Hi. I have too much credit card debt and I can't handle the payments and interest. I am 63 and retired. Am I a good candidate for filing chapter 7?

I am very sorry to hear that you’re facing this burden; it’s a heavy weight to carry. Chapter 7 is often the most appealing option for individual debtors due to its cost-effectiveness and efficiency. Based on the limited information you have provided, you may be a good candidate for Chapter 7 bankruptcy.  

Qualifying for Chapter 7 

You’ll have to pass the "means test" in order to qualify. The means test assesses whether your income and expenses justify filing under Chapter 7. You’ll also have to determine whether you’re insolvent. Your debts must exceed your assets at fair valuation, or you must generally be unable to pay your debts as they become due. Insolvency is a key factor in bankruptcy eligibility. 

Beneficial Exemptions 

I want to note that in Colorado, there are several legal exemptions that may be beneficial to someone in your circumstances. Under Colorado law, funds held in or payable from any pension or retirement plan, including those qualifying under federal statutes such as the Employee Retirement Income Security Act (ERISA), as well as individual retirement accounts (IRAs) and Roth IRAs, are exempt from creditors' claims in bankruptcy. There are also additional exemptions that may apply to property, personal items, and more depending on your situation.

This protection extends to benefits you have received, have the right to receive, or will receive in the future, ensuring you can retain these assets to support yourself. 

Additionally, if you’re already drawing Social Security benefits, these are broadly exempt from execution, levy, attachment, garnishment, or other legal processes, provided they are not commingled with other funds in a way that makes them untraceable.

State-Specific Procedures

If you qualify for Chapter 7 in Colorado, you’ll also have to meet additional requirements to receive a discharge, such as the financial management course certification. The court can close bankruptcy cases without discharging debt if this certification isn’t completed and filed. 

I hope this information has helped.

Suggested Next Steps

As you can see, there are numerous factors that decide bankruptcy eligibility. I recommend setting up a consultation with a member of our Bankruptcy Team to discuss your circumstances in more detail. Afterwards, you'll know better if you're a good candidate for Chapter 7.

If that’s something you would like to do, please call our office at 303-688-0944 or schedule the appointment online.