Colorado bankruptcy law.
The State of Colorado is located in the Rocky mountain region of western and south western regions of the United States. IN Colorado there is one District Court and attached Bankruptcy court. The U.S. Bankruptcy Court (U.S.B.C.) is a Federal Court in the District of Colorado. The U.S.B.C. is a unit of the U.S. District Court and is located in Denver at the U.S. Custom House in downtown Denver.
Colorado bankruptcy law follows the federal law in almost all aspects. In Colorado the right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court .The benefit of bankruptcy is the reduction or elimination of your debt.
Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law. Often, this is a huge weight lifted off your shoulders. In Colorado Bankruptcy law filing under Chapter 12 would be possible only if you are a farmer. Thus in most cases this wont be an option. You will have to file for bankruptcy in Colorado bankruptcy law under Chapter 7 or chapter 13 respectively. Either type of case may be filed individually or by a married couple who can file in the district court jointly.Once you have filed the case the means test will decide whether you file under Chatter 7 or chapter 13 of the Act. Chapter 7 is straight bankruptcy and certain exempted property can be kept by you. But in case you can afford to pay back to your creditors over a 3 to 5 year period then chapter 13 may be the only option for you. This is the result of the 2005 amendment signed by President Bush. Remember the Colorado bankruptcy if you have high income and an ability to repay your debts over time, you may not be permitted a discharge in Chapter 7 and Chapter 13 is your only option.
As a general rule, if your income is less than the median income for the state of Colorado, you can pass the means test and file your bankruptcy proceedings under chapter 7. In Colorado the income limit for an individual is about $41,000. For a family of 2, the limit goes up to about $56,000. For 3, the limit is further raised to $62,000 and for 4 it is about $68,000. It further goes up by about $5000 per year for each additional member of your family.
This income issue will need a review with your attorney before filing. In a Chapter 7 case, you can keep all property which the law says is ‘exempt’ from the claims of creditors. Colorado exemptions include:
$45,000 in equity in your home; (the homestead exemption)
$3,000 in equity in your car;
household goods up to a total of $3,000;
$10,000 in things you need for your job (tools, books, etc.);
$1,000 in jewelry;
$1,500 in collectibles, CDs, and/or art;
any amount in an IRA, 401(k), or pension plan;
Certain benefits such as social security, unemployment compensation, veteran’s benefits, public assistant, and pensions – regardless of the amount can in any case be received by you.
The amount of the exemptions is doubled when a married couple files together, with the single exception of the homestead exemption. The homestead exemption is $45,000 even if you file as a married couple.
Colorado residents can also opt to have a Debt settlement. This generally requires that you have a lump sum of money available for this purpose. You are an optimal candidate for debt settlement if you have credit card and unsecured debt in excess of $40,000 and you have a lump sum of cash available to pay off creditors for 50-65 cents on the dollar.
There are drawbacks to debt settlement. You do not have the protection of the Court, and there may be tax consequences.
Colorado Bankruptcy law follows the federal law except with respect to the limitations which have been mentioned above.