Is My Income/wages Exempt When Filing For Chapter 7 Bankruptcy In Colorado?

[Banain]

I researched the statutes for exemptions in relation to chapter 7 bankruptcy in Colorado and noticed that it said "75% of unpaid earned income" is exempt. what does this mean exactly and does it mean that they can still take 25 % of my income. wouldn't that defeat a partial purpose of reliving myself of my debt if the purpose were to prevent wage garnishment from a collection agency/creditor?

[Rider]

income/wages exempt when filing for chapter 7 bankruptcy in Colorado Experienced Lawyer Outlines the Means Test in ColoradoThe Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 sought to curb perceived abuse of the bankruptcy process by above-average income consumer debtors. Prior to 2005, the bankruptcy court could dismiss a case filed by an individual Chapter 7 consumer debtor, if the court found the granting of relief to be a substantial abuse of Chapter 7.There was a presumption in favor of granting the relief requested by the debtor. A few, but not many, entertainers, sports figures, and professional debtors were denied Chapter 7 relief because their post-filing income was deemed sufficient to support a continuous "lavish lifestyle" which ought not be at the expense of their creditors.Each judge's "good smell test" had to be offended, and some judges were reluctant about overcoming the statutory presumption favoring the debtor's choice of chapter. At the Law Office of Jon B. Clarke, P.C, we are well-prepared to explain details behind the means test applied in Colorado. Contact our law firm today to discover how this affects you.History Behind the Means TestBeginning in the late 1990's, the credit card industry lobbyists complained to Congress that too many debtors were choosing Chapter 7 as a first resort rather than a last resort. Many debtors were accused of having sufficient income after living expenses to make meaningful payments to unsecured creditors over time in Chapter 13.Creditors urged §707 be expanded to create a mathematical formula for determining abuse based on a consumer debtor's gross income less certain allowed expenses, i.e., a "means test". If the means test showed a meaningful distribution to unsecured creditors was possible over 60 future monthly "discretionary income" payments, then Chapter 7 relief would be denied. A debtor who qualified for Chapter 13 would have to convert from Chapter 7 or get no debt relief at all. A debtor whose debts exceeded the Chapter 13 limits would have to convert to Chapter 11 or get no debt relief at all.Reform litigation introducing a means test was introduced in 1997, and it was approved in 2000 by the U.S. House of Representatives and Senate. As he was leaving office, President Clinton vetoed the means test as being unfair to working people. Creditor reform efforts from 2001-2004 failed to clear the Senate, but following the 2004 election, Senate consumer advocates could no longer forestall the so-called Bankruptcy Abuse Prevention legislation from becoming law.Since October 2005, every Chapter 7 debtor has been required to submit a Statement of Current Monthly Income and Means Test Calculation. Certain disabled veterans, reservists, National Guard members, and non-consumer debtors are excused. All other debtors must document their all-source pre-filing average monthly income. If this amount, annualized, is below the Internal Revenue Services'(IRS) current median family income for the applicable state and household size, a presumption of abuse will not arise.Above-Average Income DebtorsMany of Jon B. Clarke's clients' applicable income is above-median. These debtors must then calculate allowed deductions from income using IRS national and local standards plus "other necessary expenses". If total allowed deductions exceed current monthly income, again, the presumption of abuse does not arise. Finally, if such deductions do not exceed current monthly income, but the difference paid to unsecured creditors over 60 months will not exceed 25 percent of their unsecured debts, again the presumption of abuse does not arise. Sources: http://www.jonbclarke.com/CM/Custom/ColoradoMeansTest.asp DCDX524 50 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Steaphan]

Michelle, Please get in touch with a consumer credit adviser in your state. Be sure to find a community or non-profit based adviser. Also be careful if you're looking on the web; lots of danger out there. Never get personal info online to an unknown party. Colleges and local government listings are a good place to start. I hope someone has a more specific idea for you. Good luck.

