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Here is How Filing for Bankruptcy Works in Colorado Springs

— June 28, 2023

Your creditors will be notified by the clerk that you filed for bankruptcy. Once you do that, the creditors can no longer touch you.

Colorado Springs, CO – Most people associate bankruptcy with becoming destitute, and losing their house and their car. Total nightmare. However, this is not what bankruptcy laws are meant to do. On the contrary, filing for bankruptcy may be the only solution to end the nightmare people struggling with debt are trapped in. If done right, filing for bankruptcy will allow you to make a fresh start. Debt-free. Also, if you consult experienced lawyers you may save some if not most of your assets. 

What are the steps when filing for bankruptcy in Colorado Springs

Chances are you’ve been warding off creditors for quite some time since you’re considering bankruptcy. Don’t rush it. Here is what you must do.

Talk to a lawyer

There are various types of bankruptcy available and you must understand what each of them entails. Reach out to seasoned Colorado Springs bankruptcy lawyers as soon as possible. Learn about Chapter 7 bankruptcy, also known as liquidation bankruptcy. Many Colorado residents go for it as it allows them to discharge most of their debts and the process is quick. You’ll be done in 4-6 months. 

See if Chapter 13 might be a better option. This is often referred to as the ‘wage-earners bankruptcy’. This does not involve selling any of your assets like Chapter 7 does. Chapter 13 focuses on reorganizing your debt in such a way that you can pay everything you owe in 3-5 years. You will have to prove that you earn enough to be able to do that. 

Businesses and other entities can opt for Chapter 11, which is similar to Chapter 13 as it centers on debt repayment.

Go to credit counseling

Blue notebook with white numbers on cover sitting next to a laptop; image by Volkan Olmez, via
Blue notebook with white numbers on cover sitting next to a laptop; image by Volkan Olmez, via

Under Colorado laws, before filing for bankruptcy you must complete a credit counseling course. This must be done in the six months before you file for bankruptcy. Check out the DOJ website to make sure you pick an approved credit counseling agency. 

Prepare your case

There’s a lot of paperwork involved in the process. The bankruptcy forms are dozens of pages long and they can be very confusing. You may want to seek help from reliable Colorado bankruptcy lawyers to make sure there are no mistakes in your form. If there are, the bankruptcy court clerk may reject your application and tell you to come back when your papers are in order.

However, bankruptcy forms are not the hardest part. 

When filing for bankruptcy you must submit a list of all your creditors. You are not allowed to cherry-pick who you want to pay. Your lawyers will explain what types of debts are dischargeable under Colorado laws.

You must also submit a list of all your assets. Well-versed Colorado Springs bankruptcy lawyers warn their clients not to hide anything. Bankruptcy courts are very thorough when looking at a debtor’s assets. If you are caught hiding some assets or transferring funds or real estate to a friend or relative, not only will your application be dismissed but you may find yourself charged with fraud. You must also provide pay stubs, bank statements and tax returns for the past few years. 

Tip: Since you’ll be dealing with lawyers and court clerks, now would be a good time to educate yourself a bit on legal matters.

Finally, you can file for bankruptcy

If you have a lawyer, this will be easy as they can file the papers for you. If not, you will have to go down to the bankruptcy court in your district, wait in line and present your documents to the clerk.

A court-appointed trustee will be in charge of selling your non-exempt property to cover your debts. Bankruptcy exemptions are very important so make sure to seek legal advice. 

Now for the good part – your creditors will be notified by the clerk that you filed for bankruptcy. Once you do that, the creditors can no longer touch you – all lawsuits are suspended, they cannot make wage garnishments, and they can’t even call you to ask about the money you owe them. Soon enough the nightmare will be over and you can start anew. 

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