The Law Offices of Ken McCartney P.C.



Work Outs
Chapter 7
Chapter 11
Chapter 13
Creditor's Claims
Colorado Exemptions
Wyoming Exemptions
Action Areas

If you pick up a ball, a bat and a glove, pretty soon the rules of the game of baseball come into play.

It is no different when creditors and debtors wrangle over their differences.  Like it or not, the "B" word is mentioned.  No one ever wants to file bankruptcy,  however, in the presence of financial difficulties the solutions available through that division of federal courts are so pervasive that they need to be clearly understood. 

A wise man once said, "the worst thing that can happen to anyone who has developed financial problems is not to  use the best possible solution to those problems."  Having to file once is shameful. Twice is unnecessary.  It is all about knowing your options, and choosing the best approach possible under the circumstances.  It is far a worse failing, to become insolvent a second time after financial troubles arise by not seeking out and taking the best way out. 

A little bit of knowledge is a dangerous thing, but that should by no means deter the first step in gaining understanding.  Life is complicated.  The information provided here is not intended to substitute for good legal advice from someone with an overall understanding of the insolvency process.  What follows is not an exhaustive treatment.  It is not intended to be.   It is a starting point. Good decisions are made by informed clients.

Possible options are described here, with a separate, more detailed web page, dedicated to each choice, linked to the descriptions that follow. More detail is contained in the pages linked through the navigation bars at the left and at the bottom of this page.

    Generally the choices are to work things out without an actual bankruptcy (the effects of a bankruptcy, however, often dictate terms), or to seek relief under one of the four popular operative chapters of the bankruptcy code: Chapters 7, 11, 12,  or 13.




  • Leave town without a forwarding address.
  • Sell assets and pay debt.
  • Find an angel.
  • Work out a voluntary composition or extension.
  • Force an extension (Chapter 13).
  • Liquidate and pay only liquidation value (Chapter 7).
  • File Chapter 11 - any or all of the above.
  • Ignore the problem.
  • Sell out.
  • Find an angel.
  • Work out a voluntary composition or extension.
  • File Chapter 11:
    • Can involve any or all of the above,
    • Leverage composition,
    • Time to sell by the stay of creditors.

Please note that borrowing money is not on either list.


Many times actually filing bankruptcy can be avoided.  Something as simple as the sale of assets may be all it takes.  Often the threat of bankruptcy is all it takes.  Having a good bankruptcy attorney in your corner can be a comfort through out this process.  For more information, click  Workouts

Chapter 7  or "Straight" Bankruptcy

Basic.  Relatively inexpensive.  Simple.  By far the most predictable and certain.  A debtor simply gives over to a trustee all of his, her, their,  or its non exempt assets, and gains a court order that denies creditors all lawful remedies whereby they may have collected legitimate debts.  With a little planning non exempt property can be lawfully minimized.

    The majority of chapter 7 debtors have no administrable assets. The key to chapter 7 is to take all necessary, lawful, action to minimize the possibility of administrable assets.  Call it negative estate planning. Chapter 7

Chapter 13 Bankruptcy  

The federal law which makes  bankruptcy possible has more than one chapter describing potential relief for debtors.  Relief under each operative chapter is different.  By requesting relief under Chapter 13, individuals with regular income are able to avoid giving up non-exempt property.  Congress prefers this form of relief and over the years has added to its attractiveness in several ways.  A Chapter 13 discharge is broader than a Chapter 7 discharge.  For instance, C13 will discharge damages awarded as a result of intentional wrong doing where  a C7 will not.  Most frequently, C13 is used to catch up on secured loan arrearages (home or car), or to buy collateral at its value in lieu of loan payoff. Chapter 13

Chapter 12 Bankruptcy

This operative chapter applies only to persons or entities engaged in agriculture.  It resembles Chapter 13, with higher dollar limits.  There is an eligibility test based on last year's tax return.  Roughly 50% of a prospective debtor's income must have been from agricultural related activities. Chapter 12

Chapter 11 Bankruptcy

This is the most expensive relief in most cases.  It allows a qualified entity to gain protection from the bankruptcy court and its current operators to continue to manage the business for their benefit and possibly that of creditors.  There are many complications involved.  This office prides itself on the number of successful reorganizations it has completed over the years. 


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