Know all your rights through bankruptcy consultation Denver in Colorado

 Most individual bankruptcies in the US are filed either under Chapter 7 or Chapter 13, that eliminate your debt differently. You need to pursue different procedures for full or partial repayment to your creditors. If you take bankruptcy consultation Denver in Colorado, you will come to know that Chapter 7 bankruptcy could be an option if your financial means fall below a specified limit, which is the Median income of the family of your size in the state of Colorado. If your average income for the past six months before filing of Chapter bankruptcy is less than the Median income of the size of your family the Colorado, you will primarily pass the test and be eligible to file for Chapter 7 bankruptcy. However, your assets valued beyond an exempt amount will be forfeited and sold, and the proceeds will be distributed among your creditors.   

  

A trustee will be appointed by the bankruptcy court to oversee your personal assets and finances, and ensure that your creditors are paid off in the right order, as per “Absolute Priority” rules. Secure debts are cleared first, followed by unsecured debt. Secured debts are backed by collateral to reduce the risk associated with lending. In case of default, the bank will seize the collateral, sell it, and use the proceeds to pack the creditors. Debts that are secured include mortgages and auto loans. Interest rates on secured debts are often lower. Unsecured debts are not backed by any collateral. Credit card bills and medical costs are two examples. Your lawyer providing you with bankruptcy consultation Denver, such as the ones available with Recovery Law Group, will work to wipe out most or all of your unsecured debts.  

  

However, certain assets are exempt under Chapter 7 bankruptcy, which are:  

  

·         A certain amount of home equity  

·         A vehicle of a certain value   

·         Some tools of the trade  

·         Many household goods  

·         Most public benefits  

·         Retirement accounts, etc.   

  

Reorganization plan under Chapter 13   

Get to know more about exemptions under Chapter 7 during your bankruptcy consultation Denver. However, if you earn sufficiently and only need extra time to repay your debts, you may be suggested to file for Chapter 13 bankruptcy wherein you will agree to a reorganization plan to repay your debts under the supervision of the court. Chapter 13 will halt the foreclosure process that would have resulted in your home being seized. You will pay all your secured debts, mortgages, car loans, etc., over a period of three to five years, and pay a portion of your unsecured debts, such as credit cards. You will pay an agreed-upon sum each month, that will effectively consolidate all your debts into a single monthly payment.   

  

At the end of the repayment plan, any remaining debt, with certain exemptions, will be discharged by the court, which means you will not be required to repay that. Your Recovery Law Group attorney providing you with bankruptcy consultation Denver will ensure that automatic stay is implemented as soon as you file for bankruptcy, be it Chapter 7 or Chapter 13. Automatic stay means your creditors will not be able to contact you as soon as the bankruptcy is filed, and must stop all their collection and recovery efforts. If they still continue, Recovery Law Group’s specialist bankruptcy lawyers will sue them for violating the automatic stay.