What is Bankruptcy?

Bankruptcy is a legal process designed to help individuals and businesses manage or eliminate overwhelming debt under the protection of federal bankruptcy courts. It provides a structured way to address financial difficulties, either by discharging (eliminating) certain debts or creating a repayment plan to pay creditors over time. Bankruptcy laws exist to give people a fresh start when debt becomes unmanageable, while ensuring creditors are treated fairly.

The process is governed by the U.S. Bankruptcy Code, and it typically involves filing a petition with a bankruptcy court, which triggers an automatic stay. This stay halts most collection actions, such as lawsuits, wage garnishments, and creditor calls, giving you breathing room to address your financial situation.

Types of Bankruptcy: Chapter 7 and Chapter 13

Bankruptcy comes in different forms, known as “chapters,” with the most common for individuals being Chapter 7 and Chapter 13. Understanding the differences can help you decide which option is best for you.

Chapter 7 Bankruptcy: Liquidation

Chapter 7, often called “liquidation bankruptcy,” is designed for individuals with limited income who cannot repay their debts. In this process, a bankruptcy trustee may sell (liquidate) non-exempt assets to pay creditors. However, many filers keep most or all of their property due to state and federal exemptions. Once completed, most unsecured debts—like credit card balances, medical bills, and personal loans—are discharged, giving you a clean slate.

Who qualifies? To file for Chapter 7, you must pass a means test, which evaluates your income and expenses to determine eligibility. If your income is below the median for your state, you’re likely eligible.

Chapter 13, known as the “wage earner’s plan,” allows individuals with regular income to create a 3- to 5-year repayment plan to pay back some or all of their debts. This option is ideal for those who want to keep assets like a home or car and have a steady income to make monthly payments. At the end of the plan, remaining eligible debts may be discharged.

Chapter 13 Bankruptcy: Repayment Plan

Who qualifies? Chapter 13 is typically for individuals with income too high for Chapter 7 or those looking to protect assets from liquidation.

How Does Bankruptcy Work?

The bankruptcy process varies depending on the chapter you file, but here’s a general overview:

1. Consultation with a Bankruptcy Attorney: A qualified attorney will review your financial situation, discuss your goals, and recommend the best chapter for your needs.
2. Filing the Petition: You’ll file a bankruptcy petition with the court, including detailed financial information like income, expenses, assets, and debts.
3. Automatic Stay: Once filed, an automatic stay stops most creditor actions, giving you temporary relief.
4. Trustee and Creditor Meeting: A bankruptcy trustee oversees your case and holds a meeting of creditors, where you answer questions about your finances.
5. Debt Resolution: In Chapter 7, eligible debts are discharged after asset liquidation (if any). In Chapter 13, you follow a court-approved repayment plan.
6. Financial Fresh Start: Upon completion, you’re free from discharged debts and can begin rebuilding your financial life.

Is Bankruptcy Right for You?

Bankruptcy isn’t a one-size-fits-all solution. It can provide significant relief for those drowning in debt, but it also has long-term consequences, such as a temporary impact on your credit score and likely a few years before qualifying for a home loan. However, think how much more able you will be to pay a future loan if you have discharged your debt.  Before filing, consider:

• Your Debt Load: Are you unable to keep up with payments despite cutting expenses?
  • Types of Debt: Bankruptcy can discharge unsecured debts like credit cards and medical bills but may not eliminate student loans, child support, or certain taxes.
  • Your Goals: Do you want to keep your home or car? Are you looking for a complete debt discharge or a manageable repayment plan?

Consulting with an experienced bankruptcy attorney can help you weigh the pros and cons and explore alternatives like debt settlement or credit counseling.

Why Choose LONG & LONG?

Attorney Martin Long is a former Trustee for the U. S. Bankruptcy Court. At LONG & LONG, we understand how stressful financial challenges can be. Our compassionate bankruptcy attorneys have helped countless clients in Denver and Colorado achieve debt relief and regain control of their finances. We provide personalized guidance, from evaluating your eligibility to guiding you through the entire bankruptcy process.

Ready to explore your options? Contact us today for a free consultation. Call us at 303-832-2655 or fill out our online contact form to schedule an appointment. Let us help you take the first step toward a brighter financial future.

Frequently Asked Questions About Bankruptcy

Will bankruptcy ruin my credit?

Bankruptcy will impact your credit score, but the effect is temporary. With responsible financial habits, you can rebuild your credit over time.

Can I keep my house and car?

In many cases, yes, especially with Chapter 13 or if your assets are protected by exemptions in Chapter 7. An attorney can help you understand your options.

How long does bankruptcy take?

Chapter 7 typically takes 4–6 months, while Chapter 13 lasts 3–5 years, depending on your repayment plan.

Take control of your financial future today. Don’t let debt hold you back. Contact LONG & LONG to discuss how bankruptcy can help you achieve a fresh start.

Can You File Bankruptcy By Yourself?

Here are the 5 most common warning signs that it may be time to consider filing for bankruptcy in Denver and Colorado:

1. You’re Using Credit Cards to Pay for Basic Living Expenses

One of the clearest red flags is relying on credit cards for groceries, gas, utilities, or rent. When your income no longer covers necessities and you’re charging everyday expenses just to survive, you’re likely in a debt spiral. High interest rates make the problem worse, turning small shortfalls into massive credit balances.

Denver and Colorado reality check: With Colorado’s high cost of housing and inflation still affecting many families, this sign appears frequently among working persons professionals and families across the metro area.

2. You’re Only Making Minimum Payments — or Missing Payments Entirely

If you can barely afford the minimum payments on credit cards, medical bills, or personal loans — or you’ve started missing payments — your debt is probably growing faster than you can pay it down. Late fees and penalty interest compound the issue, making it nearly impossible to catch up on your own.

This is especially stressful when combined with Denver’s competitive job market or unexpected expenses like car repairs in our variable mountain weather.

3. Creditors Are Harassing You Constantly

Non-stop collection calls, letters, and emails create enormous anxiety. Once creditors start threatening legal action, the pressure becomes unbearable for many people.

Good news: Filing bankruptcy triggers the automatic stay, which immediately stops most creditor harassment, collection calls, lawsuits, wage garnishments, and even foreclosure proceedings in most cases.

4. You’re Facing Foreclosure, Repossession, or Wage Garnishment

• Behind on your mortgage and received a notice of default?
• Worried your car will be repossessed?
• Already dealing with a wage garnishment or bank levy?

These are urgent warning signs. In Colorado, Chapter 7 or Chapter 13 bankruptcy can often stop foreclosure and give you time to catch up or discharge unsecured debts. Colorado’s generous homestead exemption (up to $250,000 in home equity — or $350,000 if you, your spouse, or a dependent is 60+ or disabled) helps many Denver homeowners protect their homes.

