Means Test

Colorado Bankruptcy Attorneys

What are the different types of Personal Bankruptcy?

There are three different types of personal bankruptcy that you can file in Colorado; Chapter 12, Chapter 13, and Chapter 7. A Chapter 12 bankruptcy is used exclusively by family farmers. A Chapter 13 bankruptcy requires you to pay back some or all of your debts through a debt repayment plan. A chapter 7 bankruptcy discharges most of your unsecured debts in the fastest possible manner.

What are the requirements to file a chapter 7 bankruptcy?

In order to file a chapter 7 bankruptcy you have to pass the “means test.” The means test looks at your income, debts, and expenses, to determine whether or not you can afford to pay back your creditors. If the test finds that you are able to pay back some of your creditors you will be required to file a chapter 13.

How does the “Means Test” Work?

The first part of the means test compares your current monthly income to the median income of other Colorado households of your size. If your income is less than the median, you may file Chapter 7bankruptcy. Currently in Colorado the median income for a single individual is $55,858; the median income for a family of two is $72,037; the median income for a family of three is $81,496; and the median income for a family of four is $95,117. However, if you make more than the median income, all is not lost, it may still be possible to file a chapter 7, but more calculations must be made.

What if I make more than the median income?

If your monthly income exceeds Colorado’s median income you must determine whether your family would have enough disposable income left, after subtracting allowed expenses, to pay off some of your unsecured debts. Unsecured debt includes personal loans, credit cards, payday loans, medical bills, etc. If your disposable income is equal to or more than a minimum amount set by law, you will not be allowed to use Chapter 7.

How do I take the Means Test?

The means test can be very complicated as you not only impute your income, but also use state and national standards for food, housing, and other expenses to determine if you qualify for a chapter 7 bankruptcy. If you are considering filing a chapter 7 bankruptcy, it is always recommended that you contact a qualified Colorado bankruptcy attorney. Your attorney will be able to determine if you “pass” the means test. Should you earn too much they can also advise you on other bankruptcy options.

Can someone help me with the Means Test?

There are qualified bankruptcy attorneys throughout Colorado including: Denver, Aurora, Centennial, Littleton, Lakewood, Westminster, Broomfield, Thornton, and Commerce City. Many of these attorneys offer free consultations and payment plans based on your income.

Want A Fresh Start, LLC
2373 Central Park Blvd Ste. 100
Denver, CO 80238
Phone: (303) 578-7931
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How Do I File Bankruptcy In Phoenix, Arizona?

Whether you live in Phoenix, Mesa, Glendale, Peoria, or Buckeye, your bankruptcy will be filed in the Federal Bankruptcy Court in downtown Phoenix, Arizona. If you live in another county, your bankruptcy may be filed in a different location. For example, in Prescott, your bankruptcy will still be filed in the Phoenix bankruptcy court, but your creditor’s meeting will be held in Prescott. If you live south of the Maricopa county line, in Casa Grande or anywhere in Pinal county, your creditors’ meeting will be held in Florence. If you live in Pima county, your bankruptcy petition and case will be filed in Tucson and your creditors’ meeting will also be in Tucson.

When Can I File Bankruptcy in Phoenix or Arizona?

Do you feel like you are barely making the minimum payments on your debt? You are not alone. According to, 4.4% of credit card debt became newly delinquent in the second quarter of 2017. Americans have more debt per capita than ever before in history. CNBC and the Federal Reserve estimate it at over a trillion dollars. So what is the best way to get out of debt? How much debt do I need to file bankruptcy?

Everyone who finds themselves struggling to pay bills or to pay down debt should consider bankruptcy. Even Donald Trump has declared bankruptcy, four times! Bankruptcy should not be a last resort. Bankruptcy should be a strategic decision when it makes sense with your finances.

How Much Debt Do I Need to Qualify for Phoenix Bankruptcy?

Even an average amount of debt qualifies for bankruptcy discharge in Arizona. For example, let’s say you have an average amount of credit card debt according to If everyone in America carried balances on their cards, the average balance would be about $5500. But only 38 percent of Americans carry balances. This makes the average balance over $16,000 for people who carry credit card balances. The minimum payments on those credit card balances is astonishing. It would be $500 a month or more.

