Filing Bankruptcy Colorado Springs: Understanding The Different Types of Bankruptcy

Filing bankruptcy is a difficult time in anyone’s life, but it doesn’t have to be the end of the world. You can file bankruptcy and then do what you need to do to repair your credit, finances, and even your life. It is important to keep in mind that Filing Bankruptcy Colorado Springs is not a decision that should be taken lightly. You need to discuss your situation with a bankruptcy lawyer so that he or she can help you consider all of your options and make you aware of the possible outcomes.

When considering bankruptcy, it is important for you to understand how the process works. You can visit the website of a lawer such as David M. Koppa for more information about bankruptcy. The first thing you need to understand is that there are three common kinds of bankruptcy. The biggest reason why someone hires a lawyer is to figure out which kind of bankruptcy they should be filing. There are three types of bankruptcy you could end up filing for: Chapter 7, Chapter 11, and Chapter 13.

Chapter 7 Bankruptcy

Chapter 7 is a liquidation bankruptcy and should be considered a fresh start. Your debts are canceled, but you lose any nonexempt property to your creditors. You can keep your secured property as long as you are making the payments regularly.

Chapter 11 Bankruptcy

Chapter 11 is usually for businesses even though individuals may file a Chapter 11. The debtor keeps all their assets and develops a plan to pay their debts over time. With this plan, the debtor has some protection from debt collectors while reorganizing.

Chapter 13 Bankruptcy

Chapter 13 is considered reorganization and allows you to keep property, such as your car or home as long as you make the payments. You have to make the current payment and something towards the arrears and you have up to 5 years to pay the past due.

Filing Bankruptcy Colorado Springs may help your situation, but remember that it stays on your credit for 10 years. When you make late payments, it will remain on your record for 7 years. You should also keep in mind that you are only legally allowed to file bankruptcy every 6 to 8 years depending on what type you file for.

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