5. You Have No Emergency Savings and Live Paycheck to Paycheck

If an unexpected expense (medical bill, car breakdown, or job change) would push you over the edge, and you have no savings left, your financial cushion has disappeared. Many people in this situation also max out credit cards and consider payday loans or retirement withdrawals — both of which can make things worse.

Other common triggers in Denver include overwhelming medical debt, divorce, business failure, or job loss in industries affected by economic shifts.

What Should You Do If You Recognize These Signs?

Don’t wait until the situation becomes a crisis. Speaking with an experienced Denver bankruptcy attorney early can help you understand your options, protect your assets, and stop stressful collection actions.

In Colorado, you may qualify for Chapter 7 bankruptcy if your household income is below the current median (as of late 2025/early 2026: approximately $85,685 for one earner, $106,690 for two, and higher for larger families). Even if your income is higher, the full means test often allows qualification after allowable expenses.

Filing fees in 2026:

• Chapter 7: $338
• Chapter 13: $313

Attorney fees vary by case complexity, but many Denver filers find the cost is far less than the ongoing stress and interest of unmanageable debt.

Take the First Step Toward Financial Relief

If several of these warning signs sound familiar, it’s time to explore your options. A confidential consultation with a Denver bankruptcy lawyer can give you clarity on whether Chapter 7, Chapter 13, or another debt solution is right for your situation — without any obligation. Also see /bankruptcy-blog/can-bankruptcy-stop-repossession-bank-or-wage-garnishment-in-colorado/

Ready to stop the stress? Contact our Denver bankruptcy law office today for a free, no-obligation consultation. We proudly serve clients throughout Denver, Highlands Ranch, Aurora, Lakewood, Arvada, and the entire Front Range.

Call LONG & LONG P.C. now at 303-832-2655 or fill out the contact form below to schedule your appointment.

This is general information and not legal advice. Every situation is unique. Results depend on your specific financial circumstances and federal and Colorado bankruptcy laws.

What is Debt Relief?

Debt relief refers to strategies that help individuals reduce, manage, or eliminate overwhelming debt. These strategies can include debt consolidation, debt settlement, credit counseling, or bankruptcy. Each option has its benefits and drawbacks, but bankruptcy stands out for its ability to provide a legally protected path to a fresh financial start.

How Bankruptcy Provides Debt Relief

Bankruptcy is a federal legal process designed to help individuals and businesses address unmanageable debt. By filing for bankruptcy, you can either eliminate certain debts or restructure them into an affordable repayment plan. The process begins with filing a petition in bankruptcy court, which triggers an automatic stay. This powerful tool immediately halts creditor actions like collection calls, lawsuits, wage garnishments, and even foreclosure proceedings.

Bankruptcy offers two main options for individuals: Chapter 7 and Chapter 13. Each provides unique benefits for debt relief, depending on your financial situation.

Chapter 7 Bankruptcy: Wipe Out Debt

Chapter 7 bankruptcy, often called “liquidation bankruptcy,” is ideal for those with limited income who can’t keep up with debt payments. It eliminates most unsecured debts, such as credit card balances, medical bills, and personal loans, typically within 4–6 months. A bankruptcy trustee may sell non-exempt assets to pay creditors, but most filers keep their property due to state and federal exemptions.

Who qualifies? You must pass a means test, which compares your income to the median income in your state. If your income is too high, Chapter 13 may be a better option.

Chapter 13 Bankruptcy: Restructure Your Debt

Chapter 13 bankruptcy, known as the “wage earner’s plan,” allows you to keep assets like your home or car while repaying debts over a 3- to 5-year plan. This is ideal for individuals with regular income who want to catch up on missed mortgage or car payments while managing other debts. At the end of the plan, remaining eligible debts may be discharged.

Who qualifies? Chapter 13 is suited for those with steady income and debts below certain limits (e.g., $465,275 for unsecured debts as of 2025).

Other Debt Relief Options

While bankruptcy is a powerful tool, it’s not the only path to debt relief. Here are some alternatives to consider, and how they compare:

• Debt Consolidation: Combines multiple debts into a single loan with a lower interest rate. This can simplify payments but doesn’t reduce the total debt owed.
• Debt Settlement: Negotiates with creditors to reduce the amount you owe. This can save money but may harm your credit and result in taxable forgiven debt.
• Credit Counseling: Works with a nonprofit agency to create a debt management plan. Payments are restructured, but you must still repay the full debt over time.

Unlike these options, bankruptcy offers legal protections, such as the automatic stay, and can fully discharge certain debts. However, it may impact your credit for 7–10 years, so consulting a bankruptcy attorney is key to choosing the best path.

Benefits of Bankruptcy for Debt Relief

Bankruptcy offers unique advantages for those struggling with debt:

• Stop Creditor Harassment: The automatic stay halts collection efforts, giving you peace of mind.
• Eliminate or Restructure Debt: Chapter 7 wipes out eligible debts, while Chapter 13 creates affordable payments.
• Protect Assets: Exemptions in Chapter 7 and repayment plans in Chapter 13 help you keep your home, car, and other essentials.
• Fresh Start: Bankruptcy clears the slate, allowing you to rebuild your financial future.

Is Bankruptcy Right for You?

Deciding to file for bankruptcy depends on your unique situation. Ask yourself:

• Are you unable to pay bills despite cutting expenses?
• Are you facing foreclosure, repossession, or wage garnishment?
• Do you have mostly unsecured debts (e.g., credit cards, medical bills) or secured debts (e.g., mortgage, car loan)?

A bankruptcy attorney can assess your income, debts, and goals to recommend the best debt relief strategy. For example, Chapter 7 may suit those with high unsecured debt and low income, while Chapter 13 is better for protecting assets or catching up on missed payments.

How to Get Started with Bankruptcy

Here’s a quick overview of the bankruptcy process:

1. Consult a Bankruptcy Attorney: Meet with an experienced attorney to review your finances and explore Chapter 7 or Chapter 13.
2. Complete Credit Counseling: Take a mandatory course from an approved agency before filing.
3. File Your Petition: Submit detailed financial paperwork to the bankruptcy court to start the process.
4. Attend the 341 Meeting: Meet with a trustee and creditors (if they attend) to discuss your case.
5. Follow Through: In Chapter 7, eligible debts are discharged in months. In Chapter 13, you’ll make payments for 3–5 years.
6. Complete Financial Education: Take a debtor education course to receive your discharge.

Why Choose LONG & LONG for Debt Relief?