Let’s weigh and balance the alternatives for getting out of the average amount of debt. Let’s say you pay the minimum payment of $500 per month for a year, which is a lot for the Phoenix/Mesa metro area. You have now paid $6000, and you still owe the original amount. Let’s say you find a way to pay $750 per month for a year. You have now paid $9000, and you have paid less than a sixth of the balance on the credit card. There is a lot of hard work and dedication to paying a lot of money to get nowhere. There is an easier way, and it comes from a surprising place. 

What Is Bankruptcy?

The federal government, almost from inception, has provided a way to get rid of debt without working your whole life just to pay interest to a bank. It was obvious, even to our founding fathers, that people who were disenfranchised by little hope of ever paying their debt would become desperate. Desperate people do desperate things. In an attempt to establish justice and insure domestic tranquility, a way was provided to deal with overwhelming debt. They called it bankruptcy, but that word has taken on such a negative connotation. It should be called anything else. Would it sound as negative if it was called Reasonable Debt Solution?

You Can File Bankruptcy in Phoenix/Mesa, Even If You Have Assets and Income

The only requirement for bankruptcy is that you want to make use of a federal program to help with your debt. You can have income and assets and still use the bankruptcy system in Arizona. In Phoenix, most assets are exempt from the bankruptcy process. That means that you keep the assets regardless of how much you owe creditors. The bankruptcy exemptions in Arizona will protect your home and your car, as well as most other assets. 

How Does Arizona Bankruptcy Work?

The most difficult part of bankruptcy is realizing that you need one. There is no reason to understand the thousands of pages of laws that make up the bankruptcy filing process. There are bankruptcy lawyers in Phoenix and all of Arizona who know and understand the law. Filing for bankruptcy in Phoenix/Mesa is very affordable. These experienced bankruptcy professionals will take small monthly payments. This is much easier and safer than trying to learn the entire bankruptcy law.

To file the bankruptcy petition, you will need to gather a bunch of documents. These include paystubs or proof of income for the last full six months before filing. You will need to provide copies of your Arizona car title or your real estate deed filed with the Maricopa county or other county recorder. You will want a copy of your recent tax returns and bank statements. If you have not filed taxes, you will need to file them soon after filing the bankruptcy petition.

After your bankruptcy attorney files the petition, you will have to go to a creditors’ meeting–also called a 341 meeting–about six weeks later. If you live in Maricopa county, your meeting will be held in downtown Phoenix. Most counties have places to hold the creditors’ meeting in their county. Bankruptcy filings in Yavapai county hold their 341 meeting in Prescott. Pima county bankruptcy filings will go to creditors’ meetings in Tucson, and Pinal county bankruptcy goes to Florence. You will receive notice of the 341 meeting or meeting of creditors shortly after filing your bankruptcy petition.

After attending your creditors’ meeting, many things could go wrong. The creditors’ meeting is conducted by a trustee that is appointed by the court. If the trustee finds reason to question your bankruptcy filing, the bankruptcy trustee could schedule further inquiry. This could take many forms. The bankruptcy trustee could ask for a deposition, known as a 2004 exam. This is sworn testimony from the debtor (you) to clarify things on the bankruptcy petition. The trustee could move to dismiss the case or disallow exemptions. There are many things that can go wrong. That is why the money spent for a bankruptcy attorney in Phoenix is worth every penny. To schedule a free consultation with an experienced Phoenix bankruptcy attorney today, contact us online or call us at (602) 265-3822.

Want A Fresh Start, LLC
10090 W. 26th Ave.
Lakewood, CO 80215
Ph: (303) 578-7931
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Where Can I File A Cheap Bankruptcy?


Although federal courts in every state have different local rules for filing bankruptcy, one thing remains the same—the filing cost. The current filing fees for bankruptcy, regardless of where you file, are $335 for a Chapter 7 and $310 for a Chapter 13.


