The answer is “it depends.” The greatest factor in determining your ability to keep a piece or property or any asset in bankruptcy is the value of that piece of property. After you know the value of your property you will need to know whether property is exempt.
Each state has different laws that protect your property from Creditors. The protection laws are called exemptions. Some states also use the federal protection laws instead of their state laws.
Colorado uses its state laws. You will often hear an attorney refer to your property as “exempt” or “non-exempt.” If it is non-exempt it means you may have a problem keeping your property if you do not carefully plan with an attorney prior to filing your bankruptcy.
In Colorado your rental property is completely non-exempt (i.e. unprotected in the bankruptcy), unless you live at the property.
However, even if your property is not protected from the bankruptcy court you may still generally keep the property in a Chapter 7 bankruptcy if there is no equity in the property or if there is equity you may be able to work with the Bankruptcy Trustee in a Chapter 13 to keep the property.
A Colorado bankruptcy attorney is your greatest asset and can lead you through all of the complexities you may face in bankruptcy, including trying to keep a rental property.
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