What Is The Colorado Vehicle Exemption?
The Colorado vehicle exemption allows you to keep up to $5,000 ($10,000 if you are 60 or older or disabled) in equity in any vehicles you own. So, if your car is worth $12,000 and you owe $10,000, you have $2,000 in equity which will be entirely protected by the Colorado vehicle exemption. If you file a joint petition with your spouse, the exemption amount is doubled. If you use your vehicle for work (other than just using it to get to and from work), we might be able to apply the Colorado tools of the trade exemption, which allows you to protect up to $20,000.
The Colorado Vehicle Exemption Can Help You Keep Your Car
In most cases, you will not lose your car during your bankruptcy case as long as your equity in the vehicle is fully exempt. If you have taken out a loan that has been secured by your car (meaning you promised the lender it could have your car if you failed to pay the loan back), bankruptcy does not make that security interest go away. If you don’t make your payments on that loan, the lender may be able to take and sell the car, during or after the bankruptcy case.
If you are not behind on your loan payments, you may be able to keep your car if you agree to keep making payments and sign a reaffirmation agreement if required by the lender. You may even be able to negotiate a lower principal amount, based on what your car is actually worth. If you are behind on your loan payments, you may want to file a Chapter 13 bankruptcy petition. Chapter 13 bankruptcy may allow you to pay what your car is currently worth versus what your loan amount is. Chapter 13 also allows you to catch up on your back payments and bring the loan current.
Talk To A Colorado Bankruptcy Attorney About How To Keep Your Car
Whether or not you’ll lose your car when you file bankruptcy can depend on a variety of factors and hiring a competent Colorado attorney can make a big difference when using the Colorado vehicle exemption. To learn more about whether or not Chapter 7 bankruptcy or Chapter 13 bankruptcy is your best option, schedule your free, confidential bankruptcy consultation with a bankruptcy attorney today. Our online scheduling system allows you to schedule bankruptcy consultation at a time that is convenient for you, or you can also call 303.331.3403.