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When Should I file for Bankruptcy?

When facing a lot of financial troubles, you would do whatever it takes to be free from the situation you’re currently in. You’d probably begin thinking of ways to help you achieve debt relief fast, and one of those could be filing for bankruptcy. If you have recently made bad financial decisions or stockpiled credit card debt over time, filing for bankruptcy may be the best solution. However, it would be wise to ask yourself, “When should I file for bankruptcy?”

Financial problems often happen as a result of significant changes in your life, such as losing your job, serious illness, existing credit card debt, and other unexpected events like accidents, divorce, etc. Bankruptcy can actually help you get back on your feet without worrying too much about having to deal with debt collectors and creditors constantly.

Asking the question, “when should I file for bankruptcy” is necessary if you want to achieve debt relief.

Yet, it’s just as important to know what you’ll be getting into. Making the Law Office of Clark Daniel Dray, your partner during this process will save you a ton of time, effort, and resources during bankruptcy proceedings. Call our Colorado bankruptcy attorneys today!

Why do I need a Bankruptcy Attorney in Colorado?

If you’re one of those who always seem to struggle with debt, you might feel that there’s no way out. Deciding to file for bankruptcy is a hard choice – but it can also become the best decision you ever made! 

Our legal team at the Law Office of Clark Daniel Dray is more than up to helping all our clients become debt free through bankruptcy. We do our best to answer the question, “When should I file for bankruptcy?”  easier for you.

By allowing us to handle the legal matters of your bankruptcy case, you’ll be with an attorney who:

  • Strives to make help change every person’s life for the better through bankruptcy relief
  • Understands the importance of ensuring future generations are well-provided for
  • Takes time to understand exactly what each client wants to attain
  • Prepares all needed documentation in a way that makes it understandable for anyone
  • Gets in touch whenever you need help with your bankruptcy case

When money troubles prevent you from sleeping well at night, a top-notch debtor education might be the solution you’re looking for. If that’s what you need, call us immediately!

What is Bankruptcy?

Bankruptcy is a legal process by federal courts in the United States. It is designed to help a group or individual be free of debt or figure out a plan to repay their creditors gradually. Contrary to what most people believe, bankruptcy can be beneficial since it functions as a safety net for individuals or businesses that owe a large sum of money to their creditors.

If you are still unsure and still ask yourself, “When I should file for bankruptcy?” the sections below can help you learn more about the types of bankruptcy you can petition for, the process of filing for bankruptcy, who are allowed to file for bankruptcy, and other options that may be available to you.

What are the Different Bankruptcy Chapters?

Depending on your current financial situation, different bankruptcy chapters are available for you in Colorado. Below are the four types of bankruptcies according to the United States Bankruptcy Code and who can most benefit from each chapter:

  • Chapter 7 Bankruptcy is a personal bankruptcy often filed by individuals to liquidate some of their assets. 
  • Chapter 11 Bankruptcy is a business bankruptcy normally filed by businesses wanting to reorganize their debts shortly after liquidating their assets.
  • Family farmers and fishermen usually file Chapter 12 Bankruptcy to adjust their debts.
  • Chapter 13 Bankruptcy is a personal bankruptcy typically filed by individuals to help them gradually pay off their debts within three to five years.

Before you can answer the question “When should I file for bankruptcy?” consulting with a Colorado bankruptcy lawyer is necessary. It may also be an advantage to know about the two most common bankruptcy chapters filed in Colorado, namely Chapter 13 and Chapter 7 bankruptcy.

What is Chapter 13 Bankruptcy?

Also known as individual or consumer reorganization, Chapter 13 Bankruptcy is where the debtor does not need to surrender or liquidate personal property or assets. You will, instead, be given three to five years to repay your creditors through a debt settlement plan. The length of time you will be given to pay your debt will depend on how much is your monthly income during the date of filing your bankruptcy petition.

A regular source of income is necessary to qualify for Chapter 13 bankruptcy filing. It is also considered the most helpful bankruptcy chapter as it allows you more opportunities and adequate time to pay your debts.

What is Chapter 7 Bankruptcy?

Also called the liquidation chapter, Chapter 7 bankruptcy is where an appointed bankruptcy trustee gathers and sells some or most of your personal assets not protected by Colorado bankruptcy exemptions. The money raised during the liquidation process will pay your debt. After filing for it successfully, this bankruptcy discharge will be in effect for three to six months.

Knowing which of your property can be exempted from liquidation is crucial to preventing your valuable assets from being taken away. Under normal circumstances, you can keep your car, social security, and other belongings like your clothes. Speaking with a Colorado attorney about these bankruptcy exemptions is critical to give you a better idea of what to expect during Chapter 7 bankruptcy proceedings.

To help you answer the question “When should I file bankruptcy?” and determine which bankruptcy chapter is most suitable for your current financial situation, reach out to a Broomfield bankruptcy attorney immediately!

When Should I File for Bankruptcy?

To help you make a good decision as to whether or not it makes sense to file for Bankruptcy, you need to ask yourself the following questions:

  • Do I pay for my essentials (food, utilities, etc.) using my credit cards?
  • Do I often get calls from my creditors and/or debt collectors?
  • Do I spend more than I earn?
  • Do I have debts that I cannot pay back?
  • Am I in a position to lose my home or car?
  • Am I still able to track my debts?
  • Will it take me at least five years to pay off my debt, even with extreme adjustments?
  • Have my debts severely affected my relationship and the overall quality of my life?

If your answer to most or all of the above is YES, you probably need to consider filing for bankruptcy.

The following scenarios, however, might indicate that it would be best to avoid or postpone bankruptcy filing:

  • You recently used your credit card or a cash advance to purchase something expensive
  • You transferred some assets under somebody else’s name
  • You have assets that you do not wish to lose
  • You are hiding property or money somewhere
  • You have paid more than the allowed amount to creditors before filing for bankruptcy 
  • You anticipate receiving a substantial sum of money in the near future that you can use to pay off your debts
  • Your income has dramatically increased, and you need a little more time to get back on track

Seek the legal advice of a Springfield, CO, Bankruptcy attorney if you still have a tough time answering, “When should I file for bankruptcy?”

How Do I File for Bankruptcy in Broomfield, CO?

By now, you should have already figured out the answer to the question, “When should I file for bankruptcy?” Regardless of what bankruptcy chapter you want to petition for, you need to appear before the United States Bankruptcy Court and follow their given directives 180 days before filing bankruptcy. You should also undergo credit counseling from an approved credit counseling agency within 180 days before filing unless you qualify for an exception. 

Speak to a Colorado Bankruptcy lawyer regarding your preferred chapter, where you can attend credit counseling and all the bankruptcy forms needed during the process.

Call our Colorado Bankruptcy Attorney Now!

Your decision whether to file for bankruptcy or not will certainly affect your financial situation during the following months or years. The Law Office of Clark Daniel Dray has the skills and experience needed to provide excellent legal services for clients to wipe out their credit card debt, tax debt, medical bills, and more. 

Give Dray Legal a call today for a FREE initial consultation. Aside from our Broomfield law firm, we also have offices in Denver, Boulder, Louisville, and Littleton.

Denver Lawyer Clark Daniel Dray

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