Keeping Your Guns When You File Bankruptcy In Colorado
Can you keep your guns if you file bankruptcy in Colorado? In most case, yes. Read on to learn more.
Having grown up in Wyoming where it wasn’t uncommon to see people driving around with rifles mounted in gun racks in their pickups, I understand how important guns are to some people. Unfortunately, the Bankruptcy Code is less concerned with your Second Amendment rights and more concerned with making sure that creditors get whatever non-exempt (unprotected) assets you have to pay off your debts.
While exemption rules vary from state to state, in 2022 the Colorado legislature created a $1000.00 exemption for guns. For most people, this is more than enough to protect a single handgun used for personal protection. However, if you have more than one gun, we need to talk about potential outcomes if you file bankruptcy.
When one of our clients owns personal firearms that have a collective value of more than $1,000.00, we tell them they have a few options. The first is that they can sell the guns before we file their petition as long as they make sure it is for fair market value and preferably to an unrelated third party. They also need to spend the proceeds from the sale before we file in an appropriate way.
Another option, depending on the value of the guns, is to go ahead and include it in their petition. If the value is relatively low (less than a couple of hundred bucks over the exemption amount) the trustee might ask some questions about the guns and might even want pictures, but he probably won’t be interested. If he decides their value is enough to bother with and the client isn’t attached to them, the client will turn it over so the trustee can sell it and distribute the proceeds to the creditors. I’d like to avoid that if possible, though. At that point the case turns into an “asset” case which means that the trustee will probably start looking for assets, like non-exempt wages, to go after.
If the guns are higher value and the clients wants to hold onto them, the trustee will offer to let the client “buy” the property. The trustee is most concerned in getting the dollar value of the guns, not the guns themselves. His offer will be based on what he believes the guns are worth. If we’ve done our homework, our client will already have a good idea what the guns are worth based on a third party appraisal. Using our value and the trustee’s, we can usually negotiate a fair dollar value for the guns. Although that will also turn the case into an asset case, it might be worth it to the client.
If you use a gun in your employment, we can use the tools of the trade exemption to protect your firearm and allow you to keep it. Police and security guards are typically clients who can use this exemption for firearms, but I’ve also seen other examples.
Talk To An Attorney To Learn If You Can Keep Your Guns When You File Bankruptcy In Colorado
If you have any questions about what property you can keep when you file personal bankruptcy, we hope you’ll come into our office for a free, no-obligation consultation with an experienced bankruptcy lawyer. You can use our online scheduling system or call 303.331.3403 to set a time that’s convenient for you.
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