COVID-19 Effects On Chapter 7 And 13 Bankruptcy Filing In Colorado
During financial crises, most people and businesses are usually not able to service their debts. When the situation becomes overwhelming, people start looking for ways of preventing their assets from undergoing liquidation. In the U.S., chapters 7 and 13, a bankruptcy filing is how debtors protect their liquidation assets.
What is Chapter 7 And Chapter 13 Bankruptcy Filing?
Chapter 7 bankruptcy filing prevents creditors from liquidating debtors’ non-exempt assets. However, to qualify for this type of filing, you need to pass a means test, and you should not for the past eight years discharged any chapter 7 bankruptcy filing. Chapter 7 filing discharges unsecured debts.
Chapter 13 bankruptcy filing is for people with significant income and ideal for those who don’t want to lose their valuable assets. Such individuals usually file chapter 13 bankruptcies to protect their valuable property in exchange for debt relief. With this filing, the parties agree on a repayment plan period of about 3–5 years.
So, How Has COVID-19 Affected Chapter 7 And 13 Bankruptcy Filing In Colorado?
COVID-19 has significantly affected businesses not just in Colorado but across other states in the United States. The pandemic has seen many people lose their jobs, reducing their earnings significantly. So, those with loans have not been able to make payments.
Some businesses have closed, and others are still struggling, a situation that has led to job loss in Colorado. The majority of people have not been able to service their debts. This has left them with no other option but to file for chapter 7 and chapter bankruptcy to avoid losing their assets to creditors.
The COVID-19 pandemic may lead to massive bankruptcy filing for chapters 7 and 13 in Colorado if the situation doesn’t change for the better. So, it is evident that most people will be looking to file for chapter 7 and 13 bankruptcy.
Conclusion
Filing for chapter 7 and 13 bankruptcy is not an easy process. It requires the input of an experienced attorney who understands how the two processes work. Well, if you ever find yourself in this situation, feel free to call us or visit our office located in Colorado Springs. We serve clients from Southern Colorado, Teller, and Pueblo Counties, and it will be our pleasure to help you.
