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(303) 839-8888 or EmailFor A Bankruptcy Consultation, Call 303-839-8888 THE MOST COMMON QUESTIONS ASKED ABOUT BANKRUPTCY - WHAT EXACTLY IS STRAIGHT BANKRUPTCY?
A straight bankruptcy case is a proceeding under Chapter 7 of the Bankruptcy Code when a person is released from paying debts by filing a petition with the Bankruptcy Court and turning all of the nonexempt property over to a Trustee assigned to the case. Some types of debts are not affected by bankruptcy, for example, child support and some taxes. - WHAT IS A DEBT CONSOLIDATION PLAN?
A debt consolidation plan is a bankruptcy under Chapter 13 of the Bankruptcy Code. Unlike the Chapter 7, in a Chapter13, you agree to pay off your bills, over 36 months or longer. By this process, taxes and other debts can be paid off and you can keep all of your property. Homeowners can use Chapter 13 to make up missed mortgage payments. One payment is made each month to cover all, or a portion of, your bills and this payment is paid each month to the Chapter 13 Trustee for the length of the Plan, which is usually 36 months. - WHO CAN FILE BANKRUPTCY?
Any person who resides in, does business in, or has property in this country can file bankruptcy. It is not necessary that your debts be greater than your assets to file, although as a practical matter, it is seldom wise to do so unless your debts are greater than your assets. - WHAT IS THE ORIGIN OF BANKRUPTCY LAW?
The Bankruptcy Code has its beginnings in the Bible. See Deuteronomy, Chapter 15, verses1-5. It is now federal law. - CAN BOTH HUSBAND AND WIFE FILE A JOINT BANKRUPTCY PETITION?
Yes. Under the bankruptcy laws, a husband and wife may file a joint bankruptcy petition, using the same set of forms. Only one filing fee is paid for a join petition, so it costs no more to file a joint petition than to file a single petition. - WHEN SHOULD I FILE BANKRUPTCY?
The answer depends on the status of your debts and the nature of your assets. It is not wise to file bankruptcy if you are likely to incur sizeable new debts in the near future. For example, if you or a member of your family are in bad health and have huge medical bills, it would be wise to wait until the illness or injury is cured, or until you have obtained adequate insurance coverage before filing bankruptcy. Generally, and there are exceptions, it will be at least six years before you can file bankruptcy again, and it will do you little good to discharge $10,000 in the next few months. - CAN I FILE BANKRUPTCY IF MY DEBTS ARE BEING ADMINISTERED BY FINANCIAL COUNSELORS?
A Financial counselor cannot stop you from filing bankruptcy. - HOW DOES FILING BANKRUPTCY AFFECT LAWSUITS AND ATTACHMENTS THAT HAVE ALREADY BEEN FILED AGAINST ME?
The filing of a petition in bankruptcy will automatically stop lawsuits and attachments against you, including wage garnishments and the Internal Revenue Service ("IRS"). It will also stop home foreclosure sales, if the petition is filed before the sale date. - WHEN WILL I GO TO COURT AND WHAT DO I DO THERE?
Your first appearance will be about a month after your case has been filed. This is not considered a "Court" appearance, since there is no judge and you do not appear in a Court Room; rather, this is what is referred to as an administrative hearing. There, you will be questioned under oath by the Trustee about your assets, liabilities, income and expenses. This is usually the only time you will have to appear. - WHAT IS A TRUSTEE IN BANKRUPTCY?
The Trustee in bankruptcy is an officer of the court, appointed to gather your nonexempt property, convert it into cash, and pay this money out to the proper creditors if you file a Chapter 7. The law gives the Trustee the power and the means to perform his or her duties, the principal one of which is to collect, on behalf of your creditors, all of your nonexempt property. If you have no nonexempt assets, the Trustee will still be appointed, but he or she will not collect any property. In a Chapter 13 case, the Trustee inquires as to whether you can make your regular monthly payments. You generally keep all your property in a Chapter 13. - WHAT ARE MY RESPONSIBILITIES TO THE TRUSTEE IN BANKRUPTCY?
The law requires you to cooperate with the Trustee in bankruptcy, and be truthful. If you do not cooperate with the Trustee, your discharge in bankruptcy may not be granted. - WHAT IS A FIRST MEETING OF CREDITORS?