Federal Law requires that you file your bankruptcy case in the judicial district and state where you live or have your domicile. You are probably wondering: “What is a domicile?” Your domicile is the place where you have your driver’s license, vote, get your mail, and intend to live permanently, even if you are currently living someplace else because of your job or military deployment. Colorado has one bankruptcy district located in Denver, CO. The court is located at 721 19th St. Denver, CO 80202.


If you are considering bankruptcy, you are probably short on disposable income and wondering whether there is a way to avoid paying filing fees. In some cases, if you are filing a Chapter 7 bankruptcy, you can request a waiver of fees. To do this, you will fill out an Application to Have the Chapter 7 Filing Fee Waived. The court will require you to provide detailed financial information when you file the request.

Should you not qualify for a waiver of filing fees and can’t pay the entire filing fee at one time, you can request to pay the filing fee through an installment plan. To do so, you will complete an Application to Pay Filing Fees in Installments. Currently, the district of Colorado requests that you pay $125 two weeks after filing and then two payments of $105 in the following two months.


The courts allow individuals to file bankruptcy on their own, but it is strongly recommended that you consult with an attorney. Whether you live in Arvada, Brighton, Aurora, Denver, Parker, Lakewood, Westminster, Wheatridge, or Broomfield, there are qualified Colorado Bankruptcy attorneys who can help you successfully file your bankruptcy. Many attorneys offer free consultations and base their fees on your income. Some attorneys even offer payment plans. It always makes sense to discuss your case with a Colorado-based attorney before you move forward with filing a bankruptcy.

Want A Fresh Start, LLC
10090 W. 26th Ave.
Lakewood, CO 80215
Ph: (303) 578-7931
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Can Bankruptcy Save Your Home From Foreclosure In Colorado?

Five years ago, you purchased your dream home. Maybe it was in Denver, Aurora, Lakewood, Golden, Westminster, Arvada, Centennial, or Commerce City. Three bedrooms, two bathrooms, a basement, and a yard for your kids and dog. You always thought it would be your forever home. Then you lost your job and got behind on payments. Luckily, you were able to secure a new job. Everything seemed to be turning around. Then you heard a knock on your door and were served foreclosure paperwork.Your heart sunk. How could you save your home? There was no way you could pay back all of your missed payments immediately. There may be another way. Chapter 13 Bankruptcy can stop the foreclosure action in it tracks.

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows individuals with regular income to develop a plan to repay all or part of their debts. Your qualified Colorado licensed attorney will submit a plan to the court to make regular monthly payment to creditors over three to five years. The monthly payments will be based upon your disposable income. Your disposable income is the amount of money you have remaining from your paycheck after paying you regular recurring bills like your mortgage, utilities, groceries, etc. These repayment plans will last from three to five years depending on your income compared to the income of similarly situated families in Colorado. Once you have completed the proposed Chapter 13 plan, many of your unsecured debts, even if they have not been fully repaid to the creditor, will be discharged.

How Does This Stop Foreclosure?

During the pendency of the Chapter 13 plan, the law forbids creditors from starting or continuing collection efforts. Luckily, foreclosure is considered a collection effort. A Chapter 13 plan will immediately put a stop to the foreclosure activity. Although the foreclosure is halted, you will still have obligations to your mortgage company to keep your home.

What Are My Obligations?

First, you will have to continue, or begin, to make your regular mortgage payments. Although the bankruptcy will halt the foreclosure based on your past missed payments, it will not stop the mortgage company from taking additional actions should you fall behind again. Second, you will include your mortgage payment arrearages in the Chapter 13 plan. The court allows you to pay back what you owe the mortgage company over that three to five year period that you are making your regular monthly mortgage payments. During the Chapter 13 repayment period, you get to remain in your home.

Are There Any Catches?

The most important requirement to file a Chapter 13 bankruptcy is that you have a regular source of income with some disposable income. Without an income, you will not be able to make regular payments and your case will be dismissed. The second caveat is that you have to pay back your creditors as much as they would have been repaid if you had filed a Chapter 7 bankruptcy.

What Does That Mean?

In a Chapter 7 bankruptcy, your debts are discharged. However, the court may force you to sell certain possessions to pay back your creditors. The court allows you a certain amount of equity in your possessions that you get to keep, called exemptions, even after your debts are discharged. In Colorado, you are able to keep $75,000 of home equity if you are under 65 and $105,000 of home equity if you are over 65.

