10 Reasons I Love Bankruptcy. No, Seriously
When I was in law school, I had NO thought that I would ever practice bankruptcy law for a living. To be honest, I thought my class on bankruptcy was pretty boring, and I didn’t connect with it. But over the course of the last several years, while helping thousands of individuals and married couples navigate through their chapter 7 or 13 cases, I’ve come to truly love this work. I thought for this blog’s first post I’d share with you just what makes this job so wonderful, and why I wake up every day thankful that I get to help good people in a tough spot in their lives.
- If you’ve come to the point where you know you can’t pay your debts, or can’t pay them in any reasonable period of time, and you follow all the laws and requirements of the bankruptcy process, then most types of debts will be completely forgiven in chapter 7, or you’ll just need to pay what you can afford to pay in chapter 13.
- If you hire a good lawyer to help you through the chapter 13 process, what you can “afford to pay” is almost never everything, and it’s quite often not that much at all.
- If you’re a homeowner who’s lived in Colorado for at least two years, and you file a chapter 7 bankruptcy, you can keep your home (assuming you’re paying for it) as long as you don’t have more than $60,000 in home equity. If you’re 60 or older, or disabled, it’s $90,000. If you have more equity than that, you may still be able to keep your home by filing a chapter 13 bankruptcy.
- If you’ve lived in Colorado for at least two years, you can keep at least $5,000 of equity in your cars, motorcycles, or other motor vehicles – even if you own more than one. If you’re 60 or older, or disabled, it’s $10,000. And if you have more equity than that, you may still keep them by filing chapter 13.
- If you’ve lived in Colorado for at least two years, most other property you own that you need to live or work is protected in bankruptcy. And again, if it’s not, there’s always chapter 13!
- As soon as you file for bankruptcy protection, almost anyone to whom you owe anything must leave you alone during your bankruptcy case, even if their debts survive the bankruptcy. This is a court order called the “automatic stay”, and if creditors violate it, you may be able to sue them for their illegal collection attempts.
- If you file for chapter 13 relief and your home is “upside-down” (you owe more than it’s worth) and you have more than one mortgage, you may be able to wipe out your 2nd or other mortgages.
- You may be able to use a chapter 13 to save money on tax debts, or your auto loan, or to catch up your mortgage payments, while just paying your disposable income to everyone else. And it’s all bundled into one payment with no interest (99% of the time anyway) and no late fees.
- If you’re in the middle of a chapter 13 plan, and your finances change for the worse, you can often lower your chapter 13 plan payments, or get out of chapter 13 early, or change your case to chapter 7. Chapter 13 is flexible!
- I’ve been able to make a career using these wonderful laws to help thousands of individuals and families find the peace and freedom that a bankruptcy can bring.