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General Bankruptcy FAQ's
What is Bankruptcy?

When an individual or a business owes more money to creditors than they can afford to repay...they have the option of filing bankruptcy. Bankruptcy is a legal remedy that allows debtors (businesses or individuals) to start with a clean slate. Depending on the chapter of bankruptcy filed, the debtor can either work out a plan to pay the creditors on a payment plan...or wipe the debt out completely.

Who can file Bankruptcy?

Any individual or business owing money to a creditor can file for bankruptcy. There are few exceptions to this.

How often can I file Bankruptcy?

Filing bankruptcy can adversely affect your ability to obtain future credit, rent housing and even negatively impact a job application. Any decision to file must be carefully considered.

Chapter 7: You can file 8 years from a previous Chapter 7 filing. You can file 6 years from a previous Chapter 13 filing.

Chapter 13: You can file 4 years from a previous Chapter 7 filing. You can file 2 years from a previous Chapter 13 filing.

What Chapter of Bankruptcy should I file?

Individuals typically file Chapter 7 or Chapter 13 bankruptcy. In a Chapter 13, repayment is made to creditors through a payment plan. In a Chapter 7, the debts are wiped clean.

Each chapter of bankruptcy will cover:
-What bills can be eliminated
-How long payments can be stretched out
-What belongings you can keep
-Additional information

The chapter of bankruptcy that you file depends on your circumstances and whether or not you have assets available to repay all or part of the your debts. Bankruptcy laws can be quite involved and sometimes tricky so it is a good idea to contact an attorney and discuss your individual options.

What is a chapter 7, 11, 12, and 13 Bankruptcy?

Chapter 7 is the most frequently used chapter because it involves the complete liquidation of a debtor's property. If you use Chapter 7 you may lose your home (depending on your state) but it does enable you to get out from under the burden of debt more quickly.

Chapter 11 is typically used for business bankruptcies and restructuring. It is not commonly used by individual consumers since it is far more complex and expensive to pursue.

Chapter 12 allows farmers with real estate debts to pay off the debts from the profits generated by future crops.

Chapter 13 is used by about 25% of consumers. In Chapter 13, consumers work out a periodic payment plan with their creditors to pay off their debts, or at least substantial portions of the debt. One of the important benefits of Chapter 13 is that debtors generally continue to live in their home so long as they comply with the terms of the Chapter 13 arrangement. If the debtor fails to comply, the Court treats the matter as a Chapter 7 liquidation. The disadvantage of Chapter 13 to the debtor is that the debts can linger for years, burdening future income.

Can I change from one chapter of bankruptcy to another?

You can change from one chapter of bankruptcy to another chapter of bankruptcy a single time. You can convert from one chapter of bankruptcy to one other chapter that you are eligible to file. Keep in mind that you will need to review your case and look for issues when moving from a Chapter 13 to a Chapter 7. You may have acquired items that are now considered property of the estate under a Chapter 7 that were not part of the previous filing. It is a good idea to consult an attorney or the trustee before making a decision on converting a bankruptcy filing.

Are there advantages in filing bankruptcy?

The most obvious advantage to filing bankruptcy is the release of debt. Once your debts are "discharged" through your bankruptcy...they are erased and you no longer owe the debt. Some other advantages of bankruptcy are stress relief and the chance to start fresh!

Do I have to appear before a bankruptcy judge or go to court?

For typical bankruptcy cases, you will go to a proceeding called the "meeting of creditors" (341 hearing). The bankruptcy trustee and any creditor who chooses to come will be in attendance. This meeting will take place approximately 30 or 40 days after the date of your bankruptcy filing.

The trustee is not a judge but an individual appointed by the United States Trustee to oversee your case. Most of the time, this meeting is short and simple. You will be asked a few questions about the bankruptcy forms you filled out and your financial situation.

Occasionally, if a creditor or the trustee files a motion or an adversary action, or if you choose to dispute a debt, you may have to appear before a judge at a hearing. If you need to go to court, you will receive notice of the court date/time from the court and/or from your attorney.

How do I begin the bankruptcy process, what do I need to do?

The first step you should take after deciding to file bankruptcy is to contact an attorney and find out what your rights are. You can call us at 303.757.5833 for a free consultation.

You will need to get a copy of your credit report to make sure you list all your creditors. This credit report is included in our bankruptcy package price. Having a current credit report from all three reporting agencies will help you list any and all debts. Sometimes, you may have an old debt that you have forgotten about. Having the credit reports prior to filing also gives evidence that you did attempt to list all of your creditors.