Attorney Martin Long is a Former Trustee for the U.S. Bankruptcy Court. At LONG & LONG, we understand the stress of financial hardship. Our dedicated bankruptcy attorneys in the Denver and Colorado area have helped countless clients achieve debt relief through bankruptcy and other solutions. We provide personalized guidance, from evaluating your options to securing your financial fresh start.

Ready to break free from debt? Contact us today for a free consultation. Call 303-832-2655 or fill out our online contact form to schedule an appointment. Let us help you find the best path to financial freedom.

Frequently Asked Questions About Debt Relief and Bankruptcy

Will bankruptcy ruin my credit forever?

No. While bankruptcy stays on your credit report for 7–10 years, you can rebuild credit with responsible financial habits, like paying bills on time.

Can bankruptcy stop foreclosure?

Yes, the automatic stay can pause foreclosure, and Chapter 13 can help you catch up on missed mortgage payments.

What debts can’t be discharged?

Most student loans, child support, alimony, and certain taxes are not dischargeable, but an attorney can clarify what applies to you.

Take the first step toward debt relief today. Contact LONG & LONG now to discuss how bankruptcy or other solutions can help you achieve a brighter financial future. Operators are standing by to assist you 24/7. Here’s the clickable version of your link:

Denver Bankruptcy Attorney Near Me: Your Guide to Financial Relief

Why Choose a Denver Bankruptcy Attorney?

Filing for bankruptcy is a significant decision that requires personalized guidance from a skilled attorney familiar with Colorado’s bankruptcy laws. A local Denver bankruptcy attorney offers several advantages:

• Unmatched Local Expertise: Attorney Martin Long is a former Chapter 7 Trustee for the U. S. Bankruptcy Court. Our attorneys at Long & Long understand the nuances of Colorado bankruptcy courts, including the U.S. Bankruptcy Court for the District of Colorado, ensuring your case is handled efficiently.
• Personalized Service: Unlike large firms, we provide one-on-one attention, ensuring you feel supported throughout the process. Our Centennial office, conveniently located next to I-25 and Arapahoe Road, offers easy access throughout the Front Range, flexible hours and free parking for easy access.
• Comprehensive Support: From initial consultations to post-bankruptcy credit repair advice, we help you navigate every step, including the mandatory pre- and post-bankruptcy counseling courses.

Understanding Chapter 7 and Chapter 13 Bankruptcy

Bankruptcy laws offer different options depending on your financial situation. Here’s a breakdown of the two most common types for individuals:

Chapter 7 Bankruptcy: A Fresh Start

Chapter 7, often called “liquidation bankruptcy,” is ideal for individuals with limited income who need to discharge unsecured debts like credit card balances or medical bills. To qualify, you must pass the “means test,” which compares your income to Colorado’s median income for your household size.

• Benefits: Discharges most unsecured debts, stops wage garnishments, and halts creditor harassment through an automatic stay.
• Process: Involves disclosing all income, debts, and assets. Our attorneys at Long & Long help identify exempt assets (like your home or car) to protect them from liquidation.
• Timeline: Typically takes 4-6 months, with a “Meeting of Creditors” where our former U.S. Bankruptcy Court Trustee, Martin E. Long, guides you through questioning under oath.

Chapter 13 Bankruptcy: Reorganization for Stability

Chapter 13, known as “reorganization bankruptcy,” is suitable for those with regular income who want to keep non-exempt assets, like a home facing foreclosure. It involves a 3-5 year repayment plan tailored to your budget.

• Benefits: Prevents foreclosure, allows you to “strip off” second mortgages, and restructures debts into manageable payments.
• Process: You submit payments to a trustee, who distributes them to creditors based on priority. Our attorneys ensure your repayment plan is feasible and compliant.
• Who Qualifies: Ideal for those who don’t pass the Chapter 7 means test or have non-exempt assets or non-dischargeable debts like taxes or child support.

Why Long & Long Stands Out

At Long & Long, we’re committed to making bankruptcy accessible and stress-free. Here’s why Denver residents trust us:

• Experience: Attorney Martin E. Long, a former U.S. Bankruptcy Court Trustee, has conducted thousands of bankruptcy cases, offering unmatched insight into the process.
• Affordability: We offer free consultations, affordable fees (Chapter 7: $1,700-$3,000+; Chapter 13: $4,500+), and flexible payment plans to ease financial strain.
• Client-Centered Approach: We prioritize your peace of mind, providing 24/7 access to our team and clear explanations of each step. Our clients praise our compassion and professionalism, with reviews highlighting our ability to navigate complex cases.
• Convenient Location: Our Centennial office serves metro Denver, Aurora, Littleton, Englewood, Highlands Ranch, Castle Rock, Colorado Springs and beyond, with virtual consultations available for those outside the metro area.

Common Reasons to File for Bankruptcy in Denver

Life’s challenges can lead to overwhelming debt. Common reasons Denver residents file for bankruptcy include:

• Medical Bills: Unexpected healthcare costs are a leading cause of bankruptcy, even for insured individuals.
• Job Loss or Income Disruption: Unemployment or reduced income can make it impossible to keep up with debt payments.
• Credit Card Debt: High-interest credit card balances can spiral out of control during financial hardship.
• Foreclosure or Wage Garnishment: Bankruptcy’s automatic stay can halt foreclosure and garnishment, giving you time to regroup.

What to Expect When Working with Long & Long

1. Free Consultation: Schedule a no-obligation consultation by calling (303) 832-2655 or visiting www.denverbankruptcylawyer.net. Bring details of your debts, income, and expenses for a thorough evaluation.
2. Document Preparation: We’ll provide a Chapter 7 Timeline, intake sheet, and fee agreement via DocuSign for easy signing. Complete the intake sheet, and we’ll review it promptly.
3. Counseling Courses: Complete the required pre- and post-bankruptcy counseling courses (about 1.5 hours each, at a nominal cost) to meet court requirements.
4. Filing and Representation: We handle all paperwork and strategies and represent you at the Meeting of Creditors, ensuring a smooth process.
5. Post-Bankruptcy Support: We offer guidance on rebuilding your credit, helping you achieve a 700+ credit score within 24 months.

Debts That Cannot Be Discharged

Not all debts are dischargeable in bankruptcy. These include:

• Child support and alimony
• Most student loans
• Certain taxes
• Criminal fines or restitution

Our attorneys will review your debts to determine which can be discharged and advise on the best course of action.

