Colorado has a Homestead Law that protects a portion of equity in your home from the Bankruptcy Trustee and creditors.
New legislation passed in March of 2022, will significantly increase the protection of the equity in your home. The Governor of Colorado still needs to sign the legislation into law.
The Homestead Exemption has been increased to protect $250,000 in equity for a person under 60 years of age.
If you are 60 years of age or older, the Homestead Exemption now protects up to $350,000 in home equity.
For a disabled person or a person that has a disabled spouse or disabled dependent living in the home the Homestead Exemption now protects up to $350,000 in home equity.
You only receive one Homestead Exemption for the home even if you are filing bankruptcy with your spouse.
In most circumstances, you must be living in the home to claim the Homestead Exemption.
In addition, Federal Law limits the protection to $170,000 if you have not owned your home for 1215 days which is about 41 months.
The Federal limit has been increased to $189,050 effective April 1, 2022.