You should begin to collect your bills and statements from creditors or collection agencies. Under the new bankruptcy law you are required to complete Credit Counseling and Debtor Education. You must complete a Credit Counseling Course prior to filing your bankruptcy. Additionally, prior to receiving your discharge you must complete a Debtor Education Course.

The process begins with an initial consultation with an attorney to determine your rights as a debtor and decide if bankruptcy is right for you.

Is there a minimum amount of debt needed to file?

There is no minimum amount of debt required to file bankruptcy.

Should I stop using my credit cards if I'm planning on filing for bankruptcy?

Yes. As soon as you think you are going to file bankruptcy, stop using your credit cards! Bankruptcy law allows the review of questionable purchases for potential fraud. If purchases are made 40 days prior to filing or cash advances taken within 20 days of filing, the debt may possibly be excluded from the bankruptcy and it can be dismissed.

If I change my mind after I filed for bankruptcy, can I stop the process?

Unfortunately, once you have "filed" for bankruptcy, the judge is the only person who can decide if your case should be dismissed. Even if the judge dismisses your bankruptcy, your credit report will still show that you filed.

Can the discharge be revoked?

Yes, a bankruptcy discharge can be revoked. The court may revoke a discharge based on allegations that the debtor obtained the discharge fraudulently or committed one of several acts of impropriety described in section 727(a)(6) of the Bankruptcy Code. Typically, a request to revoke a discharge must be filed within one year of the discharge or before the date that the case is closed.

Can a bankruptcy be reopened?

Yes, a bankruptcy can be reopened. There are several reasons someone may request that a bankruptcy case be reopened. Possibly, the debtor would like to add a creditor they had originally missed, or there is a discovery of assets not known prior to the closing of the case. The bankrutcy court has to approve of the bankruptcy being reopened.

What about my debts?? (Return to top)
Can I discharge all types of debt in a bankruptcy?

No. The debts that can't be discharged vary slightly between the different chapters of bankruptcy. Generally, the following cannot be discharged:
· Taxes owed to local, state or federal agencies

· Money, property, services or refinancing of credit obtained fraudulently

· Debts that weren't in the initial filing or that the debtor waived being cancelled

· Debts owed for alimony, maintenance or child support

· Court judgement for injury to another person or property owned by another

· Government student loans (unless it can be shown that repayment will cause an undue hardship)

· Court judgement for death or personal injury caused by the debtor's drunk driving/DUI

· Debts incurred after a bankruptcy was filed

· Most legal judgments as against debtors by creditors are dischargeable

Can I discharge my student loans?

You cannot discharge your student loans in any chapter of bankruptcy unless you can prove that repayment would cause undue hardship.

How long does it take before my debts are discharged?

Chapter 7 takes between 3 to 8 months;
Chapter 11 can take from just under a year to many years;
Chapter 13 can take several months while trying to get your repayment plan approved. However, the actual discharge is not final until you've met the payment plan requirements which takes from 36 to 60 months to complete.

Do I have to include all the accounts I owe in a bankruptcy?

Yes, you must list all of your debts on your bankruptcy schedules, even debts that are non-dischargeable or secured.

However, you can choose to reaffirm any debt you choose after the filing. Or, you can voluntarily pay a creditor after you receive a discharge, without becoming legally liable to continue paying. Listing a creditor does not prevent you from paying creditors you wish to pay after your bankruptcy.

Omitting a debt constitutes perjury which could result in your discharge being denied

If I forget to list some of my debts, can I add them later?

The discharge order in a bankruptcy case discharges only those debts that are included on the schedules. In some instances, it is not possible to know all of your creditors at the time of filing. In these situations, the Bankruptcy Court will allow you to amend your schedules to add debts that you owed prior to the filing but did not list. In most cases, you will have added fees to amend your case. There are set time frames for amending your schedules.

Will I lose my retirement accounts or payments from social security?

Generally, no. Retirement accounts that are ERISA-qualified aren't considered property of an estate and aren't taken into consideration as assets. Social Security benefits are protected from assignment, or garnishment for debts in bankruptcy. Once paid, the benefits continue to be protected only as long as they can be identified as Social Security benefits. For example, money in a bank account where the "only" deposits into the account are direct deposits of Social Security benefits are identifiable and generally protected.

What is a reaffirmation agreement, is it a good idea to reaffirm debts?

When you reaffirm a debt in banruptcy, you are making a new contract with that creditor to pay the loan. For example, you want to keep your car, you will need to sign a reaffirmation agreement with the creditor , assuming you still owe money on the vehicle. You are making a new agreement to pay the terms of the loan. You also agree that the protection of the bankruptcy court will not extend to this debt after your discharge.

