Parker Colorado Chapter 7 Bankruptcy Lawyer

Chapter 7 Bankruptcy Information
Colorado Attorney R. Brian Daniel

When faced with mounting invoices and harassing phone calls from bill collectors, many people seek bankruptcy to erase their debts and start over with a clean slate.  A Chapter 7 bankruptcy can relieve you of most or all of your unsecured consumer debts, including credit card bills; however, it is important to understand that not all types of debts can be eliminated.  Bankruptcies filed under Chapter 7 are generally most suitable if you are in debt, but do not have significant income or assets.  However, changes in bankruptcy laws that occurred in 2005 have made filing for bankruptcy protection under Chapter 7 more restrictive.  Therefore, you should seek the advice of an experienced Parker, Colorado Bankruptcy Attorney if you are considering filing for bankruptcy protection.   

Chapter 7, commonly known as a “liquidation bankruptcy”, is one of the most frequently used forms of personal bankruptcy.  Before filing for bankruptcy protection, individuals must first seek credit counseling from an approved organization.  Debtors filing under Chapter 7 may be forced to give certain assets to a bankruptcy trustee who then sells the assets and uses the proceeds to repay the debtor’s creditors.  Notwithstanding, many exemptions exist that permit a debtor to keep most, if not all, of their assets.  By statute, each state, including Colorado, determines which assets debtors may keep (exempt assets) and which must be given up (non-exempt assets). 

Once all non-exempt assets have been liquidated, if any, debts that are not secured by property or collateral (unsecured debts) are then discharged.  When debts are discharged, debtors are no longer liable for those debts and creditors are no longer permitted to pursue collection actions against the debtor.  A qualified Parker, Colorado Bankruptcy Lawyer can help keep your valuable property, including your home or vehicle, from being taken from you through bankruptcy. 

Individuals, partnerships, and corporations are eligible for debt relief under Chapter 7.  However, the new bankruptcy laws impose income limitations on Chapter 7 bankruptcies.  Individuals whose debt is primarily consumer debt must now pass a “means test” to qualify for a Chapter 7 bankruptcy.  This is used to prevent individuals with income sufficient to repay their debts from filing for debt relief under Chapter 7.  The means test compares a debtor’s annual income (looking over paystubs from the past six months) to the median income for households of the same size in the debtor’s state of residency.  If their income is less than or equal to their state median income, debtors are eligible to file under Chapter 7.  If they do not qualify for a Chapter 7 bankruptcy, they may be eligible for a repayment plan under Chapter 13 instead. 

In Colorado the annual maximum income thresholds for Chapter 7 as of MAy 1, 2013, are as follows:

1 Person: $49,549.00

2 Person Family: $65,631.00

3 Person Family: $72,259.00

4 Person Family: $86,787.00 *

* Add $8,100 for each additional person in the Debtor’s family unit.

A Chapter 7 bankruptcy can eliminate most credit card and other consumer debts; however some will remain.  For example, you typically cannot discharge debts for child support, spousal maintenance (alimony), mortgages, most student loans, court fines and criminal restitution, personal injury judgments resulting from drunk driving or driving under the influence of drugs.

If you are considering bankruptcy due to unmanageable debt, you should talk to a qualified Parker, Colorado Bankruptcy Attorney to find out what debts might qualify for a discharge. 

If you are facing a complicated legal issue, reach out to The Daniel Law Firm. We take great pride in serving clients all over Colorado. Let us discuss with you the best strategy for moving your case forward in both a positive direction and timely manner. Call us today at (303) 951-0233.

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