Bankruptcy in Colorado (2026): Exemptions & Means Test

Bankruptcy is a federal process, but what you keep depends on your state's exemptions, and Colorado made two key choices. Colorado opted out of the federal bankruptcy exemptions, so filers must use the Colorado exemptions, and the state pairs that with a high homestead protection and a comparatively generous motor-vehicle exemption. This guide explains how Chapter 7 and Chapter 13 work for Colorado residents, the main Colorado exemptions, and the current Chapter 7 means-test income figures, all dated to primary sources.

This guide is part of our Bankruptcy by State series. It is general information, not legal advice, and exemption and income figures change, so confirm current amounts before relying on them.

Colorado opted out: state exemptions only

The threshold question in any bankruptcy is which exemptions apply, because exemptions decide what you keep. Under 11 U.S.C. 522(b), a state may keep the federal exemption menu available or opt out and require its own. Colorado opted out. Colorado Revised Statutes section 13-54-107 provides that the exemptions in 11 U.S.C. 522(d) are denied to Colorado residents, and that a debtor's exemptions are limited to those expressly provided by Colorado statute. So a Colorado filer cannot use the federal list at all and must rely on the Colorado exemptions in the Colorado Revised Statutes, published by the Colorado General Assembly. The good news is that several Colorado exemptions, especially the homestead and the vehicle, are among the more generous in the country.

The Colorado homestead exemption: $250,000 (or $350,000)

Colorado protects a substantial amount of home equity. Under Colorado Revised Statutes section 38-41-201, a homestead occupied as a home by an owner or the owner's family is exempt up to $250,000 in actual cash value above any liens or encumbrances. The amount rises to $350,000 if the homestead is occupied by an owner, spouse, or dependent who is elderly or disabled, with elderly defined as age 60 or older. These amounts were enacted by Senate Bill 22-086 in 2022, which sharply increased the prior figures. They are fixed dollar amounts written into the statute rather than figures that index automatically with inflation, so while they are high they do not rise each year on their own, and the legislature would have to amend the statute to raise them again. Confirm the current amount before relying on it, since exemption statutes are periodically revisited. The Colorado homestead applies automatically and protects the equity, not the full value, of the home.

Vehicle, personal property, and wage exemptions in Colorado

Colorado's other exemptions, set mainly in Colorado Revised Statutes section 13-54-102, are robust compared with many states. The motor-vehicle exemption covers up to two vehicles or bicycles in an aggregate value of $15,000, increasing to $25,000 if the debtor, or the debtor's spouse or dependent, is elderly or disabled. Household goods are exempt up to $6,000, necessary wearing apparel up to $2,000, and watches, jewelry, and articles of adornment up to $2,500. Tools of the trade, equipment, and stock used in the debtor's primary occupation are exempt up to $60,000 in aggregate (and up to $20,000 for a secondary occupation), with a separate $3,000 exemption for a professional library. Colorado also protects most disability benefits and a portion of wages. Because Colorado is an opt-out state, there is no general federal-style wildcard, so these category limits, not a flexible cash exemption, define what personal property you can keep.

The Chapter 7 means test and Colorado median income

Chapter 7 erases most unsecured debt, but you generally must complete the means test, which starts by comparing your household income to the median family income for Colorado and your household size. The U.S. Trustee Program publishes those medians from Census Bureau data and updates them periodically. For cases filed on or after April 1, 2026, the Colorado median family income figures are $87,940 for one earner, $109,497 for a household of two, $130,850 for three, and $153,501 for four, adding $11,100 for each additional person. If your income is at or below the figure for your household size, there is no presumption of abuse (the rule that presumes a Chapter 7 case is an abuse when income left after allowed expenses reaches set thresholds) and you do not need to complete Form 122A-2, the second means-test form, but that alone does not make you eligible for Chapter 7. If it is above, you complete the full means-test calculation that subtracts allowed living expenses to determine whether a presumption of abuse arises or you should file Chapter 13. These figures change roughly twice a year, so verify the current table at filing.

