Understanding Your Chapter 7 Options
A sudden change of fortunes such as a medical emergency, loss of a job or divorce can turn manageable debt into unmanageable debt. If you have debts you cannot afford to pay, Chapter 7 bankruptcy - also known as "straight" bankruptcy - may be the best option for you to get the debt relief you need.
At George T. Carlson & Associates in Englewood, Colorado, we have extensive experience helping clients file for Chapter 7 bankruptcy. Contact us to schedule a free initial consultation with an experienced bankruptcy attorney.
Most Filers Lose Little to No Property
Chapter 7 bankruptcy is also known as liquidation bankruptcy. It gets that name because, if you have "nonexempt" property, you must give it up in order to move forward with the bankruptcy. However, in reality, most people who file for Chapter 7 bankruptcy have little or no nonexempt property.
In Colorado, property that is exempt (meaning you do not have to give it up) includes the following:
- Up to $60,000 of home equity (or $90,000 if you are aged or disabled)
- An automobile worth up to $5,000 (or $10,000 if you are aged or disabled)
- Household goods worth up to $3,000
- Tools of a trade worth up to $20,000
- Jewelry and furs worth up to $2,000
- Retirement accounts
Nonexempt property includes cash, bank accounts, luxury items, investments, 25 percent of any wages owed to you on the day you file, and tax refunds owed when you file. Under Chapter 7, these items are sold off by a bankruptcy trustee in order to partially repay your debts.
If you do not want to lose your nonexempt property, Chapter 13 bankruptcy may be a better option.
Many Debts Can Be Completely Erased
Chapter 7 bankruptcy can be used to discharge (eliminate) credit card debts, medical bills and other oppressive obligations. There are some debts, however, that cannot be discharged in bankruptcy. These include back taxes, student loans, divorce judgments, and fines, penalties and restitution in criminal cases.
We are skilled and experienced at advocating for our clients' interests in bankruptcy proceedings, including their eligibility to file for Chapter 7 under the new laws.
Contact us to explore the option of Chapter 7 debt relief with the help of an experienced bankruptcy lawyer.
At George T. Carlson & Associates, based in Englewood, Colorado, we represent clients throughout Colorado, including Denver metro, and the cities of Aurora, Centennial, Denver, Greenwood Village, Highlands Ranch, Littleton and Lone Tree; and Adams County, Arapahoe County, Denver County, Douglas County, Elbert County and Jefferson County.
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