Debt Relief and Bankruptcy: Your Path to Financial Freedom

Are you overwhelmed by mounting debt and searching for effective debt relief options? Bankruptcy may be the solution you need to regain control of your finances. At LONG & LONG P.C., our experienced bankruptcy attorneys in the Denver, Colorado area are here to guide you through the process. In this article, we’ll explore how bankruptcy works as a debt relief tool, compare it to other options, and help you decide if it’s right for you.

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 P.C. for Debt Relief?

Attorney Martin Long is a Former Trustee for the U.S. Bankruptcy Court. At LONG & LONG P.C., 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 P.C. 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