With respect to assets exempt from seizure in certain proceedings, and with regard to that, expanding the amount of the homestead exemption and its application to personal property actually used as a residence, increasing the scope and amount of assets that may be exempted, adding certain new exemptions, recreating and increasing an exemption for money in depository accounts, and removing a requirement that a person must deposit and not commingle funds in order to render child support payments or unemployment benefits exempt from levy to pay a debt.
A portion of a homestead in Colorado is protected from seizure to satisfy a debt, contract, or civil obligation. Section 2 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.
“Homestead” is defined in section 3 as encompassing a “dwelling”, and a dwelling is defined in section 4 as conventional housing and personal property used as a residence, including vehicles, trailers, vessels, camper coaches, mounted equipment, railway cars, shipping containers, sheds, yurts, and tiny houses.
As a result of current law, the proceeds of a homestead exemption or, if the owner sells a homestead property, the proceeds of the sale are exempt from execution or attachment for two years if the exempted proceeds are kept separate and apart from other assets. Moreover, Section 5 extends the exemption to include proceeds from insurance policies which cover destruction of homestead property, which proceeds are held for the purpose of restoring or replacing the property.
Under Section 6, existing exemptions from levy and sale under a writ of attachment or execution are increased 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.
Section 6 also recreates and decreases an exemption for money in depository accounts.
As a result of Sections 6, 7, and 8, people are no longer required to deposit child support payments into an account designated for the child. They are also required not to commingle funds when claiming child support payments or unemployment benefits exemptions.