Take the First Step Toward Financial Freedom

If you’re searching for a “Denver bankruptcy attorney near me,” Long & Long is here to help. With decades of experience, a client-first approach, and a commitment to affordability, we’ll guide you through Chapter 7 or Chapter 13 bankruptcy to secure a brighter financial future. Don’t let debt control your life—call (303) 832-2655 or visit www.denverbankruptcylawyer.net to schedule your free consultation today. Also check out our posts at: Here’s your clickable website link:

👉 Getting Credit Cards After Filing for Bankruptcy

👉 What is Bankruptcy? A Complete Guide to Understanding Your Options

Disclaimer: The information provided is for general purposes only and does not constitute legal advice.

Action Steps to Ensure Your Bankruptcy Discharge

1. Verify Your Account Status with Secured Creditors 

Contact your mortgage company and other secured lenders in writing to confirm that your accounts are current. This includes verifying that you’ve paid any additional fees they may have charged related to your bankruptcy, such as costs for filing a proof of claim. Request a written statement from each lender confirming your account is up to date.

2. Stay Ahead on Payments 

To avoid any last-minute issues, we strongly recommend staying one month ahead on both your Chapter 13 plan payments to the trustee and your payments to secured creditors (e.g., mortgage or car loans). Maintaining this buffer until your discharge is granted will help ensure you meet all requirements, even if unexpected delays or fees arise.

3. Contact your Attorney with Questions 

Always contact your attorney 4 to 5 months before the end of the Plan to make sure you are on tract to receive your discharge.

Why These Steps Matter

Under 11 U.S.C. § 1328, the bankruptcy court requires strict compliance with your Chapter 13 plan to grant a discharge, which eliminates eligible debts and completes your bankruptcy case. Missing even a single payment or failing to address lender fees could jeopardize your discharge, prolonging financial stress. By staying proactive and working with your Denver bankruptcy attorney, you can avoid these pitfalls and secure your fresh start.

You’re Almost There!

Reaching the final months of your Chapter 13 plan is a significant milestone. With just a few steps left, you’re on the verge of achieving debt relief and financial freedom.

What is Bankruptcy? A Complete Guide to Understanding Your Options

Considering a Chapter 13 bankruptcy? Contact our experienced Denver bankruptcy attorneys today for personalized guidance. Schedule a free consultation with Martin Long of LONG & LONG by calling 303-832-2655 or visiting Denver Bankruptcy Lawyer | Centennial Chapter 7 & 13 Bankruptcy Attorney | LONG & LONG . We’re here to help you navigate the U.S. Bankruptcy Court for the District of Colorado and achieve your financial goals.

How Does Bankruptcy Work? A Step-by-Step Guide to Debt Relief

What is Bankruptcy? A Complete Guide to Understanding

How Does Bankruptcy Work? A Step-by-Step Guide to Debt Relief

What Does Bankruptcy Do?

Bankruptcy is a legal process governed by federal law that helps individuals and businesses manage or eliminate debts they cannot pay. It provides a fresh start by either discharging (eliminating) certain debts or restructuring them into a manageable repayment plan. When you file for bankruptcy, an automatic stay immediately stops most creditor actions, such as collection calls, lawsuits, wage garnishments, and foreclosures, giving you time to address your financial situation.

Types of Bankruptcy for Individuals

Before diving into the process, it’s important to know the two main types of bankruptcy for individuals: Chapter 7 and Chapter 13. Each works differently and suits different financial situations.

• Chapter 7 (Liquidation): This eliminates most unsecured debts (e.g., credit cards, medical bills) by liquidating non-exempt assets to pay creditors. It’s ideal for those with low income and few assets.
• Chapter 13 (Repayment Plan): This allows you to keep your property while repaying debts over 3–5 years. It’s suited for those with regular income who want to protect assets like a home or car.

How Does Bankruptcy Work? A Step-by-Step Guide

The bankruptcy process varies slightly depending on whether you file Chapter 7 or Chapter 13, but here’s a general overview of the key steps:

Step 1: Evaluate Your Financial Situation

Start by assessing your debts, income, expenses, and assets. Consulting a bankruptcy attorney is crucial at this stage. They’ll help determine if bankruptcy is the best option or if alternatives like debt settlement or credit counseling might work better. A qualified attorney can also recommend whether Chapter 7 or Chapter 13 is right for you.  

Step 2: Complete Credit Counseling

Before filing, you must complete a credit counseling course from an approved agency. This course, which takes about 1–2 hours, reviews your financial situation and explores debt relief options. You’ll receive a certificate of completion, which must be filed with your bankruptcy petition.

Step 3: File the Bankruptcy Petition

Filing begins with submitting a bankruptcy petition to the federal bankruptcy court in your district. This includes detailed forms listing your income, expenses, assets, debts, and financial transactions. Once filed, the automatic stay takes effect, halting creditor actions. Your attorney will ensure all paperwork is accurate to avoid delays or complications.  https://www.uscourts.gov/court-programs/bankruptcy

Step 4: Meet with the Bankruptcy Trustee

After filing, a bankruptcy trustee is appointed to oversee your case. You’ll attend a 341 meeting of creditors (named after Section 341 of the Bankruptcy Code), typically 20–40 days after filing. At this meeting, the trustee and creditors (if they attend) ask questions about your finances under oath. Your attorney will prepare you for this straightforward process, which usually lasts 10–15 minutes. https://www.cacb.uscourts.gov/video/bankruptcy-basics-part-5-creditors-meeting

Step 5: Follow the Bankruptcy Process

The next steps depend on your bankruptcy type:

Chapter 7: The trustee reviews your assets to determine if any non-exempt property can be sold to pay creditors. In most cases, filers keep all their property due to exemptions. After 60–90 days, eligible debts are discharged, meaning you’re no longer obligated to pay them. The entire process typically takes 4–6 months. https://www.irs.gov/businesses/small-businesses-self-employed/bankruptcy-frequently-asked-questions

Chapter 13: You propose a repayment plan, which the court must approve. You’ll make monthly payments to the trustee, who distributes funds to creditors. The plan lasts 3–5 years and remaining eligible debts may be discharged upon completion.  https://www.weltman.com/publication-your-top-chapter-7-and-13-bankruptcy-questions-answered

Step 6: Complete a Financial Management Course

Before receiving a discharge, you must complete a debtor education course (different from the initial credit counseling). This course teaches budgeting and financial management skills to help you avoid future debt problems. You’ll file a certificate of completion with the court.

Step 7: Receive Your Discharge

Once all requirements are met, the court issues a discharge order. In Chapter 7, this wipes out eligible debts. In Chapter 13, it eliminates remaining eligible debts after completing the repayment plan. Note that some debts, like student loans, child support, and certain taxes, are typically not dischargeable. https://www.justice.gov/ust/bankruptcy-information-sheet-0

What Happens After Bankruptcy?

