Barry Arrington is Denver’s Fresh start bankruptcy attorney. However you will need more than just a bankruptcy attorney to file for bankruptcy in Denver. You will first need a Colorado means test. Actually a means test is required throughout the country but since Barry Arrington
is a bankruptcy lawyer that servers the Denver area we are concentrating this information for Denver area residents. The Denver area includes Aurora, Englewood, Littleton, Parker, Centennial, Lakewood and more.
What is a Colorado Means Test?
A Colorado bankruptcy means test determines who can file for debt forgiveness through Chapter 7 bankruptcy
Your income, expenses and family size are all determining factors when it comes to your ability to repay your debts. If you don’t have enough disposable income you may qualify for bankruptcy. The Colorado means test was deigned to restrict the number of debtors who can get their debts forgiven through a Chapter 7 bankruptcy. But with the help of your Denver bankruptcy attorney you should be able to pass the test easily.
Chapter 13 bankruptcy is for those that either don’t qualify for Chapter 7 bankruptcy or who need to retain specific assets like a car or home. A bankruptcy attorney can hep you avoid home foreclosure or auto repossession.
How a Means Test Works
The Colorado means test has two parts. Both parts of the means test are designed to see if you have disposable income that you could put toward paying off debt. In most cases, your bankruptcy attorney will fill out the form based on information you provide to him. After completion, he will submit it to the court with the rest of your filing papers on your behalf.
The means test is mainly used by individuals, mot businesses. If you have overwhelming credit card debt. student loans or medical debt you are most likely an ideal candidate for a means test.
Basic Steps for Colorado Means Test
There are essentially a few basic steps for filing Chapter 7 bankruptcy in Colorado.
1) Determine if your household income below Colorado state’s median income? Click here for Colorado median income information. The first part of the means test checks whether your household income is below your state’s median income. So your income must be below the state level to qualify.
2) Gather as much documentation as possible about your expenses over the past six months. This includes rent, mortgage, groceries, gas, medical costs, tuition etc. These are known as “allowable expenses.”
Be as thorough as possible. And save receipts if you can and bill payments. Also, print out your bank statements from the last six months to give to your bankruptcy attorney.
3) Hire a bankruptcy attorney. Preferably one that has a flat fee and not a ton of hidden charges. Barry Arrington will give you a flat fee for filing.
In summation, if you’re below Colorado’s median income and you’ve passed the means test and can file for Chapter 7 bankruptcy.
What if I Fail The Colorado Means Test?
The test can be taken again in six months as again it is based off the last six months. So if you failed your means test be more diligent in keeping records for the next six months. Again, there is no appeals process.
If you can’t wait six more months to file for bankruptcy and can’t pass the means test, you will have to file for Chapter 13 bankruptcy.