Assets and Exemptions
After You File
Bankruptcy and Credit Reports
Questions for Creditors

What happens to my personal property, real property and other assets?
What is an "exemption" and what would be "exempt"?
Can I keep my home and automobile?
Are pension plans and 401(k) plans exempt?
Are IRA accounts exempt?

What happens to my personal property, real property and other assets?
Once the bankruptcy is filed, all of your property at the time of the filing and certain other property to be received in the future, becomes the property of the bankruptcy estate. This means that the bankruptcy trustee may take control of this property to satisfy your creditors. You are required to file a schedule with the court describing all of your assets.

Certain property is either "excluded" from the bankruptcy estate or "exempt," and you will be able to keep that property. The law describes what property is "excluded" from the bankruptcy estate and what property is exempt.

Often, all of your assets can be protected. However, if any question exists regarding protection of assets, you should hire an attorney to ensure that the exemptions are properly chosen and applied to maximize the value of assets retained.

What is an "exemption" and what would be "exempt"?
Certain property is protected from creditors in bankruptcy and is known as "exempt" property. Exactly what property is protected depends on the exemption scheme chosen. In many states, you can either exempt the certain property or exempt any "property that is exempt under [other] Federal law...or State or local law that is applicable..." In other states, you can only choose the "other Federal and State law exemption scheme." These states have "opted out" of the bankruptcy exemption scheme. Determining what property in Colorado is exempt requires a complete understanding of the laws governing residency within states and the exemption laws of the state of Colorado.

Can I keep my home and automobile?
In many cases you can retain your home and automobile in a chapter 7 bankruptcy proceeding. You will lose your home or automobile in a chapter 7 if (1) you are behind in making payments on a loan secured by the home or automobile and can not reach a payment agreement with the creditor, or (2) the home or automobile has equity (i.e.. a liquidation value in excess of the amount owed to creditors with liens against the property) in excess of what you are allowed to exempt.

If either of these two conditions exist, you might consider filing a chapter 13 petition, which allows you to develop a plan for repaying your creditors without necessarily liquidating assets.

Are pension plans and 401(k) plans exempt?
The United States Supreme Court has held that pension plans, 401(k) plans, and other "ERISA-qualified plans" are generally "excluded" from the bankruptcy estate

Are IRA accounts exempt?
Unlike 401(k) plans, IRA accounts are not ERISA-qualified plans. However, Colorado law protects IRA's from the bankruptcy estate. Some bankruptcy court judges have held that an IRA may be partially exempt.

What happens after I file a bankruptcy petition?
Who deals with my creditors and bill collectors during the bankruptcy?
What is the "automatic stay?"
My creditors ignored the automatic stay. What do I do?

What happens after I file a bankruptcy petition?
First, the bankruptcy court will send your creditors a "Notice of Commencement of Case" informing them that you have filed the petition.

About 40 to 60 days after filing the bankruptcy petition, you will have to attend a hearing presided over by a bankruptcy trustee. This hearing is called the First Meeting of Creditors. The trustee is not a judge, but an individual appointed by the United States Trustee to oversee bankruptcy cases. At the First Meeting of Creditors the trustee will ask you questions under oath regarding the content of your bankruptcy papers, your assets, debts and other matters.

Under normal circumstances, in a chapter 7 proceeding the Bankruptcy Court will automatically issue you a discharge 70 to 85 days after the First Meeting of Creditors. In a chapter 13 proceeding, the Court will enter an order confirming your chapter 13 plan. In a chapter 13 proceeding you receive your discharge upon completion of the chapter 13 plan.

Who deals with my creditors and bill collectors during the bankruptcy?
Usually, your attorney deals with all creditors.

What is the "automatic stay?"
When you file a bankruptcy petition, your creditors are automatically barred from taking any action to collect the debts owed them or seizing your property. There are some exceptions. For example, a bankruptcy petition does not stay the commencement or continuation of a criminal action (unless brought to collect a debt), an action to collect alimony, maintenance or support from certain assets or income, or an action to enforce a government's police or regulatory power.

My creditors ignored the automatic stay. What do I do?
First, make sure the creditor is aware that you filed bankruptcy and ask it to stop collection efforts. If the creditor does not respond, contact your attorney if you have one. If not, ask the bankruptcy court to enter an order specifically enjoining the creditor from further action.

If you are an individual and are injured by your creditor's willful failure to comply with the automatic stay, the law allows you to recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, punitive damages.

Finally, in some states you may have to obtain an order from the bankruptcy court reversing the action taken by the creditor.

Will the fact that I filed bankruptcy appear on credit reports?
How can I re-establish my credit rating after bankruptcy?

Will the fact that I filed bankruptcy appear on credit reports?
The bankruptcy is treated as judgment and will be listed in credit reports for a period of up to 10 years.

How can I re-establish my credit rating after bankruptcy?
The best way is to obtain new credit and make the payments religiously. Sometimes an existing creditor may continue to grant you credit based upon a reaffirmation agreement made during the bankruptcy. You may also be able to obtain a secured credit card, where the credit limit is based upon the amount of security given, or obtain credit using a co-signer. There are also numerous books that show how to rebuild your credit.

My ex-spouse filed bankruptcy. What do I do?
My employer filed bankruptcy. How do I get paid?
Are there bankruptcy crimes?
How do I report a bankruptcy crime?

My ex-spouse filed bankruptcy. What do I do?
Consult an attorney. In most cases your spouse must continue to make alimony, maintenance and child support payments. If your spouse agreed to pay certain joint obligations, pay the mortgage on your home, or transfer assets to you, you may be able to obtain a bankruptcy court order excepting those obligations from the bankruptcy discharge. Finally, if your spouse discharges a joint debt, that fact may appear on your credit report.

My employer filed bankruptcy. How do I get paid?
If you are a union employee, contact your union. Often unions will represent the employees in the bankruptcy proceeding. If not, file a proof of claim for any unpaid wages, vacation benefits, etc. owed from before the date of filing. You can obtain a proof of claim form from the local bankruptcy court.

Follow the instructions on the proof of claim. File the proof of claim with the bankruptcy court. Make sure you send them a copy and ask to have it returned to you with a date stamp. Call the bankruptcy court and obtain the name and address of the debtor's attorney or the attorney for the trustee if a trustee has been appointed. Send them copies of the proof of claim.

Are there bankruptcy crimes?
Yes. Examples of bankruptcy crimes are knowingly and fraudulently concealing assets, lying under oath or on bankruptcy schedules, or knowingly and fraudulently filing a false proof of claim. Bankruptcy fraud can also be used to support a RICO claim.

How do I report a bankruptcy crime?
If you are aware of a bankruptcy crime, you should report the crime to the trustee assigned to oversee the case. If no trustee is appointed, contact the U.S. Trustee's Office. The trustee will, if he or she has reasonable grounds for believing that a crime was committed, report the facts to the United States Attorney for investigation.