Bankruptcy is a scary thing for most people. They don’t know how it works or what the consequences are.

When you file for bankruptcy, your life gets disrupted, but it doesn’t end. Bankruptcy doesn’t always mean sunshine and rainbows, but it can give you a fresh start if you’re hopelessly in debt.

Are you considering filing for bankruptcy in Denver? Want to know how it will affect your Denver home? Read more to learn what’s in store for you.

What Bankruptcy Law in Denver Tells You

The process for filing for bankruptcy in Colorado isn’t much different from filing in another state. Bankruptcy is governed by federal law, and it works by unwinding the contracts between you and your creditors.

Chapter 7 or Chapter 13 are the most common bankruptcy filings. Here’s the difference between them:

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Chapter 7 Bankruptcy

Chapter 7 is often the first choice for bankruptcy filers. The process will be done in a few months, and you don’t have to pay anything to creditors. File for this kind of bankruptcy if your property consists only of essential items.

However, people with more assets can lose them, especially if they own unnecessary luxury items. Chapter 7 doesn’t have a payment plan for catching up on late mortgage or car payments. If you’re behind on your payments when you file, you could lose your home or car.

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Chapter 13 Bankruptcy

By contrast, Chapter 13 filers have to repay their creditors over a three to five-year period. But the payment plan allows Chapter 13 benefits that Chapter 7 doesn’t. For example, you can save your home from foreclosure or your car from repossession if you file this. This chapter lets you force a creditor into a payment plan if you need time to repay a debt you can’t discharge in bankruptcy.

However, the biggest disadvantage to Chapter 13 is that it can be very expensive. There are a lot of people who can’t afford the monthly payment.

How to Get Out of Bankruptcy in Denver

Most people face bankruptcy because of unexpected medical bills or sudden unemployment, but people facing bankruptcy may also end up there because of poor spending and saving habits. No matter why your finances are in trouble, here are some steps you can take to get out of bankruptcy:

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Sell some of your possessions

By selling some things you don’t need, you can pay back your creditors easily and prevent yourself from filing for bankruptcy. For example, you might want to sell your house and move to a downsized property. If you need the funds right away, you can sell your Denver house fast to a cash home buyer so you can pay your creditors right away.

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Live on a shoestring budget

You’re trying to get out of bankruptcy, so there’s no room for frills in your budget. No streaming, no cable, no huge cellphone plans, no dining out, and no vacations until you’re debt-free. Make your own meals, drink coffee you brewed yourself, and cut down on luxuries.

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Consider getting a second job

These days, it’s not uncommon for people to work two (or three) jobs. You can avoid bankruptcy if you have an extra source of income. Just make sure you’re paying off your debts with the extra income. Getting a second job means sacrificing time with family and friends, and we know that’s hard. But remember, this is just a temporary situation.

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Seek professional help

Sometimes it’s best to talk to a financial coach when you need help. It’s hard to talk about money, but you’re in the middle of a crisis, and you need help. It’s okay to admit that and seek help.

Learn More About Our Cash Buying Process

At Blue Halo Homes, LLC, we specialize in helping you sell your home for a reasonable price. We buy houses in Denver, Colorado from homeowners in financial distress, sudden or unexpected life events, with problematic property, and other situations.

We’ll give you peace of mind throughout the sales process. Since we keep our costs low and take less profit than the competition, we can offer you the best deal. We won’t require you to clean or repair your home. We’ll buy it as is. Lastly, our closing process works around your schedule.

Need to learn more about us? Call us today at (303) 457-1181.