One of your primary concerns when considering bankruptcy should be how filing will affect any personal property and real estate that you own. The bankruptcy code allows each state to decide just how much property is protected. Colorado’s protections (what we lawyers call “exemptions”) cover your primary residence, household goods, clothing, jewelry, vehicles, and other items, all up to certain limits.
One other exemption, for tools of the trade, protects items that a filer uses “for the purposes of carrying on any gainful occupation”. Colorado Revised Statue 13-54-102(1)(i) lists protected items such as “stock in trade, supplies, fixtures, maps, machines, tools, electronics, equipment, books, and business materials,” but court decisions have also extended the protection to things like vehicles and farm equipment.
In a recent Bankruptcy Appellate Panel (BAP) for the 10th Circuit decision, the BAP was asked to decide whether the tools of the trade exemption also protected the filer’s office building. In a brief decision, the BAP help that it did not. What this means is that the filer’s office building is unprotected and subject to lien, and possible foreclosure, by their creditors.
If you have questions about what property is protected under Colorado’s tools of the trade exemption and whether it applies to your particular situation, we hope you’ll come in for a free consultation with an experienced bankruptcy attorney. You can schedule an appointment by calling 303.331.3403 or by using our online scheduling system.