What can I keep if I file for Bankruptcy in Colorado?
Denver Bankruptcy Lawyer David M. Serafin discusses what you can keep if you file for bankruptcy in Colorado.
"Exemption" is a bankruptcy term which describes property you can keep when filing for bankruptcy in Colorado. A bankruptcy debtor is permitted to keep (exempt) the basic assets so as to obtain a "fresh start."
The new bankruptcy laws do not require you to sell everything you own in live in abject poverty. You still will be able to maintain a place to live, motor vehicle and debt relief in order to have a “fresh start.”
For example, if bankruptcy allows you to prevent against foreclosure on your home, your home would be "exempt” from claims made by the bankruptcy estate. In completing the paperwork to file bankruptcy, we would claim the home as exempt property. If neither the Bankruptcy trustee nor any creditors file an objection to the exemptions taken by the Bankruptcy debtor within 30 days after the 341 Meeting of Creditors, they become final 30 days after the 341 Meeting of Creditors. Exempt property is then not deemed to be included within the bankruptcy estate.
The Colorado bankruptcy laws do permit you to exempt a certain amount of equity in a primary residence or motor vehicle depending on the value of the property, your age and your overall circumstances.
Household goods and personal effects are typically exempt because they have low resale value, making such worthless for the bankruptcy trustee to seize, dispose of, and pay creditors.
Pension and retirement plans are rarely ever included in the bankruptcy estate or are almost always exempt from the bankruptcy estate depending on your circumstances. The new bankruptcy laws increased the exemption for IRAs to $1,095,000, regardless of your state of residence.