Parker Colorado
Bankruptcy Lawyer

Bankruptcy Filing in Colorado
Colorado Attorney R. Brian Daniel

In 2009, over 1.1 million individuals and business in the United States filed for bankruptcy protection according to U.S. Bankruptcy Court statistics, and in 2009 nearly 28,000 cases were filed in the State of Colorado.  Filing for bankruptcy protection can provide an opportunity for individuals struggling with overwhelming debt to be released from some or all of their obligations.  However, many changes to bankruptcy law have gone into effect as a result of the Bankruptcy Abuse and Consumer Protection Act of 2005. These changes include new income limitations regarding an individuals’ ability to file under Chapter 7.  The bankruptcy law changes can make it very confusing for individuals and business owners seeking debt relief.  If you are considering bankruptcy, it is important to get solid legal advice before going forward. An experienced Parker, Colorado Bankruptcy Attorney can help you determine whether you are eligible to file for bankruptcy protection and, if so, under which chapter you should file. 

The two basic types of bankruptcies are referred to as “liquidations” (certain assets belonging to the debtor may be deemed non-exempt and may be sold to completely or partially repay creditors) and “reorganizations” (wherein a debt payment plan based on disposable income is created to repay creditors over the course of between 3 and 5 years).  There are specific chapters of bankruptcy law under which individuals or business may file, depending upon their circumstances.  The most common bankruptcy forms are: 

• Chapter 7 – A liquidation bankruptcy that can be filed by individuals and businesses.  This common form of bankruptcy provides relief from non-secured debt liabilities after certain debtor’s non-exempt assets are sold to repay creditors.  There are maximum income limits for filing under Chapter 7.  A Trustee is appointed to take over your non-exempt property and any such property will be sold or turned into money to pay your creditors.  Many debtors are able to keep most of their personal property and their primary residential real estate.
• Chapter 11- This is a reorganization bankruptcy primarily used by businesses wishing to repay their creditors while continuing to operate their business.  There is no Trustee unless the Judge decides that one is necessary.  If a Trustee is appointed, the Trustee takes control of the business and property.
• Chapter 12 – This type of reorganization bankruptcy is used to help family farmers or family fishermen to repay their debt.  It is similar to a Chapter 13 bankruptcy, but allows a higher debt limit. 
• Chapter 13 – This type of reorganization bankruptcy can only be used by individuals with enough income to repay some or all of their debts.  A payment plan is created which allows debtors to make payments to their creditors over a specified period of time (between 3 to 5 years).  Individuals whose income are too high to qualify for Chapter 7 bankruptcy, may be eligible to file bankruptcy under Chapter 13, but there are debt limits with this form of bankruptcy.  You can usually keep your property, but you must earn wages or have some other source of regular income and must agree to pay part of the income to your creditors through the Chapter 13 Payment Plan.  The Court must approve your Chapter 13 Payment Plan and your budget.  A Trustee is appointed and will collect the payments from you, pay your creditors, and make sure you live up to the terms of the Payment Plan.

In all cases, you are required to obtain credit counseling and attend debt management classes as part of the bankruptcy procedure.  In addition, you need to be aware that certain debts cannot be eliminated through bankruptcy. Further, income and debt limitations exist related to the different forms of bankruptcy, and there are always risks of losing your property during bankruptcy.  A knowledgeable Parker, Colorado bankruptcy lawyer can provide valuable guidance through the bankruptcy process and help you to maintain most or all of your assets.

If you are facing a complicated legal issue, reach out to The Daniel Law Firm. We take great pride in serving clients all over Colorado. Let us discuss with you the best strategy for moving your case forward in both a positive direction and timely manner. Call us today at (303) 951-0233.

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