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U.S. bankruptcy laws do not require people to have a minimum amount of debt to file for bankruptcy.
Bankruptcy becomes a viable option when you can no longer manage your debts. Every case is different; for some, unmanageable debt looks like a six-figure medical bill obtained treating a medical emergency. For others, it may look like an impending foreclosure notice due to missed mortgage payments.
Almost any person in Jefferson County can file for bankruptcy, but there are some steps you must take to affirm your eligibility. We provide a general outline of bankruptcy qualifications for Chapter 7 and Chapter 13 bankruptcy, however, if you’re looking for more in-depth information, or answers to questions about your specific circumstances, we urge you to contact the experienced Lakewood debt relief attorneys at our Jefferson County bankruptcy law firm.
We provide a free case consultation to all prospective clients to go over all bankruptcy qualifications and how they pertain to your individual needs.
Chapter 7 bankruptcy is the most commonly filed personal bankruptcy chapter in the country because it is widely perceived as the fastest and best way to get out from under unmanageable credit card debt. 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.
Before 2005, that wasn’t always the case. To ensure only the truly needy were allowed to file for Chapter 7 bankruptcy, 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.
Before you can proceed with a Chapter 7 petition, you must pass a means test. There are two ways to pass the means test– The first, easiest way to pass the Colorado means test is to determine if you earn less than the median household of the same size in Colorado, if so then congratulations! you pass the Chapter 7 Means Test.
If you don’t pass the first step of the means test, then you move on to the second, more complicated step. Our Lakewood bankruptcy attorneys want to remind you to try not to panic if you are above median income because most people still pass the means test. Even people who are well above median income can qualify for a Chapter 7 bankruptcy. However, a far more in-depth analysis must be performed when household income is above the median.
The means test uses a complicated mathematical formula that compares your gross monthly income to your household expenses and from those numbers comes up with what is considered your “disposable income.” Then more complicated math is done to ascertain whether your amount of disposable income is sufficient to cover repaying the debts you owe.
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 Lakewood bankruptcy attorney who understands the fine details of calculating income and has access to accurate figures about the medians in the state.
We should also point out that even if you qualify for Chapter 7 bankruptcy via the means test, there is still another qualification you must meet before you can file for Chapter 7 bankruptcy in Colorado. 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.
Thanks to the BAPCPA, 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 Jefferson County, contact our Lakewood Chapter 7 bankruptcy attorneys for a free case consultation.
Even if you don’t qualify for chapter 7 bankruptcy, chapter 13 is still an option. As a matter of fact, Chapter 13 is the better bankruptcy option for Lakewood residents who
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–
During Chapter 13 bankruptcy, also known as a “wage-earners bankruptcy” or a “reorganization bankruptcy,”, you and your experienced Lakewood Chapter 13 bankruptcy lawyer will work to formulate a debt repayment plan that is then submitted for approval to the Federal Bankruptcy Court. Once your payment plan is approved by the court-appointed trustee, you will continue to make monthly payments over the course of three to five years. At the end of your repayment plan, any remaining unsecured debt will be discharged.
Crafting a repayment plan that is both accurate and feasible requires the help of a skilled Lakewood Chapter 13 bankruptcy attorney and should not be attempted without the aid of a qualified attorney. If you’d like to speak to an experienced legal professional about Chapter 13 bankruptcy qualifications, please contact our firm for more information.
The bottom line is, you should consider filing for bankruptcy if:
Let our Lakewood bankruptcy attorneys help you figure out if you qualify for bankruptcy. With over 30 years of combined experience, our team of professional and knowledgeable Lakewood debt relief lawyers can advise you of your rights and legal options during your no-cost case consultation.