Colorado: Credit, Debt & Bankruptcy

Federal law caps consumer wage garnishment at 25 percent of a paycheck. Colorado sits well under that. It also goes further: the statute itself tells a debtor how to ask for more protection when the standard cap still leaves the household short.

Colorado regulates credit repair through the Attorney General, not a licensing board. And it draws a sharp line between credit repair firms and debt settlement firms. Knowing which one a business is changes what you should expect from it.

Your official Colorado resources

These are the state-level starting points most Coloradans dealing with debt problems need:

• Colorado Attorney General — Consumer Credit Unit — the office that licenses and registers collection agencies, debt management providers, credit services organizations, and lenders, and investigates complaints about them.
• Colorado Attorney General — file a complaint — the state complaint portal.
• Colorado Judicial Branch — Self-Help Resources — the court system's own forms and self-representation materials.
• Colorado Legal Services — the statewide nonprofit providing free civil legal aid to eligible low-income Coloradans and seniors, with a garnishments page and a Spanish section.
• U.S. Bankruptcy Court — Colorado is a single federal district, the District of Colorado, in the U.S. Custom House at 721 19th Street in Denver.

If you need	Official starting point
To respond to a debt lawsuit	Colorado Judicial Self-Help Resources
To report a collector or a credit repair company	Attorney General complaint portal
Free or low-cost legal help	Colorado Legal Services or the LSC locator
Bankruptcy forms and local rules	The District of Colorado court site

Debt lawsuits in Colorado

Colorado collection cases are filed in county court or district court, depending on the amount. The summons served on the defendant sets the response date. That printed date controls, not a rule of thumb.

Colorado also licenses the collectors themselves. The Attorney General's Collection Agency program enforces the Colorado Fair Debt Collection Practices Act. It licenses collection agencies, looks into complaints, and disciplines licensees. So a Colorado consumer has a state complaint route on top of the federal FDCPA. It is also a way to check whether the business chasing them is licensed at all.

Missing the response date lets the creditor ask for a default judgment. That opens the door to garnishment and bank levies. Filing a response instead forces the creditor to prove three things: that the debt is valid, that it owns the debt, and that the claim is still timely. Start with what to do when you are sued for a debt, the debt lawsuit response checklist, and the Colorado Judicial Self-Help Resources forms.

Statute of limitations basics

Colorado gives creditors six years for the kind of debt most consumers face. C.R.S. §13-80-103.5(1)(a) covers all actions to recover a liquidated debt. It also covers an unliquidated but determinable amount of money owed to the person suing. Either way, the suit must start within six years after the claim accrues.

What counts as liquidated? Colorado courts have treated a debt that way when the amount owed can be worked out. That is why credit card and loan balances usually fall under this rule.

Read how the statute of limitations on debt works before making a decision about an old Colorado account.

Wage garnishment and protected income

Colorado protects more of a paycheck than federal law requires. It does that in three ways at once.

C.R.S. §13-54-104(2)(a)(I) sets the cap for ordinary debts. A creditor may take the lesser of three figures. The first is 20 percent of that week's take-home pay. The second is the amount above 40 times the federal minimum hourly wage. The third is the amount above 40 times the state minimum hourly wage, which the Colorado constitution sets.

The state's definition of take-home pay is friendlier than most, too. C.R.S. §13-54-104(1)(a) subtracts required withholding. It also subtracts the cost of health insurance you pay for or your employer withholds.

Then comes the part almost no article mentions. C.R.S. §13-54-104(2)(a)(I)(D) lets a debtor file a written objection and ask for a hearing. There is no need to talk to the employer first. At that hearing, the debtor can show that more of the pay should be exempt to support the family. The court must weigh real living costs proved from the prior sixty days. The statute lists them: rent or mortgage, utilities, food, medical and dental bills, child care, clothing, school, travel, and support payments. If what is left is not enough to live on, the court must exempt more.

The 20 percent cap has limits. It does not apply to court-ordered support, to some bankruptcy orders, or to state or federal tax debts. A higher cap applies to judgments for public assistance obtained by fraud.

Property and account exemptions sit apart, in C.R.S. §13-54-102, and federal benefits carry their own shield. Our wage garnishment guide covers the federal baseline. Colorado Legal Services' garnishments page is a good plain-language companion.

