Chapter 7 bankruptcy differs from Chapter 13 in that, by filing for Chapter 7, someone’s assets that are not subject to an exemption are able to have their debt forgiven in exchange for the liquidation of their assets. In order to qualify for Chapter 7, your bankruptcy attorney in Greeley CO will help determine if you are qualified because of a “means test.” Through this, your bankruptcy attorney in Greeley CO will determine if your income is low enough to qualify.
In order to qualify via the means test in Colorado, your income must be under the median income for your size household. For a single person, this would be $50,242. For a family of four, it would be $83,330. Any household that makes less than the median income would be qualified to file Chapter 7, as long as there are no other issues with the bankruptcy such as fraud when applying for credit. Anyone who makes more than the median amount would have to file for Chapter 13 bankruptcy, where they would have to make payments over a span of a few years to eliminate the debt.
In Chapter 7, assets belonging to the debtor would have to be sold to pay back the debts owed. However, when using a bankruptcy attorney in Greeley CO, you can have exemptions to what types of property you can keep without having to liquidate it. This could include items such as a car with little equity, real property that costs less than $60,000 that is occupied or $3000 in household goods. Your attorney will use their skill and expertise to determine what kinds of exemptions you have when they do your paperwork so it can be determined what property you get to keep.