Individuals are eligible to file bankruptcy under either Chapter 7, Chapter 11 or Chapter 13 of the U.S. Bankruptcy Code.
Chapter 7 is often called "straight bankruptcy," and it's usually used by individuals who need a fresh start in life.
Chapter 11 bankruptcy, on the other hand, is a reorganization proceeding that can allow a business or a business owner to continue operations.
Chapter 13 involves a re-payment plan for people with regular a income. Depending on ones income, the re-payment period could be three or five years. A complex analysis is needed to calculate the amount of the monthly payment.
I believe in an analysis of each client's unique situation and a solution that fits his or her specific needs. I understand that bankruptcy can seem confusing, even daunting, and we take the time to ensure that each client understands his or her rights, obligations and options.
We represent both debtors and creditors. Our approach is thorough, precise and assertive. With extensive experience in bankruptcy practice and business law, we bring a comprehensive understanding of the many aspects of bankruptcy law to our clients.
Both Chapter 7 bankruptcies and Chapter 11 bankruptcies often generate separate lawsuits regarding:
Please see our bankruptcy litigation page for more information.
James Chadderdon served as a panel trustee in Colorado Chapter 7 bankruptcy cases from 1988 to 2000.
Bankruptcy Update:
Can you still file bankruptcy under the new law?
Can you keep your business if you file bankruptcy under the new law?
What is a “debt relief agency” and why do I have to take these courses under the new law if I want to file bankruptcy?
What does the new bankruptcy law require that I do before I can file a bankruptcy case?
How do I decide if I should file bankruptcy?
What exactly is bankruptcy?
Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as "liquidation" or "reorganization."
Under a liquidation bankruptcy (Chapter 7), you ask the bankruptcy court to wipe out (discharge) the debts owed. Under a reorganization bankruptcy (Chapters 11 and 13), you file a plan with the bankruptcy court proposing how you will repay your creditors. Some debts must be repaid in full; others you pay only a percentage of the balance due; others aren't paid at all.
What is the difference between Chapter 7, Chapter 13, and Chapter 11 bankruptcy?
Under Chapter 7 bankruptcy, you ask the bankruptcy court to discharge most debts owed. In exchange for the discharge of debts, your nonexempt property is sold and the proceeds are used to pay off your creditors. Eligible consumers and businesses can file under Chapter 7.
Under Chapter 11 or Chapter 13 bankruptcy, you file a repayment plan with the bankruptcy court proposing to pay back your debts over time. The amount you'll have to repay depends on the amount of property you own and the types of debts you owe. Chapter 13 is less expensive and less complex than Chapter 11, but not everybody qualifies for Chapter 13 bankruptcy.
Will I lose my house?
Not if you make your mortage payments and your house does not have a great deal of equity. In Colorado the homestead exemption is $60,000 ($90,000, if over 60 or disabled). This means that unless you would receive more than $60,000 in net proceeds from the sale of your house, it has not "liquidation value." It, therefore, cannot be sold by your bankruptcy estate.
What if I'm behind in my mortgage payments? If you are behind on your mortgage payments, you will lose your house in foreclosure if you file a Chapter 7 bankruptcy and you can't quickly catch up on your past-due payment . Your mortgage lender will ask the bankruptcy court to lift the automatic stay to begin or resume foreclosure proceedings.
In a Chapter 13 bankruptcy, you will not lose your house if you immediately resume making the regular payments called for under your agreement and repay your missed mortgage payments through your plan.
Renting and Bankruptcy. If you are current on your rent payments and file for bankruptcy, your landlord will receive notice that you filed, but is most unlikely to take any action under your lease.
If you are behind on your rent, there's a good chance that your landlord will begin eviction proceedings to get you out. Your inclination may be to file for bankruptcy just to get the automatic stay in place to stop the eviction. This will work, but not for very long. Expect your landlord to come into court to have the stay lifted, which is likely to be granted.
Disclaimer
This publication and the information included in it are not intended to serve as a substitute for consultation with an attorney. Specific legal issues, concerns and conditions always require the advice of appropriate legal professionals.
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