After bankruptcy, you can start rebuilding your financial life. While bankruptcy stays on your credit report for 7–10 years (7 for Chapter 13, 10 for Chapter 7), its impact lessens over time. To rebuild credit, focus on paying bills on time, maintaining a low debt-to-income ratio, and using secured credit cards responsibly. https://www.boginmunns.com/faqs/bankruptcy-frequently-asked-questions/

Bankruptcy also offers a fresh start, free from the stress of unmanageable debt. You may be able to qualify for certain loans, like FHA mortgages, as soon as 1–2 years after filing, depending on your situation.

Why Work with LONG & LONG?

Attorney Martin E. Long is a former Bankruptcy Trustee for the U.S. Bankruptcy Court, District of Colorado. Navigating bankruptcy can be overwhelming, but you don’t have to do it alone. At LONG & LONG, our compassionate bankruptcy attorneys in Denver, Colorado have helped countless clients throughout Colorado achieve debt relief through Chapter 7 and Chapter 13. We provide personalized guidance, from filing your petition to securing your discharge, ensuring a smooth process.

Ready to take control of your finances? Contact us today for a free consultation. Call 303-832-2655 or fill out our online contact form to schedule an appointment. Let us help you start your journey to a debt-free future.

Frequently Asked Questions About Bankruptcy

Will I lose everything if I file for bankruptcy?

No. Exemptions protect certain assets, like your home, car, and personal belongings, in most cases. An experienced bankruptcy attorney will maximize what you keep.

 Common Bankruptcy Questions

How long does bankruptcy take?

Chapter 7 typically takes 4–6 months, while Chapter 13 lasts 3–5 years due to the repayment plan.  https://hallnavarro.com/11-common-bankruptcy-questions-answered/

Can bankruptcy stop foreclosure?

Yes, the automatic stay can temporarily halt foreclosure, and Chapter 13 can help you catch up on missed payments.

Don’t let debt control your life. Contact LONG & LONG at 303-832-2655 or through this website. You will receive a quick response today to learn how bankruptcy works and explore your path to financial freedom./bankruptcy-blog/chapter-7-vs-chapter-13-bankruptcy/

Why Tax Refunds Matter in Bankruptcy

Tax refunds are considered part of your bankruptcy estate, meaning they could be subject to scrutiny by the bankruptcy trustee. In Chapter 7 bankruptcy, a refund might be treated as an asset that could be used to pay creditors. In Chapter 13 bankruptcy, it could affect your repayment plan. Spending your refund improperly before filing could lead to accusations of hiding assets or fraud, potentially jeopardizing your case. To avoid issues, you need to know what’s allowed and what’s not.

General Guidelines for Spending Tax Refunds

Before diving into specifics, here’s a key principle: Bankruptcy courts expect you to use your tax refund for reasonable and necessary expenses. Lavish or non-essential spending can raise red flags and may be seen as an attempt to hide assets from creditors. Always consult with a bankruptcy attorney before spending your refund to ensure compliance with local bankruptcy rules.

Here are some general do’s and don’ts:

• Do: Spend on essential living expenses or debts that align with your normal budget.
• Don’t: Make large, luxury purchases or transfer the refund to someone else to “protect” it.

Now, let’s break down what you can safely spend your tax refund on before filing bankruptcy.

Acceptable Ways to Spend Your Tax Refund

The following expenses are generally considered reasonable by bankruptcy courts, as they reflect typical household needs or financial obligations. However, keep receipts and documentation to prove how the money was used.

1. Everyday Living Expenses

You can use your tax refund to cover basic necessities, including:

• Groceries and household supplies
• Rent or mortgage payments
• Utilities (electricity, water, internet, etc.)
• Transportation costs (gas, public transit, or car maintenance)

Why It’s Okay: These expenses are essential for maintaining your household and are unlikely to be questioned unless the amounts are excessive.

Tip: Stick to your usual spending patterns. For example, don’t buy a year’s worth of groceries at once, as this could look like an attempt to “use up” the refund.

2. Medical Expenses

Paying for healthcare costs is typically allowed, such as:

• Doctor or dentist visits
• Prescription medications
• Urgent medical procedures

Why It’s Okay: Courts recognize medical care as a priority, especially if it’s necessary to maintain your health or ability to work.

Tip: If you’re catching up on overdue medical bills, check with your attorney to ensure the timing doesn’t raise suspicion, and do not pay the creditor $600 or more.

3. Car Repairs or Maintenance

Using your refund for vehicle-related expenses is often permissible, including:

• Oil changes or tire replacements
• Repairs to keep your car operational
• Car insurance payments

Why It’s Okay: A functioning vehicle is often essential for work and daily life, especially if you don’t have access to public transportation.

Tip: Avoid buying a new car or making luxury upgrades, as these could be seen as non-essential.

4. Paying Certain Debts

You can use your refund to pay some debts, but be cautious:

• Secured debts: Payments on your mortgage or car loan are generally fine, as they protect assets you want to keep.
• Regular monthly bills: Paying utility bills in your normal amounts is typically safe.
• Court-ordered obligations: Payments like child support or alimony are almost always acceptable.

Why It’s Okay: These payments show you’re maintaining financial responsibilities, not hiding money.

Warning: Avoid paying off large amounts ($600 or more) to one creditor (especially friends or family) right before filing, as this could be considered a “preferential transfer” and undone by the trustee.

5. Legal Fees for Bankruptcy

Using your tax refund to pay your bankruptcy attorney or filing fees is usually allowed.

Why It’s Okay: Courts recognize the need to fund your bankruptcy case, and legal fees are considered a legitimate expense.

Tip: Ensure the payment is reasonable and documented to avoid any misinterpretation.

What to Avoid Spending Your Tax Refund On

Certain spending habits can jeopardize your bankruptcy case. Steer clear of these to avoid complications:

1. Luxury Purchases

Avoid spending on non-essential or extravagant items, such as:

• Vacations or travel
• High-end electronics (e.g., a new TV or gaming console)
• Designer clothing or jewelry

Why It’s Risky: These purchases can be seen as an attempt to dissipate assets, potentially leading to objections from the trustee or even a denial of discharge in extreme cases.

2. Paying Off Friends or Family

Repaying loans to relatives or close friends right before filing is a red flag.

• Example: Giving $5,000 to your cousin to “settle” an informal loan.

Why It’s Risky: The trustee may view this as hiding assets and could demand the money be returned to the bankruptcy estate.

3. Large Cash Withdrawals or Transfers

Taking out cash or moving your refund to another account (or someone else’s) can look suspicious.

• Example: Depositing your refund into a child’s account to “keep it safe.”

Why It’s Risky: This could be interpreted as fraud, leading to serious consequences like a dismissed case.

