Do I Get to Keep Anything if I File for Bankruptcy?
The good news is that every state, including the state of Colorado, has bankruptcy exemptions established by law that allow bankruptcy filers to keep many of their belongings and assets. Federal law also establishes some exemptions that bankruptcy filers can utilize under some circumstances. If you are a resident of Colorado and plan to file bankruptcy under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code, you should be sure to take advantage of these exemptions. Plus, the Colorado legislature revised Colorado’s bankruptcy exemptions in 2015, some of which are located at C.R.S. 13-54-101 and C.R.S. 13-54-102. These revisions increased the value of the different exemptions that bankruptcy filers can claim under Colorado law. What follows are details some of the more common exemptions for bankruptcy filers in the state of Colorado.
The Homestead Exemption
One of the issues that is most important for people who intend to file bankruptcy is the ability to stay in their homes. Homestead exemptions are based on the amount of equity that a homeowner has in the property, i.e. the value of the home, less any outstanding mortgage balance. The Colorado homestead exemption allows a bankruptcy filer to keep a home or property with equity that is valued at $75,000 or less. In other words, the individual filing bankruptcy will not have to sell his or her home if the equity in the home is valued at $75,000 or less. The homestead exemption also allows homeowners who are 60 or older or disabled to keep their homes if their equity is valued at $105,000 or less.
The Motor Vehicle Exemption
This exemption applies to any motor vehicles, but does not apply to motorhomes, campers, boats, or ATVs. The exemption available under Colorado law for an individual’s equity in a motor vehicle rose from $5,000 to $7,500 in 2015. Again, the equity in a motor vehicle is measured by the value of the vehicle, less any outstanding loan balance. Plus, the newly amended motor vehicle exemption places a limit on the number of motor vehicles that bankruptcy filers can retain under this exemption. Now, the amended statute limits usage of this exemption to two vehicles per person filing bankruptcy.
Exemptions for Personal Belongings
The exemption for household goods under Colorado law is now set at $3,500 per debtor. Household goods include appliances, furniture, electronic devices, pots and pans, and toys. Each debtor and each dependent in the debtor’s household can also exempt all types of clothing up to $2,000. A household in which an individual is filing bankruptcy also can exempt up to $2,000 of books. Finally, if you are self-employed, the “tools of your trade,” or whatever equipment, tools, inventory, and fixtures you need to operate your business, are exempt up to $30,000 if the business is your primary source of income, and up to $10,000 if it is not your primary source of income.
Contact our Law Office Today for Help
Kealy Law Firm provides you with an experienced Loveland, Colorado bankruptcy lawyer who has handled a wide variety of personal bankruptcy cases under Chapters 7 and 13 of the Bankruptcy Code. We know how to maximize the value of your exemptions and protect as many of your assets as possible throughout the bankruptcy process. Drop us an email at [email protected] or give us a call to set up an appointment today. 970-776-9504.
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