The Chapter 13 bankruptcy process in Denver can be very complicated. A debtor should always seek the assistance of an attorney to ensure that their bankruptcy case is handled properly.
Here’s how the experienced Denver bankruptcy attorneys of Cohen & Cohen, P.C., can help.
How does Chapter 13 bankruptcy in Denver work?
While every case is different, there is a general timeline that is followed in all cases. A Chapter 13 is a reorganization of personal debt, much like a Chapter 11 is for business debt. This means that a debtor will make monthly payments to the Trustee for a period of three to five years. This payment is determined by assessing the income and expenses of the debtor.
The assumption is that all disposable income will be paid to the Trustee to be distributed to creditors. The Trustee will distribute this money to creditors based on the priority and amount of the creditor’s claim.
If the debtor makes all the payments required under the Chapter 13 plan, any remaining debt will be discharged.
Should I file Chapter 7 or Chapter 13?
There are lots of push-and-pull factors in a Chapter 7 versus Chapter 13 case. The biggest push factor is income.
If the debtor in Denver doesn’t qualify for a Chapter 7 filing because he or she makes too much money, they are oftentimes forced into a Chapter 13. But oftentimes the “super-discharge” of a Chapter 13 will pull debtors from a Chapter 7 into a 13.
- Taxes can be put into a Chapter 13 plan;
- A debtor can save her home in a Chapter 13 plan;
- Sometimes second mortgages can be removed in a Chapter 13 plan.
The actual process is much like that in a Chapter 7. Upon filing, an automatic stay goes into place, preventing any collection efforts by creditors. This means that creditors cannot sue, garnish wages, or even call the debtor.
After this, there will be the Meeting of Creditors.
See also: Bankruptcy Adversary Proceedings Defined
What happens after my meeting of creditors?
Approximately three weeks after the Meeting of Creditors, there will be a Confirmation Hearing. At the Confirmation Hearing, the Judge presiding over the case will hear from the debtor’s attorney and from the Trustee regarding any disputed matters.
In some cases, the debtor and objecting parties are unable to resolve their dispute and it is necessary to take the issue to hearing so that a Judge may resolve it. More commonly, however, the parties will come to an agreement and it will not be necessary to take the issue to hearing. Once all outstanding objections are resolved, the Judge will sign off on the Plan and the debtor will make the agreed upon payments to the Trustee.
Contact a Chapter 13 Denver Bankruptcy Attorney Today
Still on the fence? Check out our page on the Long Term Financial Advantages of Chapter 13 Bankruptcy.
Please note that this information is only intended as a brief overview of how a Chapter 13 case may work for you. You’ll want to consult with an experienced Chapter 13 Denver bankruptcy attorney before filing.
Contact Cohen & Cohen, P.C. today for a free debt evaluation. We may even be able to help you determine your options outside of filing for bankruptcy.
About the Author: Robertson Cohen
Rob Cohen is a Managing Partner of Cohen & Cohen, P.C., serving clients in Colorado and Wyoming. He’s a Chapter 7 Bankruptcy Panel Trustee, certified mediator, and has administered over 8,000 Chapter 7 bankruptcy estates.