Colorado has opted out of the federal bankruptcy exemptions. Colorado residents must use the Colorado exemptions.
Colorado limits an exemption to a specified “value,” or simply what is worth. This is the fair market value (FMV) of the property after deducting any liens. Examples of liens are mortgages, car loans or judgements.
If the FMV is greater, than amount provided for in the “excemption” then that property can be sold by the bankruptcy trustee or you may be given the opportunity to purchase the “excess equity” and keep the property.. If the property is sold by the Trustee, you are entitled to a part of the sales proceeds equal to the exemption amount.
- Homestead $75,000, or $105,000 if the debtor, spouse, or a dependent living in the home is age 60 or older or disabled
- Personal property $2,000 in clothing, $2,500 in jewelry, $3,000 in household goods, and more
- Vehicle $7,500 aggregate value, up to two motor vehicles or bicycles; increases to $12,500 if debtor, spouse, or dependent is age 60+ or disabled
- Wages At least 75% of weekly disposable earnings This increases to 80% in October 2020.
- Pension/retirement Exempt
Colorado has a homestead exemption. After deducting for liens the first $75,000 from the sale of the property. This increases to $105,000 if the debtor, the debtor’s spouse, or a dependent of the debtor who lives in the home is at least 60 years old or disabled.
Two motor vehicles or bicycles kept and used by the debtor, up to an aggregate value of $7,500 are exempt in Colorado. This increases to $12,500 if the debtor’s spouse, or a dependent of the debtor is at least 60 years old or disabled. Snowmobiles, all-terrain vehicles, golf carts, watercraft, travel trailers, tent trailers, or motor homes not exempt.
Personal Property Exemption
Examples of personal property of exempt include:Necessary clothing up to a value of $2,000.
- Household goods — such as furniture, dishes, appliances, musical instruments, and home electronics — to the extent of $3,000.
- Tools of the Trade. The stock in trade, supplies, fixtures, equipment, and other business property used to carry on the debtor’s gainful occupation. If the gainful occupation is the debtor’s primary gainful occupation, this exemption covers up to $30,000; or if is not your primary occupation, it covers up to $10,000 for “tools of the trade”.
- Watches, jewelry, and similar items up to a value of $2,500.
- Library, family pictures, and school books to the extent of $2,500.
- Professionally prescribed health aids.
- These maybe doubled if a husband and wife file together.
After October 1, 2020 at least 80% of Disposable a wages are exempt. Disposable earnings are the sum of compensation for personal labor or services and funds held in or payable from any health, accident, or disability insurance, minus any amounts required by law to be withheld.
There are special exemptions provisions for active and former military members. Any money received as a pension, compensation, or allowance arising out of a person’s services in the armed forces during a time of war or armed conflict are exempt.
Pensions/Retirement Accounts Exemption
Any funds in any pension, retirement, or deferred compensation plan, including ERISA plans, IRAs, Roth IRAs, and 401(k) plans.