How Recessions Affect Bankruptcy

We have all seen the effects of an economic downturn.  There is a strange problem that can occur as a result of the “means test” that determines whether a person would qualify for a Chapter 7 Bankruptcy or a Chapter 13 bankruptcy.  Data which is compiled by the US Census is always behind a bit as it requires reporting of data.  If someone loses their job today, it is most likely to hit next year in the means test data.  So, if the average in Colorado is $45,000 per individual today (it’s not, but trying to make this easier to understand) and with people losing work, maybe it should be $40,000 — your case will be based on the $45,000 until the Census catches up.  Seems simple, what’s the big deal? 

If you are having to file a Chapter 13 Bankruptcy instead of a Chapter 7 Bankruptcy in Fort Collins, your legal costs will more than double, it is a lot more work and your relief is less.  It doesn’t affect those people who are making next to nothing, but those on the precipice are the ones who tend to get screwed.

If you are close to the median state salary and your expenses are high, but not BRUTAL, you may get hosed over due to this small differential.  Our job as bankruptcy attorneys in Fort Collins is to do what we can in terms of helping you disclose every legitimate debt and all earnings and make the best case we can for your financial well being.  There will be a few of you who we feel should be able to qualify for a Chapter 7 Bankruptcy due to real financial calamity, but we’ll have to do a Chapter 13 bankruptcy filing instead.

Given the changing laws and the importance of doing a bankruptcy filing correctly, we always recommend you go to an attorney.  Even if you choose to use someone else, which we don’t want, we still believe since bankruptcy law is challenging, you should avoid Do It Yourself bankruptcy  because making mistakes only put you in further jeopardy. 

If you would like a free Bankruptcy consultation to determine if you would qualify for Chapter 7 bankruptcy in Fort Collins, Chapter 13 bankruptcy in Fort Collins or neither, please give us a call!

Santa After Learning He Had Gone Bankrupt...

Santa had a rough year with the economy the way it was last year.  He found that the price of feed for the reindeers had gone up and his credit cards were through the roof.  The elves were demanding a pay increase and the credit card companies had raised his rates.  Mrs Claus falling and breaking her hip as she was baking delicious Christmas cookies certainly did not help…  And we all heard about Rudolph’s trip to the hospital when he contracted the H1N1 virus.  Yes, Santa had a tough year and needed some help filing for bankruptcy.  He went through his list and found there were only 3 attorneys in the country who were not on the naughty list and luckily one of them was a bankruptcy attorney.  You can imagine our shock the day Santa called! 

As we met with Santa, we had some basics to work out.  First of all, would he qualify for a Chapter 7 bankruptcy or would we need to file a Chapter 13 bankruptcy on his behalf?  Unfortunately, Santa brings in a lot of cash to the North Pole…  So he failed the means test.  This meant we would have to file a Chapter 13 Bankruptcy for Santa.  Santa would have to pay back all the people he owed money to. 

Luckily, we were able to get a discharge on some of his debts, but he does have a repayment plan that extends over the next 5 years.  We hate to be the bearers of bad news, but Santa may be a little cheaper this year than he had been in the past for you.  Don’t expect that sweet toy because Santa is not allowed to overspend for the next 5 years by order of the court.  The good news is Santa will still be allowed to keep his place at the North Pole.  It would be a bit weird to have Santa living in Fort Collins. 

If you would like to meet with us knowing if we could save Christmas for Santa, your case certainly will not be too challenging to us, please give us a call for a free initial  bankruptcy consultation to see what we can do for you.  Please bake Santa some extra good cookies this year and he’ll still be able to enjoy the holidays because of these goodies and knowing his creditors can’t bother him so he can focus on being the merry man we have all grown to love.

Chapter 13 Bankruptcy Steps

If you are considering a Chapter 13 Bankruptcy filing in Fort Collins Colorado, there are some steps you need to be aware of in order for this to go smoothly!  Hiring a bankruptcy attorney in Fort Collins is your best bet, but some people want to try everything themselves.  Just to give you an idea of some of the things you’ll need to line up, we have decided to list them out for you.

• Simple evaluation.  Is Chapter 13 bankruptcy or Chapter 7 bankruptcy a better fit or simple debt renegotiation?
• File your petition.  There are many details which must be on your petition if you want an automatic stay to stop garnishments.
• Tax filings from the past year gets sent to the courts for review.
• Court fees get paid
• You attend a meeting of Creditors
• Attend the Confirmation Hearing
• Make payments to the trustee
• Take a debtor education course

Of course there are details in each of these steps.  This is why it makes sense to hire a bankruptcy attorney in Fort Collins to help you through this time.