On July 1, 2015, amendments to Colorado's bankruptcy exemptions will take effect. The amendments will increase the amount of many of the exemptions for people seeking bankruptcy protection. This means that Chapter 7 debtors can protect more of their assets from liquidation and Chapter 13 can potentially pay less to their creditors.
One of the major changes is the increase in the homestead exemption. With home prices on the rise in Colorado, this is a major protection for bankruptcy debtors. The homestead exemption will increase from $60,000 to $75,000 for individuals under 60 years of age and will increase from $90,000 to $115,000 for individuals over 60 years old.
Similarly, the vehicle exemption will rise from $5,000 to $7,500 for those under 60 and from $10,000 to $12,500 for those over 60. However, whereas the old law allowed you to exempt multiple vehicles, the new law only allows you to exempt 2 vehicles. This can be a problem for individuals who are titled on their kids' cars. If you are considering bankruptcy and you own more than 2 vehicles, talk to an experienced Colorado bankruptcy attorney before transferring any vehicles out of your name. The law also clarified that the exemption does not apply to RV's ATV's, snowmobiles, boats, trailers and other small vehicles.
Many in Colorado were hoping that the law changes would include a "wild card" exemption, allowing people to exempt items of their choosing that were not protected by any other law. This change was not made and Colorado continues to have no "wild card" exemption. This means that if a person's property is not protected by a certain Colorado bankruptcy exemption, that property could be subject to liquidation in bankruptcy. If you're considering filing bankruptcy in Colorado, talk to an experienced Colorado bankruptcy attorney regarding all of Colorado bankruptcy exemptions.