The Law Office of
Elizabeth D. Atkinson, LLC




Bankruptcy Information
The following are commonly asked questions about consumer bankruptcy. For more detailed information, please contact Elizabeth Atkinson, Esq. at the number below or via the contact page on this site.

What is the difference between Ch. 7 and Ch. 13 bankruptcy?

What is the Means Test?

What is the Automatic Stay?

How much do you charge for a bankruptcy?

Do I have to tell the court about everything I owe or can I leave some things out?

What is NOT dischargeable in bankruptcy?


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What is the difference between Ch. 7 and Ch. 13 bankruptcy?


Chapter 7 Bankruptcy:

Chapter 7 bankruptcy allows for the discharge of mostly unsecured debts through the liquidation of any assets owned by the debtor. A Trustee will be assigned to the case and will take any non-exempt property of the debtor to create an 'estate' used to pay off creditors. Remaining debts that were included in the bankruptcy that can't be paid by the estate will be discharged.

Chapter 7 is usually available to consumers with a high amount of unsecured debt (credit cards and other loans not secured with collateral) and not much equity in assets. It does not allow a debtor to keep their property like a Chapter 13 will, but certain property can be retained through 'redemption' or 'reaffirmation' of the debt.

In order to 'qualify' for a Ch. 7 bankruptcy, the consumer must pass what's known as the Means Test (see below).


Chapter 13 Bankruptcy:

Chapter 13 bankruptcy allows a debtor to pay off secured and some unsecured debts over a 3-5 year period, based on their ability to pay. A Chapter 13 can be the best way to save property from foreclosure or other assets from repossession. A Ch. 13 allows the debtor to pay mortgage arrears or other secured loan payments over time through the plan. The debtor can keep the property as long as they go forward with timely payments on the loan. This, of course, assumes that the debtor is able to go forward on the loan and stay current on payments.

Chapter 13 bankruptcy can become very complicated, sometimes involving litigation, so consumers should definitely seek the advice and direction of legal counsel if considering a Chapter 13 bankruptcy.


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What is the Means Test?

The Means Test looks at a debtor's income compared to the median income for the location and deducts allowable expenses as determined by the IRS. There are several criteria involved in the Means Test calculation. If a consumer does not pass the Means Test (i.e. they have income above the median) they can still qualify for a Ch. 7, but a 'presumption of abuse' arises because the court will see that there is some disposable income that could be used to made for processing payments through a possible Ch. 13 plan (see explanation below). Failing the Means Test does not always mean you can't file a Ch. 7, but it does create the possibility that the case could be converted by the Trustee to a Ch 13 under certain circumstances.


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What is the Automatic Stay?

When a bankruptcy is filed with the court, what's know as the 'automatic stay' goes into effect immediately. Notice is given to all creditors that you have filed for bankruptcy and no collection action can be taken against you during the bankruptcy proceeding (or for a time determined by the court). If a creditor continues to attempt to collect a debt, you should refer them to your attorney and call your attorney immediately.

The automatic stay can be helpful if you are facing a foreclosure, wage garnishment, levy, trial for civil judgment, etc because it prevents such proceedings from taking place until the bankruptcy has been either discharged or dismissed.

Certain events will shorten the time available for the automatic stay. If you have previously filed a bankruptcy within the last year, you will only be allowed a 30 day stay unless the judge consents to an extension of time. Again, it is important to consult a bankruptcy attorney if you are considering filing for bankruptcy.


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How much do you charge for a bankruptcy?

Bankruptcy is typically billed on a flat fee basis, depending on the complexity of the bankruptcy case. I charge anywhere from $1200-$1500 for a Chapter 7 and an uncomplicated Chapter 13 costs $3000. As with most legal issues, a full evaluation of your financial situation is necessary. Please call my office at (303) 834-7791 to schedule a consultation. The first half hour is free and each half hour beyond that is $50 which is applied to your retainer balance if you choose to retain my services.

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Do I have to tell the court about everything I owe or can I leave some things out?

Full disclosure is required. You must disclose ALL of your debts and ALL of your assets to the court. Failure to do so is considered fraudulent and will lead to dismissal of your case among other things. Please be completely honest about everything listed in your petition. You are signing and attesting to the honesty and accuracy of your information under penalty of perjury in Federal Court.


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What is NOT dischargeable in bankruptcy?

Not all debts are dischargeable in a bankruptcy. These include but are not limited to:

      • child support obligations

      • spousal support or alimony obligations

      • student loans (unless you can show that repaying the loan would cause 'undue hardship', which is very difficult to prove)

      • most taxes

      • debts for willful and malicious injuries to a person or property

      • debts not listed in your bankruptcy petition


      • debts for personal injury caused by the debtor's operation of a motor vehicle while intoxicated

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Due to the complex nature of bankruptcy law after 2005 rule changes, it is very important to consult an attorney before attempting to file for bankruptcy. Too many things can go wrong and the last thing anyone wants is to do all the work to prepare a petition and then have the bankruptcy dismissed because they failed to perform a requirement or misunderstood the law. I am here to assist you through this process. Please call my office at (303) 824-7791 for a consultation. I look forward to meeting you and helping you through this decision so that you can move forward with the rest of your life.


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