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Financial difficulties can happen to anyone, at any time.
When well-intentioned people find themselves buried under a mountain of debt, facing creditor harassment or impending home foreclosure, repossession, or wage garnishment, they often seek relief through bankruptcy.
How do you know if bankruptcy is right for you? Maybe you do know that you want to file bankruptcy in Colorado Springs, but don’t know the right time to do so.
Unfortunately, the question of when to file for bankruptcy—or even whether this is the right option for you—doesn’t have one clear answer. There are many pros and cons when it comes to filing for bankruptcy, as well as many factors to consider when determining which type of bankruptcy is most beneficial for your situation.
That being said, you may wish to consider filing for bankruptcy if you are dealing with any of the following:
If you’re going through financial difficulty and considering filing for bankruptcy, you don’t need to go through it alone. Contact our Colorado Springs Bankruptcy Attorneys today to schedule a free one-on-one consultation. Our experienced legal professionals can offer you the detailed legal counsel and advocacy you need to navigate important financial decisions in your bankruptcy proceedings.
Before deciding to file bankruptcy, it’s beneficial to understand the sequence of events that will come after you make the choice to file. If you’re unsure about whether you should file for Chapter 7 or Chapter 13 bankruptcy we’re here to help you understand your options and take action to resolve your financial issues. To that end, we’ve laid out in the following section a basic timeline of events for filing for Chapter 7 or Chapter 13 bankruptcy.
The first decision you should make when trying to figure out whether or not bankruptcy is right for you is to contact an experienced El Paso County bankruptcy attorney. Having a knowledgeable and experienced lawyer on your side can help guide you to the right avenue of financial relief that you may not have previously considered.
Once you’ve obtained legal council, the next step is
Credit Counseling- Before filing a bankruptcy petition, every debtor must take a Credit Counseling course, and obtain a certificate of completion from the credit counseling agency. This certificate is a mandatory component of your paperwork when officially filing for bankruptcy in Colorado. Agencies providing the Credit Counseling course must be approved by the U.S. Trustee’s office. A list of acceptable credit counseling courses in Colorado can be found on The Department of Justice Website. It’s important to note that federal law mandates that you must file for bankruptcy no later than 180 days after completion of your credit counseling course. If you fail to file before that period is over, you will need to take the credit counseling course again before you can file for bankruptcy.
Gather the Documents Required for Bankruptcy- These documents, also referred to as schedules will include tax returns for the last several years; 6 months’ worth of paystubs or evidence of income from whatever source; an appraisal for any property or real estate that you own; the names and addresses of all of your creditors with the approximate amount owed to each; statements from bank accounts, stock accounts or other investment accounts; statements on 401K, pension or retirement plans; life insurance statements; and mortgage payment statements or car payment statements. If you’re working with one of our Colorado Springs bankruptcy attorneys, we can help you find and file all relevant paperwork necessary.
Preparation of Bankruptcy Petition-Upon meeting with you and obtaining all of this information related to your finances, your CO bankruptcy attorney will prepare a bankruptcy petition. Depending on the specifics of your situation, you and your Longmont bankruptcy attorney may decide to file Chapter 7 or Chapter 13 Bankruptcy.
Filing of the Bankruptcy Petition- The next step is done electronically. The United States Bankruptcy Court, District of Colorado has a list of all forms that will need to be filled out by both you and your lawyer. Different forms are required depending upon whether you are filing Chapter 7 or Chapter 13 bankruptcy.
Meeting of Creditors- You may frequently see or hear this meeting referred to as a 341(a) meeting. After filing the bankruptcy petition, a document from the court is sent out which is called the “Notice of Commencement of Case.” This notice is sent out to all creditors to whom you owe money. The form contains the case number and the date, time, and place for the meeting of creditors. This meeting is the initial hearing in the bankruptcy case where the debtor and the attorney go and meet with the court-appointed trustee to review the petition and take testimony as to the accuracy of the petition and other financial issues related to the debtor’s financial affairs.
After the 341(a) meeting, creditors have 60 days to file an adversary case to dispute the debtor’s right to a discharge. Although this rarely occurs, a creditor will usually object to the discharge of a particular debt when fraud or an intentional wrongful act is perpetrated by the debtor prior to filing bankruptcy.
At this point, the timeline for Chapter 7 Bankruptcy and Chapter 13 Bankruptcy processes diverge. If you filed Chapter 7 Bankruptcy, the final two steps are-
Take a Debt Education Course- No later than 60 days after the 341(a) meeting, you must attend a mandatory debt education course and file a simple form telling the court that you have completed it along with a certificate of completion from the counseling agency. Note that this is a different course than the credit counseling course required before filing for bankruptcy. Federal Law stipulates that both courses must be completed to qualify for debt dischargement.
Obtain A Discharge Order- Once the deadlines have passed and the court gets all the required documentation, including the certificate showing you’ve completed debtor education, the judge issues the discharge. You will receive an official order by mail once that happens.
If you filed Chapter 13 Bankruptcy, the next steps are only slightly different from the Chapter 7 timeline-
Attend Confirmation Hearing- At your confirmation hearing, the judge assigned to your case will decide whether to approve your Chapter 13 debt repayment plan and allow your case to move forward. If there are no objections by either your trustee or your creditors, your case will be confirmed.