[Crom]

Filing for Chapter 7 Bankruptcy If you are inclined to file for Chapter 7 bankruptcy, take a moment to decide whether it makes economic sense. You need to consider three questions:Are you judgment proof -- that is, are creditors legally barred from taking your property or income even if you don't file for Chapter 7 bankruptcy?Will Chapter 7 bankruptcy discharge enough of your debts to make it worth your while?Will you have to give up property you really want to keep?Are You Judgment Proof?Most unsecured creditors are required to obtain a court judgment before they can start collection procedures, such as a wage garnishment or seizure of personal property.(Collections for taxes, child support, and student loans are exceptions to this general rule.)If your debts are mainly of the type that require a judgment, the next question is whether you have any income or property that your creditors can seize if they go to the trouble of obtaining a judgment. For instance, if all of your income comes from Social Security(which can't be taken by creditors), and all of your property is exempt, there is nothing your creditors can take from you to satisfy their judgment. That makes you "judgment proof."While you may still wish to file for Chapter 7 bankruptcy to get a fresh start, nothing bad will happen to you if you don't file, no matter how much you owe.Will Chapter 7 Bankruptcy Discharge Enough of Your Debts?Certain categories of debts cannot be discharged in Chapter 7 bankruptcy. It doesn't make much sense to file for Chapter 7 bankruptcy if your primary goal is to eliminate these nondischargeable debts. The main nondischargeable debts are:back child support and alimony obligationsstudent loans, unless repayment would cause you undue hardshipincome taxes less than three years past duerecent debts for luxuries(more than $550 to any one creditor incurred within 90 days before you file for bankruptcy, and cash advances of more than $825 within 70 days before you file), andcourt judgments for injuries or death to someone arising from your intoxicated driving.The bankruptcy judge may rule some types of debts as nondischargeable if the creditor objects to a discharge in the bankruptcy court. These debts include:debts incurred on the basis of fraud, such as lying on a credit application or writing a bad checkdebts from willful or malicious injury to another or another's propertydebts from larceny(theft), breach of trust, or embezzlement, ordebts arising out of a marital settlement agreement or divorce decree that aren't otherwise automatically nondischargeable as support or alimony.If the bulk of your indebtedness is from debts that creditors may object to being discharged, it may still make sense to file for Chapter 7 bankruptcy and hope your creditors don't object.Codebtors will still be on the hook. If you want to discharge debts for which you have a codebtor(such as someone who cosigned a loan for you, or a business partner who is equally liable for the debt), bankruptcy won't wipe out the debt. If the debt is of a type that can be discharged in Chapter 7 bankruptcy, you will no longer be legally responsible for paying it, but your codebtor will.get more here http://articles.directorym.com/Filing_for_Chapter_7_Bankruptcy-a1141090.html Sources: http://articles.directorym.com/Filing_for_Chapter_7_Bankruptcy-a1141090.html Jessin 50 months ago Please sign in to give a compliment. Please verify your account to give a compliment. Please sign in to send a message. Please verify your account to send a message.

[Wycliff]

If you are inclined to file for Chapter 7 bankruptcy, take a moment to decide whether it makes economic sense. You need to consider three questions:Are you judgment proof -- that is, are creditors legally barred from taking your property or income even if you don't file for Chapter 7 bankruptcy?Will Chapter 7 bankruptcy discharge enough of your debts to make it worth your while?Will you have to give up property you really want to keep?Are You Judgment Proof?Most unsecured creditors are required to obtain a court judgment before they can start collection procedures, such as a wage garnishment or seizure of personal property.(Collections for taxes, child support, and student loans are exceptions to this general rule.)If your debts are mainly of the type that require a judgment, the next question is whether you have any income or property that your creditors can seize if they go to the trouble of obtaining a judgment. For instance, if all of your income comes from Social Security(which can't be taken by creditors), and all of your property is exempt, there is nothing your creditors can take from you to satisfy their judgment. That makes you "judgment proof."While you may still wish to file for Chapter 7 bankruptcy to get a fresh start, nothing bad will happen to you if you don't file, no matter how much you owe.Will Chapter 7 Bankruptcy Discharge Enough of Your Debts?Certain categories of debts cannot be discharged in Chapter 7 bankruptcy. It doesn't make much sense to file for Chapter 7 bankruptcy if your primary goal is to eliminate these nondischargeable debts. The main nondischargeable debts are:back child support and alimony obligationsstudent loans, unless repayment would cause you undue hardshipincome taxes less than three years past duerecent debts for luxuries(more than $550 to any one creditor incurred within 90 days before you file for bankruptcy, and cash advances of more than $825 within 70 days before you file), andcourt judgments for injuries or death to someone arising from your intoxicated driving.The bankruptcy judge may rule some types of debts as nondischargeable if the creditor objects to a discharge in the bankruptcy court. These debts include:debts incurred on the basis of fraud, such as lying on a credit application or writing a bad checkdebts from willful or malicious injury to another or another's propertydebts from larceny(theft), breach of trust, or embezzlement, ordebts arising out of a marital settlement agreement or divorce decree that aren't otherwise automatically nondischargeable as support or alimony.If the bulk of your indebtedness is from debts that creditors may object to being discharged, it may still make sense to file for Chapter 7 bankruptcy and hope your creditors don't object.Codebtors will still be on the hook. If you want to discharge debts for which you have a codebtor(such as someone who cosigned a loan for you, or a business partner who is equally liable for the debt), bankruptcy won't wipe out the debt. If the debt is of a type that can be discharged in Chapter 7 bankruptcy, you will no longer be legally responsible for paying it, but your codebtor will.get more here http://articles.directorym.com/Filing_for_Chapter_7_Bankruptcy-a1141090.html