Bankruptcy in Colorado

Bankruptcy is federal, and Colorado is a single district. The District of Colorado sits in the U.S. Custom House at 721 19th Street in Denver, and its site posts local rules, forms, a pro se filing guide, a free legal help page, and Zoom meeting-of-creditors information.

State law decides what a filer keeps. Colorado opted out: C.R.S. §13-54-107 says the exemptions in section 522(d) of the federal bankruptcy code are denied to residents of this state, and that exemptions claimed by Colorado residents are limited to those expressly provided by Colorado statutes.

Those exemptions are listed in C.R.S. §13-54-102, with the wage protection in §13-54-104. Colorado has raised several exemption amounts in recent years, so any dollar figure found online is worth re-checking against the current statute, the court, legal aid, or a bankruptcy attorney.

For the big picture, start with our bankruptcy hub, the Chapter 7 guide, and filing without a lawyer. If bankruptcy is not the right fit, the debt relief options page compares the alternatives.

Free and low-cost legal help

Many Coloradans qualify for free help and never use it. Colorado Legal Services is the statewide nonprofit providing free civil legal aid to eligible low-income Coloradans and to people 60 and older, with offices around the state, an online application, consumer pages on garnishments and medical bills, and a Spanish-language section.

The Colorado Judicial Branch self-help resources cover court forms and procedure, and the bankruptcy court keeps its own free legal help page. Court clerks can explain how and where to file, though they cannot give legal advice. Nationally, the LSC legal aid finder covers every state.

Common mistakes to avoid

• ✕Assuming the federal 25 percent garnishment cap applies. Colorado caps ordinary garnishment at the lesser of 20 percent of disposable earnings or the amount above 40 times the state or federal minimum wage.
• ✕Never asking for a hardship reduction. C.R.S. §13-54-104(2)(a)(I)(D) lets a judgment debtor object in writing and request a hearing to exempt more, based on living expenses from the prior sixty days.
• ✕Paying a credit repair company up front. C.R.S. §5-19-104(1)(a) bars any charge before full and complete performance, with no bond exception.
• ✕Missing the five-working-day cancellation window Colorado gives on a credit repair contract.
• ✕Confusing credit repair with debt settlement. Debt management providers register with the Attorney General and post a bond; credit repair companies do not register the same way.
• ✕Paying for help before checking Colorado Legal Services and the Judicial Branch self-help resources, which are free.

Credit repair companies in Colorado: registration, bond, and how to check

Colorado's credit repair law is the Colorado Credit Services Organization Act, C.R.S. §5-19-101 et seq. The citation matters, because the Act was moved. It was relocated into Title 5 in 2017 by HB 17-1238 and is similar to former §12-14.5-101, so older articles and even older contracts may still point at the Title 12 numbering.

The Attorney General's Consumer Credit Unit runs the program. It covers credit repair and credit restoration firms, non-profit and for-profit alike. It also covers any business offering to improve a consumer's credit record, history, or rating. Lawyers doing this work inside their own practice are excluded.

Money up front is banned outright. C.R.S. §5-19-104(1)(a) bars a credit services organization from charging or taking any money before it has fully performed the work it agreed to do. Texas, Tennessee, and Indiana let a bond buy an exception. Colorado does not.

Five working days to cancel. C.R.S. §5-19-107(1)(a) requires a written contract, dated and signed by the buyer. Next to the signature line it must carry a bold statement: the buyer may cancel any time before midnight of the fifth working day after the deal. The contract must also state the total of all payments. And it must describe the services, the guarantees, the refund promises, and an estimated finish date.

The credit report has to be attached. C.R.S. §5-19-107(1)(c)(III) is strict. The contract has to list the bad entries on the buyer's credit report that will be worked on. It has to say exactly what each change will be. And the buyer's current credit report must be attached, with those entries and the proposed changes clearly marked. A vague promise to clean up your credit does not meet that bar.

Registration is a different program. Credit counseling and debt settlement firms are debt management providers. They must register with the Attorney General under C.R.S. §5-19-204. The administrator keeps and publishes a list of who is registered. They must also file a surety bond. C.R.S. §5-19-213(b)(1) sets it at $50,000 unless the administrator names another amount. So a firm that says it is registered with the Colorado Attorney General is telling you it is a debt management provider, not a credit repair company.