So How Does This Affect the Chapter 13?

Let’s say you have $100,000 of equity in your home. If you filed a Chapter 7, the court would sell your home to pay off your creditors. The exemption would allow you to keep $75,000 from the sale of your home and the court would use the remaining $25,000 to pay off your creditors. That means that if you file a Chapter 13 bankruptcy, you would need to pay at least $25,000 to your creditors over the 36-60 months that you are following the Chapter 13 plan. Your minimum monthly payments would be at least $417 per month.

Should I File Chapter 13 Bankruptcy?

In order to determine if you need to file a Chapter 13 bankruptcy, you should contact a qualified Colorado bankruptcy attorney. There are many bankruptcy attorneys throughout the Denver Metro area, including Denver, Aurora, Arvada, Lakeland, Centennial, Castle Rock, Parker, Westminster, Brighton, and Broomfield, who offer free consultations. These experienced bankruptcy attorneys will be able to individually assess your situation and let you know whether a Chapter 13 bankruptcy is right for you.

Want A Fresh Start, LLC
343 W Roosevelt St #100
Phoenix, AZ 85003
Phone: 602-468-3328
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Filing For Bankruptcy In Arizona

Our offices in Phoenix, AZ represent those who need to get out from under debt and get back on track with their lives. We know that people fall under challenging times, and we believe that bankruptcy is a way out of crushing debt that allows otherwise responsible people to make a fresh start.

Bankruptcy laws fall under federal jurisdiction, so those laws remain identical regardless of the filing state. However, Arizona law dictates rules about exemption, creditor repayment for Chapter 13 filings, and caps for large property exemption. Each state, including Arizona, has a unique set of resources for those looking to file either Chapter 7 or Chapter 13 bankruptcy.


Arizona has its own set of exemption laws for bankruptcy and does not share jurisdiction with federal law. This means that you must follow Arizona guidelines for exempting property in Chapter 7 or Chapter 13 bankruptcy. Read “Arizona Bankruptcy Exemptions” for more information. As of 2016, homestead exemptions are capped at $150,000, with other exemptions dictated by state law.


Arizona finances also effect eligibility for Chapter 7 bankruptcy: during your means test, which you must file before considering Chapter 7, your income will be compared to Arizona median income statistics. Current median income in Arizona as of 2017 is $74,317 for a four-person household according to the U.S. Justice Department, but these numbers change frequently.


Prior to filing either Chapter 7 or 13 bankruptcy in Arizona, state law mandates you complete mandatory credit counseling. You must pick from a list of approved Arizona agencies to complete the course before filing.

After filing either Chapter 7 or 13 bankruptcy, you must also take a debtor education course. This also means you must attend an approved course through an approved Arizona agency before the bankruptcy is final.

In any case, your best starting point is contacting a reputable bankruptcy lawyer in your area. Experienced lawyers are available throughout the state.

Once you have completed these steps, understand the basics of the law, and have consulted with your attorney, you will file at one of the major metropolitan areas throughout Arizona, including Phoenix, Flagstaff, Yuma, Tucson, and Prescott.

Want A Fresh Start, LLC
343 W Roosevelt St #100
Phoenix, AZ 85003
Phone: 602-468-3328
Blog URL:

Chapter 7 Bankruptcy And The Means Test

Bankruptcy is nothing to ashamed of, which is why you need to make the best choices for you and for your family. Our offices represent hundreds of people like you throughout the Phoenix, AZ, Denver, CO, and Las Vegas, NV areas, and we know that people who get caught up in the avalanche of debt need relief that comes with dignity. In this article, we’ll talk about Chapter 7 eligibility through the means test, and the other factors that go into determining whether Chapter 7 bankruptcy is for you.

The means test helps determine if you are eligible for Chapter 7 bankruptcy. While Chapter 7 bankruptcy can remove debt accountability and give you a fresh start, it is often the case that many can (or must) successfully get out from under debt through Chapter 13 bankruptcy repayment plans instead. In fact, depending on the outcome of the means test, you may only be eligible for Chapter 13 repayment and not for Chapter 7 debt discharge.

