| Colorado Springs Bankruptcy Attorneys/Chapter 7The vast majority of bankruptcies in Colorado are Chapter 7 bankruptcies, also known as a liquidation bankruptcy.The Colorado Springs Bankruptcy Lawyers at McKinney & Associates work with consumers every day, as clients seek a new beginning and a more secure financial future after years of struggling with debt. Filing for Chapter 7 Bankruptcy in Colorado will immediately stop foreclosure actions, garnishment of wages and even divorce actions.A Chapter 7 Bankruptcy in Colorado will eliminate virtually all types of debt with a few exceptions like tax debt or child support. Filing requires a consumer to relinquish property to a bankruptcy trustee, who then liquidates the assets and distributes the proceeds among creditors. |
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| But in reality, there are usually few assets to sell not already encumbered by loans, such as a mortgage. At the conclusion of this process, all unsecured debt – including credit card debt and medical bills – will be forgiven.In 2005, the federal government passed an overhaul of the consumer bankruptcy laws, largely at the request of big banks and credit card companies. This law was ostensibly designed to prevent consumers from abusing the bankruptcy system. Changes include applying an income-to-debt ratio in determining whether debt should be discharged or whether a repayment plan should be established. In reality, the bad-faith business practices of credit card companies and banks have been so egregious, and consumers have been so overwhelmed with debt, that the vast majority of bankruptcy filings in Colorado are still Chapter 7 liquidation bankruptcies.In 2009, about 85 percent of Colorado’s bankruptcies were Chapter 7 filings, according to the U.S. Bankruptcy Court. Fewer than 5,000 of the state’s 27,997 bankruptcies were not filed as Chapter 7 cases.Those who file for Chapter 7 bankruptcy are not eligible to do so again for a period of nine years. Proper filing is critical. In the event that a creditor is left off of the petition – even if a consumer did not realize that he or she owed the debt – a creditor may seek to collect and a consumer will be without the benefit of bankruptcy protection. In other cases, a court may determine that a consumer is abusing the bankruptcy system or may otherwise refuse to approve the filing.
Consulting an experienced Colorado bankruptcy lawyer is critical to protecting your rights and ensuring the long-term financial well-being of you and your family. For a free initial consultation in Colorado Springs and the surrounding area, contact McKinney & Associates today. Call 719-633-4541. McKinney & Associates — 719-633-4541 – Free Consultation |
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