Colorado's Bankruptcy
& Family Law Firm

Bankruptcy exists to ensure that individuals in the United States who find themselves in financial straits are able to obtain a fresh financial start. If you are behind on your mortgage, your medical bills, credit card debt, and find yourself with other owed payments, bankruptcy may be something you should begin to consider so you can get back on the road to repaying your creditors or getting your debts forgiven.

When it comes to filing for bankruptcy, the rules and regulations regarding the process, the issues, and the information you will need varies based on every situation. Specifically, every state has different rules regarding how its citizens file for bankruptcy and to what extent filing a bankruptcy can help you. At Berumen, we are experts on the rules regarding bankruptcy in the state of Colorado. We’re looking to share some of that insight with you today.

You Must be a Colorado Resident

First and foremost, you have to fulfill the residency requirement. Every state has residency requirements that ensure that only those who are domiciled in the state can take advantage of filing for bankruptcy therein. In order to file for bankruptcy in Colorado, you must have lived here for at least 91 days. Once you have completed your residency requirement, you may begin the process of filing for bankruptcy.

You Must Pass the Colorado Means Test to File a Chapter 7 Bankruptcy

Secondly, those looking to file a Chapter 7 bankruptcy, the type of bankruptcy that is most likely to clear all of your debts, must pass the Colorado means test. The Colorado means test is in place to allow the state to figure out how much money you bring in in accordance with the size of your household.

Your average household income can be determined by finding your average monthly income over the previous six months. This means that you should add up your income every month and then divide that larger number by six. It is important to keep in mind that timing may be important when it comes to completion of the means test and your current income.

While the Colorado median income varies every year and the test may change, this is the test as of the date of this post:

Household Size                Median Income

1 person                             $56,698
2 person                             $74,305
3 person                             $83,180
4 person                             $94,472
5 person                             $102,872
6 person                             $111,272
7 person                             $119,672
8 person                             $128,072
9 person                             $136,472
10 person                           $144,872

If your income is above the means test and you are unable to pass, don’t fret. You may still be able to file a Chapter 13 bankruptcy, which may enable you to slowly pay off a reduced version of your debts to your creditors. Alternatively, it is always good to clarify that you have done the means test correctly with a bankruptcy expert, such as one of our Colorado bankruptcy attorneys.

You Must Obtain Credit Counseling

Thirdly, you must make sure that you are in compliance with the credit counseling requirement. Colorado law requires that those filing for bankruptcy receive credit counseling within the first 180-days prior to filing for bankruptcy. Not only is this credit counseling mandatory, but it may be beneficial to learn more about how you can take advantage of some of Colorado’s local credit-assistance resources as well as the education they can provide about managing your funds.

While some credit counseling agencies may charge a small fee for their service, many of the credit counseling sessions across Colorado are offered on a reduced or waived-fee rate. This, of course, is determined on a case-by-case basis. For example, if you are disabled, incapacitated, or on active military duty, you may be likely to get this fee waived. Once you complete the credit counseling sessions, you will receive a certification. This certification is to be filed alongside your bankruptcy application, which will kickstart the process to financial relief.

Conclusion

Unfortunately, all of these rules and requirements are required to be met before the filing of your bankruptcy. Of course, the process of continuing and completing your bankruptcy is bound to bring about many more requirements- including time, energy, and concentration.

If you are considering bankruptcy and have questions about where to start, contact our Colorado bankruptcy specialists today.

Photo by Nathan Anderson on Unsplash