How to File for Colorado Bankruptcy

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Categories: How Tos | Legal | Bankruptcy Law

  • If you live in Colorado and are thinking about filing for bankruptcy, you may find that it's the way to start off with a clean slate that you've been looking for. Bankruptcy isn't fun, but it's a proven way to stop a downward spiral and begin rebuilding your financial future. This page shows you How to File for Colorado Bankruptcy.

  • Disclaimer

    The content in this page is not a substitute for professional financial advice. Please contact your financial adviser before using the information presented here.

  • Introduction

    Bankruptcy falls under the domain of federal law in all 50 states, and Colorado therefore requires that you file for bankruptcy in federal court. That being said, some aspects of the process will reference state law. For example, variables such as what assets you can and can't keep (as well as the dollar value of them) will fluctuate based on the state that you live in.

  • Step 1: What is Chapter 7 Bankruptcy?

    Liquidation bankruptcy or straight bankruptcy is officially known as Chapter 7 bankruptcy. It is a legal process that eliminates your unsecured debts and allows you to start over financially. In some cases, asset sales can be avoided yet unsecured debt can still be completely eliminated. However, secured debt will likely remain. Even if you find a Chapter 7 filing to be unappealing after consulting an attorney, a Chapter 13 restructuring may still be a viable option. Details vary from state to state, so it's best to check with a lawyer practicing in Colorado.

  • Step 2: Chapter 7 Colorado Income Test

    To pass the Chapter 7 Bankruptcy means test, you'll need to demonstrate that your household income that is smaller than the median income for Colorado amongst similarly sized families. This median is determined by the Census Bureau and is as described below for cases filed after March 15, 2009http://research.lawyers.com/Colorado/Bankruptcy-in-Colorado.html:

    1. Single individual: $46,765
    2. Two person family: $65,668
    3. Three person family: $70,838
    4. Four person family: $78,905
    5. Five+ person family: $78,905 plus $6,900 for each extra individual above four

  • Step 3: Chapter 7 Colorado Exemptions

    If you've declared Chapter 7 Bankruptcy in Colorado, you can still keep some or all of your assets. Though your attorney can go over the complete list with you in detail, some exemptions are as follows:

    1. Equity in your home or sale proceeds if sold within the year prior to bankruptcy, up to $60,000; $90,000 if owner, spouse or dependent is disable or aged 60 or older
    2. Farm machinery, tools and livestock, up to $50,000
    3. Jewelry and articles of adornment, up to $2,000
    4. Equity in motor vehicle or a bicycle, up to $6,000 or $10,000 if elderly or disabled
    5. Personal books and family pictures, up to $1,500
    6. Work related tools, books, supplies, electronics and more up to $20,000
    7. Any amount in an IRA, 401(k) or pension plan
    8. One burial plot per family member

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