Colorado Debtors Affected By COVID-19 Can Get a Garnishment and Collection Moratorium Through June 1, 2021

Colorado’s limitations on "extraordinary" collection actions are part of the state’s efforts to protect consumers from economic hardship during the coronavirus crisis.

By , Attorney

Last year, Colorado passed a law (SB 20-211) prohibiting judgment creditors from initiating new "extraordinary" collection actions through November 1, 2020, unless specific legal requirements were met. Under this law, before taking any action in the nature of a garnishment, attachment, levy, or execution to collect or enforce a judgment on a debt as defined under the Colorado Fair Debt Collection Practices Act, the creditor has to notify the debtor about, and provide the debtor with, a garnishment and collection suspension, if requested.

As permitted by SB 20-211, the Administrator of the Uniform Consumer Credit Code extended the right to get a garnishment and collection moratorium through June 1, 2021.

How to Get a Garnishment and Collection Suspension

Before initiating an extraordinary collection action, like a wage garnishment, a judgment creditor has to send a notice to the debtor's last known address explaining that a debtor can temporarily suspend the action until June 1, 2021, if they're facing a financial hardship, directly or indirectly, as a result of the COVID-19 emergency.

To get the suspension, you must notify the judgment creditor that you're experiencing a financial hardship because of the crisis and provide some personal information. You can give this notice by phone or by writing to the creditor at the address shown in the notice. You don't have to provide additional hardship documentation to support your request.

A creditor's failure to send this notice constitutes an unfair and unconscionable means of collecting a debt under Colorado law.

Collectors Also Can't Take Money From Accounts With Up to $4,000

Also, under Colorado law, from June 29, 2020, through June 1, 2021, up to $4,000 cumulative in a depository account or accounts in a debtor's name is exempt from levy and sale under a writ of attachment or execution.

Talk to a Lawyer

If you need help getting the suspension or think a creditor failed to send the required notice in violation of this law, consider talking to an attorney to get advice about your options. You might be able ask a court to deny the creditor's request for a writ or legal process to effect an extraordinary collection action if the creditor didn't comply with SB 20-211's requirements.

Effective date: January 21, 2021