Although there are several debt relief options available to consumers, bankruptcy has always been seen as a last-resort method. To help clear up some of the confusion or reservations some may have about the bankruptcy process, our Colorado debt relief team provides answers to some of bankruptcy’s most commonly asked questions.
How Much Does it Cost to File in Colorado?
The cost to file bankruptcy in Colorado varies depending on the chapter one wishes to file under. The filing fee for Chapter 7 is $338, while the filing fee for Chapter 13 is $313.
Bankruptcy filers are also required to attend credit counseling, which can cost between $10-$50. This fee can be waived, however, if your income falls below 150% of the federal poverty guidelines.
How Long Does Bankruptcy Take?
The length of the bankruptcy process depends on the chapter you choose to file. Chapter 7 bankruptcies range from four to six months, while Chapter 13 bankruptcies can take anywhere from three to five years depending on the circumstances of the filer.
Do I Have Enough Debt to File Bankruptcy?
The restrictions for filing bankruptcy depend on the chapter that one wishes to pursue. If someone chooses to file for a Chapter 7 bankruptcy, there is not necessarily a debt limit, but their qualification will be based on their income.
Potential Chapter 7 filers are required to take a means test to evaluate their income and expenses to determine whether they qualify. If their income falls below the median income of their area, they are able to file. If their income stands above the median income of their area, the court may recommend they file under a different chapter, most likely Chapter 13.
Chapter 13 does have debt limits. An individual must have less than $394,725 in unsecured debts such as car loans and mortgages, and less than $1,184,200 in secured debts such as credit card debts, student loans, and medical debt.
Will Bankruptcy Take Away My Social Security Benefits?
Bankruptcy will not take away your benefits from Social Security. There are federal laws in place
that protect these funds from being liquidated during the bankruptcy process to pay off debts.
Do I Have to Be Employed to File for Bankruptcy?
One common misconception about bankruptcy is that you need to have a job in order to file. You are not required to be employed to file bankruptcy, however, it may have an impact on the success of a Chapter 13 bankruptcy, since you will need a steady income to make payments towards your court-approved plan.
What Happens to My Home?
One of the most prevalent concerns of many potential bankruptcy filers is whether or not they will be able to keep their homes. Chapter 13 bankruptcies, in particular, are designed for filers to be able to keep their home while simultaneously taking care of their debt issues.
Bankruptcy is also especially suited to saving homes from bankruptcy. With the benefits of automatic stay, bankruptcy makes any creditor’s actions to contact you or collect on your debts illegal, including the foreclosure of your home.
What’s the Difference Between Chapter 7 and Chapter 13 Bankruptcies?
The main difference between the two main types of bankruptcy chapters is the way in which they are able to eliminate debt.
Chapter 7 is known as the “liquidation” chapter of bankruptcy. It utilizes any assets or property that are non-exempt under the law to help permanently eliminate larger amounts of debt in a relatively short amount of time.
Chapter 13 is known as the “reorganization” chapter of bankruptcy and uses a court-approved payment plan to eliminate debt over a longer period of time.
Contact Our Colorado Bankruptcy Team Today
We understand how overwhelming a stressful financial situation can be. At Wagner Law Office, P.C., we are ready to help guide you to financial freedom with compassionate and personalized services.
If you have questions about how bankruptcy can help you, don’t hesitate to contact us today through our website or give us a call at (303) 536-5124 to schedule a consultation.