The First Meeting of Creditors is an administrative hearing held to start the administration of your case. During the hearing, you will be called upon to testify under oath and will be asked questions about your assets, your debts, and other matters that may affect the settlement and administration of your bankruptcy estate. - WHAT HAPPENS TO THE PROPERTY THAT I TURN OVER TO THE BANKRUPTCY TRUSTEE IN MY CASE?
It is converted into cash, which is then distributed to those of your creditors who file claims against your bankruptcy estate. The expense of administering your estate will also be paid with these funds. - WHAT WILL HAPPEN IF THERE IS NO MONEY OR PROPERTY TO TURN OVER TO THE BANKRUPTCY TRUSTEE?
If, from your bankruptcy forms, it appears that you have no money or property that is not exempt, your case will be considered a "no-asset case" and a notice will be sent to your creditors advising them not to file claims. Unless a creditor or the Trustee files an objection to your discharge, or unless you need more time in which to reaffirm dischargeable debts, your case will probably be closed soon after the Creditors Meeting (about 90 days). Remember, in a Chapter 13 case, no property is turned over to the Trustee, except your monthly payments. - WHAT HAPPENS IF MY CASE IS AN ASSET CHAPTER 7 CASE?
If your case is one involving assets, the Trustee in bankruptcy will immediately begin to collect all of your property to which he or she is entitled by law. Your creditors may file claims any time within 90 days after the First Meeting of Creditors. The Trustee will examine these claims and object to those that are improper. When all of your nonexempt property has been collected by the Trustee, converted to cash, and distributed to your creditors, your case will be closed. - HOW DOES FILING A BANKRUPTCY AFFECT MY CREDIT RATING?
Some financial institutions openly solicit business from recent bankrupts, because they know that the debtor cannot, generally, file bankruptcy again for at least six years. If there are compelling reasons for filing bankruptcy that were not within your control, such as an injury or illness, most credit-rating agencies will take that into consideration in rating your credit after bankruptcy. A bankruptcy filing mark will appear on your credit report for at least seven (7) years. - WILL NEWS OF MY BANKRUPTCY BE PUBLISHED?
When your bankruptcy papers are filed, they become public records and the fact that you have filed may be published by some credit-reporting agencies. However, most newspapers do not keep, report or publish consumer bankruptcies such as yours. - DO I LOSE ANY OF MY RIGHTS, SUCH AS THE RIGHT TO VOTE, BY FILING BANKRUPTCY?
No. Bankruptcy is a civil proceeding, and not a criminal proceeding. You do not forfeit any of your civil or constitutional rights by filing. Also, neither a utility or governmental unit may discriminate against you because you have filed bankruptcy. - MUST MY EMPLOYER KNOW THAT I AM FILING BANKRUPTCY?
The Trustee in bankruptcy rarely requests information from your employer about the status of your wages or salary. - ARE MY OUT-OF-STATE DEBTS DISCHARGED IN BANKRUPTCY?
Yes. Bankruptcy is a federal proceeding and the Bankruptcy Court has the jurisdiction and power to discharge debts contracted anywhere in the country, whether in or out of Colorado. - WILL I LOSE ALL OF MY PROPERTY IF I FILE BANKRUPTCY?
You will only have to turn your nonexempt property over to the Trustee in bankruptcy if a Chapter 7 is filed. Under the laws of Colorado, and under the federal laws, certain properties are declared to be exempt, and out of the reach of your general creditors. It is these exempt properties that you will get to keep after your bankruptcy. - IS THERE A WAY THAT I CAN MINIMIZE THE AMOUNT OF NONEXEMPT ASSETS THAT I WILL HAVE TO TURN OVER TO THE TRUSTEE IN BANKRUPTCY?
You will only be required to turn over to the Trustee in bankruptcy the non exempt assets that you possess on the day and hour that you file your petition in bankruptcy. Most of your nonexempt assets will be liquid in nature and will tend to vary from day to day. It will pay you, therefore, to engage in some negative estate planning to minimize the value of your assets on the day and hour that you file bankruptcy; The nonexempt liquid assets that the Trustee in bankruptcy usually looks for in a chapter 7 case are cash deposits, prepaid rent, accrued and unpaid earnings and vacation pay, income tax refunds (both State & Federal) and sporting goods. Again, under Chapter 13, you lose no property but agree to pay the Trustee a monthly payment. - WHAT IS A DISCHARGE IN BANKRUPTCY?
It is the Court Order stating that you do not have to pay your dischargeable debts. A debt that is discharged in bankruptcy is one that you do not have to pay now or ever. - WHAT DEBTS ARE NOT DISCHARGED IN BANKRUPTCY?
