Bankruptcy in Colorado

The burden of excessive medical, credit card, auto, and home debt can seem insurmountable. The toll excessive debt often places on you and your family can seem hopeless. As such, many people seek to lessen the burden by filing for personal bankruptcy. Bankruptcy can happen to anyone. There is no shame in filing for a bankruptcy; all sorts of things can lead to one. Many hard-working families find themselves in dire financial situations due to unexpected life events, lay-offs, illnesses, and divorce. Filing for bankruptcy can halt creditor and IRS harassment, repossession, and in some instances, foreclosure.

There are options under the bankruptcy code that you may or may not qualify for. Shelly Rosnik will guide you through the various options that include: chapter 7 bankruptcy, chapter 13 bankruptcy, or in some instances, debt negotiation. Each case is different and careful analysis is a must to determine what best fits your unique circumstance.

How do I know if I qualify for bankruptcy?
“In most instances everyone will qualify for bankruptcy under Chapter 7 or Chapter 13. In order to qualify for Chapter 7 your family’s gross annual income must fall below the levels  as provided by the “means test” that does change often. As of May 1, 2017, in Colorado a single person with a household of 1 filing for Chapter 7 needs to make less than $55,858; household of two the combined annual income needs to be less than $72,037, a household of 3 your income needs to be less than $81,496, and a household of 4 your income needs to be less than $95,117. If your household consists of more than 4 people the means test allows an additional $8,400 per person. To see any updates or other states this link is helpful: https://www.justice.gov/ust/means-testing. If your income is greater than the stated levels you still have an option under Chapter 13. However, income is not the only consideration in order to qualify for Chapter 7. If your assets exceed the allowable exemptions you may need to file Chapter 13 regardless if your income is less than the “means test”. There are instances where you may not qualify for either Chapter for example one reason may be that you cannot afford to make a Chapter 13 plan payment because it may require a payment to cover mandatory priority claims. In this instance debt negotiation is another option.”

What is the difference between Chapter 7 and Chapter 13?
“Chapter 7 is a complete relief of most of your debt and you may not have to pay anything back to any unsecured creditors or secured creditors if you surrender the secured property. There may be some turnover of money to the Chapter 7 trustee for distribution to your creditors. Chapter 13 requires a payment plan to the trustee who will distribute money to creditors who timely file a proof of claim. The plans may be a full pay and depending on your disposable income can be fully funded at any time but less than 5 years. If the plan is not a 100% payback then the plan will be 3 years or 5 years depending on income and/or non exempt assets and/or mandatory priority claims.” 

I need to file bankruptcy again, what are my options?
“Generally, you may file Chapter 7 every 8 years in order to receive a second discharge. Likewise, you may file a Chapter 13 every 6 years in order to receive a second discharge. If you have filed a Chapter 7 and you need to file again before the 8 years, you may have an option to file under Chapter 13 after 4 years from filing the Chapter 7. If you filed a Chapter 13 and received a discharge you may be eligible to file a Chapter 7 after 6 years. There are many caveats and these dates are very general. Each case is unique.”

How long does bankruptcy take?
“For a Chapter 7 from the date of filing until discharge it is not less than 90 days. So long as everything went smoothly you should receive your discharge shortly after the 90 day statutory time. For a Chapter 13 from the date of filing it may be as long as 5 years but not longer.” 

Columbine Law Group, PC always offers a free consultation to answer any questions you may have about your financial issues. ​ Please call us at 720-787-7870 to schedule a consultation to meet with one of our team members.