During your initial consultation with a bankruptcy attorney, he or she should ask you about the property you own, whether it’s personal property or real estate. It’s important to understand at the outset whether or not any pre-filing planning needs to be done to be sure that you can keep as much of your property as possible. Under Colorado law, people who file bankruptcy are allowed to keep certain property. This property is “exempt” (protected) from being used by the trustee to pay the person’s debts. There are various categories for exempt property, including household goods, jewelry, vehicles, trade tools, and others.
Colorado Revised Statute 13-54-102(1)(e) allows bankruptcy filers to exempt household goods in the amount of $3,000.00. If you’re filing with your spouse, you can double that amount to $6,000.
Typically, this value is based on the price you would get for the property if you were to sell it at a garage sale, not the replacement value if you had to buy the property new. Part of the pre-filing process involves taking a complete inventory of everything you own, whether it’s in your home, in storage, or if you’re keeping it at a relative’s home. If you own a couch, for example, you’ll assign the value you would expect to get for it if you put it out on your driveway this weekend for a garage sale. As you can imagine, its garage sale value is much less than what you paid for it new. My clients usually have no problem coming in much less than the exemption amount using this method to value their household goods.
In the off chance that your household goods exceed the value of the exemption amount, you have a few options. You can sell it for fair market value to a third party before and use the money before you file; you can negotiate a price to buy it from the trustee after you file; or, you can turn it over to the trustee after you file and let him pay your creditors with the money he makes. Our job is to make sure that you keep as much of your property as possible when we represent you.
If you’re considering bankruptcy and wondering what property you’ll be allowed to keep, we hope you’ll come in for a free, no-obligation consultation with an experienced bankruptcy attorney. You can make an appointment with our online scheduling system or call 303.331.3403 to set a time that’s convenient for you.
