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May 2022Colorado Bankruptcy Homestead Just Increased to $250,000
Posted by Robert Weed / in Virginia Bankruptcy, Weekly Posts /
In Bankruptcy, Can I Protect the Equity in My House?
Bankruptcy is set up by the Federal government, but each state sets its own rules on how much equity you can protect if you file Chapter 7 bankruptcy. That protection is called your homestead exemption. In April 2022, Colorado raised their homestead exemption from $75,000 to $250,000.
Colorado is one of five states that has increased their homestead since 2020. Let’s see how they compare.
California increased to $300,000
Colorado to $250,000
Connecticut to $250,000
Washington state to $125,000
Virginia to $30,000
July 2020 was when Virginia increased their homestead exemption from $5,000 to $30,000. At the time that seemed like a big boost. And that did move us out of last place in the entire country. But it’s still one of the lowest anywhere.Â
Now the good news for most married people is that the Virginia’s homestead exemption is mainly needed by singles.

Virginia has one of the smallest homestead exemptions in the country.
Virginia Does Have a Better Rule for Married Couples   Â
Virginia recognizes tenancy by the entirety, which gives great protection to real estate owned by married couples. Under tenancy by entirety, real estate owned by a married couple is safe from the creditors of only one. Some married people, for cultural reasons or bad advice, put the house in only one name. And entirety doesn’t protect you for loans you co-signed for each other.Â
Widows, divorced people, singles need the protection of a bankruptcy homestead exemption or Chapter 13
Widows, divorced people, singles and poorly advice married people need the protection of a homestead exemption. Virginia’s is near the bottom. Now, having too much equity does NOT mean you automatically lose your house when you can’t pay your credit cards. The bankruptcy court can help you with a Chapter 13. Chapter 13 is a payment plan through the bankruptcy court. That payment can be quite painful. Because the Virginia homestead exemption is one of the smallest in the country, people who could file Chapter 7 bankruptcy in most places end up in a Chapter 13 payment plan here. Â
Want to know more about Virginia exemption law?  Â
I’ve written more about Virginia exemption law here.        Â
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