Chapter 7 is not necessarily for everyone: you might be ineligible for Chapter 7, or better served using a Chapter 13 repayment plan. Check out our page on Chapter 7 Eligibility and Requirementsto learn more.

The basis for Chapter 7 filing is the means test. This test takes income, debts, expenses, and other financial information to determine your ability to repay debt. If you “flunk” (show that you can repay at least some of your debts) then you will need to file Chapter 13 bankruptcy under a repayment plan. Check out our page on the Bankruptcy Means Test to learn more.

The good news is that if your debt falls under certain conditions (you previously served in the military, or your debt is primarily business debt) you don’t need to pass the means test. Read more information on opting out of the means test on our page about not taking the means test.

Following this, you should learn more about “Consumer vs. Nonconsumer Debt” to determine whether or not you will need to take the means test.

You’ll also need to understand how to calculate “current monthly income” as determined by Congress. Check out our “What is Current Monthly Income for the Means Test?” page to calculate this information. The general rule us that the lower your income, the more likely you are to pass the test. This is beneficial for those who have suffered a recent drop in salary or loss of employment, as these conditions do not count against you when filing Chapter 7.

You’ll also need to understand your household size, expenses, and employment status will affect the means test. In many cases, you can make deductions or adjustments that can mean the difference between a fail and a pass. Our pages on expenses and the means test, household size and the means test, and how mortgages can help you pass the means test can help you fine-tune your monthly income and finances to better represent your financial status.

Don’t forget that you can also adjust deductions and expenses when it comes to the means test based on your marital status. Check out what “Adjustments of Means Test for Spouse Filing Bankruptcy Alone” and “Allowable Deductions for the Means Test” are available to you based on your marital and filing status.

Want A Fresh Start, LLC
343 W Roosevelt St #100
Phoenix, AZ 85003
Phone: 602-468-3328
Blog URL:

Chapter 7 Bankruptcy Basics

If you are burdened with high credit card bills, medical expenses, or overdue loan payments, it can feel like a mountain you’ll never dig out from under. There is nothing wrong with falling behind, as the debt system doesn’t provide much help for those who come on hard financial times. If you are a responsible person who just lost a job or suffered a loss, then your debt shouldn’t be something that you have to worry about or carry with you for the rest of your life. That’s why bankruptcy can be an effective solution to hit the reset button. There are two kinds of bankruptcy available for typical people: Chapter 7 and Chapter 13. Chapter 7 bankruptcy eliminates debt quickly and completely, while Chapter 13 requires a 3- or 5-year repayment plan. Check out our page on Chapter 13 bankruptcy for more information.

If you are looking into Chapter 7 bankruptcy, there are some basic facts you need to know. Chapter 7 bankruptcy typically has some concessions, mostly involving assessment of property like cars or homes, as well as a series of tests to see whether you are qualified due to income. Your bankruptcy trustee (the person working on the bankruptcy itself) will sell property to pay creditors before your balance is wiped clean. However, you can exempt certain kinds of property (like an inexpensive car) and keep it outside of your bankruptcy proceedings.

Chapter 7 bankruptcy could be the solution to your debt problems. But not everyone qualifies for Chapter 7. Here, we will discuss Chapter 7 qualifications, property issues, debt discharge, and the process itself.


To determine financial eligibility, you have to pass an examination known as the “means test.” The means test takes your average gross income over the past six months and compares it to the median income of your state of residence. If your income is less than the state median, you qualify automatically. If not, don’t lose hope: even if your income is greater than the state median, you can deduct certain expenditures like income tax payments, childcare, and health care premiums or payment.

You can find out what your state median income is through the U.S. Trustee website. Select the most recent date in the “Data Required for Completing the 122A Forms and the 122C Forms,” followed by the “Median Family Income Based on State/Territory and Family Size” link.


The good news is that you can keep some of your private property despite declaring bankruptcy. Depending on state laws, you can “exempt” property that serves an essential household purpose. These include
  • household staples like bedding and kitchenware,
  • cars (as necessary transportation),
  • your home,
  • retirement and Social Security Benefits, and
  • tools integral for the performance of your profession.
Read more on property exemptions.

