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Debt can spiral out of control quickly.
Just one medical emergency or job loss can make it impossible to pay your bills on time or at all. If this sounds like your situation, and creditors are harassing you at all hours of the day, filing for bankruptcy may be the best choice for you.
If you are faced with overwhelming debt, you are not alone. Bankruptcy is a federally regulated process that is designed to allow those who have become overwhelmed with debt to have a fresh financial start. The number of people seeking debt relief through personal bankruptcy in Colorado has been rising for decades.
You should also know that filing for bankruptcy should not be considered a personal failure. The negative stigma attached to filing for bankruptcy is quickly becoming a thing of the past in these struggling economic times.
Bankruptcy can be a complicated process, but you can get the fresh start you need by teaming up with an experienced Colorado Springs bankruptcy attorney. Our firm has helped hundreds of individuals file for bankruptcy in El Paso County and is fully equipped to handle your bankruptcy case. We can help you obtain a second chance at building a successful financial future. Get in touch with us today to discuss your case.
Many people don’t understand what it means to file for bankruptcy in Colorado. Further complicating matters is that predatory debt collectors have a habit of spreading lies about filing for bankruptcy to keep people in their debt.
We know that you probably have many questions about bankruptcy, and our Colorado Springs bankruptcy lawyers are committed to answering those questions in the most straightforward way possible. We have designed this website to provide you with some basic bankruptcy information, however, additional information on bankruptcy is available through the United States Federal Courts website.
For a more in-depth explanation, or to discuss details about your specific circumstances, we do suggest that you contact our firm. During your no-cost consultation, we will take the time to learn about your specific situation so we can advise you on whether bankruptcy is right for you and what steps you should take to get the maximum benefit from filing bankruptcy.
Bankruptcy is a process that gives you a legal means of starting over financially when you can’t afford to pay your debts. The goal of modern bankruptcy is to allow the debtor to have a “fresh start,” and the creditor to be repaid.
If you’ve been researching bankruptcy and debt management, then you’ll have seen the terms unsecured debt and secure debt sprinkled liberally throughout the information you’re seeing. The difference between them is very important and will help you to understand what kinds of debt can be erased when filing for bankruptcy in Colorado Springs.
There are several forms of bankruptcy, but the two most common, geared to help individuals struggling with financial burdens, are called Chapter 7 and Chapter 13.
Chapter 7 Bankruptcy – Filing for this type of bankruptcy, also known as liquidation bankruptcy, is a viable option for people looking to clear a significant amount of unsecured debt, with no current means to pay back the debt.
Once you have filed for Chapter 7 bankruptcy with the court, a trustee will be appointed to your case. The trustee’s job is to collect all of your assets and sell any assets which are not exempt. An experienced Colorado Springs Chapter 7 Bankruptcy lawyer can help you figure out what exemptions you qualify for when submitting all of your paperwork. After filing, the proceeds of the liquidation are then distributed to your creditors, releasing you from debt.
Chapter 13 Bankruptcy- Filing for Chapter 13 bankruptcy, also commonly referred to as reorganization bankruptcy, is an option for people who have a regular source of income and can use a portion of that income to pay down debt. This filing proposes a 3-5 year repayment plan to creditors and lenders offering to pay off all or part of the debts from your future income. If you can stick to the terms of your repayment agreement, all of your remaining dischargeable debt will be released at the end of the plan. Having the help of a knowledgeable Colorado Springs Chapter 13 bankruptcy attorney will make this a much easier process than trying to figure out Chapter 13 bankruptcy alone.
If you have large debts that you can’t repay, are behind in your mortgage payments and in danger of foreclosure, are being harassed by bill collectors—or all of the above—declaring bankruptcy might be your answer.
An automatic stay is immediately imposed upon filing for bankruptcy to give you the necessary time to review your current financial situation. What does an automatic stay do?
Stops Creditor Harassment- If you’ve been struggling to make payments on loans, then you’re probably experiencing an increase in debt collection phone calls, emails, and letters. Filing bankruptcy prevents creditor harassment and forbids those creditors from continuing any collection efforts. Creditors who attempt to collect debts after an automatic stay is imposed face strict consequences, so it’s important to hire an experienced Colorado bankruptcy lawyer who can help you if your creditors continue to contact you after you’ve filed for bankruptcy.
Stops Repossession- Are you a few payments behind on your car and facing repossession? As soon as you file for bankruptcy, any creditor who has a secured interest in your car and wants to repossess it can no longer do so. It’s important to note that filing for bankruptcy won’t erase all debt to a car loan provider- filing bankruptcy gives you options. Bankruptcy will allow you to hold onto your vehicle until you can negotiate or modify your agreement with the lender, get caught up on payments, or surrender the vehicle at a later date so you have time to replace your vehicle or find other means of transportation.
Stops Home Foreclosure- Just like the above section on bankruptcy halting the repossession of your vehicle, an automatic stay will also stall home foreclosure proceedings. Additionally, if you file for Chapter 13 bankruptcy, it’s possible to eliminate any second (or third!) mortgages on your house. It’s important to note, just like with the vehicle repossession, that bankruptcy may only stop the inevitable foreclosure from happening, as it does not wipe out mortgage debt. That means that if you cannot work out a way to make your payments, then the foreclosure may proceed.
Stops Wage Garnishment- Some people facing wage garnishment look to bankruptcy to regain control of their finances. Wage garnishment occurs when a court issues an order that requires your employer to withhold a portion of your paycheck and send it directly to a person or entity to which you owe money. Filing for bankruptcy stops most wage garnishment and also prevents creditors from seeking new garnishment orders against you. However, you should be aware that bankruptcy will not stop the garnishment of child support or other non-dischargeable debts, including alimony or some student loans.