[Brittan]

maggo said: 1 Michelle, Please get in touch with a consumer credit adviser in your state. Be sure to find a community or non-profit based adviser. Also be careful if you're looking on the web; lots of danger out there. Never get personal info online to an unknown party. Colleges and local government listings are a good place to start. I hope someone has a more specific idea for you. Good luck. 63 months ago

[dunixi]

Experienced Lawyer Outlines the Means Test in ColoradoThe Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 sought to curb perceived abuse of the bankruptcy process by above-average income consumer debtors. Prior to 2005, the bankruptcy court could dismiss a case filed by an individual Chapter 7 consumer debtor, if the court found the granting of relief to be a substantial abuse of Chapter 7.There was a presumption in favor of granting the relief requested by the debtor. A few, but not many, entertainers, sports figures, and professional debtors were denied Chapter 7 relief because their post-filing income was deemed sufficient to support a continuous "lavish lifestyle" which ought not be at the expense of their creditors.Each judge's "good smell test" had to be offended, and some judges were reluctant about overcoming the statutory presumption favoring the debtor's choice of chapter. At the Law Office of Jon B. Clarke, P.C, we are well-prepared to explain details behind the means test applied in Colorado. Contact our law firm today to discover how this affects you.History Behind the Means TestBeginning in the late 1990's, the credit card industry lobbyists complained to Congress that too many debtors were choosing Chapter 7 as a first resort rather than a last resort. Many debtors were accused of having sufficient income after living expenses to make meaningful payments to unsecured creditors over time in Chapter 13.Creditors urged §707 be expanded to create a mathematical formula for determining abuse based on a consumer debtor's gross income less certain allowed expenses, i.e., a "means test". If the means test showed a meaningful distribution to unsecured creditors was possible over 60 future monthly "discretionary income" payments, then Chapter 7 relief would be denied. A debtor who qualified for Chapter 13 would have to convert from Chapter 7 or get no debt relief at all. A debtor whose debts exceeded the Chapter 13 limits would have to convert to Chapter 11 or get no debt relief at all.Reform litigation introducing a means test was introduced in 1997, and it was approved in 2000 by the U.S. House of Representatives and Senate. As he was leaving office, President Clinton vetoed the means test as being unfair to working people. Creditor reform efforts from 2001-2004 failed to clear the Senate, but following the 2004 election, Senate consumer advocates could no longer forestall the so-called Bankruptcy Abuse Prevention legislation from becoming law.Since October 2005, every Chapter 7 debtor has been required to submit a Statement of Current Monthly Income and Means Test Calculation. Certain disabled veterans, reservists, National Guard members, and non-consumer debtors are excused. All other debtors must document their all-source pre-filing average monthly income. If this amount, annualized, is below the Internal Revenue Services'(IRS) current median family income for the applicable state and household size, a presumption of abuse will not arise.Above-Average Income DebtorsMany of Jon B. Clarke's clients' applicable income is above-median. These debtors must then calculate allowed deductions from income using IRS national and local standards plus "other necessary expenses". If total allowed deductions exceed current monthly income, again, the presumption of abuse does not arise. Finally, if such deductions do not exceed current monthly income, but the difference paid to unsecured creditors over 60 months will not exceed 25 percent of their unsecured debts, again the presumption of abuse does not arise.