The Colorado Answer in One Paragraph
Colorado filers choose between Chapter 7 (liquidation, 3-4 months, strong discharge rate) and Chapter 13 (3-5 year repayment plan, better for saving a home from foreclosure or for filers above the means test). Three Colorado-specific inputs drive the choice: (1) the Colorado means test median of $82,700 for a 1-person household, (2) the Colorado homestead exemption of $250,000 ($350,000 if elderly/disabled), and (3) the local filing mix and outcome data below. Everything else on this page is elaboration on those three factors.
Quick Side-by-Side
Chapter 7 in Colorado
Chapter 13 in Colorado
Colorado Means Test Thresholds (April 2026)
Colorado's single-person median of $82,700 is well above the national average. A larger share of would-be filers here land above the means test threshold on Part 1, which pushes them into Part 2 expense calculations or away from Chapter 7 entirely.
| Household Size | Colorado Median Income |
|---|---|
| 1-person household | $82,700 |
| 2-person household | $107,500 |
| 3-person household | $125,700 |
| 4-person household | $146,400 |
| 5-person household | $158,800 |
| 6-person household | $171,200 |
For household sizes above 6, add $11,100 per additional member. Full details at the Colorado means test calculator. For a general discussion, see our means test overview.
Colorado Homestead Exemption and the Chapter Choice
Colorado's homestead exemption protects $250,000 ($350,000 if elderly/disabled) of primary-residence equity under CRS 38-41-201. If your home equity is below that amount, Chapter 7 can usually wipe out your unsecured debt without putting the home at risk. If your equity exceeds the exemption, Chapter 13 is typically the right tool to keep the home while cramming down or curing mortgage arrears over 3-5 years.
Colorado is a state-exemptions-only jurisdiction. The federal exemption scheme under 11 U.S.C. Section 522(d) is not available. Review the full exemption list at bankruptcyexemptionsbystate.com/colorado before assuming any specific asset is safe.
Homestead amount (Colorado): $250,000 ($350,000 if elderly/disabled). Statute: CRS 38-41-201.
Colorado's Chapter 7 vs Chapter 13 Filing Mix
Colorado follows the national pattern: 97.7% of its 86 consumer cases are Chapter 7, and 2.3% are Chapter 13. Most filers who qualify for Chapter 7 choose it, and Chapter 13 is reserved for filers who need to save a home from foreclosure or cannot pass the means test.
Why does filing mix matter? Attorney fee structures often favor Chapter 13 (paid through the plan rather than up-front), which can produce local-market bias toward Chapter 13 that is not driven by individual debtor facts. FJC data lets you see whether Colorado's mix matches the economics of the typical filer's situation.
Colorado Federal Court Data
Numbers below come from the Federal Judicial Center Integrated Database, covering 86 consumer bankruptcy cases filed in Colorado's federal bankruptcy courts.
| Chapter | Cases Filed | Discharge Rate (resolved) |
|---|---|---|
| Chapter 7 | 84 | 98.8% |
| Chapter 13 | 2 | n/a |
National-average completion rates apply: Chapter 7 discharges over 93% of the time, Chapter 13 about 40-50% (the remainder dismissed before plan completion).
Which Chapter Fits Which Colorado Filer?
- If your income is below the Colorado median ($82,700, 1-person) and you own little non-exempt property: Chapter 7 is almost certainly the right choice. Fast, cheap, and the highest discharge rate in consumer bankruptcy.
- If you are behind on your mortgage or car loan and want to keep the collateral: Chapter 13 lets you cure arrears over 36 to 60 months while the automatic stay blocks foreclosure and repossession.
- If you have high home equity and Colorado caps the homestead exemption: run the numbers on Chapter 13 cramdown, lien stripping (for wholly underwater junior liens), and the federal BAPCPA homestead cap before assuming Chapter 7 is safe.
- If you have filed before within the lookback windows: use the 1328(f) discharge screener first -- a prior Chapter 7 discharge bars another Chapter 7 for 8 years, and a prior Chapter 13 discharge bars another Chapter 13 for 2 years.
Rule of thumb for Colorado: if you qualify for Chapter 7 on the means test AND your home equity is within the $250,000 ($350,000 if elderly/disabled) homestead, Chapter 7 is almost always the right choice. Chapter 13 is the right answer when specific facts (arrears, non-exempt equity, prior Chapter 7 within 8 years) rule Chapter 7 out.
Frequently Asked Questions
Is Chapter 7 or Chapter 13 better in Colorado?
For most Colorado filers who pass the means test, Chapter 7 is faster, cheaper, and succeeds more often. Chapter 13 is the right choice if you need to save a home from foreclosure, cure arrears, catch up on priority taxes, or cannot qualify for Chapter 7.
What is the Chapter 7 income limit in Colorado?
There is no hard dollar limit. The means test compares your 6-month average income (annualized) to the Colorado median for your household size. One person: $82,700. Four person: $146,400. Above-median filers can still qualify by running Part 2 expense deductions.
Can I use federal bankruptcy exemptions in Colorado?
No. Colorado opted out of the federal bankruptcy exemption scheme. Filers must use state exemptions exclusively.
How much home equity is protected in Colorado bankruptcy?
Colorado's homestead exemption protects $250,000 ($350,000 if elderly/disabled) under CRS 38-41-201. Federal BAPCPA limits (11 U.S.C. Section 522(p)) can cap this at approximately $214,000 for a residence acquired within 1,215 days of filing.
How long does bankruptcy take in Colorado?
Chapter 7 takes 3 to 4 months from filing to discharge in Colorado federal bankruptcy court. Chapter 13 takes 3 years (below-median) or 5 years (above-median) of monthly plan payments before discharge.
Can I switch from Chapter 13 to Chapter 7 in Colorado?
Yes. Under 11 U.S.C. Section 1307(a), a Chapter 13 debtor in Colorado generally has the right to convert to Chapter 7 at any time, as long as the case was not previously converted from Chapter 7. You must still pass the means test at the time of conversion.
Related Colorado Resources
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Last updated: 2026-04-18. Not legal advice. Statutory homestead and median-income figures are reproduced from public sources and may lag statutory amendments -- verify against current state statute before relying.
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