There are very few things that can bring a family to its knees more than financial struggles. Those Colorado residents who are struggling with debt understand exactly what this means, as the mounting debt can dig a person in a hole that seems nearly impossible to climb out of.
Fortunately, there are effective options for debt relief, even during a person's darkest financial days. Through Chapter 7 bankruptcy, individuals can finally break free of the debt that has burdened them.
For instance, one man recently received a discharge in his personal bankruptcy case that was filed shortly after the company he owned closed its doors. The man had personally guaranteed hundreds of thousands of dollars worth of the business's debt, which accounted for much of the man's $3.2 million in personal liability. All of that debt is no longer legally binding on the man, however, due to the bankruptcy discharge.
The case above was similar to most Chapter 7 cases, in that it was a no asset case. This means the debtor has no assets that are not exempt or subject to valid liens. Under those circumstances, the trustee who is appointed to handle the case will file a no asset report with the court, which means the unsecured creditors will not receive any distribution.
When there are assets to be liquidated, the process may be slightly different. In those cases, creditors may file objections and be involved in determining the priority of claims to the person's assets.
In either event, the individual who files for bankruptcy can obtain a debt discharge. However, it is helpful to know how the case will proceed, as each individual's case will vary depending on his or her individual circumstances.
Source: Lehigh Valley Live, "Richard Norton, owner of Norton Oil Co., has personal bankruptcy discharged," Matthew Bultman, June 5, 2014