The Colorado exemptions protecting property increased in April of 2022.  One of biggest benefits is  $2,500 in protection for the total amount of money in bank accounts. Previously there was  no protection for money in bank accounts unless it was social security, disability (with limits) or wages (80% protected). If someone  gave you money to help  you out and you put it in your bank account  it was not protected. There was also an issue of comingling money from different sources and what could and could not be protected. This is a big deal because people no longer need to try to drain their bank accounts before filing which has reduced the stress of filing bankruptcy.  You can now keep money in your bank accounts up to $2,500 in total  to pay bills after the case is filed. No more worrying about not having money to pay rent or buy food.

For people that own cars or trucks that are below 60 years of age the equity in your vehicle is now protected up to $15,000  which is a huge increase  from the prior exemption of $7,500. This is important because used vehicle vales have increase significantly in the past couple of years. Without the change many people vehicles would be over the equity limit. If you are 60 or older or disabled the protection increased to $25,000.

For people that own a home that they live in, the homestead exemption increased from $75,000 to $250,000 if you are less than 60 years of age and it increased from $105,000 to $350,000 if you are 60 or older. This is a huge increase and has meant that many people who could not qualify to file a Chapter 7 Bankruptcy before can now quality and protect their home. This was also needed because of the significant increase in home values on Colorado.

One exemption that was added in April pf 2022 was protection for guns in total up to $1,000 per person filing bankruptcy. Previously there was no exemption for guns. It has made it a lot easier for people that own guns to file knowing that there is now some protection for the guns.

Yes.

The Statement of Financial Affairs portion of the Bankruptcy Petition specifically asks in question 9 if you have been involved in a lawsuit, court action or administrative proceeding in the last year. This includes personal injury lawsuits as well as all other types of legal actions.

Paragraph 33 of Section A/B  (asset section) of the Bankruptcy Petition  requires that you disclose “Claims against third parties, whether or not you have filed a lawsuit or made demand for payment”, In the examples, it specifically lists “accidents”.  In Colorado the proceeds are generally protected by exemption statute  13-54-102(1)(n) and at least one court decision.

(n) The proceeds of any claim for damages for personal injuries suffered by any debtor except for obligations incurred for treatment of any kind for such injuries or collection of such damages;

Failure to disclose a personal injury action may prevent you from pursuing the action because the insurance company involved in the case may request dismissal as a result of it not being disclosed in your Chapter 7 or Chapter 13 Bankruptcy.

You should always consult with your  bankruptcy attorney regarding your specific situation before filing bankruptcy.

In addition to the Trustee and creditors’ ability to prevent a discharge under section 727 of the Bankruptcy Code  for transfers with in one year of filing,  there is another section of the Bankruptcy code to be concerned about.

Under section 548 of the Bankruptcy Code, a Trustee has the ability to go back two years prior to the date of filing bankruptcy to undue a transfer  made with ”actual intent to hinder, delay or defraud any entity to which the debtor was or became, on or after the date  that such transfer was made or such obligation was incurred, indebted;

Bankruptcy Code Section 548 is  follows in part:

(a)(1) The trustee may avoid any transfer (including any transfer to or for the benefit of an insider under an employment contract) of an interest of the debtor in property, or any obligation (including any obligation to or for the benefit of an insider under an employment contract) incurred by the debtor, that was made or incurred on or within 2 years before the date of the filing of the petition, if the debtor voluntarily or involuntarily—

(A) made such transfer or incurred such obligation with actual intent to hinder, delay, or defraud any entity to which the debtor was or became, on or after the date that such transfer was made or such obligation was incurred, indebted; or

(B)(i) received less than a reasonably equivalent value in exchange for such transfer or obligation; and

(ii)(I) was insolvent on the date that such transfer was made or such obligation was incurred, or became insolvent as a result of such transfer or obligation;

(II) was engaged in business or a transaction, or was about to engage in business or a transaction, for which any property remaining with the debtor was an unreasonably small capital;

(III) intended to incur, or believed that the debtor would incur, debts that would be beyond the debtor’s ability to pay as such debts matured; or

(IV) made such transfer to or for the benefit of an insider, or incurred such obligation to or for the benefit of an insider, under an employment contract and not in the ordinary course of business.

So, transferring an interest in real estate or other property under the circumstances described in this portion of Bankruptcy Code section 548 can cause you significant problems in bankruptcy. It may result  in the loss of  very assets that you transferred  in an effort to protect. Transferring assets to an “insider” such as a family member will result in increased scrutiny of the transfer. The Courts are split on whether transferring the property back prior to filing bankruptcy will  undue the problem.

The Trustee also has the ability to go back further in time  to undue transfers. For example, if  the IRS is involved, it is a 10 year look back period.

You need to consult your bankruptcy attorney about the consequences of any transfer that you have made so that you can be properly advised.

 

 

 

Yes.

The updated Colorado Law provides:

“Any past or present child support obligation owed by a parent or child support
payment made by a parent that is required by a support order is exempt from
levy under writ of attachment or writ of execution for any debt owed by
either parent.”

It needs to be  Court Ordered child support to be protected. Voluntary child support payments are not protected as child support.

Before the recent change in the law, if you co-mingled the funds with other money in a bank account you could have an issue protecting it. That is no longer an issue but, you should still segregate it  into a separate bank account to be safe.

You should always consult with your attorney prior to filing bankruptcy to make sure your assets are protected.

Protection may depend on the type of disability benefits that you are receiving.

Social Security Disability and VA Disability are protected under Federal Law.

Colorado’s new Exemption Law is intended to protect disability  that is not already protected.

Any claim for public or private disability benefits or proceeds thereof that  is not already protected  by law,  is now protected up to $5,000 per month in Colorado.  Amounts above  $5,000 per month are subject to garnishment.   If you purchased a private disability policy, this new law should help you protect your monthly benefits or proceeds.

You should consult with your attorney to make sure that you are protected.