Changes to Colorado’s statutes regarding exempt property took effect on July 1, 2015. While many of these changes help to protect debtors by reflecting inflation in property values, other changes create restrictions as to how these exemptions may be used.

The homestead exemption increased by $15,000 across the board. The debtor’s interest in the net equity of her residence is now exempt at $75,000, or $105,000 if the debtor or any of her dependents is disabled or elderly (sixty years of age or older).

The exemption amounts in several categories were increased by $500 per debtor or dependent. Clothing is now exempt at $2,000 in value per debtor, jewelry and adornment is now exempt at $2,500 in value per debtor, and the personal library, pictures, and school books is now exempt at $2,000 per debtor.

Disability payments are now exempted at the amount of $4,000 per month, rather than $3,000 per month.

The motor vehicle exemption increased by $2,500 across the board. The debtor’s interest in motor vehicles is now exempt at $7,500 per person, or $12,500 if the debtor or any of her dependents is disabled or elderly. However, the motor vehicle exemption is now limited to the equity in a maximum of two vehicles per debtor. Furthermore, the exemption cannot be used for snowmobiles, all-terrain vehicles, golf carts, boats or other watercraft, travel trailers, tent trailers, or motor homes.

The exemption amount allowed under tools of the trade now depends on whether the property the debtor is seeking to exempt is used and kept for the purpose of carrying on the debtor’s primary gainful occupation. If so, the exemption is increased by $10,000 to a total aggregate value of $30,000. If, on the other hand, the debtor is seeking to use the exemption to protect property that is used or kept for any other gainful occupation that is not his primary occupation, the exemption is reduced to a total aggregate value of $10,000.

Other changes to the statute clarify certain issues with respect to the earnings of an independent contractor and the calculation of the cash surrender value of life insurance. Additionally, the notice provisions for non-wage garnishments have been modernized.

Debtors who are contemplating filing bankruptcy, or who are concerned that their property may be subject to foreclosure, repossession, levy, attachment, or garnishment, would be well served by contacting a bankruptcy or debtor’s rights attorney.

If you have questions, please give us a call.  Eric would be glad to help you clarify your rights in your particular situation.