If you’re a Colorado resident facing an insurmountable amount of debt, you may be considering bankruptcy. Bankruptcy helps people get out from underneath crippling debt, but many consumers ignore bankruptcy options because they’re afraid they will lose their car, home, or retirement benefits if they decide to file. Fortunately, filing bankruptcy in Colorado doesn’t mean you will lose your home or your car. In fact, consumers in Colorado can escape debt without losing their most important possessions thanks to bankruptcy exemptions.
In fact, the state of Colorado is one of the most progressive in the country when it comes to bankruptcy. This is due in large part to Colorado’s relatively generous bankruptcy exemption rules. When a consumer files chapter 7 bankruptcy in Colorado, they’re entitled to a series of exemptions. Exemptions are an important legal right that allow people who are filing bankruptcy to keep important assets like their car or their home.
Many people do not realize that bankruptcy is a fundamental American right that’s included in the U.S. Constitution. America’s founders included the right to file bankruptcy in the constitution because they believed that the common person is entitled protection from creditors. Many famous people in America’s history – from businessmen Henry Ford and Milton Hershey to politicians Abe Lincoln and Thomas Jefferson – have filed for bankruptcy protection.
The right to bankruptcy is important because it allows people to start over. Most people know that bankruptcy laws allow consumers to walk away from most unsecured debts. However, what many people don’t know is that bankruptcy is NOT meant to strip a person of all of their assets. Since a person’s home often represents a lifetime’s worth of work, Colorado bankruptcy exemptions allow residents who file bankruptcy to keep as much as $60,000 worth of equity in their home.
Colorado provides exemptions for other important assets as well. Colorado residents are entitled to exempt their vehicle, their retirement assets, and many basic possessions that are necessities (like clothing and furniture). Again, bankruptcy is designed to protect consumers and help them start over. Important possessions that are needed for daily life – like a car and tools for work – can be kept out of bankruptcy.
Of course, filing bankruptcy isn’t some magical way to avoid obligations. There are many assets that aren’t exempted from bankruptcy. For example, second homes and any cash a consumer has will be taken and distributed to creditors. Furthermore, while there are exemptions for personal assets, these exemptions are generally limited to a few thousand dollars total. So, valuable jewelry, art work, or expensive furniture may be taken as well. There ARE some strategies for keeping these types of assets out of bankruptcy, but they should only be discussed with an attorney.
Bankruptcy is serious business, and anyone considering bankruptcy would be wise to speak with an attorney. A bankruptcy lawyer can advise you, help you prepare, and guide you through the bankruptcy process, and they can help you keep from making mistakes during your bankruptcy that could cause you to lose property or cause other legal problems.
Certainly, bankruptcy is a serious matter that is not for everyone. While bankruptcy allows consumers to start over, it’s not a legal trick that can be used to avoid responsibility. However, for many people who are facing overwhelming debts, bankruptcy is a logical financial choice. If you are a Colorado resident who is considering bankruptcy, you can rest assured that you can file without losing your home, vehicle, or retirement. Your next step is to contact a bankruptcy lawyer and discuss your options.
Author and Colorado native Jason Lancaster is a former finance manager. Since Jason is not an attorney, be sure to consult with a bankruptcy attorney to learn more about exemption rules and your legal rights.
categories: bankruptcy exemptions,bankruptcy,credit,personal finance,finance,money,colorado,advice