A Brief Guide to Colorado State Bankruptcy Law
Before Filing for Colorado Bankruptcy
The United States government currently requires that all individuals (not businesses) have completed credit counseling within the 180 day period before filling for bankruptcy. Without a certificate showing counseling was completed, Colorado bankruptcy cannot be successfully filled. Look on the website of the U.S. Justice Department for a list of qualified counselors here:
All individuals are recommended to seek attorney assistance if filling for bankruptcy since it is so complicated. Those who cannot afford it on their own should seek pro bono assistance. All businesses and corporations filing for bankruptcy are required to have legal representation.
Filing for Bankruptcy
Forms appropriate to the particular chapter of bankruptcy applied for may be delivered by an individual to the Court in person at the main office of the Colorado division of the U.S. Bankruptcy Court. It can also be mailed to the Court at Bankruptcy Court, 721 Nineteenth Street, Denver, Colorado 80202-2508. Attorneys may also file bankruptcy forms electronically, but this is not permitted for those without licenses.
Many forms are required to file, which are collected in what is called a petition packet. Additional forms depend on the type of bankruptcy being petitioned for. A list of different forms by Chapter is listed under Colorado Personal Bankruptcy.
Colorado Corporate Bankruptcy
Businesses can file for bankruptcy when their debts fall beyond their means and they lose hope of being able to pay off their creditors in the near future. However, a wide variety of different businesses in different states of financial steadiness qualify for that description, and this variation is represented in the different types of Colorado corporate bankruptcy.
• Chapter 7: Many businesses may file for Colorado corporate bankruptcy not believing that their business has the potential to ever become profitable. This is a sad realization to come to, but Colorado bankruptcy laws mean that putting this ill-fated venture in the past is easier. Once you’ve successfully filed for Chapter 7 Colorado bankruptcy, the court liquidates the business’s assets to get funds to pay off creditors. For some businesses, those assets may include its office space, its materials, its distribution line or even its name.
• Chapter 11: Often times, businesses that are still fundamentally strong run into temporary financial trouble that may quickly spiral out of control. Businesses that are unable to pay off debts but would like to recover and become profitable should file for Chapter 11 Colorado bankruptcy. The Court works together with the business’s leaders to restructure the business in a more sound manner and then to organize a feasible schedule for repaying debt. This requires a corporate ownership statement, a list of twenty largest creditors, and a list of equity interest holders.
Colorado Personal Bankruptcy
individual debts must have a Social Security Number Statement, Official Form 1 Exibit D, Certificate of Credit Counseling, and Statistical Summary of Certain liabilities in order to apply for bankruptcy. Here are the types of bankruptcy that private Colorado individuals may file for, and the additional forms needed for each.
• Chapter 7: Colorado bankruptcy works similarly under Chapter 7 whether it is for commercial businesses or private individuals. Individuals have their property liquidated by the court with the proceeds going towards creditors. After this, the filer may be relieved of their debt obligations. It’s a relatively short process that can last just a few months and is best for individuals whose debt comes in the form of unsecured credit card debt, not student loans or mortgages. Those filing for Chapter 7 need Statement of Current Monthly Income and Means, a Statement of Intent, and Exhibit D Statement of Compliance with Credit Counseling.
• Chapter 13: Some persons don’t qualify for Chapter 7 Colorado Bankruptcy because they earn too much income. Instead, their income is looked at as a way to pay back their outstanding debt. In Chapter 11 bankruptcy, the court watches over a repayment program where debtors are repaid via the bankrupt individual’s discretionary income. They must supply the court with Statement of Current Monthly Income and Disposable Income and a Plan T.L.B.F. that must be given no later than 15 days after first filing.
• Chapter 11: Relatively rare for individuals, this type of Colorado bankruptcy should only be pursued by those with debts of over 1,000,000 and large incomes. This requires Statement of Current Monthly Income, a list of twenty largest creditors, and a list of equity interest holders.
Tax debt is the most difficult type of debt to have absolved by a Colorado court. Talk to a Colorado bankruptcy lawyer about whether you have any legal options to help you get out from under the shadow of yours.