Total Lawyer Costs for 2026

right away upon filing, through the automatic stay. You lag on your mortgage and desire to keep your homeYour earnings is above the Colorado typical and you do not pass the Chapter 7 suggests testYou have non-exempt equity you wish to safeguard by paying its value into a plan rather of losing the assetYou have debts that make it through Chapter 7 (specific taxes, some domestic assistance defaults) that you require structured time to payYou have actually filed Chapter 7 too just recently to file once again (see timing rules listed below)The methods test under 11 U.S.C.

apfsc.org

Here's how it works in plain terms: The U.S. Trustee Program publishes average household income figures by family size, upgraded every April and November utilizing Census Bureau information. If your typical regular monthly earnings over the previous six months, annualized, falls at or below Colorado's mean for your home size, you pass the means test automatically and might submit Chapter 7.

Numerous above-median filers still qualify for Chapter 7 after these reductions. or you might still have choices depending upon the type of debt you bring (the means test only uses to filers whose financial obligations are primarily customer debts). Due to the fact that the mean earnings figures and IRS expenditure standards change twice a year, the precise numbers that used when a friend or relative filed might not use to your case today.

Chapter 13 isn't available to everyone no matter earnings there are statutory debt ceilings under 11 U.S.C. 109(e). As of the most current inflation modification (effective April 1, 2025, through March 31, 2028), the limitations are different for secured and unsecured debt, in the low 7 figures integrated. There is active, bipartisan legislation pending in Congress that would raise and streamline these limitations into a single combined limit worth watching if you're near the existing ceiling, especially if a large mortgage is what's pushing you over.

Stop Wage Garnishment Through 2026 Bankruptcy

This is normally the choosing element for Colorado filers. Colorado's exemption statutes protect a set amount of equity in your house, vehicle, tools of trade, pension, and personal effects. If your equity in a possession surpasses the exemption, the trustee can sell it and pay you the exempt portion however for the big bulk of filers with average equity levels, whatever is safeguarded and nothing is sold.

This is frequently why higher-equity homeowners or company owner pick Chapter 13 even when they may technically pass the Chapter 7 means test. 34 months to discharge35 years to dischargeNoYes, per court-approved planLower, one-timeLower, one-time (plus ongoing trustee charge)Typically paid up front or shortly after filingFrequently paid through the strategy over timeStays ten years from filingStays 7 years from filingUnsecured financial obligation with no significant assets at riskSaving a home, treating financial obligations, above-median earnings Chapter 13 Chapter 7 You typically need to wait 8 years for another Chapter 7 discharge, but may qualify for Chapter 13 faster (timing rules are technical and case-specific) Chapter 13, to cure the default and keep the cars and truck Typically Chapter 13, though eligibility depends on the "regular income" requirement Chapter 13's co-debtor stay offers protection Chapter 7 does notI invested years administering cases as the Trustee -seeing firsthand which decisions held up and which ones backfired.

Filing the incorrect chapter, or filing properly but with an avoidable error, can imply losing property you might have kept or paying years longer than needed. If you're weighing Chapter 7 vs.

apfsc.org

Comparing Chapter 7 Vs Chapter 13 in 2026

Yes, in most cases many can convert your transform from Chapter 13 to Chapter 7 if your circumstances change, subject to certain restrictions and court approval.

It depends on your family income compared to Colorado's existing median figures for your family size, plus enabled expense reductions if you're above typical. These figures alter twice a year, so a precise answer needs inspecting the chart in result on your filing date. Yes. Filing either Chapter 7 or Chapter 13 triggers the automatic stay, which instantly stops most wage garnishments, collection calls, and lawsuits.

Chapter 13 deals court-enforced protection that personal financial obligation settlement doesn't supply, however it's a longer commitment. This article is for general informative functions just and does not make up legal advice. Bankruptcy law is fact-specific, and results depend upon your specific scenarios. Contact our workplace to discuss your scenario straight.