Colorado Bankruptcy Exemptions

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Like all states, Colorado has its own set of exemptions that you may use when filing for Chapter 7 or Chapter 13 bankruptcy. Exemptions determine what property (such as a home, car, instrument, retirement account, etc.) you may keep in a Chapter 7 bankruptcy, and how much you must pay to certain creditors in Chapter 13 bankruptcy. Some states allow debtors to choose between the state exemption system and a set of federal bankruptcy exemptions – but Colorado is not one of them. In Colorado, you must use the state exemptions below. In addition to this list, you may also use any applicable amounts in the federal nonbankruptcy exemptions.

Unless noted otherwise, if a couple is married and filing jointly in Colorado, each spouse may claim the full amount of each exemption. This is informally called “doubling.”

To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy? 

Special Note: Colorado’s Bankruptcy-Only Exemption System

Colorado, along with seven other states, has an exemption scheme that applies only in bankruptcy (which means you can’t use them against judgment creditors that try to take your property in other situations). Several courts have ruled that bankruptcy-only exemption schemes are unconstitutional. Although others have determined the opposite – that debtors may use these exemptions.

Although the majority of bankruptcy courts allow debtors to use bankruptcy-only exemption schemes, you may wish to consult with an attorney to determine what exemptions are permitted in your local bankruptcy court. 

Colorado Bankruptcy Exemptions

Unless otherwise noted, all law references are to the Colorado Revised Statutes.

Homestead

38-41-201, 203, 207 - Real property up to $60,000; if a dependent, spouse, or owner is over 60 years of age and disabled, $90,000. The proceeds of a sale are exempt after 2 years have passed since they were received.

38-41-204 - Spouse or child of deceased owner can also qualify for homestead exemption.

Personal Property

13-54-102 - Bicycles and motor vehicles that are used to travel to work up to $5,000 (up to $10,000 if used by elderly or disabled debtor or dependent); clothing to $1,500; health aids; household goods to $3,000; food and fuel up to $600; 1 burial site per person; jewelry and articles of adornment up to $2,000; family pictures and books to $1,500; security deposits; proceeds for damaged exempt property; personal injury recoveries.

Wages

13-54-104 - Either minimum 75% of earned but unpaid wages, insurance, and pension payments or 30 times the federal minimum wage. The greater of the two amounts will be used.

In re Nye, 210 B.R. 857 (D. Colo. 1997)

In re Kobernusz, 160 B.R. 844 (D. Colo. 1993)

Pensions

11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans). 

11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,171,150.

13-54-102 - ERISA-qualified benefits, including IRA's and Roth IRAs. Veteran's pension if veteran served in armed conflict or war.

24-51-212 - Public employees' pensions, defined contribution plans and deferred compensation.

31-30.5-208 - Police officers and firefighters.

Public Benefits

8-42-124 - Workers' compensation.

8-80-103 - Unemployment compensation.

13-54-102 - Veterans' benefits for veteran, spouse or child if veteran served in war. Crime victims' compensation. Earned income tax credit. Disability benefits up to $3,000.

26-2-131 - Aid to blind, aged and disabled as well as other public assistance.

Tools of Trade

13-54-102 - Stock in trade, supplies, fixtures, maps, machines, tools, electronics, equipment, books, and business materials to $20,000; library of a professional to $3,000; livestock or other animals, tractors, farm implements, trucks used in agriculture, harvesting equipment, seed, and agricultural machinery and tools to $50,000. National Guard members' personal military equipment.

Alimony and Child Support

13-54-102.5 - Child support

Insurance

10-7-106 - Life insurance proceeds if policy prohibits use to pay creditors.

10-7-205 - Group life insurance policy or proceeds.

10-14-403 - Fraternal benefit society benefits.

10-16-212 - Disability benefits up to $200 per month. Entire amount is exempt if it was received in one lump sum.

13-54-102 - Life insurance cash surrender value up to $100,000. Contributions made within the past 48 months will be excluded.

38-41-209 - Homeowners' insurance proceeds for 1 year after received, up to homestead amount.

Misc.

7-60-125 - Business partnership property.

Other 

Add any applicable Federal Nonbankruptcy Exemptions.

Confirming Exemptions

This list includes the majority of bankruptcy exemptions available in Colorado. However, it may not include all exemptions, and states often create exceptions to specific exemptions. In addition, Colorado may have changed the amounts since this list was last updated in June of 2011. Consider cross-checking this list with www.legalconsumer.com, which updates the state exemption amounts regularly, or check with your local bankruptcy court. 

by: , J.D.

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