Many consumers have been hit hard by tough economic times or have seen that more conventional methods of improving their finances have failed to work. This has led many to consider whether bankruptcy may be an option that works for them. But what kind?
For anyone looking at filing for bankruptcy in Colorado, these proceedings are handled in the United States Bankruptcy Court in the District of Colorado in Denver. If you are a resident anywhere in Colorado, this is where bankruptcy proceedings take place.
So, what has gotten us in this position? For many consumers, the real estate bust in 2007 and 2008 and the aftermath – high unemployment rates, major medical bills and high-interest loans – have put hard-working people into a bad financial situation that has lasted for years. Others have seen investments struggle, costing them savings. Colorado Springs Bankruptcy Lawyer Stephen H. Swift understands the situation and is dedicated to helping.
Most people are familiar with Chapter 7 bankruptcy compared to Chapter 13 bankruptcy. But both offer powerful consumer protection.
The numbers tell the story of bankruptcy in Colorado in that the number of people who have used these laws to their advantage has increased considerably in the last several years. According to the American Bankruptcy Institute, the number of people who have filed for bankruptcy protection in Colorado has increased from 14,854 in 2007 to 31,415 in 2010. That’s a 111 percent increase in only four years.
The statistics show that Chapter 7 filings remain steady at about 70 percent of the total number of filings. But more and more people are considering Chapter 13 bankruptcy in Colorado Springs as well.
What’s the difference between Chapter 7 and Chapter 13 bankruptcy?
The major difference between these two forms of bankruptcy is how the debt is discharged.
Chapter 7 bankruptcy is typically designed for people struggling with debt in excess of their income’s ability to repay. And who have relatively few assets. Chapter 13 bankruptcy is usually designed for a person who has a steady income, but still has more debt than income.
Chapter 7 bankruptcy:
- Debts are discharged so the consumer gets a fresh start.
- Liquidation of assets is possible, but most consumers who choose chapter 7 don’t have many assets worth taking.
- Filers may be able to keep their car or house, depending on the circumstances.
- Retirement accounts are protected.
Chapter 13 bankruptcy:
- Debts are discharged as the consumer sets up a 3- to 5-year payment plan.
- Assets are protected from creditors.
- Debt that is left over at the end of the plan may be discharged.
- Monthly payments may be altered depending on a change in circumstances.
- Retirement accounts are protected.
How Can A Colorado Springs Bankruptcy Lawyer Help?
As you can see, either form of bankruptcy can be beneficial to the consumer. On the one hand, a person who is no longer able to make payments on debts because of job loss in this tough economy can have all their debts forgiven so they are able to get back on track. For those who may have a steady income, but whose debt obligations are overwhelming, they can make smaller monthly payments so that they can get rid of the debt that is making life stressful.
These are complex matters and should be discussed with an experienced lawyer. If you are considering bankruptcy call the Law Office of Stephen H. Swift for a free initial consultation to discuss your situation, your rights and how bankruptcy may be right for you. Serving clients in in Colorado Springs, Pueblo, Denver or throughout the area.
Colorado Springs bankruptcy – 719-520-0164 – legal consultation
