Bankruptcy is a proceeding based on federal law allowing people to obtain relief from their debts. There are a number of different proceedings but the most common is Chapter 7.

Basically, the debtor gives his/her property to a trustee appointed by the government. The trustee converts the property to cash and pays the creditors, to the extent possible.

The person filing bankruptcy is called the debtor. Husbands and wives can file together or individually.

The person filing bankruptcy (debtor) keeps his/her exempt property and is discharged (doesn’t have to pay) the debts which are legally allowed to be discharged. Most debts are dischargeable.

The exemptions in Colorado (the property you get to keep), and the fact that the value of houses and vehicles are often security for their loans, means that the debtor may, in many cases, keep their house and their cars. There are many other exemption categories which prevent the person filing bankruptcy from losing their possessions. This includes retirement funds.

Should I see a lawyer?

Yes! You should see Tom Silverman, or other qualified lawyer, to help you decide whether bankruptcy is right for you and to represent you if you decide to do it.

I don’t say this just because bankruptcy is part of our business at Silverman Law Offices. Bankruptcy is sufficiently complicated that I believe you need our help for filings under Chapter 7 or 11, 12 or 13.

No website is a substitute for competent legal counsel in bankruptcy. Even the United States Bankruptcy Court’s publications recommend having a lawyer rather than trying to do it yourself.

Call us at our Glenwood Springs office (970 945-1000) or our Rifle office (970 625-9444).

How much does it cost?

The cost consists of the filing fee and the attorneys fees. Each of these depends on the type of bankruptcy case that is filed.

For a Chapter 7 case the filing fee is a total of $299 and the attorneys fees depend on the complexity of the case. We have compared our fees to others and believe we are the same as, or less than, our fellow bankruptcy lawyers in this area.

Can anybody file bankruptcy?

No. Chapter 7 filings are subject to a “means” test. This means that your income and expenses are subject to a test to determine whether you are eligible to get bankruptcy help. The formula is a bit complicated.

We can help you determine whether you qualify. In many instances you can call our assistant, Cassie, and she can “pre-qualify” you to see if you are eligible for Chapter 7 before you come in to see me.

Should I feel bad about considering bankruptcy?

Absolutely not! I find that in the 30 some years I’ve been involved with bankruptcy many people feel uncomfortable about seeking bankruptcy as a debt solution.

Our founders put bankruptcy authorization in the United States Constitution. They had seen debtors’ colonies and debtors’ prisons and specifically authorized the Congress to enact “uniform Laws on the subject of Bankruptcies”.

Our bankruptcy law was passed to give debtors a “fresh start” from burdensome debts. The United States Supreme Court wrote “…it gives to the honest but unfortunate debtor … a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.”

Sometimes because of economic decline, medical problems, divorce, legal problems, garnishments, credit card debt and other common problems, you find that the “math doesn’t work”. You just don’t have enough money to pay your bills and survive. Bankruptcy may help.

I believe having your debts discharged in bankruptcy actually stimulates the economy by allowing you to re-enter the economic marketplace.

Honestly, I can’t think of anyone who filed bankruptcy who wasn’t glad they did. Sometimes it’s your only meaningful choice.

Tom Silverman