When Should You Consider Chapter 7 Bankruptcy in Denver, CO?

In Colorado, chapter 7 bankruptcy filings have increased significantly for the past three years. A few decades ago, people would hesitate to file in Colorado. Chapter 7 bankruptcy has now become a popular alternative in many states all throughout the country. However, there are a few things to think about before deciding to file chapter 7. Denver courts, like many other courts are very strict when it comes to the requirements. Below are some of the guidelines to make an assessment whether chapter 7 bankruptcy is appropriate for you.

Judgment-Proof Income

Like in any other state, in Colorado, chapter 7 bankruptcy is not necessarily the last option, particularly in cases where a debtor only has unsecured creditors. In most cases, these creditors are obliged to obtain a court judgment prior to certain collection procedures such as wage garnishment or seizure and sale of personal property. In Denver, if a debtor decides not to file chapter 7, Denver courts would have to assess whether there are properties or other resources which could be subject to seizure by the creditors. For instance, if the debtor’s only source of income is his social security benefits, then his income would be exempted from seizure. For this reason, a debtor needs to assess his financial status first before deciding to file for chapter 7. Denver boasts of one of the best legal counsels in the country. The Cimino Benham law firm has handled several complex cases of Colorado chapter 7 bankruptcy filings and has been providing legal advice locally as well as beyond the Colorado state. If the debtor’s income is not subject to seizure by creditors, such income is considered to be “judgment proof”.

Debts That Survive Bankruptcy

Unfortunately, not all kinds of debts could be discharged through chapter 7. Denver bankruptcy courts, for instance, would not discharge debts such as alimony, student loans, government fines, tax arrearages, court judgments pertaining to injuries or fatalities in connection with drunk-driving convictions. In complex cases, it is inevitable to consult an experienced chapter 7 bankruptcy lawyer. Denver law firms such as the Cimino Benham law firm would be able to assist the debtor in making an initial assessment whether or not the best option is to file chapter 7. Denver residents, like in many other states in the U.S., have been badly affected by the economic downturn and the lawyers in the Cimino Benham law firm have successfully represented many individuals as well as corporate entities in bankruptcy proceedings.

Protecting a Cosigner

If someone else cosigned a loan for you, the cosigner could be subject to payment by the creditors. In many states, a close friend or relative typically takes on the role of a cosigner. In such cases, it is imperative to consult a chapter 7 bankruptcy lawyer. Denver has its share of cases where a cosigner is involved. Thus, if you want to protect your cosigner from debt collection, you should try other alternatives other than file chapter 7. Denver bankruptcy law firms such as Cimino Benham should be able to assist you in choosing the appropriate alternative in your case. For instance, you could agree on a payment plan with your current creditors to keep them away from your cosigner. In doubt, a debtor should always seek counsel from a chapter 7 bankruptcy lawyer. Denver bankruptcy courts have reported several cases of conflicts between the creditors, the actual debtor and the cosigner. Thus, it is important to seek legal advice before initiating the proceedings.