I never meet with a potential client with the objective of trying to get him or her to pay me to help with their bankruptcy. My main objective during an initial consultation is to find out if bankruptcy is the best option to take care of their financial problems. Sometimes it isn’t, and I don’t have a problem telling them that, even though it means I won’t be getting their business.
When is bankruptcy a bad idea?
If you’re judgment proof. Most unsecured creditors are required to obtain judgment in Colorado before they can start collection procedures like garnishment or filing a lien against your home. If you don’t own any real estate, are not working, or don’t own any other property of significant value, even if your creditors get judgment, they aren’t going to really be to do anything to collect that judgment. In that case, there probably isn’t an urgent need to file bankruptcy. It’s important to remember that in Colorado a county court judgment survives for six years, and a district court judgment survives for twenty years. If you start working during that time or buy real estate, they can still take action against your wages or property.
If bankruptcy won’t get rid of enough of your debts. Not all debts can be eliminated by bankruptcy. If a potential client comes in to see if she can get rid of a debt for child support, back taxes, alimony, student loans, or injuries or deaths resulting from drunk driving convictions, I will not recommend she files bankruptcy, unless she has other significant debt.
If somebody co-signed a loan for you. If you asked someone to co-sign a loan for you and your co-signer won’t be filing bankruptcy, too, he or she will be on the hook for the loan once your debts are discharged. This could be especially awkward if the co-signer is a family member or close friend.
If you will lose valuable property. If you happen to own a piece of property that will not be protected by Colorado exemption rules, the trustee will sell the property and apply it to the debts you owe. If you don’t want to lose that property, bankruptcy might not be your best option. However, you might be able to sell that property and buy new property that is protected by the exemption rules, or you might be able to buy it from the trustee for a reduced price.
If you are wondering if bankruptcy is a good idea, we hope you’ll come into our Denver office for a free, no-obligation consultation with an experienced bankruptcy lawyer to learn more about your options. You can call 303.331.3403 or use our online scheduling system to set up a time that is convenient for you.