One of the most damaging myths about filing for bankruptcy in Denver is that you will lose all of your assets – or that there will be an auction. This is rarely the case. The law permits you to keep personal items and many of your existing assets – in many cases, even your car and house are protected.
The Denver bankruptcy attorneys at George T. Carlson & Associates understand filing for bankruptcy is an uncertain time; we are here to answer your questions and ensure that you and your family are able to make the best of the fresh start available to you through bankruptcy protection.
What assets can I keep when filing for bankruptcy in Denver?
While Chapter 7 is sometimes known as a liquidation bankruptcy, the reality is that most filers do not end up surrendering assets. Those with significant non-exempt assets may be better off filing for Chapter 13, which will permit you to keep and protect large assets in exchange for establishing a 3-5 year repayment plan. Unpaid debts that remain at the end of that period can be forgiven.
Assets exempt from forfeiture under Chapter 7 bankruptcy in Colorado include:
- Home equity: Up to $60,000 ($90,000, if 60 years old or disabled). The result of the real estate collapse is that many families are upside down on their mortgage and owe more on their home than it’s worth. If you have less than $60,000 in equity, you can keep your home. Those dealing with bad mortgage debt can file for bankruptcy on the mortgage and make a fresh start.
- Your car: Up to $5,000 ($10,000, if 60 years old or disabled) equity in your car. In other cases, you may be able to lower your interest rate and even lower your loan balance to the current value of the vehicle – thereby jettisoning any negative equity on your car loan.
- Life Insurance:Â Cash value in a life insurance policy is exempt up to $50,000, except for any cash value accumulated in the last 4 years.
- Pension and benefits: Pension funds, government disability benefits and public assistance benefits are exempt. Private disability benefits are exempt for 100% of the first $3,000 per month, then 75% for any additional amount.
- IRAs, 401ks: Retirement funds held in protected accounts are exempt.
- Work equipment: Business property owned by a sole proprietorship is exempt up to $20,000.
- Personal Items: Thousands of dollars worth of exemptions are available for jewelry, furniture, and other personal items.
Choosing between Chapter 7 and Chapter 13 bankruptcy in Colorado
Those who choose Chapter 13 bankruptcy in Colorado may do so for several reasons:
- If you have significant disposable income, you will be required to be in chapter 13.
- People with significant non-exempt assets may choose chapter 13 to keep, but pay for those assets over 3 to 5 years.
- Certain non-support divorce obligations may be discharged in a chapter 13 bankruptcy.
- Homes with mortgage arrears may be saved in chapter 13.
- Second mortgages can often be eliminated in chapter 13 bankruptcy
Contact a Colorado Bankruptcy Attorney Today
If you need bankruptcy assistance in Denver or would like more information, call George T. Carlson & Associates today at 303-789-1313 for a free consultation or contact us online. We are a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code
Denver Bankruptcy Help – 303-789-1313 – Free Consultation
