Speak With Denver Bankruptcy Lawyers Wink & Wink to See If Filing for Bankruptcy Makes Sense For You
This year has brought with it tremendous financial challenges. COVID-19 continues to cause economic hardships for people and businesses, home prices have gone through the roof (no pun intended), and inflation has made things more and more expensive in 2022.
If you’re already suffering from overwhelming debt, your financial situation may only be getting worse. You’re probably wondering what’s the smartest, most responsible, way out of debt.
One option is filing for bankruptcy as a way to liquidate crippling debt and get you back on your feet again. While “bankruptcy” can sound like a scary word, it can be a smart, sensible choice for those in need of a fresh financial start.
In response to the economic challenges that Americans are facing, lawmakers have introduced new laws that benefit people who are dealing with debt and considering filing for bankruptcy.
Let’s review some of these recent changes.
Colorado recently made several changes to how much of an asset may be exempt when you file for your bankruptcy. These changes mean you could keep even more of your assets!
First, let’s dig into what exemptions are.
Exemptions help you protect some assets from being taken away by creditors to repay debts. Essentially, they exempt certain property from garnishment or foreclosure by creditors. In bankruptcy, the exemptions tell you what you can keep.
Typically, the property you can keep is defined by a cap on how much value of the asset you can exempt. For example, you can keep up to a certain dollar-amount value of clothing, but it’s not unlimited.
Some examples of exempt assets include:
- Your home
- Your car
- Household goods
- Tools or instruments for your job
- Pensions and benefits related to welfare, social security, unemployment, and other things
- Retirement accounts, such as a 401(k), IRA, etc.
Recent Colorado Changes to Exemptions
Colorado recently made these changes:
- Homestead exemption – Previously, you could protect up to $75,000 of equity in your home. This meant that if you owned less than $75,000 on your home, you could potentially keep your home when filing for bankruptcy. That limit has now been increased to $250,000.
- If you or your family is 60 or older, or you or your spouse/dependent still living at home is disabled, the previous equity limit was $105,000. It’s now $350,000.
- Money in a bank account was previously not considered a bankruptcy exemption, as in, a creditor could take that money to repay a debt. However, the new law allows for up to $2,500 in a bank account to be exempt when filing for bankruptcy.
- Motor vehicles – Previously, you could potentially keep up to two motor vehicles if you only had equity of up to $7,500 (combined). Now that’s $15,000.
- If you are 60 or older or disabled, the previous equity limit was $12,500. It’s now $25,000.
- Household goods – Previously, you could potentially keep up to $3,000 in household goods. (This value is based on the supposed resale value if the asset was sold, not what its original cost was.) This limit has now been increased to $6,000. Household goods include kitchen appliances, furniture, decor, and more.
If you’re wondering which and how much of your assets you could keep in a bankruptcy case, it’s crucial you speak with a trusted bankruptcy lawyer, such as Wink & Wink, who serve the greater Denver, Colorado area. We can review your finances and help you determine what you may be able to keep.
Bankruptcy can be extremely confusing on your own, and one tiny mistake can get your case dismissed. That’s why it’s essential you speak with an expert.
Federal Changes to Debt Limit
The United States federal government recently increased the amount of debt you can have and still file for Chapter 13 bankruptcy.
Previously, your debt could not exceed $465,275 of unsecured debt, such as medical debt, credit card debt, or back rent, and $1,395,875 of secured debts, such as your home or vehicle. Now you can have up to $2,750,000 in debt (secured and unsecured combined) and be allowed to file for Chapter 13 bankruptcy.
Is Filing for Bankruptcy Right For You?
If your debt has become all-consuming, it’s time you speak with a Denver bankruptcy attorney who can help you get the best outcome possible.
Although bankruptcy will have a big impact on your credit score, with smart financial decision-making and behaviors, you can rebuild your credit score and be on your way to a healthy financial future within just a couple of years after filing for bankruptcy.
Talk With a Denver Bankruptcy Attorney Today
If your debt is spiraling out of control, it’s time to speak with a Denver bankruptcy lawyer before it gets even worse. Wink & Wink has helped hundreds of clients get much-needed debt relief. We can review your case and see if bankruptcy makes the most sense for you and help you understand how much of your assets you may be able to keep.