It is hard to say whether or not a reaffirmation is a good idea. In some cases, a reaffirmation can be good and in some cases it can be a bad idea. Your best bet is to take this on a case by case basis.

What will happen to my inheritance if I file bankruptcy?

The answer to this question depends on when you become entitled to the inheritance and what chapter of bankruptcy you are seeking to file.

- Chapter 7 bankruptcy
If you become entitled to an inheritance within 180 days of your filing date, the inheritance will be a part of your bankruptcy estate, and can be used to pay your debts.

- Chapter 13 bankruptcy
The 180 day rule does not apply in a chapter 13 case. Your inheritance can be used in determining how much you have available to pay creditors under your repayment plan. The date you become entitled to the inheritance is the important date here. Not when you "receive" the inheritance.

What about my stuff?? (Return to top)
Do I get to keep any of my belongings if I file for bankruptcy?

Most debtors in bankruptcy keep most or all of their property, but the methods of doing that vary, depending on the type of case you file, the kind of property you own, and the existence of any liens on that property.

A Chapter 13 bankruptcy, which is a payment plan, allows a debtor to keep all property as long as the repayment plan meets certain guidelings.

A Chapter 7 bankruptcy is a liquidation. The Bankruptcy Court appoints a trustee whose job is to try to identify assets that can be sold to pay creditors, and liquidate those assets. Although a trustee does sometimes take property and sell it to pay creditors, there are many situations where the trustee either can’t sell it (because it's exempt), or won’t sell it because it has only nominal value.

Most Chapter 7 bankruptcy cases are whay you call “no asset” cases, in which the trustee finds no property to sell to pay creditors.

Can I keep my house, car or pets?

There are many factors to consider in determining whether you get to keep certain items. Do you own more than one car? Do you have a vacation home as well as a primary residence? In the case of your pets, although you should report pets of any value in your bankruptcy such as pedigree dogs or cats, etc., you will most likely be able to exempt them from bankruptcy and keep your pets.

Will I lose my home if I file for bankruptcy?

Many debtors fear that they will lose their home if they file bankruptcy. However, if the home has no equity, which is calculated by taking today's value of the home and subtracting the costs of the sale, payoff balances and any liens, the trustee in a Chapter 7 bankruptcy will "abandon" the house to you. Abandoning the house to you means that you will be able to remain in your home and keep your house on condition that you can maintain payments on your mortgage. However, filing for a bankruptcy does not alleviate the property of any voluntary liens, like tax liens, deeds of trust or mortgages. The lender continues to preserve the right to foreclose on the property if the payments are not made as agreed. As long as the mortgage payments are made on time and as agreed, all is well because generally no lender wants to obtain any debtor's property. Lenders are in the business of giving loans, not obtaining property.

What about my credit?? (Return to top)
Is there a timeframe on how long it will take before I can get a regular CC or mortgage?

If you have a recent bankruptcy on your credit and are looking to get financing for a home, there is hope. Buying a home with bad credit will just put more emphasis on the other two factors needed to get a mortgage loan, which are; income verification and a down payment.

After bankruptcy most lenders want you to wait at least 2 years from the time of the bankruptcy discharge before they will consider you for a mortgage loan. After the two year waiting period is over, you should be able to get financing easily. You should also be able to get 100% financing as well. You can usually achieve this as long as at least most of your payments have been reported to the credit bureau as having been paid on time since the discharge of your bankruptcy.

If you are looking to get a mortgage loan after bankruptcy sooner than the 2 years from the time of discharge, you will need to have almost flawless payment history since your bankruptcy discharge. Also, you may need to have a down payment. If you have even 3-5% to use as a down payment, that may be enough to help you get approved.

Almost anyone can get credit soon after a bankruptcy. It's just a matter of knowing how. It's true that bankruptcy deals a devastating blow to your credit and your credit score, the three-digit number lenders use to gauge your creditworthiness. But the effects don't have to be lasting. Long before the bankruptcy drops off your credit report, you could be qualifying for loans with good rates and terms.

How long will the bankruptcy stay on my credit report?

According to the Fair Credit Reporting Act (FCRA), a consumer reporting company is officially permitted to list accurate negative information on a consumer’s credit report history for seven years (7) and bankruptcy information for ten (10) years.

Can I do anything to have the bankruptcy removed from my credit report?

You just have to wait the 10 years for the bankruptcy to fall off your credit report.

How will bankruptcy affect my credit score?

