The bill increases homestead exemption amounts that would qualify for seizure for consumers with debt. An amended version considered this week closed the gap on those exemptions.
02/24/2022 10:45 A.M.
2 minute read
Colorado is seeking to increase the amount of the homestead exemptions that are protected from seizure to satisfy a debt in a bill from Democrat State Sen. Faith Winter and Democrat State Rep. Matt Gray.
The proposed legislation, which was discussed by the state’s Senate Finance Committee last week, exempts a portion of a homestead from seizure to satisfy a debt, contract or civil obligation.
The amended legislation increases the amount of the homestead exemption:
- From $75,000 to $250,000 if the homestead is occupied as a home by an owner of the home or an owner’s family; and
- From $105,000 to $350,000 if the homestead is occupied as a home by an owner who is elderly or disabled, an owner’s spouse who is elderly or disabled, or an owner’s dependent who is elderly or disabled.
The original version of the bill aimed to increase the homestead exemption from $75,000 to $300,000 and from $105,000 to $400,000.
The legislation also includes an expansion of the definition of “homestead” to include “dwelling,” which means conventional housing and personal property that is used as a residence, including any vehicle, trailer, etc. It also would increase the maximum amounts of existing exemptions from levy and sale under a writ of attachment or execution for certain types of property and creates new exemptions for:
- Firearms and hunting and fishing equipment;
- Economic impact payments;
- Health savings accounts; and
- Money placed into a life expectancy set-aside account or similar reserve fund, escrow or impound account, which money is derived from reverse mortgage proceeds that are designated for specific uses.
The legislation also recreates and increases an exemption for money in depository accounts and removes a requirement that a person must deposit child support payments in an account designated for the child and, with regard to child support payments and unemployment benefits, not commingle funds in order to claim an exemption for child support payments or an exemption for unemployment benefits.
The Colorado Senate Finance Committee approved the amended legislation by a 5-1 vote. The Colorado Senate passed the bill 20-13 Feb. 24 and it will now be considered by the state House.
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