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Approaching the bankruptcy decision with care

With another summer approaching, Colorado residents are getting ready for warmer weather once again. It is not all sun and fun for those struggling with financial challenges, however, as they look for ways to deal with overwhelming debt.

Fortunately, individuals facing high debt have choices. Through various types of bankruptcy, individuals can discharge the debt that may be holding them back, and get back on track with their finances and their future.

Deciding whether to file for bankruptcy is a personal choice, however, and therefore individuals need to seriously weigh their options and determine what is best for their situation. Even after a person decides to file for bankruptcy, they must figure out which type of bankruptcy they qualify for.

For example, in Chapter 7 bankruptcy, a person can discharge their unsecured debts by liquidating their property. Individuals can also protect certain assets from being sold in the bankruptcy. Recent figures showed the average person who filed for Chapter 7 in 2012 had about $116,000 in total assets and a monthly income of $2,764.

These figures are important because a person cannot file for Chapter 7 if their income is over a certain level. The person may also be prohibited from filing if they have went through a previous bankruptcy within a recent period before attempting to file again.

At the end of the day, filing for bankruptcy is a serious matter that should not be taken lightly. Individuals should consider their options and what works best for their personal situation. After doing so, individuals can then get their finances back on track and move forward with their lives.

Source: Fox Business, "Debt judgment may trigger bankruptcy," Fred O. Williams, May 7, 2014

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