4. Gambling or Speculative Investments

Spending your refund on risky ventures, like gambling, cryptocurrency, or stocks, is a bad idea.

• Why It’s Risky: These actions suggest you’re trying to dispose of the refund rather than using it responsibly.

Chapter 7 vs. Chapter 13: How It Affects Your Refund

The type of bankruptcy you file impacts how your tax refund is handled:

• Chapter 7 Bankruptcy:
  • Your tax refund is considered an asset. If you receive it before filing, spending it improperly could lead to issues.
  • Some states allow exemptions to protect part or all of your refund (e.g., earned income credit for a child, additional child  tax credit, wildcard exemptions). Check with your attorney to see what applies in your state.
  • Timing matters: If you file late in the year or early in the year the tax refund you have earned up to that point but have not received will be claimable by the trustee.
• Chapter 13 Bankruptcy:
  • Your refund may need to be included in your repayment plan to pay creditors.
  • Courts may require you to turn over refunds during the plan (3-5 years) unless you budget them for necessities.
  • Spending the refund before filing is less scrutinized, but you still need to justify it as reasonable.

Pro Tip: Discuss your refund with your attorney to see if exemptions or timing strategies can protect it.

Timing Your Bankruptcy Filing

When you file bankruptcy relative to receiving your tax refund can make a big difference:

• Before Receiving Your Refund: If you haven’t received your refund yet, it can be considered part of your estate. If, for example, you file bankruptcy on November 1, the tax refund you earned from January 1 to October 31 can be considered part of the bankruptcy estate.
• After Spending Your Refund: If you’ve already spent the refund, be prepared to show it went to legitimate expenses. Courts typically look back 90 days to 1 year for questionable transactions.

Best Practice: Keep detailed records (receipts, bank statements) of how you spent the refund, and avoid filing immediately after large purchases to reduce suspicion.

Practical Steps to Protect Your Refund

1. Consult a Bankruptcy Attorney: Before spending your refund, get personalized advice to ensure compliance with local laws.
2. Document Everything: Save receipts and bank statements to prove your spending was reasonable if questioned.
3. Use Exemptions: Ask your attorney about state or federal exemptions that might protect your refund from creditors.
4. Budget Wisely: Incorporate the refund into your normal budget rather than treating it as “extra” money.
5. Avoid Sudden Changes: Don’t alter your spending habits drastically before filing, as consistency looks better to the court.

Conclusion: Spend Smart, File Confidently

Your tax refund can be a valuable resource, but spending it wisely before filing bankruptcy is critical to a smooth case. Stick to necessary expenses like rent, utilities, medical bills, or legal fees, and avoid luxury purchases or payments to friends and family. By planning ahead and consulting a bankruptcy attorney, you can use your refund responsibly without risking your fresh financial start.

Ready to file bankruptcy and protect your assets? Contact our experienced bankruptcy attorneys at LONG & LONG today at  303-832-2655 for a free consultation. We’ll guide you through every step to ensure your tax refund and finances are handled correctly.

How Chapter 7 Bankruptcy Can Impact Your Tax Return

Understanding Bankruptcy and Divorce

Bankruptcy and divorce are two separate legal processes, but they often intersect when a marriage ends amid financial strain. Bankruptcy can help eliminate or reorganize debts, while divorce divides assets and liabilities between spouses. The timing of these events can significantly affect your financial outcome, so it’s critical to weigh your options carefully.

There are two primary types of personal bankruptcy to consider:

• Chapter 7 Bankruptcy: A liquidation process that wipes out most unsecured debts (e.g., credit card debt, medical bills) but may require selling non-exempt assets.
• Chapter 13 Bankruptcy: A repayment plan that allows you to restructure debts over 3-5 years while keeping your assets.

Each type interacts differently with divorce, so let’s explore the timing question step by step.

Filing Bankruptcy Before Divorce

Filing for bankruptcy before finalizing your divorce can streamline the process, especially if you and your spouse are on amicable terms and share significant debt. Here’s why this might be the right choice:

Pros:

1. Joint Filing Option: If you’re still married, you and your spouse can file a joint bankruptcy petition. This can save time, reduce legal fees, and address all marital debts in one case.
2. Simplified Debt Division: Bankruptcy can discharge shared debts (like credit cards or personal loans) before the divorce, leaving fewer financial loose ends to split in court.
3. Lower Costs: Handling bankruptcy first consolidates legal efforts, potentially reducing the overall expense of two separate proceedings.
4. Protects Divorce Negotiations: Clearing debts beforehand can prevent disputes over who’s responsible for what during the divorce.

Cons:

1. Delays Divorce Proceedings: Bankruptcy triggers an “automatic stay,” halting most legal actions, including your divorce, until the bankruptcy case is resolved.
2. Income Complications: If you file Chapter 7 jointly, both spouses’ incomes are considered. A higher combined income might disqualify you from Chapter 7, pushing you toward Chapter 13 instead.
3. Asset Risks: In Chapter 7, non-exempt assets could be liquidated, complicating property division in the divorce.

Best For:

• Couples with significant joint debt who can cooperate.
• Situations where both spouses want a clean financial slate before parting ways.

Filing Bankruptcy After Divorce

Waiting until after your divorce is finalized to file bankruptcy might make sense if your financial situation is tied up in the divorce settlement or if you and your spouse can’t agree on a joint filing. Here’s what to consider:

Pros:

1. Individual Control: Post-divorce, you file bankruptcy based solely on your income and assets, giving you more control over the process.
2. Divorce Debt Clarity: Divorce agreements often assign specific debts to each spouse. Filing afterward lets you address only your portion of the liability.
3. No Divorce Delay: Your divorce can proceed without interruption from an automatic stay, which might be critical if tensions are high.
4. Protects Settlement Assets: Bankruptcy exemptions can shield assets you receive in the divorce, like a home or car, if timed correctly.

Cons:

1. Higher Costs: Separate bankruptcy filings for each spouse can double legal fees compared to a joint filing before divorce.
2. Lingering Joint Debt: If the divorce doesn’t fully resolve shared debts, you might still be liable for your ex-spouse’s obligations unless discharged in bankruptcy.
3. Credit Impact Timing: Divorce can already hurt your credit; adding bankruptcy afterward might prolong your financial recovery.

Best For:

• Individuals with minimal joint debt or significant personal debt post-divorce.
• Cases where divorce negotiations are contentious or complex.

