Overview of Chapter 7 Bankruptcy
In a Chapter 7 bankruptcy, you wipe out all of your debt and start over financially. Chapter 7 is sometimes called a “liquidation” bankruptcy. In chapter 7, a government employee called the trustee will review your bankruptcy forms and collect any non-exempt assets to be sold in order to pay creditors. In Colorado, there are “exemptions” which protect some of debtor’s property from being sold. Some of these exemptions are very generous, for example a person can keep an unlimited amount of their retirement funds and still wipe out most of their debts. Therefore in the vast majority of cases, chapter 7 bankruptcy wipes out the person’s debt and the person does not have to give up any property.
Debts such as mortgages and car loans can survive chapter 7 bankruptcy if you want to keep those items. There are some debts which can not be eliminated in Chapter 7, such as most tax debts, debts for most student loans, and alimony/child support obligations.
Preparation is the key to success in any type of legal matter. We have the bankruptcy experience necessary to prepare your case quickly and get it done right. We also have the expertise to determine whether chapter 7 is right for you, and suggest alternate bankruptcy avenues where appropriate.