Bankruptcy can help people out of paralyzing debt; however, many Coloradoans do not explore the benefits of bankruptcy because they are afraid of losing their car or home.
Fortunately, Colorado has lenient “exemption” laws that allow bankruptcy filers to keep their car and home (and other essential items). Exemption laws allow a filer to keep specific assets outside of the bankruptcy estate so that the asset remains with the filer during and after the bankruptcy. Lawmakers created bankruptcy exemptions to allow debt relief without losing certain assets that are viewed with importance.
Colorado has made recent law changes that have generously increased the amount of bankruptcy exemptions. As of the drafting of this article, some of Colorado’s most common exemption limits are:
|Homestead||$250,000 in equity|
|$350,000 in equity (if over the age of 60 or disabled)|
|Vehicle||$15,000 in equity (combined equity up to 2 vehicles)|
|$25,000 in equity (if over the age of 60 or disabled)|
|Funds in Bank Account||$2,500|
|Tools of Trade||$60,000|
For purposes of determining the homestead exemption, equity is defined as the current value of the property minus any secured loan or mortgage.
Some filers are surprised when they learn that “homestead” encompasses many “non-traditional” housing situations. Under Colorado law, homestead exemptions apply to some personal property that is used as primary housing. These include mobile homes, manufactured homes, trailers, and trailer coaches if used as primary living quarters.
The attorneys at Burnham Law are standing by to start your path to financial relief. Burnham Law understands that financial stress is real and affects all aspects of our lives. Burnham Law would be honored to be your legal partner in moving toward a financially stress-free life.