May 3, 2017
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, see Bankruptcy 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.
Here are some of the most common exemptions available under Colorado law:
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(1)(d) and 7–47–106.
Child or domestic support. Colo. Rev. Stat. § 13-54-102(1)(u); 13-54-102.5; 13-54-102(4).
Crime victims’ compensation is 100% exempt. Colo. Rev. Stat. §§ 13–54–102(1)(q); 24–4.1–114.
Fraternal benefit society benefits are 100% exempt. Colo. Rev. Stat. §§ 10–14–122, 403.
Under Colorado law, homeowners may exempt up to $75,000 of their home or other property covered by the homestead exemption. The homestead exemption is $105,000 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. §§ 38–41–201(1)(a) and (b), 38–41–201.6, 38–41–202, 38–41–207, 38–41–209.
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 $4,000 per month in benefits from sickness and accident insurance during the debtor’s disability, subject to certain exceptions; lump sum is 100% exempt. Life insurance proceeds are 100% exempt. The cash surrender value of life insurance is exempt up to $100,000 (but not contributions to the policy within four years prior to filing). Colo. Rev. Stat. § § 10–7–205, 10–16–212 and 13–54–102(1)(l).
A debtor may exempt up to $7,500 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 $12,500. 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.
Firefighters, police officers, and public employees. Colo. Rev. Stat. §§ 13–54–104 and 24–51–212.
Tax exempt retirement accounts (such as 401ks and IRAs) are exempt as per the federal rules. For current amounts, see Your Retirement Plan in Bankruptcy.
A debtor may exempt the following personal property:
Colo. Rev. Stat. § § 13–54–102 and 13–54–103.
Public assistance is 100% exempt. Colo. Rev. Stat. § 26–2–131.
Earned income tax credit or refund. 13-54-102((1)(o).
Disability benefits to $3,000.
A debtor may exempt up to $30,000 in trade implements if they are used in the debtor's primary occupation and up to $10,000 if they are used in an occupation other than the debtor's primary one. Colo. Rev. Stat. § § 13–54–102(1)(i) and 13–54–102(1)(k).
Professional may exempt a library, to $3,000.
Livestock, animals, machinery, tools, and seed of person engaged in agriculture, to $50,000.
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.
Workers’ compensation is exempt except for employer reimbursement and court-ordered support. Colo. Rev. Stat. § 8–42–124.
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. You'll find Colorado's statutes here.