Colorado Bankruptcy Law
Discover the in's and out's of filing for bankruptcy in Colorado
Filing business bankruptcy in Colorado is tougher now than it was in past years. When bankruptcy laws were revised in 2005, the new laws made it tougher on the debtor. Bankruptcy laws in Colorado now require debtors to pass a means test to file for the more lenient Chapter 7 bankruptcy—they may not qualify if their current monthly income is greater than the median family income where they live.Filing for bankruptcy in Colorado is always an option for businesses in dire straits. However, keep in mind these points before deciding to file:
1. Bankruptcy laws in Colorado only allow for certain exemptions. Find out what they are beforehand, or you may lose more in the bankruptcy than you expect.
2. Evaluate Colorado bankruptcy attorneys and decide if the price is worth it for your time and anxiety.
3. Remember that seeking protection under Colorado bankruptcy laws isn't the solution for all of your problems. If you plan to keep your business afloat, you will have to pay back some of the debts.
Know which chapter of Colorado bankruptcy law you will be filing
Colorado bankruptcy laws allow businesses to file for two different types of bankruptcy. In Chapter 7 bankruptcy, the business assets are liquidated and a trustee will collect and sell property to pay the creditors. This is best for business owners who don't want to keep the business. Chapter 11 bankruptcy helps business restructure their debts. Creditors vote to accept or reject the reorganization plan and debtors have to pay a quarterly fee to the U.S. Trustee.
Try: The U.S. Trustee's Office will advise if you qualify for Chapter 7 bankruptcy. Before you file, you must see an approved credit counselor. A list of approved counselors in Colorado can also be found at the Trustee's Office website.
Get familiar with Colorado bankruptcy law exemptions before filing
Some of your property may be exempted from Colorado bankruptcy law and some may be at risk. For instance, Colorado bankruptcy exemptions include part of the value of property you occupy and the car you drive to work. It is best to know what you stand to lose before your file. Colorado bankruptcy lawyers can steer you in the right direction.
Try: The Bankruptcy site outlines Colorado-specific exemptions. Also, the Denver Bar Association has free clinics for those who are considering filing for bankruptcy. During these meetings, the ramifications of bankruptcy are discussed.
Enlist the help of Colorado bankruptcy attorneys
Even if you eventually wish to proceed by yourself, many Colorado bankruptcy lawyers will give a 30-minute free consultation which may help you get some Colorado bankruptcy advice.
Try: The National Association of Consumer Bankruptcy Attorneys (NACBA)'s Attorney Finder will help you locate attorneys who are well-versed in Colorado business bankruptcy laws. Also, BankruptcyLawFirms.com will let you search for an attorney by using your Colorado ZIP code. Some of the bigger business bankruptcy law firms in Colorado include: Edward Levy, P.C. in Aurora and James R. Chadderdon, P.C. in Colorado Springs.
- If you are thinking of filing bankruptcy in Colorado, don't pay some creditors and ignore others. Courts call these "preferential payments" and they are against Colorado bankruptcy laws.
- Bankruptcy laws in Colorado vary from federal regulations, so make sure you know the difference when filing.
Copyright © 2011 Business.com, Inc. All Rights Reserved.
