More Property Protected in Bankruptcy Under New Colorado Exemption Laws

On April 7, 2022, Governor Polis signed into law Senate Bill 22-086 which greatly increased the property people can protect in bankruptcy.

The old exemption amounts were out-of-date to offer fair protection since the pandemic and inflation and other factors increased home and vehicle values beyond the old limits and caused danger for some folks of losing their homes or cars in bankruptcy.

This blog will not detail all of the provisions of the Bill. It will highlight some of the most significant changes.


For example, under the old law, people could only protect $75,000 of equity in their homes. However, $105,000 could be protected for folks over 60 or disabled. The new law expands these protections to $250,000 equity ($350,000 for folks over 60 or disabled).

Let’s look at an example under the old law. If a person had a home worth $250,000 and a mortgage of $75,000, they would have $175,000 in equity. That home would be subject to sale by the trustee and the mortgage company would get paid off. The debtor would receive their $75,000 exemption, and the rest would go to pay creditors.

Under the new law, the entire $175,000 would be fully protected from sale. That is because this amount is under the new limit of $250,000.

In addition, the old exemptions were $7,500 per person for up to two vehicles. This amount has been increased to $15,000 (greater for disabled or elderly individuals).

Other highlights include an expansion of the definition of types of housing that is protected, the protection of HSA accounts, an exemption for firearms of $1000, an exemption of $2500 for bank accounts, an increase in household furnishings, and an increase in work tool values.

The bottom line of these expanded protections is to allow people overwhelmed with debt to obtain relief through Chapter 7 Bankruptcy without losing their most important assets to creditors in the bankruptcy.

With all the bad news and pressure people are under nowadays, these exemption increases are good news because people can find help under the bankruptcy laws and not lose their most important assets.

Would you like to discuss the contents of this blog, or have any other questions about bankruptcy? Call me, Peter Milwid, at 303-831-0733. Thank you.

Peter’s Blog