How to check and complain: start at the Attorney General's Credit Services Organizations program page. If a firm claims to be registered, check the debt management registration list. Then look it up in the CFPB complaint database. Complaints go to the Colorado Attorney General and the CFPB.

The federal floor everywhere: the Credit Repair Organizations Act (15 U.S.C. §1679) bans advance fees, requires a written contract, and gives a three-business-day right to cancel. Accurate, timely information cannot be removed by anyone. How to vet an offer is on credit repair services.

Finding a bankruptcy attorney in Colorado

Every Colorado bankruptcy case runs through one court, the District of Colorado in Denver. The site posts local rules, local forms, a guide to filing bankruptcy, a self-representation tool, a petition preparer page, and a free legal help page listing clinics and programs.

If income is limited, Colorado Legal Services screens for eligibility statewide and takes applications online or by phone, and the LSC legal aid locator finds the federally funded program for any Colorado address. For private counsel, the NACBA member directory lists consumer bankruptcy attorneys by ZIP code. The ordered path, what a consultation costs, and the questions to ask before paying are on how to find a bankruptcy attorney near you.

Frequently asked questions

Can my wages be garnished in Colorado for credit card debt?

Yes, but less than in most states. C.R.S. §13-54-104(2)(a)(I) caps ordinary garnishment at the lesser of 20 percent of that week's disposable earnings, the amount by which they exceed 40 times the federal minimum hourly wage, or the amount by which they exceed 40 times the Colorado minimum wage. Federal law would allow 25 percent and a 30-times floor.

What is Colorado's statute of limitations on credit card debt?

Six years for a liquidated debt. C.R.S. §13-80-103.5(1)(a) requires all actions to recover a liquidated debt or an unliquidated but determinable amount of money due to be commenced within six years after the cause of action accrues, and a debt is generally treated as liquidated when the amount due is capable of ascertainment.

Can I ask a Colorado court to garnish less?

Yes, and the statute says how. C.R.S. §13-54-104(2)(a)(I)(D) lets a judgment debtor file a written objection without conferring with the garnishee and request a hearing to show that more earnings should be exempt for family support. The court must weigh actual and necessary living expenses from the sixty days before the hearing.

Does Colorado license debt collectors?

Yes. The Attorney General's Collection Agency program enforces the Colorado Fair Debt Collection Practices Act, oversees the licensure of collection agencies, investigates complaints, and takes disciplinary or legal action against licensees. That is a state route on top of the federal FDCPA.

Can Colorado filers use the federal bankruptcy exemptions?

No. C.R.S. §13-54-107 states that the exemptions provided in section 522(d) of the federal bankruptcy code are denied to residents of this state, and that exemptions claimed by Colorado residents are limited to those expressly provided by Colorado statutes, which are listed in C.R.S. §13-54-102.

How long do I have to respond to a debt lawsuit in Colorado?

This guide does not state a single statewide number of days, because the deadline is printed on the summons actually served and differs between county and district court. Missing that date lets the creditor ask for a default judgment, so confirming it with the court or the Colorado Judicial self-help resources matters.

How long does a Colorado credit repair contract give me to cancel?

Five working days. C.R.S. §5-19-107(1)(a) requires the contract to carry a conspicuous bold-faced statement next to the signature line saying the buyer may cancel at any time prior to midnight of the fifth working day after the date of the transaction, with a notice of cancellation form attached.

What paperwork must a Colorado credit repair contract include?

Along with the cancellation notice, C.R.S. §5-19-107(1) requires the total of all payments and a detailed description of the services, guarantees, refund promises, and an estimated completion date. Subsection (1)(c)(III) requires a list of the adverse credit report entries to be modified, with the consumer's current credit report annexed and the entries and proposed modifications clearly marked.

Do credit repair companies have to be registered in Colorado?

Not the way debt management companies are. The Colorado Credit Services Organization Act, C.R.S. §5-19-101 et seq., regulates credit repair through prohibited acts, disclosures, and contract rules enforced by the Attorney General, and bars any payment before the work is complete. Registration and a $50,000 bond apply to debt management services providers under C.R.S. §§5-19-204 and 5-19-213.

When to talk to a professional