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Colorado Homestead Laws

The concept of "homestead" in the context of real estate and financial matters has changed drastically since the passage of the Homestead Act of 1862, which encouraged citizens to claim "free" government land (much of which was already occupied by Native Americans). But today, homestead protections refer to the rights of homeowners to claim a portion of their primary residence a homestead and thus off-limits to creditors. State homestead laws generally allow homeowners to exempt a certain amount of their home equity (or other eligible property holdings) from bankruptcy in order to avoid becoming homeless.

What Are Colorado's Homestead Exemption Laws?

Homeowners in Colorado may exempt up to $60,000 worth of equity when filing for Chapter 7 bankruptcy protection. Unlike some other states, Colorado does not allow couples to double this amount. Homeowners who are disabled or over the age of 60 may claim an exemption of up to $90,000 (this also applies if the homeowner's spouse or a dependent is disabled or over 60).

For example, a couple has $50,000 of equity on a home worth $150,000, with a mortgage on the remaining $100,000. In a Chapter 7 bankruptcy, they may exempt the entire amount of their equity, since it's less than the $60,000 limit.

A reference to the code section and some additional details about Colorado's homestead protections are listed in the chart below.

Code Section 38-41-201
Max. Property Value That May Be Designated 'Homestead' $60,000 for individuals and married couples (cannot double exemption amount); $90,000 if the homeowner, spouse, or dependent is older than 60 or disabled.
Maximum Acreage (Urban) No limits to acreage
Maximum Acreage (Rural) No limits to acreage

Note: State laws are always subject to change, usually through new legislation, higher court rulings, or ballot initiatives. FindLaw makes every effort to keep these pages updated, but you may also want to contact a Colorado bankruptcy attorney or conduct your own legal research to verify the state law(s) you are researching.

Does the Federal Government Also Provide Homestead Protections?

While homeowners do have a choice between state and federal homestead exemptions (but not both), the federal exemption limit is only $22,975. And while a married couple filing jointly may double that amount, it's still less than the Colorado exemption limit of $60,000.

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