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Denver Lawyer Clark Daniel Dray

What Bankruptcy Can and Cannot Do

Bankruptcy Attorney in Denver, Colorado

Your credit score may suffer a substantial and long-lasting impact if you are filing bankruptcy in any form. This could impact several aspects of your life, including your ability to rent an apartment, buy a car or house, pass a credit check from a potential employer, get new credit cards, and more. Therefore, you should not use bankruptcy to solve your money problems. 

Instead, it is preferable to consult your choices with a qualified bankruptcy lawyer before deciding what course of action is best for you. 

Each person is entitled to a specific amount of material goods and financial security under Colorado law. The sum is determined by the person’s assets and income. Any asset that has to be protected must be stated on the bankruptcy form. To safeguard some or all of your assets and start over, you can seek the assistance of a Colorado bankruptcy attorney in Denver.

Why Do I Need a Bankruptcy Attorney in Denver, Colorado? 

what bankruptcy can do and cannot do You can feel lost and frustrated if you are experiencing financial difficulties and unsure of what to do or where to turn. Taking on significant issues alone might be daunting, but you can accomplish a lot with legal advice. With the assistance of a Denver bankruptcy lawyer, you can better understand the law and manage your financial uncertainty.

A knowledgeable bankruptcy lawyer may be able to assist you in making wise decisions about how to handle your case. Reading testimonials and scheduling a consultation appointment will help you locate a qualified Denver bankruptcy lawyer. Or even better, get in touch with Clark Daniel Dray’s law firm. Our Denver bankruptcy lawyers will give you the legal aid of personalized assistance and close attention that every case requires, meaning they will be with you throughout the bankruptcy process.

What are the Things that You Need to Know Regarding Bankruptcy?

A person or company that is bankrupt is unable to pay its debts. Either the debtor or, less often, creditors submit a petition at the start of the bankruptcy procedure. A portion of the debt may be partially satisfied using the assets after all the assets have been assessed and evaluated for the debtor. 

  • Bankruptcy affords a person or business a second chance by eliminating unmanageable obligations and allowing creditors to seek some recompense based on the individual’s or business’ liquidated assets.
  • The opportunity to file bankruptcy supposedly helps the economy unitedly since it allows consumers and businesses another chance to acquire credit and distributes a percentage of debt repayment to creditors.
  • All bankruptcy matters are handled by federal bankruptcy courts located anywhere in the United States. The bankruptcy court makes all decisions in federal bankruptcy cases, including whether a debtor is eligible to file and whether their debts should be erased. A bankruptcy trustee, a representative of the debtor’s estate at the hearing selected by the Department of Justice’s United States Trustee Program, typically handles bankruptcy cases. Unless a creditor objects, the debtor usually has little direct contact with the judge.

What Can Bankruptcy Do Once You File for Bankruptcy?

Bankruptcy allows debtors to start over by partially wiping out their debts. Chapter 7 and Chapter 13, the two most common types of bankruptcy, each have advantages and, in some cases, handle debt and property differently. Your financial situation, assets, and ambitions will determine which chapter is best for you.

The following can be found in Chapters 7 and 13:

  • The stay does not stop all litigation, wage garnishments, or the majority of creditor calls. Bankruptcy can cease debt collection efforts and creditor harassment. Criminal procedures will continue, and creditors will still be able to recover support payments. This is known as an “automatic stay,” issued by the Colorado bankruptcy court as soon as you file.
  • Foreclosure, repossession, or eviction can all be temporarily stopped by bankruptcy. However, these measures will cease automatically while they are still pending. Once it is finished, bankruptcy will be helpful.
  • Evictions – Following bankruptcy, an eviction currently scheduled in bankruptcy court will be delayed. The visit, though, will probably only last a short while. If your landlord already has an eviction judgment against you, bankruptcy generally won’t help.
  • Foreclosure and Repossession – A Chapter 7 petition won’t help you keep the property, even though the automatic stay will halt foreclosure or repossession. You will lose your house or car once the stay is over if you cannot bring the account current. Otherwise, Chapter 13 bankruptcy has a process that lets you make up missed payments to keep the asset.
  • Most nonpriority unsecured debt, except student loans, is effectively discharged in a bankruptcy filing, such as credit card debt. It may be possible to discharge certain debts like unsecured credit card debt, unpaid medical bills, past-due energy bills, personal loans, gym memberships, and more. 