From a credit standpoint, Chapter 7 bankruptcy is the blackest mark you can have on your credit standing. While it absolves you of the debts you owe (except for monies owed in child support & alimony or unpaid income taxes), it makes obtaining new loans or credit cards extremely unlikely for at least a year or two and perhaps longer. There are some exceptions. Federal student loans, for example, are not granted based upon credit history or income. In fact, federal law prohibits discriminating against applicants based upon these factors.

A Chapter 13 bankruptcy will have a negative effect on your credit report, but it does show your willingness to pay your debts rather than to discharge them. That should help you obtain new credit within a year or so.

How long should I wait before I can start to rebuild my credit?

You can start rebuilding your credit right away. Make sure you pay your bills on time. Start with a single credit and pay it off every month.

What about the 341 hearing?? (Return to top)
How important is the 341 hearing? Do I have to be there?

The 341 hearing is extremely important. Yes, you have to be there and you have to remember to bring your drivers license and social security card with you to the hearing!

Will my creditors be at the 341 hearing (meeting of creditors)?

Creditors do not have to be at the 341 hearing to challenge the discharge in a bankruptcy. They also do not have to be at the 341 hearing to challenge the payment plan for a chapter 13. Because of this, in most cases creditors do not appear. However, they are invited to the 341.

What is the 341 hearing and how long will it take?

The 341 hearing only takes 10-15 minutes. You meet with the trustee and answer a few questions about your petition. A "341 Meeting" is also known as a creditor's meeting. Section 341 requires the debtor to make a personal appearance at a creditor's meeting (which is why it's called a 341 meeting). The purpose of the meeting is for the trustee to gather information, and for your creditors to ask questions. The debtor (the person who is bankrupt) is required to attend. The meeting is not a formal court hearing, because the bankruptcy judge is not in attendance, but it is a formal proceeding and is a necessary procedure to complete in the bankruptcy.

Where is the 341 hearing held?

721 19th St., Denver, CO 80202 in the U.S. Custom House at the intersection of 19th St. and California

Will I stand before a judge at the 341 hearing?

No, there is no judge at the 341 hearing. You will be sworn in and answers questions asked to you by the trustee.

What about my creditors?? (Return to top)
Do my creditors have to stop contacting/harassing me after I have filed bankruptcy?

Once a creditor becomes aware of a filing for bankruptcy protection, it must immediately stop all collection efforts. After you file the bankruptcy petition, the court mails a notice to all the creditors listed in your bankruptcy schedules. This usually takes a couple of weeks. Creditors will also stop calling if you inform them that you filed the bankruptcy petition, and supply them with your case number.

Usually upon hiring bankruptcy counsel, cease and desist notices are generated and sent to creditors advising them of the representation, and informing them to cease any and all contact with the represented party. Because most debt collectors are unsophisticated and do not possess sufficient knowledge of the applicable law, they oftentimes claim they are entitled to attempt collection until the bankruptcy case has been filed and there is an actual bankruptcy case number to reference. This is not the case.

How long after I have filed do the phone calls stop?

Usually this takes only a few weeks.

Can my creditors object to my bankruptcy filing or plan?

Yes. Bankruptcy filings allow creditors to object to specific debts in the plan or the repayment or cancellation in its entirety.
Chapter 7: Creditors generally have 60 days after the first creditors meeting to object to the discharge of a specific debt. If no objections are filed, the court issues the discharge order and the trustee collects and sells the assets then distribute the proceeds to the creditors under a predetermined schedule. If there are objections, the bankruptcy proceedings, less the objected debt(s), continues. A trial may be necessary to resolve the objectionable issues.
Chapter 13: Creditors can object to the plan for repayment and the court may take this into consideration. If no objections are filed by creditors or the trustee, the plan may be confirmed as filed.

How will my creditors know if I have filed bankruptcy?

Once you file bankruptcy, all the creditors you have listed on your schedules will receive notice from the court via postal mail. This notice will supply them with the following information:

Filing of the bankruptcy
Case number
Date set for the meeting of creditors
Name of the trustee assigned to the case
Automatic stay
Where to file claims
Deadline, if any, set for filing objections to the dismissal of debts

The information will be different depending upon the chapter of bankruptcy filed.

Can my creditors object to my bankruptcy filing or plan?

Yes, creditors have the right to object to specific debts in the plan,repayment or cancellation in its entirety.

In a Chapter 7 filing, creditors generally have 60 days after the first creditors meeting to object to the discharge of a specific debt. If there are objections, the bankruptcy proceedings continue without the objected debts. A trial may be necessary to resolve the objectionable issues. If no objections are filed, the court issues the discharge order and the trustee collects and sells the assets. Then the proceeds are distributed to the creditors equally under a predetermined schedule.

