If you are filing for bankruptcy in the state of Colorado then you may have plenty of questions that you would like answers to. This is perfectly normal as bankruptcy can be a very complicated subject. If you are filing for bankruptcy, Chapter 7 is usually the best method for individuals as you can keep a large amount of your possessions and not have to worry about paying back most of the debt. You may not always be eligible for Chapter 7 though, this is to be determined by the judge pressing over the case. Your lawyer will be able to answer any questions you may have. You will find that most Chapter 7 cases are ‘no-asset’ which means you won’t have to give up any of your possessions.
In order for the judge pressing over your case to determine whether or not you are eligible for Chapter 7 bankruptcy, you will have to take the Means Test. This test basically covers the means you have of paying off your current debts. In order to determine this information, all of your income will be examined. If your income is below the median for the state of Colorado, then you are eligible for Chapter 7 bankruptcy.
If your income is above the median, then you may need to pay back your creditors at least $6,000 over the next five years as a compromise. Those who are not eligible for Chapter 7 in Colorado can only take advantage of Chapter 13. To give you an idea of what you will need to make in order to qualify for Chapter 7, the median income for a 1 person household in 2008 is $44,203; 62,302 for a two person household.
In order to file for bankruptcy in Colorado, you will have to file a long petition to the Statement of Financial Affairs. This statement includes certain information such as the lengthy schedules that outline all of your priority debts, all secured debts such as home mortgages and automobile loans, and any unsecured loans that you may have.
Bankruptcy in Colorado takes the following exemptions into consideration: equity in your home up to $45,000, farms equipment and live stock up to $25,000, household items up to $3,000, jewelry up to $1,000, cash value of an insurance policy up to $50,000, equity in vehicles up to $3,000 or $6,000, etc.
If you are facing financial hardships, consult with a bankruptcy attorney, and they will be able to guide you to the best option for you situation.