Stops Any Judgements or Lawsuits- Throughout the bankruptcy process, federal courts protect debtors from any legal action that creditors may try to impose. If a lender decides to file a lawsuit against you, then filing bankruptcy will immediately stop the lawsuit. The automatic stay makes it illegal for a lender to pursue a lawsuit and makes any judgment obtained after your bankruptcy filing void.
Other benefits clients have seen when filing for bankruptcy with our Colorado Springs Bankruptcy Attorneys include:
Wipe-out all Predatory Loans- If you’ve listened to the radio or watched television in the past few years, you’ve seen and heard the countless commercials for companies that promise “zero down payments” “no payments for a year” or “payday loans.” There’s no shame if you’ve fallen for these ads, they’re specifically designed to prey on people fallen on hard times. If you chose to file Chapter 7 bankruptcy, any debts owed to these types of predatory lending establishments will be almost immediately absolved.
Erases Medical Debts- It’s important to note that, in the state of Colorado, you cannot file bankruptcy solely to discharge medical debt, you must include ALL of your debt. Filing “medical bankruptcy” is a common misconception that many people who are considering bankruptcy have. But if you have significant debt, including unpaid medical bills, a Colorado Springs bankruptcy attorney can help you on the path towards easing that financial burden.
Prevent Utility Shut-offs- Water and electricity are a basic necessity. If you’re behind on utility bills and are in danger of having your services cut, filing for bankruptcy can give you the opportunity to halt a service interruption. It’s important to note that while bankruptcy may clear past utility debt if you do not continue to make current or future payments, your utility services will be interrupted.
Although bankruptcy is processed on a federal level, the government allows each state to draft a list of bankruptcy exemptions.
Simply put, an exemption is a law that protects your property in bankruptcy. Whether you plan to file chapter 7 or chapter 13 bankruptcy, to protect your assets, the Colorado Bankruptcy Court requires that you list and match your assets to the appropriate exemption. This is done in your bankruptcy schedules filed with the Court, which an experienced Colorado Springs bankruptcy attorney can help you with.
Exempt property can’t be sold for the benefit of your unsecured creditors. Basically, bankruptcy exemptions level the playing field so that getting a fresh start doesn’t require you to start from scratch. Some examples of Colorado state bankruptcy exemptions include:
For a more in-depth look at what exemptions are available to El Paso County residents, please see the Colorado Revised Statutes, or contact one of our Colorado Springs bankruptcy attorneys.
By the time you consider filing for bankruptcy, it’s probable that your credit is already in not-great shape since high balances and missed payments are the top factors affecting your credit score.
While it’s important to note that bankruptcy may negatively impact your credit score, that impact will lessen as time passes. Chapter 7 bankruptcy remains on your report for up to 10 years, and Chapter 13 stays there for up to seven years.
Although that’s not an ideal situation, you can immediately begin to build your credit back up as soon as you file for bankruptcy. Like with any damage to your creditworthiness, it’s possible to rebuild your credit with some focus and patience—along with using the debt relief provided by the bankruptcy to get back on track financially.
If your credit score is worrying you, we recommend you reach out for help with professional advice from an experienced Colorado Springs debt relief attorney and stay informed on your rights and options—your situation is never hopeless.
If you have decided to file for bankruptcy in Colorado, there are several steps that must be taken. Firstly, you have to fill out all of the forms the court requires, which are free and available to download on the Colorado U.S. Bankruptcy Court Website. As you can see by clicking on the link, there are many dozens of forms to be filled out, which is why hiring an experienced Colorado Springs bankruptcy attorney will be worth your time.
Once your paperwork has been filed, a meeting is held so that creditors and the trustee can ask you a series of questions under oath. This meeting is required by federal law and is presided over by the trustee, not a judge. The United States Bankruptcy Court, District of Colorado, where the meeting will be held, is located in downtown Denver, approximately 70 miles north of Colorado Springs.
Situated near the base of Pikes Peak, the city of Colorado Springs serves as the county seat for El Paso County and is home to almost 500,000 residents. Because of its unique location near the Rocky Mountains and Front Range urban corridor, Colorado Springs enjoys a semi-arid climate, however, it also subjects its residents and visitors to drastic day-to-day variability in weather conditions.
The city is considered one of the most active lightning strike areas in the United States, which prompted famous inventor and scientist Nikola Tesla to open an Experimental Laboratory in town to study the use of high-voltage, high-frequency electricity.
Another fun fact about Colorado Springs is that one of its nicknames is Olympics City, USA. It earned this designation by being home to the United States Olympic and Paralympic Committee Headquarters, the Colorado Springs Olympic and Paralympic Training Center, and the U.S. Olympic and Paralympic Museum.
Other areas of interest in Colorado Springs include the Garden of the Gods Recreation Area, which is open for camping and hiking and is one of the most photographed areas of the state, and The National Museum of World War II Aviation, which displays a fine collection of flying World War II-era aircraft, as well as other artifacts from that time period.
If your debts are sky-high, and you’re being air-bombed by debt collectors, struggling to meet your mortgage payments, or pay your car loan and other bills, our Colorado Springs debt relief attorneys can help you get control of your financial situation. Our goal is to help those who have fallen on hard times because of things like family illness, job loss, reduced work hours, or divorce find a soft place to land.
There is life after bankruptcy.
Contact our Colorado Springs bankruptcy lawyers for a free consultation.