Does Colorado make you think of anything besides fresh, cold mountain air and ski resorts? What about debt? Is your pile of unpaid bills as high as Mountain High Stadium and in danger of burying you under an avalanche of epic proportions? If so, then you may want to consider filing for a Chapter 7 Bankruptcy.
A Chapter 7 can wipe out most of your unpaid debts, leaving you less stressed and able to enjoy that fresh mountain air again.
Filing for Chapter 7 in Colorado Can Leave Your Credit Looking Like Freshly Fallen Snow
A Chapter 7 bankruptcy can wipe out many of your debts. Things like old tax liens, credit card debts, and medical bills will vanish faster than you can say, “Put on your ski boots.” Okay, the process does take around 6 months and you’ll need an attorney to help you out with the paperwork and official petition (the financial documents filed with the bankruptcy court), but onceyour petition gets to a judge and official trustee (who represents all of the creditors who owe you money) your debts will be cleared lickety-split.
There are a few things that a Chapter 7 can’t help you with. Like it or not, you’ll still be responsible for:
- Student loans,
- Recently filed tax debts
- Liens
- Child support or alimony payments
Bankruptcy does take care of almost everything else, though. Your bankruptcy lawyer is there to help you determine exactly which of your debts will be dismissed. He will help you come up with a plan or payment agreement for those that won’t.
Are You Wondering Whether or Not You Can File, Colorado Residents?
There are two ways to know if you qualify for bankruptcy, Chapter 7. The first is easy. Take a look at the chart below. If your income falls within the median income limits for the size of your family, then you qualify. If you make too much money, however, don’t panic – your bankruptcy attorney can apply something called the means test. This means if your debts are too large for your income and you’re living way beyond your budget, you may still qualify. The means test was created in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which your attorney will use to help you determine if you qualify.
The median income level requirements for the Rocky Mountain State of Colorado are as follows:
Family Size:
- 1 person – $48,598
- 2 people – $64,679
- 3 people – $70,861
- 4 people – $83,967
- More than 4 people: Debtors must add $7,500 per family member to the income level for family’s over 4 members.
Please note that these income levels can change depending on inflation and other economic factors.
All Right, I Qualify, Now What?
Qualifying is just the first step for bankruptcy, Chapter 7. The next is to make an appointment with a bankruptcy attorney. He or she will help you by answering any questions, filling out your official petition for bankruptcy, and representing you in front of the judge and trustee to clear your slate of debts. In order to start things off on the right foot, you’ll need to bring in the following documents when meeting with your attorney for the first time:
- A list of your debts. Whether they qualify for dismissal or not, you’ll need a list of all creditors. In some cases, you may also need past statements and other information.
- Your last six month’s worth or paystubs.
- Last year’s filed tax return (and your spouse’s return, as well)
Your petition for bankruptcy needs to be done right. A Chapter 7 bankruptcy petition that has missing or improper information will be dismissed immediately, leaving you with all of you unpaid bills until you re-file. It’s your attorney’s job to help you every step of the way. Contact a local Colorado Chapter 7 bankruptcy attorney today.
Bankruptcy, Chapter 7 Sounds Great, but What about My House?
Even though you qualify and plan on filing for a Chapter 7 bankruptcy, many are concerned about the property they own, or the assets they have acquired over years of hard work. The laws as mandated by Congress allow all debtors filing for Chapter 7 bankruptcy to withhold a certain amount of property. The type and amount of assets that are exempt are dependent upon the state the debtor resides in. For Colorado residents there is no option to use federal and state exemptions; debtors are limited to the exemptions provided by Colorado only.
Some of the exemptions include:
- Home exemption: A primary residence up to $90,000 in value is exempt. The sale proceeds from a home in the past two years up to $60,000 is exempt. (The exemptions cannot be used concurrently.)
- Home goods:
- Jewelry, watches, and other accessories: $2,000
- Clothing: $1,500
- Personal books, school books, and family pictures $1,500
- Other household goods: $3,000
- Pension and retirement funds:
- 100% public employees’ retirement benefits
- 100% Federal civil service retirement benefits
- 100% Armed Forces pension
- 100% Police and Firefighters pension benefits
- 100% Retirement benefits (employees of local governments)
- 100% Medal of Honor exemption (special pensions for persons on Army, Navy, Air Force or Coast Guard Medal of Honor roll)
- 100% Veterans Administration retirement benefits
- Benefits:
- 100% Workers' compensation
- 100% Unemployment compensation
- 100% Fraternal Benefit Society benefits
- Sickness and accident insurance benefits ($200 per month on periodic payments, 100% of lump sum payments for dismemberment)
- Public or private disability benefits (up to $3,000/month)
- 100% Crime victims' compensation payments
- 100% FEMA benefits
- 100% Federal civil service disability and death benefits
Filing for Chapter 7 bankruptcy does not need to be something to worry. Let your local Colorado bankruptcy attorney do the heavy lifting, while you get rid of nearly all of your debts.
Colorado Bankruptcy Courts:
Tenth Circuit Bankruptcy Appellate Panel
Bryon White United States Courthouse
1823 Stout Street
Denver, Colorado 80257-1823
Phone: (303) 335-2900
Tenth Circuit Bankruptcy Appellate Panel
United States Courthouse
721 19th Street
Denver, Colorado 80202-2500
Phone: (720) 904-7346