Other property that is not exempt becomes part of the “bankruptcy estate” and is sold so pay down your debt. Often, many people looking to file Chapter 7 can keep much, if not all, of their property for the simple reason that they do not own any non-essential or non-exempt property. In fact, non-exempt property typically refers to larger and more recreationally-oriented objects like
  • large parcels of land or secondary homes,
  • rental property,
  • time shares,
  • artwork, collectibles, or tradeable commodities,
  • investment accounts not earmarked for retirement, and
  • stock or other ownership stakes in LLCs or corporations.
As you can see, there is a clear difference between exempt and non-exempt, which is a good thing because you can consider Chapter 7 bankruptcy without losing essential goods and resources. Furthermore, if you have a lot of non-essential property it can be in your interest to use it to reduce your debt balance.

Example 1: Sally has $65,000 in credit card debt and a $5,000 painting she won in an auction. At first, she resists giving up the painting, but decides to declare Chapter 7 bankruptcy regardless because while she would like to keep the painting, she would rather clear her debt outright. The sale of the painting would reduce her credit obligation to $60,000.

Example 2: Sally decides that she really wants the painting. Since the trustee doesn’t care who buys the object, he offers sally a %20 discount, and sets up a plan with Sally to pay off the balance of the painting of 12 months.

What’s better, even if you need to relinquish non-exempt property, it’s possible to purchase that property back from your bankruptcy trustee, usually at a discount.

Exemptions are based on state and/or federal guidelines, depending on your location. Exemptions for property in Phoenix, AZ will differ from those in Denver, CO. Other states might give you options to select between state or federal laws, and California law dictates two individual state guidelines.


A “discharge” means that the debts are completely wiped out. This includes almost all unsecured debts like credit cards, personal loans, lawsuit judgments, medical bills, income taxes (over three years old) and utility bills. Debts not included in Chapter 7 are
  • Priority Unsecured Debt, like child support payments, government fines, and most income taxes),
  • Government student loans, and
  • Secured debt like a mortgage or car loan.

First, file a petition with the court that discloses property, income, debts, and financial transactions. Your lawyer will typically do this for you, so bring your paystubs and tax returns to any meeting with a bankruptcy attorney. This will help them file your motion and determine of Chapter 7 is right for you.

Once you file the petition, the process has started and creditors and their authorized collectors can no longer contact you. This is called a “stay,” and it remains in effect for the duration of the process and through its completion. Hassling calls will cease.

Then, with 30-45 days, the bankruptcy trustee will call a “341 Meeting of Creditors,” which you are required to attend. Prior to this meeting, you provide the trustee what are called the “541 Documents,” which include
  • Paycheck stubs,
  • Banking and retirement statements,
  • Mortgage payments,
  • Tax returns,
  • Car titles, and
  • Any relevant marital settlement or profit loss statements (in case of divorce or business ownership, respectively).
This material is typically required 7 days prior to the 341 meeting. The 341 meeting is also the only meeting you are required to attend.

At the meeting, you’ll provide proof identity (typically Driver’s License and Social Security Card). After a series of questions regarding income, debt, and the truthfulness of your paperwork, you’ll be asked for any last-minute changes. Creditors can and may show up to this meeting, but often do not. Most meetings are under 5 minutes.


60 days after your 341 meeting, the court will mail you the discharge notice. If you have no assets to settle (that is, no non-exempt property) then the you will receive a dismissal. Otherwise, the process could take longer to resolve any outstanding property sales. This process takes as long as it takes the trustee to sell your non-exempt property and distribute funds to the creditors.


  • Am I better served by filing Chapter 7 bankruptcy, or Chapter 13 bankruptcy?
  • How long will this bankruptcy affect my credit report?
  • How difficult will it be to gain a job, rent a house, or get lines of unsecured credit after filing bankruptcy?
Want A Fresh Start, LLC
343 W Roosevelt St #100
Phoenix, AZ 85003
Phone: 602-468-3328
Blog URL:

Means Test

What are the different types of Personal Bankruptcy? There are three different types of personal bankruptcy that you can file in Colorad...