No one takes lightly a decision to file bankruptcy. In large part, the idea that irresponsible consumer drive bankruptcy filings is a disinformation spread by major lenders and the health insurance industry, which are primarily responsible for the medical bills, credit card bills and bad mortgage debts driving consumers to seek protection.
Colorado Springs Bankruptcy Attorney Stephen H. Swift represents clients dealing with consumer debt issues throughout the area, including Pueblo and Denver.
Q & A: Filing for Bankruptcy in Colorado Springs
Will bankruptcy ruin by credit? Filing for bankruptcy will lower your credit score. But the hit is typically not as bad as people think. In fact, the real underlying question is “Will bankruptcy make it harder for me to get credit?” And the answer to that question is “No.” Lenders look primarily at your credit score and your income-to-debt ratio in determining your credit worthiness. Typically, a consumer’s credit score has been ruined by late payments long before they file for bankruptcy. Once discharged, your income-to-debt ratio is largely reset and your credit score begins to mend, both of which make you a better risk to lenders.
What about pending lawsuits? In many cases, a bankruptcy filing will stop a lawsuit in its tracks, including creditor actions, contempt of court issues and divorce litigation.
Can I keep my home and car? In many cases, you can keep a home or car. The law permits up to $60,000 in home equity ($90,000 if you are over 60 or disabled) and $5,000 in vehicle equity. With the economic downturn, many families are struggling with foreclosure or underwater mortgages. Bankruptcy will stop a foreclosure in its tracks. The question is often not whether you can keep a house or car (you can) but whether it makes financial sense to do so. An experienced Colorado Springs bankruptcy lawyer can best assist you in choosing the options that are right for you.
What about student loan debt? While some private student loans may be dischargeable, the vast majority of student loan debt will survive a consumer bankruptcy action and must be repaid. However, bankruptcy can still help those struggling to pay student loans. By getting rid of credit card debt and other debt, a consumer can often dedicate more resources to retiring student loan debt, paying loans off quicker and relinquishing fewer interest payments in the process.
How about cosigners? Filing bankruptcy will not relieve cosigners of their obligation. A person who cosigns a loan will still be responsible for paying the debt. Making arrangements to repay a cosigner is complicated by bankruptcy rules, which require reporting significant payments to third-parties made within a certain time period of a bankruptcy action. Speaking to an experienced Colorado bankruptcy attorney can help you arrive at the best course of action.
If you are facing financial issues in Colorado Springs or the surrounding areas, contact us today to discuss your options. Contact the Law Office of Stephen H. Swift for a free initial consultation to discuss your situation, your rights and whether bankruptcy may be right for you. Serving clients in in Colorado Springs, Pueblo, Denver and the surrounding area.
Colorado Springs bankruptcy – 866-893-2440 or 719-520-0164 – legal consultation