If you did not commit to returning the item you bought if you cannot pay, the debt is referred to as “unsecured.” On the other hand, if you have a secured credit card, you will need to mail the item back. Secured debts are frequently used to cover the costs of expensive purchases like jewelry, electronics, computers, furniture, and other big-ticket items.

  • If you cannot make payments on a debt secured by collateral-such as a mortgage or vehicle loan-you can discharge the obligation through bankruptcy, but you will have to give up the acquired property. Any property, such as a house, car, computer, or other assets, used as collateral for the loan, however, will be lost. If you voluntarily agree to use an asset as collateral to secure a debt, you must repay the obligation in full or forfeit the item.

What Bankruptcy Cannot Do Once You File for It? 

Not all debt problems can be resolved by declaring bankruptcy. Debt settlement cannot save you from bankruptcy. What it cannot do for you are the following:

  • A bankruptcy discharge releases you from your debts but does not release you from secured creditors’ rights to foreclose or seize assets you cannot afford. When a lien is placed on real estate, the lender has the legal authority to seize the asset, put it up for auction, and use the proceeds to settle the obligation. The lien is still attached to the property until the debt is completely satisfied.

A secured debt, which must be paid, might be dismissed through bankruptcy if the creditor has a claim on your property. The creditor can still seize the collateral, so the lien will continue to be in effect

Your home mortgage may be erased if you declare Chapter 7 bankruptcy. However, the lender will still hold a lien on the property.

  • Bankruptcy doesn’t eliminate child support and alimony obligations. You will still be responsible for paying off your debts for alimony and child custody entirely, just like you would have if you had not filed for bankruptcy. Additionally, if you submit a Chapter 13 bankruptcy petition, your repayment strategy must involve paying off all these debts.
  • Bankruptcy doesn’t eliminate student loans except in limited circumstances. A student loan is not dischargeable in bankruptcy unless you show that doing so would cause you “undue hardship,” which is a very high threshold to fulfill. You must demonstrate that you do not currently have the money to cover your debts and that the chances of you ever being able to do so are exceptionally slim.
  • Bankruptcy doesn’t eliminate most tax debts.  It is occasionally possible to discharge prior unpaid tax debts in bankruptcy, despite the difficulty. Learn the requirements for erasing tax debts through bankruptcy.
  • Bankruptcy doesn’t eliminate other non-dischargeable debts. 

The following debts are not eligible for cancellation under either chapter:

  • Debts not listed on your bankruptcy documents (unless the creditor learns of your bankruptcy case);
  • Debts incurred resulting from fatalities or personal injuries brought on by drunk driving;
  • Sanctions and fines are imposed as a punishment, such as fines for moving violations and restitution for wrongdoing.

If you file for Chapter 7 bankruptcy, these debts will still be outstanding when your case is over. All debts will be settled as part of your Chapter 13 repayment strategy.

  • Debt related to fraud might get eliminated.  If a creditor files an adversary procedure lawsuit and persuades the judge that the obligation should stay unpaid, the debt originating from deception will not be erased by bankruptcy. These debts may result from making accusations or doubtful statements on credit applications or passing off the leased property as your own to use as security for loans.

Contact Our Denver Bankruptcy Attorney at Colorado Now!

We are available to assist you if you are facing financial difficulties. Our primary goal at The Law Office of Clark Daniel Dray is to help debtors and give them the legal services they need as they go through bankruptcy proceedings. Our responsibility is to inform people in debt of their legal rights and the benefits of declaring bankruptcy. We treat our Colorado resident clients on a case-by-case basis because we work hard to have a favorable conclusion for your bankruptcy case.

Get a free consultation from our Colorado legal services by contacting our bankruptcy law offices from Broomfield, Boulder, Littleton, Denver, and Louisville. Contact our law firm today to speak with one of our bankruptcy lawyers and get bankruptcy relief!

Denver Lawyer Clark Daniel Dray

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