Chapter 7 versus Chapter 13 in Colorado

Chapter 7 is a liquidation: a trustee may sell non-exempt property to pay creditors, and most remaining unsecured debt is discharged within a few months. With Colorado's large homestead and vehicle exemptions, many filers keep everything they own, but a high-value non-exempt asset can be at risk. Chapter 13 is a three-to-five-year repayment plan that lets you keep your property and cure missed mortgage or vehicle payments over time, which makes it the common tool for stopping a foreclosure. The moment either case is filed, the automatic stay under 11 U.S.C. 362 halts most collection, including foreclosure sales, repossessions, lawsuits, and wage garnishment. Federal law requires an approved credit-counseling course before filing and a debtor-education course before discharge.

Where you file: the Colorado bankruptcy court

Colorado is a single federal judicial district, so all Colorado bankruptcies are filed in the U.S. Bankruptcy Court for the District of Colorado, based in Denver. The court publishes local rules, official forms, a self-represented filer guide, and a list of the Colorado exemptions in its local rule on exemptions, and it serves the entire state rather than being divided into eastern and western divisions.

What bankruptcy can and cannot do

Bankruptcy discharges most unsecured debts, including credit cards, medical bills, and personal loans, but several debts survive. Most student loans remain unless you prove undue hardship in a separate proceeding, and recent income taxes, domestic-support obligations such as child support and maintenance, and most court fines are not dischargeable. Filing affects your credit for years, and because Colorado limits you to its own exemptions, the timing and how your property fits the Colorado category limits matter, which is why many people review their situation with a licensed Colorado bankruptcy attorney. Nothing here predicts how a particular case will turn out; the result depends on your income, your property, and your debts.

Frequently Asked Questions

Does Colorado use state or federal bankruptcy exemptions?

Colorado uses state exemptions only. Under C.R.S. 13-54-107 the federal exemptions in 11 U.S.C. 522(d) are denied to Colorado residents, and a debtor is limited to the exemptions provided by Colorado statute. There is no option to choose the federal list.

What is the homestead exemption in Colorado?

Under C.R.S. 38-41-201 the Colorado homestead protects up to $250,000 in home equity, rising to $350,000 if the owner, a spouse, or a dependent is elderly (age 60 or older) or disabled. These amounts were set by Senate Bill 22-086 in 2022 and are fixed in the statute rather than automatically indexed for inflation, so confirm the current figure when you file.

What is the Colorado median income for the means test?

For Chapter 7 cases filed on or after April 1, 2026, the U.S. Trustee Program lists Colorado median family income as $87,940 for one person, $109,497 for two, $130,850 for three, and $153,501 for four, adding $11,100 for each additional person. The figures update periodically, so confirm the current table when you file.

Will I lose my house or car in a Colorado bankruptcy?

Often not. Colorado's $250,000 homestead (or $350,000 for elderly or disabled owners) lets many homeowners keep their homes, and a Chapter 13 plan can stop a foreclosure by curing missed payments. The motor-vehicle exemption protects up to $15,000 in vehicle equity, or $25,000 if you, your spouse, or a dependent is elderly or disabled. Whether any asset is at risk depends on your equity relative to these limits.

What is the Colorado motor-vehicle exemption?

Under C.R.S. 13-54-102, a debtor may exempt up to two motor vehicles or bicycles with an aggregate value of $15,000, increasing to $25,000 if the debtor, or the debtor's spouse or dependent, is elderly or disabled. Because Colorado opted out of the federal exemptions, there is no separate wildcard to add to this amount.

Where do I file bankruptcy in Colorado?

In the U.S. Bankruptcy Court for the District of Colorado, in Denver. Colorado is a single federal district that serves the whole state, and the court posts forms, local rules, and a guide for people filing without a lawyer.

What is the difference between Chapter 7 and Chapter 13 in Colorado?

Chapter 7 is a liquidation that discharges most unsecured debt in a few months, subject to the means test. Chapter 13 is a three-to-five-year repayment plan that lets you keep property and cure missed mortgage or car payments, which is why it is used to stop foreclosure. Both trigger the automatic stay that halts most collection.

What debts cannot be erased in bankruptcy?

Most student loans (absent proven undue hardship), recent income taxes, child support and maintenance, and most court fines generally survive a bankruptcy discharge. Credit cards, medical bills, and most personal loans are typically dischargeable.