How much does a bankruptcy lawyer in Colorado cost?

For Chapter 7 cases, the fees vary depending on the complexity of your case — which is why the first consultation is free. But generally speaking, fees start at $975 for an individual case with no anticipated problems. There is no such thing as a “simple” case since even a routine case may have hidden minefields that could explode after filing. Your attorney’s job is to identify those minefields before your case is filed with the court. But on average, a Chapter 7 case will run between $975 and $1,500 in Colorado. The bankruptcy court charges a separate $335 filing fee.

For Chapter 13 cases, the bankruptcy court establishes a “presumptively reasonable fee” that most attorneys accept. Currently, this fee in Colorado is $4,100 but you do not pay that fee out of your pocket. Instead, most of it is paid through your bankruptcy reorganization plan (indirectly by your creditors, in most cases). Some attorneys charge substantially more than $4,100 but none charge less that the “presumptively reasonable fee”. The bankruptcy court charges a separate $310 filing fee.

How do I file Chapter 7 bankruptcy in Colorado?

The bankruptcy filing consists of about 75 pages of forms, which includes the Petition, Schedules A through J, Creditor Matrix with Verification, Statement of Financial Affairs, Means Testing, and Statement of Intention. Before your attorney prepares these forms, he or she will have you complete an online questionnaire and provide supporting documents such as paycheck stubs and tax returns. The purpose of this exercise is not just so your attorney can gather information for your bankruptcy forms, but also so that the attorney can gather information that will enable him to screen for potential problems. When people try to file without an attorney, we frequently see people lose tax refunds, or worse yet, lose property worth tens of thousands of dollars or more because they thought it was exempt or because they did something wrong before filing the case. Sometimes an attorney finds cause to go after a friend or family member of the bankrupt debtor based on conduct the debtor thought was innocent.

Once the client questionnaire is complete, your attorney will spend several hours preparing all of the schedules and cross-checking them for mathematical consistency and to be sure that they make sense in terms of accurately reflecting your financial situation. This is to minimize any scrutiny by the U.S. Trustee who administers your case. Then, you will meet with your attorney for a final review and to sign the forms. They are then filed electronically with the court and you will meet with the Trustee about 30 days later with your attorney present.

How many times can you claim bankruptcy in Colorado?

Chapter 7 to 7: You can file Chapter 7 every eight years.

Chapter 7 to 13: You can file Chapter 13 every four years after Chapter 7 and still get a discharge. You can file bankruptcy less than four years after a previous Chapter 7 bankruptcy, but you are not eligible for a discharge. Sometimes, this is necessary to stop a wage garnishment or tax levy.

Chapter 13 to 13: If you previously filed Chapter 13 and received a discharge, you can file another Chapter 13 after two years and get a discharge. This is usually not a problem, since Chapter 13 plans last at least three years.

Chapter 13 to 7: If you previously filed Chapter 13, you must wait six years to file Chapter 7. There is a narrow exception to this rule: If you paid 100% of your debts in the Chapter 13, or at least 70% of your debts in good faith as your best effort, then you can file Chapter 7 at any time.

How long is bankruptcy on your credit?

Chapter 7 stays on your credit for ten years; Chapter 13 for seven years.

This is somewhat misleading, because people can and do obtain credit soon after filing bankruptcy. Often, people get a mortgage two years after Chapter 7 and sometimes 13 months after Chapter 13.

What is worse for my credit, Chapter 7 or 13?

Either bankruptcy will result in an entry on your credit report and has the same impact on your credit. The real question to case is this: Am I better off filing Chapter 7 or Chapter 13?

Will bankruptcy automatically be removed from my credit report?

Yes, 10 years after filing Chapter 7; and, 7 years after filing Chapter 13.

Is it better to file Chapter 7 or Chapter 13?

This is a question that usually can only be answered in consultation with an attorney. These are some factors to consider in determining which chapter to file:

Is your income too high for Chapter 7 (thus, Chapter 13 is the only option)? Means testing is required to qualify for Chapter 7.

Do you owe money on taxes? Most taxes (less than three years old) are not dischargeable in Chapter 7. When the Chapter 7 case closes in about three months after filing, the IRS can levy your wages and bank accounts again. Thus, Chapter 13 is the better option.

Are you behind on child support payments? If so, Chapter 7 will not stop enforcement actions, so you should file Chapter 13. Similarly, if you were ordered to pay certain divorce-related debts, Chapter 7 will not get rid of that obligation but Chapter 13 might.

Did you transfer property before seeing your attorney, repay loans to family members, or do you own property with substantial value? Chapter 13 will protect your property.  A Chapter 7 Trustee will quickly sell any property he can find that is not exempt.

These are just a few examples. A free consultation will help you decide which way to go.

Do I qualify for Chapter 7?

Means testing is required and it starts with an analysis of your family size and annual gross income from all sources. However, it is not that simple. Most people assume that if they make more than the income limit for their family size, they do not qualify for Chapter 7. To the contrary, a skilled bankruptcy attorney may often find enough allowable expenses to make you eligible for Chapter 7 — if you are not too far over the limits and if you have certain expenses like daycare costs, high medical bills, a history of regular 401(k) contributions, a high mortgage payment, or certain other allowable expenses.

Can I file bankruptcy medical bills?

Yes. But there is no such thing as a “medical bankruptcy”. Medical bills might cause your bankruptcy, but a bankruptcy is still a bankruptcy involving all of your creditors. That does not necessarily mean that filing bankruptcy would cause you to lose any property.

Can I file bankruptcy and keep my house and/or my car?

Yes, so long as you are able to make the payments going forward after the bankruptcy is filed. Your bankruptcy attorney will need to evaluate how much equity you have in such property to decide whether you should file Chapter 7 or Chapter 13.

What assets are exempt in bankruptcy?

The list of exemptions is long and technical. The most common exemptions claimed by most people include equity in a home up to $75,000 ($105,000 if or elderly disabled); a car up to $7,500; a retirement plan (100% unlimited); household goods up to $3,000; jewelry up to $2,000; business equipment up to $30,000 or $50,000 depending on type of equipment. Most of these double if you are married but the homestead exemption does not. Valuation of property is not based on what you paid for the property (not based on retail value), but rather, it is based on current resale value given its age and condition.

Can I file bankruptcy alone without my spouse?

Yes, you can file an individual bankruptcy even if you are married. Sometimes, there is no reason for a spouse to file with you. But if you file alone, your spouse’s income is still calculated in determining your eligibility for Chapter 7 or in determining your monthly plan payment in Chapter 13.