A common question I am asked when I have an initial consultation with a potential Littleton or Centennial client is whether they will lose their home when filing for Chapter 7 or Chapter 13 bankruptcy. I am always happy to explain that Colorado has a homestead exemption act that can help protect people’s homes in the event they file for bankruptcy.
Bankruptcy and Colorado Homestead Exemption Amounts in Centennial in Aurora
Under this exemption, an Aurora or Centennial homeowner can exempt up to $75,000 of the home’s equity when filing for bankruptcy. This amount can be increased to $105,000 if the homeowner, spouse of the homeowner, or a dependent of the homeowner is older than 60 or disabled. While some bankruptcy exemptions may be increased if you file jointly with a spouse, the homestead exemption is not one of them.
How Exactly Does the Homestead Exemption Work?
Colorado homestead exemption protects the equity you have in your house. For example, let’s say you purchased your house for $250,000 years ago. Currently, you owe the bank $180,000. This means you have paid $70,000 into your home. That is the equity you have. According to the homestead act, you can exempt up to $75,000 of your equity, which would completely cover you and protect your home. Even if all your home equity is not covered, there may still be some options available to help you keep your home. If the possibility of losing your home is what’s keeping you from filing for bankruptcy, call to schedule a meeting with attorney Barry Arrington to see what your options are.
Whether you are filing a Chapter 7 or Chapter 13 bankruptcy in Aurora, Centennial, or Littleton, there are programs in place that will allow you to keep you home. Call 303-205-7870 to contact Barry Arrington, experienced bankruptcy and debt relief attorney for a free consultation and begin your journey towards financial freedom.