Often, people who are thinking of filing bankruptcy feel stranded, alone, have never known anybody who filed it neither have anybody to talk about it. Certainly, it is intimating when you think you are the only person in enough financial debt that you considering to get a discharge of them. However, you are not the only one filing for bankruptcy.
Bankruptcy affects people from all walks of life and with all income levels. Whether married or single, senior citizen or starting your life, money debts pity no one leaving them no option besides filing bankruptcy.
Consumers and businessmen in Colorado can choose from various bankruptcy code including Chapter 7, Chapter 11, Chapter 12, and Chapter 13. However, Chapter 7 is the most popular one. To file Chapter 7 under the State of Colorado bankruptcy laws, you need to fully disclose all your assets, property, debts along with details of financial transactions during the past few years.
After filing Chapter 7 bankruptcy, it takes approximately three months to receive a discharge or cancellation of most of the debts. Let’s have a look at the overall process:
Pre-filing Credit Counseling Session
You are required to attend a two-hour credit counseling session before filing the petition from an approved non-profit agency which costs you depending upon your income. Among many approved agencies in Colorado, you can choose any according to your convenience. Counseling is available online, through telephone and email.
A certificate of completion is given by the agency after your counseling session that must be filed along with your bankruptcy petition. However, there are few exceptions to this general rule, such as if you are on active military duty in a combat zone. Also, you need not take Colorado credit counseling, if you are mentally or physically impaired to an extent that you cannot undertake the session.
Once you got your credit counseling certificate, the next step is to attain your bankruptcy filing number either by filing a skeleton emergency petition or by submitting the required paperwork at the same time. The court will issue your filing number and now you can have a protective shield known as the automatic stay.
This shield will protect you from the creditor’s actions to collect any debts from you. It will put an end to all the proceedings against you to repossess your car, wage garnishment, freezing bank accounts or foreclosures on your home. It gives you the breathing space you badly need to organize your financial affairs. However, efforts to collect debts you awe for alimony, child support, certain actions by the IRS and student loans will not be affected by the automatic stay.
Creditor Efforts to Remove Bankruptcy Automatic Stay
The automatic stay is not absolute. In some cases, creditors may appeal to the Court to lift the bankruptcy automatic stay. Secured debtors such as your car and home loan lenders can file the motion if the borrower is not making payments and the equity in the property is not enough to cover the loan. For example, if you are behind on your mortgage while filing the Chapter 7 Bankruptcy in Colorado, the lender is likely to ask the court to lift the stay so that he or she can proceed with the foreclosure of the home.
However, it is unusual for the unsecured creditors to file the motion in the court to lift the bankruptcy automatic stay. The court might grant the request in case of the unsecured debt that is not discharged under Chapter 7 of the bankruptcy code. For example, if your landlord wants to evict you in your bankruptcy, he or she might ask the relief from the court to go ahead with the eviction proceedings.
341 Creditor’s meeting
Under State of Colorado bankruptcy laws, approximately thirty days after you file Chapter 7 bankruptcy, you must attend a hearing commonly known as the ‘creditors meeting’ or the ‘341 hearing’. The meeting is presided over by a bankruptcy trustee, appointed by the court and another US Government official known as the US Trustee.
The basic point of 341 hearing is to have your declaration under oath regarding your petition that the paperwork is complete, correct and honest to the best of your knowledge and ability. The bankruptcy trustee in Colorado may ask about your property listed in the petition to make sure you have equity that could be used as a lump sum to pay your other creditors.
Your Chapter 7 bankruptcy case in Colorado ends with a discharge of all the entitled debts. Your creditors are forever barred from trying to collect the debt from you once it is discharged by the court. An experienced bankruptcy in Colorado can help you better with your bankruptcy filing. Bankruptcy is not the end of the world but a path towards rebuilding your financial future.