Bankruptcy in Boulder County, for people who did everything right on paper

It protects up to $250,000 of equity, or $350,000 if you, your spouse or a dependent living with you is 60 or older or disabled. In most of Colorado that covers the typical homeowner comfortably. In Boulder County it is a closer question, because home values are among the highest in the state and people who bought ten or twenty years ago can have equity well past the exemption.

If that describes you, I want you to know that equity above the exemption does not mean you lose the house, but it does change the plan. In a Chapter 7 the trustee could sell a home with substantial unprotected equity, paying you the exempt amount first. In a Chapter 13 you keep the house and pay unsecured creditors at least what they would have received from that sale, over three to five years. For many Boulder County homeowners Chapter 13 is the better fit for that reason alone. Colorado bankruptcy exemptions has the details.

The University of Colorado is a public employer, which usually means your employment counts toward Public Service Loan Forgiveness. If you are close to forgiveness, that may be the better route, and I will tell you so honestly. If you are not close, or your balance has outrun what PSLF will realistically reach, discharge in bankruptcy is a separate option that many borrowers never hear about.

Graduate degrees in fields that never paid what the borrowing assumed are one of the most common patterns I see in discharge cases. The process runs through an attestation the government uses to evaluate your circumstances, covered in the student loan attestation explained, and on the student loan discharge page.

Boulder clients are more likely than most to have retirement savings, and more likely to have been told by someone to cash it out to pay the credit cards. Retirement accounts are protected in bankruptcy. Draining them to pay dischargeable debt is one of the expensive mistakes available here, and cashing out retirement to pay debt explains why. Please talk with me before you do it.