What is the Income Limit for Chapter 7 in Colorado?
According to Colorado law, you must pass the bankruptcy means test and file a Chapter 7 bankruptcy if your monthly income over the next 60 months is less than $7,475. If your monthly revenue exceeds $12,475, you fail the means test and can't file Chapter 7.
Disqualifications for Chapter 7 Bankruptcy in Colorado
Not every individual is eligible to file for Chapter 7 bankruptcy.
You could be ineligible for chapter 7 if:
- You have a high income. To qualify for Chapter 7 bankruptcy, you must pass a means test. The means test measures your disposable income to determine if you can make meaningful payments toward your debt. Generally, the higher your monthly disposable income, the less likely you are to be eligible to file for Chapter 7 bankruptcy.
- You have previously filed for Chapter 7 or Chapter 13 bankruptcy. You cannot file for Chapter 7 bankruptcy if you already filed Chapter 7 within the past eight years and your debt was discharged. You will also be ineligible if you filed Chapter 13 bankruptcy within the past six years and your debt was discharged.
- You filed for Chapter 7 or 13 bankruptcy and the court dismissed the filing in the past six months. The filing could have been dismissed for any number of reasons, such as violating a court order.
- You obtained your debts through illegal means. An example of this would be if you made a false statement on a loan application.
If you do not qualify for Chapter 7, you may still qualify for another type of bankruptcy.
Contact our Fort Collins bankruptcy attorney to learn more about how we can help you.
Dischargeable Debts
If you are considering bankruptcy, you should keep in mind that the court will only discharge eligible debts in a bankruptcy.
Some of the most common debts that the court generally will not discharge include:
- Back taxes
- Student loans
- Child support or alimony
- Criminal fines or restitution
- Judgments related to driving under the influence of alcohol or drugs
How Does Bankruptcy Impact Your Credit Score?
Your credit score will be negatively impacted when you file for Chapter 7 bankruptcy in Fort Collins. The filing will show up on your credit report for up to 10 years, but the impact will lessen over time. It is very much possible to rebuild your credit after filing for bankruptcy.
You must complete a credit counseling class within 180 days of filing for bankruptcy. You can complete the course online. A certificate of completion must be filed with the court.
Protect Yourself from Credit Collection
After you file for bankruptcy, an automatic stay goes into place. This means that the court puts a restraining order against all collection efforts and other financial legal proceedings pending against the filer. The court mails creditors a notice ordering them to stop any action they had been taking against the filer. If a creditor intentionally violates this notice, they made be held in contempt of court and be liable to the filer for damages.
How Much Does It Cost to File for Bankruptcy in Colorado?
There are costs associated with filing for Chapter 7 bankruptcy. First, you must pay a filing fee to the court. As of June 2019, the filing fee is $335. The filing fee is the same no matter where you are living in the United States. In addition to the filing fee, you must pay attorney fees to the attorney preparing your filing.
Homestead Exemption
In a Chapter 7 bankruptcy, a trustee is appointed. It is the trustee’s job to seize any non-exempt property that you own, sell it, and use that money to pay back your creditors. The Colorado Homestead Exemption allows a filer to exempt up to $75,000 of equity in their home. This means that you are entitled to $75,000 of equity in your home before the trustee can seize it. If you are over the age of 60 or disabled, the homestead exemption increases to $105,000.
How Long Does Bankruptcy Last?
Typically, a bankruptcy case lasts between three to six months. It begins with the filing of the bankruptcy forms and ends with the court closing the case. The length of time varies depending on the number of assets that the trustee needs to go through.
Meet with a Fort Collins Chapter 7 Bankruptcy Lawyer
If you think bankruptcy might be right for you, I look forward to discussing the matter with you and helping you determine whether Chapter 7 is the right path forward. Should we determine together that filing for bankruptcy is in your best interests, I can explain to you in detail the process you can expect. You can rest assured that your case is in good hands.
Call me at (970) 293-8371 to request a free consultation.
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