As a Colorado Springs Bankruptcy Attorney, I often get questions on various aspects of bankruptcy law and practice. In my next twenty six blog posts, starting with this one, I’m going to use the letters of the alphabet to discuss different issues that come up from time to time in my practice.  By the time I get to “X”, I think I’m going to have to be pretty creative to find the right thing to write about.

For today we begin with “A” for “Automobiles”.

Oftentimes the most pressing concern for potential clients is whether they’ll be able to keep their automobile(s) if they file for bankruptcy. Usually, the answer is “Yes.”  That’s because, under the laws applicable to people filing for bankruptcy in Colorado Springs, usually the State of Colorado’s exemptions will apply.

What are exemptions?  They are the things which you are allowed to keep even though you’re filing for bankruptcy.  Keep in mind that one of the main ideas behind the Bankruptcy Code is the idea that people who are being crushed by financial burdens should be given an opportunity for a “fresh start”.

In places like Colorado Springs, where the public transportation is only slightly better than nonexistent, the vast majority of people need to be able to drive a car to get to work.  If their cars were taken away to pay their debts, they wouldn’t be able to get to work and their hopes for a fresh start would go up in smoke.

Under the Colorado exemptions, single filers get an automobile exemption of $15,000.00. Couples who file a joint case get vehicle exemptions up to $30,000.00.  It should be noted that these exemption amounts refer to the amount of equity in the automobiles that the filer has.  And, each person can have one or two vehicles – as long as the combined amount of equity is no more than the amount of the applicable exemption.

What if you don’t live in Colorado?  Or if you haven’t lived here for at least two years?  Then your bankruptcy attorney should conduct an analysis to determine what state’s exemptions will apply for you or, if no one state will cover you, then the federal exemptions will apply.  Each situation  is determined on a case-by-case basis since each person’s circumstances are unique.

So, if you are thinking about filing for bankruptcy and are concerned about losing your vehicles in the process, seek the advice of a competent bankruptcy attorney – you’ll probably be able to keep it.