, along with a filing fee. You can download a complete list of official bankruptcy forms from the court’s website.
If you do not use an attorney, you must file all of the paperwork in person at the Clerk’s office at 721 19th Street, Denver, CO 80202 or by using the filing tool available at the court’s website.