Chapter 7 Bankruptcy FAQs

The “means test” is used to determine eligibility for Chapter 7 bankruptcy. If your income is lower than Colorado’s median income, you can likely file for Chapter 7 bankruptcy. However, if your income is greater than Colorado’s median income for your family size, creditors or the bankruptcy trustee’s office may have the right to file a motion requesting that your case be dismissed as an abuse of Chapter 7. Therefore, it is important to analyze your income and expenses and determine if a Chapter 7 or Chapter 13 should be filed in your case

The most common debts that are dischargeable in Chapter 7 bankruptcy include:

Credit card debt
Repossession deficiencies on vehicle loans
Medical bills
Personal loans
Judgments
Negligence claims
Business debts
Leases
Guaranties
Tax penalties over three years old

Under the United States Bankruptcy Code, Congress has determined that certain types of debt are not dischargeable in Chapter 7 bankruptcy for public policy reasons, which means you must still repay these debts after bankruptcy. The following debts are usually not dischargeable:

Government-backed student loans
Debts incurred to pay nondischargeable taxes
Domestic support and property settlement obligations
Criminal fines, penalties, forfeitures and restitution
Debts for death or personal injury caused by driving while intoxicated
Debts that are not properly listed in your bankruptcy papers

To file for Chapter 7 bankruptcy, you must qualify under the Chapter 7 means test. The means test first compares your income to the median income in Colorado. If your income is lower than Colorado’s median income, you can file for Chapter 7 bankruptcy. However, if your income is greater than the median income, other calculations regarding your income and allowable expenses are required to determine whether or not you can file for Chapter 7 bankruptcy.

To file for Chapter 7 bankruptcy, you must qualify under the Chapter 7 means test. The means test first compares your income to the median income in Colorado. If your income is lower than Colorado’s median income, you can file for Chapter 7 bankruptcy. However, if your income is greater than the median income, other calculations regarding your income and allowable expenses are required to determine whether or not you can file for Chapter 7 bankruptcy.

What should I bring to my free initial consultation?

When you come to meet with one of the attorneys at Long & Long PC, please bring the following documents if available:

Paycheck stubs for you and your spouse (if married), including current month and last two months
Documents showing miscellaneous income received over the last seven months, including commissions or bonuses, child support or spousal support (alimony), gifts, unemployment, trust funds, inheritance, gambling winnings, Social Security payments, retirement payments, rents from tenants, interests and dividends, asset sales, etc.
Contributions received for living expenses from non-filing spouse (if married) or other household members over the last seven months
Statements for bank or credit union accounts, stock brokerage accounts or other similar accounts for the last two months
Bills, notices or letters received from creditors and/or collectors in the last three months for all your debts including notices of pending lawsuits, judgment liens, garnishments or foreclosures
Court orders for child support or spousal support, including current amounts or arrearages due and owing
Statements or bills for current monthly living expenses
Federal and state income tax returns for the last two years, including W-2s and 1099s for the most recent year
Recent credit report for each individual debtor
Documents regarding any bankruptcy you filed during the last eight years
For business debtors, balance sheets plus income and expense summary for the prior year ending and the last month of the current year

If you are considering Chapter 7 bankruptcy, contact Long & Long PC today to schedule a free initial consultation with one of our experienced bankruptcy attorneys. With offices in Downtown Denver, and the South Metro areas, we likely have a location convenient to your home or workplace.