Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is usually considered as an option of last resort, because while it can stave off financial disaster, it has some significant long-term consequences warranting careful consideration of the costs and benefits. Bankruptcy is a formation of federal law, and goes through federal courts. Therefore, the process governing bankruptcy in Colorado will be roughly the same as it is everywhere else in the U.S. But individual courts have different rules for what property is exempt, so you should consult a local Arapahoe County, Colorado before you file.
Chapter 7 Bankruptcy in Arapahoe County, Colorado
There are 2 common forms of bankruptcy in Arapahoe County, Colorado. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This usually includes homes, vehicles, insurance policies, and retirement accounts. These do not have to be sold.
Once eligible assets are sold, and the proceeds turned over to the creditors, most remaining debt is excused. However, some forms of debt cannot be discharged in bankruptcy, including student loans, taxes, child support, personal injury awards, and fines. If most of your debt in Arapahoe County, Colorado is not dischargeable, you may want to consider other options besides bankruptcy.
Chapter 13 Bankruptcy in Arapahoe County, Colorado
In Arapahoe County, Colorado, chapter 13 is extremely different from Chapter 7, and may or may not be the best option for you, depending on your situation. Chapter 13 does not discharge debt, but restructures it instead. Usually, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is usually manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in Arapahoe County, Colorado
This depends entirely on the facts of your particular case. If you have a decent amount of stable income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 may be the best option for you. If most of your property is exempt, and you don't have much stable income, Chapter 7 might be the best option.
In any case, you should talk with a local Arapahoe County, Colorado bankruptcy lawyer. Your lawyer can advise you of your options and inform you of their likely consequences. This will make it much easier for your to make an informed choice.