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 Greeley, Colorado before you file.
Chapter 7 Bankruptcy in Greeley, Colorado
There are 2 common forms of bankruptcy in Greeley, Colorado. They are known as Chapter 7 and Chapter 13 Bankruptcy. Chapter 7 involves liquidation of part of a debtor's assets. It requires that a certain percentage of the debtor's property to be sold to pay off as much debt as possible. The majority of property that most people own, however, is exempt. This usually includes homes, vehicles, retirement accounts, and others. These are not available to creditors.
Once eligible assets are sold, and the money turned over to the creditors, most remaining debt is discharged. However, there are certain types of debt that cannot be discharged in bankruptcy, including student loans, taxes, child support, and criminal fines. If most of your debt is non-dischargeable, it may not be a good idea to file for bankruptcy in Greeley, Colorado.
Chapter 13 Bankruptcy in Greeley, Colorado
In Greeley, 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 bankruptcy does not discharge debt. Instead, it restructures it. This involves the bankruptcy court coming up with a new payment plan that supersedes the terms of the agreements that gave rise to the debt in the first place. This results in a new payment plan that the debtor should find manageable, if he or she can make a few sacrifices.
Which Type of Consumer Bankruptcy Should I File in Greeley, 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, it would be a good idea to consult a local bankruptcy Lawyer in Greeley, Colorado. Your Lawyer can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).