How Bankruptcy Works in Colorado
When you cannot pay your bills, bankruptcy is the legal proceeding which can help you get a fresh financial start. Everyone has a legal and statutory right to file bankruptcy and bankruptcy cases can be heard only in federal courts.
What Can Bankruptcy Do for You?When you file bankruptcy, your creditors cannot seek to collect debts from you until debts are sorted out according to law.
By filing bankruptcy, you can:
o Get a discharge of debts, eliminating your obligation to pay most or all of your debts.
o Catch up on missed payments on your mortgage or other liens on your property as bankruptcy can delay foreclosure by a number of months.
o Prevent your car loan lender from repossessing your car or force the creditor to return it, in case it has been repossessed.
o Stop almost all debt collection, including wage garnishment, legal action, and contact by phone or mail.
o Prevent termination of utility service. A utility company may not discontinue or refuse utility service solely because you are behind on your utility bill or file bankruptcy.
What Bankruptcy Cannot DoSome debts can't be discharged in bankruptcy. It is not usually possible to:
o Eliminate some student loans, child support, alimony, debts related to divorce, court restitution orders.
o Prevent a secured creditor from repossessing property. A secured creditor is the one who has taken collateral for the loan, such as a mortgage or other liens on the property.
o Discharge new debts incurred after the petition is filed.
o Wipe out most tax debts. It is not easy to eliminate tax debts in bankruptcy. You can discharge debts for federal income taxes only if you meet the necessary conditions.
How Much Does It Cost to File Bankruptcy?The basic filing fee required by the United States Court is $335 to file bankruptcy under Chapter 7.
These fees are usually due when you file your bankruptcy petition. You can pay in one lump sum or ask the court to allow you to pay the fee in installments. You may also ask that the fee be waived. Certain actions with your case may incur additional fees.