Bankruptcy in the mountains and on the Western Slope, without the drive over the pass

This is the question I hear most from mountain towns. The means test does not look at your annual salary. It averages your household income over the six full calendar months before the month you file. If you earn most of your money in ski season or in the summer, the six months that land in that window can look very different from the six months that do not.

That makes the timing of a filing a real part of the analysis, not an afterthought. It is the law applied carefully, and it is one of the first things I look at with anyone whose income rises and falls with the seasons. The Colorado means test explained walks through the whole calculation.

Colorado's homestead exemption protects up to $250,000 of equity in the home you live in, or $350,000 if you, your spouse or a dependent living with you is 60 or older or disabled. In much of the Western Slope that covers the typical homeowner comfortably. In the resort counties it can be a closer question, because people who bought years ago may now have equity well past the exemption.

Equity above the exemption does not mean you lose the house, but it does change the plan. A Chapter 13 lets you keep the home and pay unsecured creditors at least what they would have received from a sale, over three to five years. Colorado bankruptcy exemptions covers the full list, including vehicles, tools of a trade and retirement accounts.

Many of the borrowers I hear from in this part of the state are teachers in small districts, nurses and other healthcare workers at regional hospitals, and people who borrowed for a degree and came home to a town where the jobs never paid what the loans assumed. If you work for a public employer, Public Service Loan Forgiveness may be the better route, and I will tell you so honestly. If it is not, discharge in bankruptcy is a separate option that many borrowers never hear about. Student loan discharge explains how the process works.