Chapter 7 Bankruptcy is a process that allows you, a consumer, the ability to discharge your debt under the protection of the federal government. The Founding Fathers provided for bankruptcy laws in the U.S. Constitution. Article I, Section 8, gave Congress the power to: “…establish…uniform Laws on the subject of Bankruptcies throughout the United States.” In 1800, Congress passed the first federal law relating to bankruptcy, called the Bankruptcy Act of 1800. As you can see, bankruptcy has been an integral part of American Law. Over the years, the laws have changed and expanded. Bankruptcy is nothing to be ashamed of and was created to help people just like you.
Do you live in Denver, Aurora, Littleton, Golden, Thornton, Lakewood, Centennial, Castle Rock, Parker, or another Denver Metro Community? Are you struggling to make ends meet? You are not alone. According to the U.S Census Bureau, Colorado added 100,986 people to its population between 2014 and 2015, making it the second-fastest growing state in the U.S. That growth rate has not slowed down, and much of that population increase is specific to the Metro Denver area. Because of such rapid growth, the cost of living has also increased. Many studies have found that Colorado home prices have risen faster than in any other state. This includes increases in both home purchase and rental prices. It is no surprise that many families find themselves struggling to survive.
After paying the rent or mortgage payment are you able to make minimum payments on your debts? Are you robbing Peter to pay Paul? You are not alone. Marketwatch.com has found that 4.4% of credit card debt is newly delinquent in the second quarter of 2017. Your neighbors are struggling, too. So how do you move forward? How do you get out of debt? How much debt do you need to file bankruptcy? Is it morally okay to file bankruptcy? If you trust in America and the rights bestowed upon you, it certainly is. It is a right given to you specifically by Congress under constitutional mandate. It is your right to take advantage of America’s bankruptcy laws. Don’t forget, even our President, Donald Trump, has filed four times. Bankruptcy should not be looked at as a “last resort,” but instead as a way to get a fresh start, a way to get your finances in order.
There is no minimum amount of debt that you must have to file Chapter 7 bankruptcy in Colorado. Everyone’s situation is different and what may be an insurmountable amount of debt for you is not for another person. Therefore, if you are unable to pay your debts and are facing lawsuits, wage garnishment, repossession or other threatening actions, bankruptcy may be the answer to your financial problems.
First, there is an income requirement to qualify for Chapter 7 bankruptcy. In order to file, you must pass what’s called the Chapter 7 means test. This test compares your income to the income of other families of your size in Colorado. Currently, those income requirements are $55,858 for a single-person household, $72,037 for a household of two, $81,496 for a household of three, and $95,117 for a household of four. If your family earns below the above listed amounts, you automatically meet the income requirements. However, even if you are above Colorado’s median income, you may still qualify. Your Colorado licensed attorney will be better able to assist you in determining if you qualify.
Second, there are filing history requirements. You may not be eligible to file a Chapter 7 bankruptcy in Colorado if you have already filed bankruptcy in the previous eight years. However, it is still worth contacting a qualified Colorado bankruptcy attorney as you may qualify for alternative forms of bankruptcy.
Lastly, only certain types of debt can be discharged in a Chapter 7 case. Specifically, unsecured debts like credit card bills, payday loans, personal loans, evictions, repossessions, and medical bills can be discharged by the Court, but tax debts newer than three years old, student loans, child support arrearages, and criminal restitution are not dischargeable. If you have a car loan or mortgage, you may be able to eliminate the debt obligation, but will likely have surrender the property securing the debt.
Are you concerned about your property if you file bankruptcy? Wondering if you can sell your house or other possessions after filing a Chapter 7? Understanding bankruptcy exemptions will play an important role in determining if you want to file bankruptcy. In Chapter 7 bankruptcy, exemptions determine what property you get to keep. This means if your property is exempt, you may keep it during and after your debts are discharged.
You may be able to keep your home, car, furniture, jewelry, tools, and more. However, if your property is nonexempt, the trustee, who evaluates your property, is entitled to sell the property to partially pay back your creditors. Colorado allows you to keep property up to a certain value. This includes $7500 in vehicle equity, $75,000 in home equity, $3000 in home goods, $2000 in clothing, etc. Most people lose nothing when they file bankruptcy. Prior to filing, you should discuss your assets and the use of exemptions with an attorney.
First, you decide to file bankruptcy. There are the thousands of pages of laws that make up the bankruptcy code and you do not need to do this alone. There are qualified bankruptcy attorneys in Denver, Aurora, Lakeland, Golden, and every other county in Colorado. These attorneys know and understand the bankruptcy code. In addition, many bankruptcy attorneys will allow you to pay for their services through small monthly payments.
Your job is going to be gathering documents. Your attorney will need documents, including six months of paystubs, three years of tax returns, bank account statements, retirement statements, lawsuit information, a list of assets, a budget, and more. Although this may seem daunting, many people are able to compile their documents in a few days.
