A Chapter 7 bankruptcy, also known as a liquidation, is when under bankruptcy proceedings an individual or business forfeits their property to repay creditors. Chapter 7’s require surrounding property to be sold and the proceeds of sales are used to repay debts. Following the sale of property and the allocation of funds, all dischargeable debts are discharged and creditors can make no further actions to recoup discharged debts.
Denver Bankruptcy FAQ:
Bankruptcy – The Basics
What you need to know about Denver bankruptcy law
Once a foreclosure is in process it is unlikely that a refinance loan will be approved by any bank. Foreclosures show up on credit reports soon after they are first initiated and most banks will not lend to someone who has recently had a home foreclosed. If a refinance is attempted as soon as financial difficulties are perceived and before mortgage payments are missed, it is much more likely to go through and can help prevent late payments and foreclosure by lowering future monthly payments.
Bankruptcy is a process which was created by and is governed by federal law. Although some details vary by state, bankruptcy is an option in all 50 states and is a means for debtors, who have no foreseeable possibility of fully repaying their debts, to resolve their debts with creditors either by restructured payments over 3 to 5 years or through discharge of debts following the sale and dispersal of proceeds of a debtors personal property.
Although a few exceptions exist, bankruptcies are available as a means of resolving debts to all businesses and individuals in the United States.
Filing jointly for bankruptcy often carries unique benefits but in certain cases it may be in a couple’s best interest to file separately or for one spouse to file and the other to not do so. Spouses do not need to file jointly and a bankruptcy lawyer can help you decide whether married couples should file jointly or on their own.
Bankruptcy affects credit for 7–10 years
Bankruptcies will appear on credit reports from 7 to 10 years following discharge dependent on which type of bankruptcy is filed.
When debts remain unpaid and a creditor continues to have difficulty collecting on debts they can often garnish a worker’s wages to collect on debts and recoup fines and fees. Wage garnishment can either be voluntary, allowing the debtor say over whether part of their paycheck goes directly to their creditor, or court order where a certain amount of each paycheck is required by a legal judgment to be paid directly to a creditor or other individual or business. Both forms of garnishment are designed to make sure that wage earners’ income is applied to debts each month instead on being spent on new expenses or being seen as disposable income. Wage garnishment is usually only applied to a person’s income after other forms of debt collection have failed, but wage garnishment can still create significant monthly financial deficits for debtors who can be left will only a portion of their total paycheck with which to pay all of their bills.
The question of whether or not to file a bankruptcy can be an emotional one which may prove to be one of the most difficult decisions in a person’s life. However, in many situations, when all the facts are evaluated it is usually very clear if a bankruptcy is appropriate for an individual’s situation. Understanding the initial intent of bankruptcies can help in making a clear decision about bankruptcy and may give individuals a new perspective about what bankruptcies are and what they offer. Bankruptcy is commonly described under law as a financial “fresh start”, meaning that the institution of bankruptcy is designed to create new opportunities to rebuild, create, and responsibly manage debt. By basic definition, bankruptcy was designed for individuals who have no conceivable chance to repay debts assuming there current income and taking into account their basic living expenses.
When faced with significant debt, looming foreclosure, and past due notices it can seem like solutions are few and far between. However, there are many options that exist to help individuals afford unmanageable debt and bring their debt burden under control. Each of these forms of debt relief has its own advantages and disadvantages, but most require some amount of time, usually at the very least a month of waiting for creditors to process a claim or restructure debts. Surprising to most individuals, is the fact that the most immediate form of relief from significant debt, above $10,000 dollars, is a chapter 7 bankruptcy.
Bankruptcy is an extreme solution for extreme levels of unmanageable debt. As with any extreme solution, filing for bankruptcy can present many significant drawbacks and possible negative outcomes.
Choosing an experienced bankruptcy lawyer is an important part of the bankruptcy process and can be the difference between a denied bankruptcy filing and a financial fresh start. The process of bankruptcy can be involved and often requires understanding a multitude of factors and related laws. Bankruptcies affect filer’s years after their debts are discharged and are serious financial decision which require clear attention to details and a full understanding of an individual’s financial situation.
Bankruptcies usually remain on a credit report for between 7 and 10 years after discharge, but it is possible to start rebuilding credit and achieve good credit scores while a bankruptcy still appears in an individual’s credit history. Discharged bankruptcies have been seen in the past as proof a potential borrow is unfit for any requested loan, that is no longer the case. Loan decisions are based upon a variety of factors and building credit after a bankruptcy can help to qualify individuals for most loan types, including new mortgages and refinanced existing mortgages. As with any loan, when a lender looks at a credit request from someone who has been discharged from a bankruptcy they are looking for significant proof that this individual has the means and ability to pay back loans overtime. In the case of individuals who have filed bankruptcies in the past, that means building new credit after discharge.
Bankruptcy is a matter of public record and it is possible for any bankruptcy which has been filed in the US to be viewed, however in most cases an individual’s friends, family, and co-workers would have no reason to want to find out and would most likely never know. If chapter 7 bankruptcy is declared there will often be calls for creditors to come forward in certain cases. However, the stigma that goes along with filing bankruptcy is starting to subside and people who file for bankruptcy are not seen the same way they were 30 years ago. Over one million Americans file for bankruptcy each year and most people have no reason to check through public records to look for specific names of bankruptcy filers and will never do so.
Bankruptcy is a process which is conducted under the supervision of a court and has a significant impact on an individual’s or business’s financial future. There are many specific laws that control the process of bankruptcies and how debtors can resolve their debts through bankruptcy. That said, there is no law requiring individuals wishing to file a bankruptcy to consult legal counsel prior to filing, however, all business and corporate filings must be done by an attorney. All of the changing laws and numerous options available to those in significant debt can make understanding bankruptcy and how best to proceed difficult for individuals. An attorney can be a big help in understanding the many laws that relate to bankruptcies as well as the other options that may exist.
