The Colorado Homestead Exemption and Keeping Your Rental Property in Bankruptcy In Colorado
Colorado uses its state law to determine what exemptions you can use in bankruptcy. Colorado has no exemption to protect any equity that you have in rental properties, and in order to use Colorado’s homestead exemption, you must live in the property.
So, will the trustee force you to sell your rental properties?
It depends. In a Chapter 7, if your equity in the property exceeds the value of the property, the trustee may force you to sell it and distribute the funds to your creditors. Also, whether or not your rental property is paying for itself or is just a money pit may affect whether or not your creditors will fight keeping it. In a Chapter 13, even if you have equity in the property, you might be able to keep your property, as long as it’s making money. You should talk to a bankruptcy attorney to see what your options are to protect your rental properties.
The other thing you should know about bankruptcy and rental properties in Colorado is that if the properties are generating any income, after deducting expenses, the bankruptcy trustee may ask you to turn over that income. How much he or she will ask for can depend on several factors, including how much income you’re getting and whether or not you have to turn over any other assets.
Learn Whether You Can Keep Your Rental Property When You File Bankruptcy In Colorado
If you have questions about keeping your rental properties when you file bankruptcy in Colorado, we hope you’ll come in for a free, no-obligation consultation with an experienced bankruptcy lawyer to learn more. You can make an appointment by using our online scheduling system or by calling 303.331.3403 to set up a time that is convenient for you.