Make Your Court-Mandated Chapter 13 Repayments- Under Chapter 13 bankruptcy, your debt repayment plan will take between three to five years to complete. The timeline is set by the judge and trustee and several different factors are taken into account when the timeline is set. During this time frame, you will need to make regular payments to the trustee in accordance with the bankruptcy repayment plan. You can either reach the end of the plan duration or pay the debts covered by your chapter 13 bankruptcy in full, whichever occurs first. A formal discharge from bankruptcy will be granted to cancel the balances that were not paid in full, as long as you have completed your payment plan.
Take a Debt Education Course- Just like anyone filing for Chapter 7 bankruptcy, all Chapter 13 debtors pursuing debt forgiveness with the United States government must submit to credit counseling and debt education courses to have their debts discharged. For more information on these courses, visit the United States Court Website.
Please note that these timelines have been greatly simplified and condensed for this website. For a more in-depth guide to the bankruptcy process, read the Department of Justice’s Bankruptcy Information Sheet, or contact one of our experienced Colorado Springs bankruptcy attorneys.
You may be asking yourself, what are some of the benefits of filing for bankruptcy in Colorado Springs? Because bankruptcy has been seen, for a long time, as a “weak” or “easy” way out of debt, you’re probably already aware of some of the cons of filing bankruptcy- one of the biggest, of course, being the negative connotations.
However, there are many pros to filing for bankruptcy, beyond just eventually wiping out all of your debt. 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.
Did you know that an automatic stay is immediately imposed upon filing for bankruptcy to give you the necessary time to review your current financial situation? An automatic stay is one of the biggest advantages of filing for bankruptcy in Colorado. Listed below are just a few of the things that go into effect as soon as the court issues an automatic stay:
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 Springs bankruptcy lawyer who can help you if your creditors continue to contact you after you’ve filed for bankruptcy.
Stops Home Foreclosure and/or Repossession- Filing for Chapter 7 or Chapter 13 bankruptcy will temporarily halt foreclosure or repossession of your financed car unless you’ve filed previous bankruptcies in the past. The keyword in the previous sentence, of course, is temporarily. How an automatic stay affects foreclosure and repossession can be confusing, and how it will work out for you is dependent upon several factors, such as whether you’re filing Chapter 7 or Chapter 13 bankruptcy. For more information on how an automatic stay will help you stall foreclosure on your home, contact our El Paso County bankruptcy attorneys today.
Stops Wage Garnishment- Wage garnishment is a court order instructing your employer to send a percentage of your paycheck directly to designated creditors. If you’ve ever had your paycheck garnished, then you know that living under wage garnishment can severely hamper your efforts to get out of debt. Fortunately, bankruptcy can stop most wage garnishments.
Stops Judgements or Lawsuits- If a creditor filed a lawsuit against you before you filed for bankruptcy, the automatic stay stops that lawsuit dead in its tracks. That creditor must pursue the debt through the bankruptcy court rather than through the local county court. The general rule is that if even the lawsuit was taken to judgment, the bankruptcy court has the authority to discharge that debt.
Although Automatic stays block most civil suits against a debtor once they file for bankruptcy, according to the Federal Bankruptcy Code, there are over 20 exceptions to the automatic stay including
Wipe-out all Predatory Loans- Whenever a lender utilizes fraudulent, unfair, or dishonest practices in an attempt to make a profit from the losses of their borrowers, they are committing what is known as predatory lending.
Erase Medical Debts- While you cannot file for bankruptcy in Colorado based solely on medical debt, if you have considerable debt through other means, your medical debt can be discharged if you file for bankruptcy. 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 toward easing that financial burden.
Prevent Utility Shut-offs- Water and electricity are a basic necessity, especially during the cold months in Colorado Springs. If you’re behind on utility bills and are in danger of having your services cut, filing for bankruptcy can allow you to halt a service interruption. However, while bankruptcy may clear past utility debt, you will need to pay present and future utility bills to keep your service uninterrupted.
Situated near the base of picturesque 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.
Colorado Springs is a city of many nicknames- The Springs, Little London, and Olympics City, USA. It earned the latter 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.
With so much to see and do in The Springs, it’s become a very attractive city for people from all walks of life to move to. This may contribute to Colorado Springs, according to the website LivingCost.org, landing in the top 5% of the most expensive cities in the world to live in.
Financial difficulties can happen to anyone. Whether it’s due to a veritable mountain of medical bills, excessive credit card debt, job loss, or just living in a high-cost-of-living area, there are many circumstances where people may find themselves in financial trouble. While it was once common for consumers to suffer in silence, bankruptcy is no longer taboo. It can be an effective legal tool that millions of individuals and businesses utilize to rid themselves of insurmountable debt
When you decide that filing for bankruptcy might be the best solution given your current circumstances, it is important that you have legal advice from a skilled Colorado Springs bankruptcy attorney who can assess your situation and help guide you through the process. Our team of legal professionals knows how overwhelming it is to have debt and we want to use our years of experience to help you achieve financial security.
The hardest part of considering bankruptcy is making the first phone call. Once people speak to an attorney, they usually feel better about their financial situations immediately.