Key Factors to Consider

To decide whether to file bankruptcy before or after divorce, evaluate these critical elements:

1. Type of Debt: Are your debts joint (e.g., a mortgage or co-signed loans) or individual? Joint debts are easier to handle in a pre-divorce bankruptcy.
2. Cooperation Level: Can you and your spouse work together on a joint filing? If not, waiting until after the divorce might be less stressful.
3. Income and Eligibility: Your combined income before divorce might affect Chapter 7 eligibility. Post-divorce, your individual income could qualify you more easily.
4. Assets at Stake: Consider how bankruptcy might impact property division. Filing after divorce lets you protect assets awarded in the settlement.
5. Timing and Stress: Are you in a rush to finalize the divorce? Bankruptcy first could delay things, while bankruptcy after might extend your financial burden.

How Bankruptcy and Divorce Interact

• Automatic Stay: Filing bankruptcy halts divorce proceedings temporarily, which can be a pro or con depending on your goals.
• Property Division: Divorce courts divide marital property, but bankruptcy courts determine what’s exempt from liquidation. Timing these processes can protect or jeopardize assets.
• Alimony and Support: Bankruptcy doesn’t discharge domestic support obligations (e.g., alimony or child support), so these remain intact regardless of when you file.
• Chapter 13 bankruptcy versus Chapter 7 bankruptcy: Chapter 13 allows discharge of property se

Practical Steps to Decide

1. Consult Professionals: Speak with a bankruptcy attorney and a divorce lawyer to assess your situation. Many offer free initial consultations.
2. Review Finances: List all debts, assets, and income—both joint and individual—to see how each option affects you.
3. Plan Your Goals: Are you prioritizing speed, cost savings, or asset protection? Your priorities will guide your choice.
4. Consider Mediation: If filing jointly before divorce, mediation can help you and your spouse align on financial decisions.

Conclusion: What’s Right for You?

There’s no one-size-fits-all answer to whether you should file bankruptcy before or after divorce. Filing before works best for couples with shared debt and a cooperative mindset, offering a fresh start with lower costs. Filing after suits those with individual debt or complex divorce terms, giving you flexibility post-settlement.

Ultimately, your decision hinges on your financial snapshot and personal circumstances. By consulting experts and weighing the pros and cons, you can choose the path that minimizes stress and maximizes relief. Ready to take the next step? Call or text  LONG & LONG now at 303-832-2655, or through this website,  and ask to  schedule your free consultation to explore your options and secure your financial future. With over  35 years of experience and a former Trustee for the U. S. Bankruptcy Court, Attorney Martin E. Long is the go-to bankruptcy attorney in Colorado. Here’s the clickable link:

Are Divorce Debts Discharged in Bankruptcy?

CHAPTER 11

A Bankruptcy Court sitting in a Chapter 11 case has very broad powers to allow a Chapter 11 business debtor to re-negotiate with utility companies, supply contractors and unions or other labor representatives as well many, many other individuals or entities. Chapter 11 business cases are when you want to keep their business going and you have has a realistic chance to do so, if certain costs are renegotiated and other legal objections are met. It is important to note, however, that Chapter 11 cases are complicated and expensive. It is critical that before filing for relief under Chapter 11 of the Bankruptcy Code you have a detailed discussion with your experienced bankruptcy attorney regarding your current state of affairs as well as your realistic goals for your small business in the near, intermediate and long term future. These discussions will inform your attorney as to whether it is better to negotiate a pre-packaged Chapter 11 case and then file or whether it is better to file for relief under Chapter 11 and file for various protective Order on the first day at the inception of your case.

CHAPTER 13

            Yes, Chapter 13 has a place in small business bankruptcy discussions. If you are your businesses only employee and there are numerous guarantees that you signed incurring liability in your personal capacity as well as your capacity as the owner of your small business, perhaps even using personal property or your home as collateral, you may need to file for Chapter 13 bankruptcy. If you file for relief under Chapter 13 of the bankruptcy you must be an individual, and you file as an individual, doing business as, or who owns the specific company.

CHAPTER 7

            Chapter 7 of the Bankruptcy Code allows for a business to file for relief under Chapter seven to liquidate the business. If your business does not have significant name or brand recognition and if there is little in the way of actual assets that the business owns, such as tools, a fleet of cars, many computers, et cetera, it may be worth your while to liquidate the company and officially unwind your business with the state. If you work as an educated professional your value lay in your education and experience. Plumbers, welders, electricians and all manner of skill craftsman as well as lawyers, accountants and architects certainly fall within the ambit of this discussion. You can always reopen a new business doing the same thing you are skilled at.

          The law firm of Long & Long have decades of combined experience in bankruptcy and has the know how to represent any type of client, whether debtor or creditor, in any type of bankruptcy proceeding, including Chapter 11 and Chapter 7. Long & Long can be reached at (303) 832-2655.     

http://www.denverbankruptcylawyer.net                                                                                                                  

The first thing you must do when a debt collector calls is to inquire if indeed they are the creditor themselves–such as the actual doctor’s office or hospital business office itself. They may be from a third party collection agency.

Next it is important to determine if they are trying to collect on a real debt or fake debt. As of late, this has become a serious problem. Although there are also many legally and ethically appropriate debt collection firms, many debt collection firms are notorious for operating outside the strictures of the FDCPA. Even with the many protections provided by the FDCPA, some debt collection efforts become too much even for the most resilient debtor.

TAKE STOCK OF YOUR DEBT

            After determining whether your debt is legitimate, you should determine your overall debt. You can obtain a free credit report, and it pays to make sure that all of your information listed is correct. It is best to check your credit report at least once a year to make sure you are not the victim of identity theft.

If after review you find that you cannot realistically pay down your debt to a level you are comfortable with, you should contact a consumer rights attorney who can explain your options; this may include evaluating bankruptcy options. 

FILING FOR BANKRUPTCY

Bankruptcy is a federal law that provides the ultimate trump card for almost all debt collection activity. A Chapter 7 allows debtors to get rid of their dischargeable debt without further payments. A Chapter 13 allows debtors to eliminate dischargeable debt while paying  nondischargeable debt such as taxes, child support, student loans. As such, there are extremely few situations where a debt collector would not be stopped in their tracks if the debtor filed for bankruptcy.

Experienced bankruptcy attorneys understand the larger legal structure of debtor-creditor rights and responsibilities. They know what creditors are able to sue for, how to go about defending those claims and ensure that their clients’ rights are scrupulously protected. They understand whether a debt is unenforceable due to statute of limitations or if the creditor would not be able to obtain jurisdiction over you. Once you retain an attorney, they will stand between you and the debt collectors. Depending on the action plan that you and your attorney decide upon, your attorney may try to negotiate the debt down to a reasonable level, work out a payment plan or deal with the creditor through a bankruptcy proceeding.

