Bankruptcy: Colorado Homestead Exemption
The Colorado Homestead Law: (1) prevents a forced sale of a home to meet demands of creditors; (2) provides a surviving spouse with shelter; (3) provides an exemption from property taxes; and (4) applies to ONE primary residence.
The Colorado Homestead Exemption allows you to exempt up to $75,000 of your real property value when filing for bankruptcy.
There are two primary types of bankruptcy for individuals:
Chapter 7 bankruptcy, which is typically applied to lower income individuals and involves a liquidation of your assets to pay off debt; and
Chapter 13 bankruptcy, though somewhat similar to Chapter 7, involves reorganizing and forgiving some debts through a payment plan.
If you have equity in your home greater than the exemption amount, the difference is potentially open for legal claim from creditors.
The Colorado Homestead Exemption protection applies to:
Single family detached homes
Citizens over the age of 60, or who have a disability, receive an exemption of $105,000.
The exemption amount does NOT double for married couples.
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