FAQ

Q:	What is Bankruptcy?
A:	Bankruptcy is a federal court process that allows individuals or businesses (debtors) who owe others (creditors) more money than they're able to pay to either work out a plan to repay the money over time (Chapter 13) or completely eliminate (discharge) most of the bills (Chapter 7).
Q:	What is the difference between secured and unsecured debt?
A:	Secured debt is a claim that's secured by some type of property, either by an agreement or involuntarily with a court judgment or taxes (ex. a mortgage). Creditors can generally claim the property that secures the debt in the event of bankruptcy. Unsecured debt is a claim that is not attached , or secured, to any type of property, and the creditor does not have a claim to the property.
Q:	What Bankruptcy Plan should I file?
A:	It depends on your current situation. Generally speaking, the lower your monthly income the more likely it is that a Chapter 7 is appropriate, and the greater your income the more likely a Chapter 13 is right for you. The fastest way to likely determine which plan is right for you is to click here
Q:	How often can I file Bankruptcy?
A:	It depends. Chapter 7: Can be filed every 8 years from a previous chapter 7 filing or 6 years from a prior chapter 13 filing. Chapter 13: Can be filed 4 years from a prior Chapter 7 filing or 2 years from a prior Chapter 13 filing. That being said, among other matters, a bankruptcy filing negatively affects future credit and all matters related to credit. Any decision to file bankruptcy should be made only after careful consideration.
Q:	What do I need to bring with me to my first appointment?
A:	All financial records. This includes: Most recent bank statements Most recent bills from every creditor Most recent payment coupons for vehicles (lease or purchase), real estate, and student loans Bills or invoices for purchases in the last year Receipts Files from previous litigation, including especially any judgments that have been entered against you Files from previous attorneys Any divorce decree or other court order that requires you to pay child support or maintenance Canceled Checks for any expense you cannot otherwise document ALL your correspondence with or regarding creditors, especially threat letters ALL insurance policies Tax returns for the last three years Vehicle titles Your lease or mortgage Any promissory notes you have signed Other documents relating to debts you owe other people Any proof that anyone owes you money Any lawsuits with which you have been served
Q:	Do I need to have a minimum amount of debt to file for bankruptcy?
A:	No. It is however important to determine if your financial situation is temporary. If it is temporary, it may be advisable to first attempt to work out a payment plan with your creditors. We can assist in this regard as well…simply click here
Q:	Can my husband file with me?
A:	Yes. This is referred to as a Joint Petition. The benefit is that there is only one bankruptcy filing fee. Unmarried partners must file separately.
Q:	What if my husband doesn’t want to file with me?
A:	He doesn’t have to but he will be unprotected from joint creditor debts. A spouse who does not file with the other filing spouse will remain responsible for the ongoing debts.
Q:	What if my spouse and I divorced, and he files bankruptcy, but the divorce decree requires him to pay all marital debts…am I protected?
A:	No. If you are a co-signor with your ex-spouse on a debt acquired while married, the creditor can require the entire payment of that debt from you even though the divorce decree assigns the full debt to your ex-spouse. Your divorce decree may address any personal recourse you may have against your ex-spouse should he default on the loan obligations…but you are still on the hook to your creditors.
Q:	What if I am a co-signor on a loan and the other person filed for bankruptcy?
A:	You are responsible for the debt.
Q:	Are all types of debt discharged?
A:	No. Certain debts are non-dischargeable including, but not limited to, the following: Spousal Maintenance (Alimony) Obligation to pay child support Obligation to pay educational loans Obligation to pay criminal restitution Obligation to pay in accordance with your separation agreement Taxes
Q:	Will I lose the money in my retirement account?
A:	Generally, no. Retirement accounts that are ERISA Qualified aren't considered property of an estate and aren't taken into consideration as assets. Social Security benefits are protected from assignment, or garnishment, for debts in bankruptcy. Once paid, the benefits continue to be protected only as long as they can be identified as Social Security benefits. For example, money in a bank account where the "only" deposits into the account are direct deposits of Social Security benefits are identifiable and generally protected.
Q:	Will I lose my home if I file for bankruptcy?
A:	It depends. Colorado allows for a $60,000 Homestead Exemption but other considerations include whether you are current on your mortgage and whether you are filing a Chapter 7 or Chapter 13.
Q:	How long will the bankruptcy filing show on my credit report?
A:	A Bankruptcy filing shows up on your credit report for 7 to 10 years.
Q:	Can creditors object to my filing bankruptcy?
A:	Yes. Bankruptcy filings allow creditors to object to specific debts in the plan or the repayment or cancellation in its entirety. Chapter 7: Creditors generally have 60 days after the first creditors meeting to object to the discharge of a specific debt. If no objections are filed, the court issues the discharge order and the trustee collects and sells the assets then distribute the proceeds to the creditors under a predetermined schedule. If there are objections, the bankruptcy proceedings, less the objected debt(s), continues. A trial may be necessary to resolve the objectionable issues. Chapter 13: Creditors can object to the plan for repayment and the court may take this into consideration. If no objections are filed by creditors or the trustee, the plan may be confirmed as filed.
The Colorado Bankruptcy Center is here to protect you and your future. Contact Us when you are ready for your FRESH START.