If you file for Chapter 7 bankruptcy in Colorado, you can protect some or all of your property with Colorado’s bankruptcy exemptions. The bankruptcy exemptions in Colorado also play a role in Chapter 13 bankruptcy. Read on to learn about what property is covered by Colorado’s bankruptcy exemptions.
For a general overview of bankruptcy exemptions, visit the Bankruptcy Exemption topic page.
Colorado Requires Debtors to Use State Exemptions
Colorado has enacted legislation “opting out” of the federal bankruptcy exemptions. This means that bankruptcy filers in Colorado are only permitted to exempt property using the state laws.
Common Colorado Exemptions
Here are some of the most common exemptions available under Colorado law:
Cemeteries and Burial Property
Burial sites, including spaces in mausoleums, are exempt to the extent of one site or space for the debtor and each dependent. Cemetery property that is used or owned by a corporation is exempt. Colo. Rev. Stat. §§ 13–54–102 and 7–47–106.
Crime Victims’ Compensation
Crime victims’ compensation is 100% exempt. Colo. Rev. Stat. §§ 13–54–102(1)(q) and 24–4.1–114.
Fraternal Benefit Society Benefits
Fraternal benefit society benefits are 100% exempt. Colo. Rev. Stat. § 10–14–403.
Homestead or Residential Property
Under Colorado law, homeowners may exempt up to $60,000 of their home or other property covered by the homestead exemption. The homestead exemption is $90,000 if the homeowner, his or her spouse, or dependent is disabled or 60 years of age or older. Proceeds from the sale of the exempt homestead are exempt for a year after the sale if the funds are kept separately and if the proceeds are used for a new homestead, and the new homestead is eligible for the same homestead exemption as the property sold. Colo. Rev. Stat. §§ 13–54–102(1)(o)(I), (o)(II), 38–41–201, 38–41–201.5, 38–41–201.6, 38–41–204, 38–41–205, 38–41–207, 38–41–209, 38–41–210 and 38–41–211.
For more details about how the homestead exemption works in Colorado, see The Colorado Homestead Exemption.
Group life insurance policies and proceeds are 100% exempt. A debtor may exempt up to $200 per month in benefits from sickness and accident insurance during the debtor’s disability, subject to certain exceptions. Life insurance proceeds are 100% exempt. The cash surrender value of life insurance is exempt up to $100,000. Colo. Rev. Stat. §§ 10–7–205, 10–16–212 and 13–54–102(1)(l).
A debtor may exempt up to $5,000 in one or more motor vehicles. An elderly or disabled debtor, or an elderly or disabled spouse or dependent of the debtor may exempt up to $10,000. Colo. Rev. Stat. § 13–54–102(1)(j).
To learn more, visit The Colorado Motor Vehicle Exemption in Bankruptcy.
Colorado has enacted the Uniform Partnership Act provision, which exempts a partner’s interest in specific partnership property. Colo. Rev. Stat. § 7–60–125.
Pension and Retirement Benefits
Private employees’ pensions, IRAs, and KEOGHs are exempt to the extent wages are exempt. Benefits from various employee pension systems are exempt except for child support purposes. Colo. Rev. Stat. §§ 13–54–104 and 24–51–212.
A debtor may exempt the following personal property:
- up to $3,000 in household goods
- up to $1,500 in clothing
- up to $2,000 in jewelry
- up to $1,500 in books and family pictures
- professionally prescribed health aids
- personal injury recoveries (but not those incurred for treatment of your injuries)
- compensation for damaged property if the underlying property would have been exempt
- up to $600 in food and fuel, and
- an aggregate value of $50,000 for livestock and tools.
Colo. Rev. Stat. §§ 13–54–102 and 13–54–103.
Public assistance is 100% exempt. Colo. Rev. Stat. § 26–2–131.
Tools of the Trade
A debtor may exempt up to $20,000 in trade implements. Colo. Rev. Stat. §§ 13–54–102(1)(i) and 13–54–102(1)(k).
Unemployment compensation is exempt as long it is not commingled with other funds and except for the enforcement of child support orders. Colo. Rev. Stat. § 8–80–103.
Veterans’ benefits are exempt except for the court-ordered child support of a spouse or children. Colo. Rev. Stat. §§ 13–54–102(1)(h) and 13–54–102(2).
A debtor may exempt the greater of 75% of disposable earnings or 30 times the federal or state minimum hourly wage per week. Colo. Rev. Stat. § 13–54–104.
In re Nye, 210 B.R. 857 (D. Colo. 1997)
In re Kobernusz, 160 B.R. 844 (D. Colo. 1993)
Workers’ Compensation Benefits
Workers’ compensation is exempt except for employer reimbursement and court-ordered support. Colo. Rev. Stat. § 8–42–124.
Confirming the Status of Colorado Bankruptcy Exemptions
Colorado's exemption amounts are adjusted periodically. To make sure you have the most recent figures, be sure to check for any updates at the Colorado Secretary of State’s website at www.sos.state.co.us.
For a list of other common exemptions in Colorado, see Colorado Bankruptcy Exemptions.