If your discharge in bankruptcy is granted, all of your debts will be discharged except the following: (a) Taxes due within the last three years or not assessed because of fraud; (b) If the Bankruptcy Court so rules, debts for obtaining money, property, services, or an extension, renewal, or refinancing of credit by means of false pretenses, fraud or a false financial statement with intent to deceive; (c) Debts not listed on your bankruptcy papers, unless the creditor had knowledge of the case in time to file a claim; (d) If the Bankruptcy Court so rules, debts for fraud, embezzlement, theft or larceny; (e) Debts for alimony, maintenance and child support, unless the debts have been assigned to someone other than the federal government; (f) If the Bankruptcy Court so rules, debts for intentional injuries; (h) Debts for student loans, unless not discharging the student loan debt would impose an undue hardship on you and your dependents; and (i) Debts that were or could have been listed in a prior bankruptcy case in which you either waived your discharge, or your discharge was denied. - CAN MY UTILITY COMPANY REFUSE TO SERVICE ME IF I DISCHARGE THIS BILL IN BANKRUPTCY?
Within 20 days after you file bankruptcy, if you furnish your utility company with a deposit or other security to insure the payment of future services, the utility may not discontinue your services or otherwise refuse to serve you, or discriminate against you for discharging their bill. - MAY I KEEP ANY OF MY MORTGAGED PROPERTY WITHOUT PAYING OFF THE CREDITOR?
You may retain certain personal and household items in your possession, such as household furnishings, goods and appliances, wearing apparel, tools of your trade, and similar items without paying the creditor anything, if the items are exempt to you and if the mortgage against the property is not a "purchase-money mortgage." You may also retain exempt property that is subject only to a judgment lien without paying the judgment lien holder anything. You may retain certain personal, family or household items that are exempt to you, or that are not wanted by the Trustee, by paying to the creditor an amount equal to the fair market value of the items, regardless of how much you owe the creditor. However, these matters are fairly complicated and should be discussed with an attorney. - HOW MUCH DOES IT COST TO FILE A BANKRUPTCY?
The Court filing fee is $200.00 for a Chapter 7 case, or $185.00 for a Chapter 13 case. - WHAT IS THE ROLE OF AN ATTORNEY IN A CONSUMER BANKRUPTCY CASE?
The Debtor's attorney will perform the following functions in a typical consumer bankruptcy case: (1) Analyze the amount and character of the debts owned by the debtor to determine whether bankruptcy is the best remedy for the debtor's financial problems; (2) Assemble the information and date necessary to prepare the Chapter 7 or Chapter 13 schedules, and statements for filing; (3) Prepare the proper petitions, schedules, and statements for filing with the Bankruptcy Court; (4) Assist the debtor in preparing his estate for bankruptcy, so that a minimum amount of property will later have to be turned over to the Trustee in bankruptcy; (5) File the Chapter 7 or 13 petition, schedules and statements with the Court, and if necessary, immediately notify certain creditors of the commencement of the case; (6) Assist the debtor in redeeming certain personal property and in voiding certain liens against exempt property; (7) Attend the first meeting of creditors with the debtor and any other court hearings involving contested matters; (8) Prepare and file amended schedules, if necessary; (9) Assist the debtor in reaffirming debts and overcoming obstacles to his or her discharge in bankruptcy; and (10) Prepare a budget and plan in both Chapter 7 and Chapter 13 cases. - WHAT ARE THE ATTORNEY FEES?
The fees paid to the attorney are required to be disclosed to, and must be approved by the Bankruptcy Court, which will allow the attorney to charge only a reasonable fee for representing the debtor. Our fees will depend on the complexity of your case, the time and effort required, and the number of creditors you have listed. Please call our office to set up an appointment for a free visit should you have further questions. - ARE TAXES DISCHARGEABLE IN A BANKRUPTCY?
Yes, and no. The issue of taxes can be complex. We do not give tax advice. However, we can assist your tax advisor in this regard. At your first meeting with one of our attorneys, issues of taxes will be discussed with you in more detail. - WHERE CAN I OBTAIN A CREDIT REPORT?
By law, you are entitled to one free credit report each year, from each Credit Reporting Agency. You can obtain a free credit report by calling: Experian (formerly TRW) at (888) 397-3742, Equifax at (800) 685-1111, and/or Transunion (800) 888-4213.
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