Why Should I Choose Chapter 13 Instead of Chapter 7 Bankruptcy?
There are many reasons why someone should choose Chapter 13 instead of Chapter 7 bankruptcy. During your first meeting with your bankruptcy attorney, we will go over all of the relief available to you under the Bankruptcy Code. This will involve talking about the ways in which Chapter 7 and Chapter 13 bankruptcies differ and which one is most appropriate for your financial situation.
We’re here to guide you safely through the bankruptcy and debt relief process. Our goal is to help you eliminate as much debt as possible under the bankruptcy laws while keeping as many of your assets as possible. Bankruptcy should be a giant step forward, not a step backward.
Differences Between Chapter 13 and Chapter 13 Bankruptcy
Chapter 13 and Chapter 7 bankruptcy are two very different things.
Chapter 7 bankruptcy is sometimes called liquidation bankruptcy, which means that the filers dischargeable debts will be eliminated, but the filer will also have to turn over any assets that aren’t covered by Colorado’s exemptions.
Chapter 13 bankruptcy allows the filer to keep all of her assets; however, she will have to make a monthly payment for up to five years to the Chapter 13 bankruptcy trustee to pay back a portion of her unsecured debt. The main reason someone files Chapter 13 bankruptcy is because she is over the income limits for Chapter 7 bankruptcy.
Reasons To File Chapter 13 Bankruptcy Instead Of Chapter 7 Bankruptcy
I usually recommend my client file a Chapter 13 petition if:
- her income exceeds the amount allowed to file a Chapter 7;
- she has debt that has been secured by property he wants to keep or that is on the verge of repossession or foreclosure, such as a car or home;
- she has property that exceeds the exemption amounts allowed under Colorado law that he wants to keep, such as an heirloom or collectibles;
- she has been sued for property damage;
- she has a marital property settlement obligation that is “not in the nature of support“;
- she owes back homeowner or condominium owner association dues;
- she is in arrears for non-dischargeable debts, such as alimony or back taxes, and needs to stretch out the payments to catch up.
Benefits Of Chapter 13 Bankruptcy
There are many benefits to filing Chapter 13 bankruptcy, including:
- Stopping lawsuits, foreclosures, garnishments, phone calls, and emails;
- Consolidating payments to unsecured creditors to a single, manageable payment to the Chapter 13 trustee;
- Allowing the filer to get caught up on mortgage payments they’ve fallen behind on;
- Chapter 13 filers can usually ask the court to dismiss their case; Chapter 7 filers usually cannot.
Talk To An Experienced Denver, Colorado Chapter 13 Bankruptcy Attorney About Your Options
We offer free consultations for people who are dealing with overwhelming debt and considering bankruptcy. Our top-rated Denver, Colorado bankruptcy attorneys can give you helpful information so you can decide if you should file Chapter 13 bankruptcy instead of Chapter 7.
The easiest way to schedule an appointment is by going to our scheduling page.
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