Colorado Extends Garnishment and Collection Moratorium Through February 1, 2021, in Response to COVID-19

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

Earlier this year, Colorado passed a law (SB 20-211) prohibiting judgment creditors from initiating new "extraordinary" collection actions, like garnishments, through November 1, 2020, unless specific legal requirements were met.

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

What Is an Extraordinary Collection Action?

An "extraordinary" collection action is defined as 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.

What Does Colorado Law Require?

Before initiating an extraordinary collection action, a judgment creditor has to send a notice explaining that a debtor can temporarily suspend the action if they're facing a financial hardship, directly or indirectly, as a result of the COVID-19 emergency. To exercise this right, the debtor must notify the judgment creditor that they're experiencing a financial hardship because of the crisis and provide some personal information. But they don't have to provide additional hardship documentation to support the request.

Also, under Colorado law, from June 29, 2020, through February 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.

The Bottom Line

So, debt collectors who conduct extraordinary collection activities in Colorado must continue to provide judgment debtors with the notice required under the law until February 1, 2021, and debtors have until this time to request a collection suspension. Collectors also have to avoid processing writs of attachment or writs of execution on depository accounts or accounts of up to $4,000 that are in the debtor’s name.

Effective date: October 25, 2020