In a chapter 13 filing, creditors can object to the plan for repayment and the court may take this into consideration. If no objections are filed by creditors or the trustee, the plan may be confirmed as filed.

Can a creditor make me do a reaffirmation agreement?

No. Signing a reaffirmation is completely up to the debtor. A creditor cannot force you to do a reaffirmation on a debt.

Can my creditors call me if I hire an attorney?

No. Once you have hired an attorney, creditors are not allowed to call you. If you do get a call from a creditor, you just tell them you have hired an attorney and supply them with the attorneys contact information. Also tell them not to contact you again on the matter and to contact your attorney. You should only have to do this once.

Who is the Trustee?? (Return to top)
Who is the trustee and what do they do?

In the United States, the Trustee in Bankruptcy case is a person who is appointed by the United States Department of Justice or by the creditors to administer the bankruptcy estate.

In a Chapter 7 Bankruptcy the trustee gathers the debtor’s non-exempt property, managing the funds from the sale of those assets, and then paying expenses and distributing the balance to the owed creditors.

In a Chapter 13 Bankruptcy the trustee is responsible for receiving the debtor’s monthly payments and distributing those funds proportionally to the bankrupt’s creditors. The Bankruptcy Trustee will act on behalf of the debtor to guarantee that both the creditors’ and the debtor’s interests are maintained in accordance with the bankruptcy laws, and will often be required to act as a negotiator between the two parties.

What does it mean to me when the trustee abandons property?

Any scheduled property that the trustee does not sell is deemed abandoned upon the closing of the case. Property is abandoned when its net value to the estate is minimal or less than the costs of liquidating it or when the tax burden triggered by a sale would exceed the available sale proceeds.

Is the trustee a judge?

No. The trustee is not a judge.

What about exemptions?? (Return to top)
What exactly can I exempt?

There is not an easy answer to this question. Your best bet is to call in and get a free consultation. To get information specific to your situation, call in TODAY!

Here is a brief list:
Main residence(max value equity)
One vehicle (max value equity)
Household items (max value)
Jewelry and heirlooms (max value)
Tools of the trade (max value)
Life insurance - includes disability benefits and unmatured life insurance policies.
Alimony and child support
Public benefits
Retirement funds are exempt under § 522(d)(12) of the Bankruptcy Code.

For a complete list and items specific to your case, call now! 303.757.5833

What happens if I exempt my vehicle?

An exemption allows you to file for bankruptcy relief and protect some of your property. The bankruptcy courts understand you need a car to get to work and to pick your kids up from school. So long as you aren't driving an antique classic car, you will likely be able to keep your car.

If I run out of exemptions but I still want to keep some items, then what?

If you run out of exemptions but still have items you want to can buy these back from the bankruptcy estate.

What is a federal exemption?

These exemptions are found in 11 U.S.C. §522 and can be used by anyone who is qualified to file bankruptcy in a state that allows its residents to use the federal exemptions, or by anyone who doesn’t qualify under residency requirements to use state exemptions.

Colorado does not allow you to use the federal exemptions.

Can I deal with the non-exempt assets after I file for bankruptcy?

No. All assets, both exempt and non-exempt need to be filed with the petition.

What do I need to do if I want to keep some non-exempt assets?

You will need to purchase these from the bankruptcy estate.

What do I do after I file?? (Return to top)
What happens "after" I file the bankruptcy?

After you file for bankruptcy, your 341 hearing will be scheduled. Once you attend the 341 hearing you are done with your bankruptcy. It usually take about 3 months to receive the final discharge. You will also need to take a post-bankruptcy class.

Should I get a credit card to rebuild credit?

If you can handle using only one credit card and paying it off every month, then using a credit card can help to rebuild your credit. It is very important to use only "one" credit card and "pay it off" every month. This will start to rebuild your credit and show that you can be responsible with credit.

Should I live on a cash basis, or how do I start to rebuild my credit?

Some people have a difficult time handling the responsibility of credit. However, in order to get credit for large items (such as a house or car) need to have a history of credit. With that in mind, it is not the best idea to live on a cash basis, this does not give you any credit history. And more importantly, no good credit history after a bankruptcy has been filed. You can start to rebuild your credit by paying all your bills ontime. If you kept a car loan, student loan or other debts in your bankruptcy, check to see if they report to the credit agencies. Rebuilding your credit can be a lengthy process, but if done correctly...can reap big rewards both personally and financially!

The information contained on this site is for informational purposes ONLY. We are not providing legal advice. For information specific to your case, call for your free consultation TODAY! We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

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