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Anyone can fall into the quagmire of debt. However, there is a point of no return where it becomes impossible to get caught up. Oftentimes, it begins with an illness or losing employment leading to medical bills or a lack of income. When you reach the point of no return because of spiraling debt, it’s time to explore your options.
If you’re in debt and thinking seriously about filing for bankruptcy in Aurora, you probably have many questions, including:
Our experienced Aurora area debt relief attorneys have heard these questions from hundreds of prospective clients, but one of the most popular questions we get regarding bankruptcy is:
How do I know if I qualify for bankruptcy?
Figuring out if you qualify and deciding which chapter of the Federal Bankruptcy Code to file requires careful strategy with an experienced CO bankruptcy attorney. We have designed this website to provide some general knowledge about how to qualify for the two most common bankruptcy chapters filed in Aurora and the surrounding areas, Chapter 7 and Chapter 13.
However, every case is unique, so the information provided here is meant to serve only as a basic guide to bankruptcy qualifications. If you’re ready to sit down and discuss whether or not you qualify for bankruptcy, please contact us for a free consultation to discuss your legal options.
Chapter 7 bankruptcy is the most commonly filed bankruptcy chapter in Colorado. Often referred to as “liquidation” or a “straight” bankruptcy because virtually all debt is eliminated in a relatively short amount of time, this debt relief method is reserved for those who truly need it.
However, that wasn’t always the case. In 2005, Congress passed a new law called the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Before the BAPCPA was passed, you could file for bankruptcy under Chapter 7 regardless of your income level; rich, poor, or middle class.
Now, thanks to the BAPCPA, a means test is the first step toward determining eligibility for Chapter 7 filings.
There are two ways to pass the means test:
Even if your income exceeds the median income based on the number of people in your family, you may still qualify for Chapter 7 if you do not have enough disposable income to make a significant monthly payment to your unsecured debts. A debtor’s disposable income is evaluated after allowing for several deductions from your gross income, which include the following:
As you can see, calculating eligibility to file for chapter 7 bankruptcy is not straightforward. Formulas for the calculations are complicated and online calculators often yield incorrect results. The means test computations should be completed by an experienced Colorado bankruptcy attorney who understands the fine details of calculating income and has access to accurate figures about the medians in the state.
Even if you qualify for Chapter 7 bankruptcy via the means test, there is still another hurdle in your way that you must jump before you can file. If you have previously filed a personal bankruptcy case (either Chapter 7, 11, or 13), and received a discharge, there is a waiting period before you can obtain another discharge. As of 2005, you can now be denied a discharge if you received a discharge in another Chapter 7 or Chapter 11 bankruptcy case filed in the last eight years. And if the previous case filed was chapter 13, at least six years must elapse from the date of filing of the first bankruptcy before a chapter 7 matter can be filed.
To further discuss Chapter 7 qualifications, the means test, or if you’re ready to see if you qualify to file for bankruptcy in Aurora or the surrounding areas, contact our Aurora bankruptcy attorneys for a free case consultation.
Believe it or not, filing for bankruptcy under Chapter 13 is even more complicated than filing under Chapter 7.
Individuals with significant assets but whose debts have become unmanageable can opt to file for bankruptcy under Chapter 13. Chapter 13 bankruptcy, also known as a “wage-earners bankruptcy” or a “reorganization bankruptcy,” protects assets, and the debts are discharged via an attorney and court-appointed bankruptcy trustee agreed-upon 3 to 5 year repayment plan.
Unfortunately, just because you have a job and don’t qualify for Chapter 7 bankruptcy, doesn’t automatically mean you’ll qualify to file for Chapter 13 bankruptcy (although that’s usually the case). Some requirements for eligibility include–
Crafting a repayment plan that is both accurate and feasible requires the help of a knowledgeable Arapahoe County Chapter 13 bankruptcy attorney. If you’d like to speak to an experienced legal professional about Chapter 13 bankruptcy qualifications, please contact our firm for more information.
Bankruptcy qualifications are, without a doubt, frustrating and confusing if you are unfamiliar with the Federal Bankruptcy Code. With your financial freedom on the line, you need the help of an experienced Aurora bankruptcy attorney to make sure you’re on the right course for debt relief.
Struggling with debt is a problem in life that you should not take lightly. If you need a trusted bankruptcy firm that is friendly, helpful, experienced, and professional, contact our Aurora bankruptcy lawyers today.