GET LEGAL HELP

            If debt collectors are harassing you, it pays to know your rights and to have an aggressive, experienced advocate that knows how to deal with them both legally and practically. The attorneys of Long & Long have decades of experience in thousands of bankruptcy cases. Few law firms can match the dedication, professionalism and experience of Long & Long. In fact, Attorney Martin Long is a former Trustee for the U. S. Bankruptcy Court. You can contact us by calling (303) 832-2655. 

/bankruptcy-blog/top-tips-for-handling-debt-collectors-in-colorado

/bankruptcy-blog/understanding-the-colorado-fair-debt-collection-practices-act

Bankruptcy is a significant financial event that can affect your credit score. It is essential to understand how bankruptcy affects your credit score, as this score plays a crucial role in your ability to secure loans, obtain favorable interest rates, and even rent an apartment or get a job in some cases.

Immediate Impact on Credit Score

1. Credit Score Drop: Filing for bankruptcy can typically cause a drop in your credit score. This drop can vary depending on your initial score and the type of bankruptcy filed. For example, a Chapter 7 bankruptcy remains on your credit report for 10 years from the filing date, while Chapter 13 remains for 7 years. However, after this initial drop, the effect of bankruptcy on your credit score diminishes over time.  

2. Public Record: Bankruptcy is a matter of public record, which means it will be visible to lenders and others who check your credit report. This public record status can negatively affect your creditworthiness and how lenders perceive your financial responsibility.

Rebuilding Your Credit Score After Bankruptcy

1. Timely Payments: The most crucial step in rebuilding your credit score after bankruptcy is making timely payments on any remaining debts and new credit obligations. If you are making timely payments, make sure they report payments to the credit bureau. Payment history is a significant factor in determining your credit score, so demonstrating responsible financial behavior over time is essential.

2. Secured Credit Cards: A secured credit card, where you provide a deposit that serves as your credit limit, can be a useful tool in rebuilding credit. By making regular payments and keeping balances low relative to your credit limit, you can demonstrate responsible credit use. As stated earlier, ensure they report payments to the credit bureaus, so you get the credit score you deserve.

3. Monitor Your Credit Report: Regularly monitoring your credit report allows you to track your progress in rebuilding your credit score. It also helps you identify any errors or inaccuracies that may need correction, as these can further impact your creditworthiness.

Conclusion

Bankruptcy is a complex financial decision that should not be taken lightly due to its profound and lasting impact on your credit score. While it provides a fresh start for individuals overwhelmed by debt, it requires careful planning and disciplined financial management to rebuild credit over time. Understanding the implications of bankruptcy and taking proactive steps to improve your creditworthiness are crucial in regaining financial stability.

Rare is the situation where keeping your credit score outweighs eliminating debt through bankruptcy. By responsibly managing your finances, making timely payments, and establishing positive credit habits, you can gradually rebuild your credit score and regain access to financial opportunities in the future. For more information go to https://www.cob.uscourts.gov/. Begin your fresh start by calling LONG & LONG at 303-832-2655.

First- Discuss It With Your Bankruptcy Attorney

If you are concerned about what the other spouse’s reaction may be, the best course of action is to make an appointment with an experienced bankruptcy attorney. Come prepared with a list of debts and total debt. Tally the monthly minimum payments necessary to keep a creditor from filing a lawsuit. Separate the debts into
three categories. One category is the debts one spouse is solely liable. One category is the debts the other spouse is solely liable. The third category is the debts the spouses are jointly liable on. List the assets in three categories. One for assets solely owned by one spouse. One for assets solely owned by the other spouse.

How do you know if you are jointly liable? When it comes to credit cards it is often difficult to determine if the spouses are jointly liable. Both spouses are cardholders but only one spouse may be contractually liable. Generally, people do not have copies of the cardholder agreement. If not, look at the credit reports for each spouse. If a spouse is contractually liable the credit card debt should be on the credit report. If a spouse is not contractually liable, the credit card debt should not be listed on the credit report. For a free credit report go to www.annualcreditreport.com. For medical bills, in Colorado, both spouses are usually jointly liable for the debt under the Family Purpose Doctrine.

Second- Determine If Only One Spouse Needs to File Bankruptcy

In many cases, if a spouse has little separate and joint debt the spouse can avoid filing bankruptcy. In that case the non-filing spouse will be eager for the other spouse to file bankruptcy in order to better their financial future.

Third- Discuss It With Both Your Spouse And Your Bankruptcy Attorney

Once you have determined whether both spouses or just one spouse should file bankruptcy, then a consultation with both spouses and their bankruptcy attorney is advisable. At that time the bankruptcy attorney will analyze your options, Chapter 7 or Chapter 13, or debt settlement. The bankruptcy attorney will recommend the option that is in your best financial interest. Then, both spouses will agree on the best way forward for them and their family.

I often tell clients to look three to five years into the future. Is it better to get rid of debt now and start saving for the future, or continue to pay on the old debt for the next three to five years, with no savings?

Martin Long LONG & LONG

www.denverbankruptcylawyer.net.

How Much Time Must Lapse From a Previously Filed Bankruptcy in Order to File Chapter 7?

More than 8 years must have elapsed from a prior discharged Chapter 7 filing in order to obtain a discharge in a new Chapter 7.

More than 6 years must have lapsed since a prior discharged Chapter 13 filing in order to obtain a discharge in a new Chapter 7. Exceptions to the 6-year requirement in a prior Chapter 13 are if you paid 100 percent of the allowed unsecured claims, or at least 70 percent of the unsecured claims and the plan was in good faith and the debtor’s best effort. See 11 U.S.C. §727(a)(8) and §727(a)(9).

How Much Time Must Lapse From a Previously Filed Bankruptcy in Order to File Chapter 13?

The times are much shorter to file a Chapter 13. Only 4 years since a previously filed and discharged Chapter 7 or Chapter 11 bankruptcy are required in order to file a new Chapter 13 and obtain a discharge. For a previously filed and discharged Chapter 13 the time is only 2 years. See 11 U.S.C. §1328(f)(1) and §1328(f)(2).

Debt Limits in a Chapter 13

It is important to note that to qualify as an individual debtor in a Chapter 13 the unsecured debts must be less than $419,275, secured debts must be less than $1,257,850, and you must have regular income.

The time clock begins from the date of filing the prior bankruptcy, not the date of discharge. So, for example if you filed a Chapter 7 on April 15, 2015, that was later discharged, you must wait until April 16, 2023, to file another Chapter 7, if you want a discharge.

Questions? Have your financial situation considered by an experienced bankruptcy attorney and former Trustee for the U.S. Bankruptcy Court. Call or contact Martin Long at LONG & LONG now at 303-832-2655, or www.denverbankruptcylawyer.net.