Learn how creditors can require your employer to withhold part of your paycheck, how much they can take, and how to fight it.
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If you owe money, you may feel overwhelmed and worried that a creditor can take your income or property. State and federal laws protect certain types of income and property from most creditors. When all of your income and property are protected by law, you are considered collection proof (sometimes called judgment proof). This guide explains:
- What being collection proof means
- What income and property are protected
- What limits apply to creditors trying to collect debts
- When you may want to speak with a lawyer
What does it mean to be collection proof?
Collection proof is when all of your income and property are protected by law. If you are collection proof, a creditor may not be able to take anything from you—even if they sue you and win. These protections help make sure you can still afford basic needs like housing, food, and medical care, even when you owe money.
Being collection proof doesn’t mean the debt goes away. A creditor can still win a judgment. A judgment is a court order that says you owe money. A creditor may also try to collect later if your financial situation changes.
Important!
- Your debt is still there. Being collection proof does not erase or cancel what you owe.
- Creditors can still try to collect. They may call, send letters, or take you to court, even if your income and property are protected.
- Judgments last for years. In Colorado, a money judgment usually stays valid for 6 years and can be renewed (also called “revived”) for another 6 years before it expires. This means even if you are collection proof now, a creditor could try to collect later if your income or property changes.
- Your situation can change. If you start earning more money or get new property, creditors may be able to collect on the judgment in the future.
What income is protected?
Certain income is legally protected from most creditors. These protections are called exemptions. However, some debts—like child support, student loans, or federal taxes—follow different rules and may not qualify for the same protections.
The following types of income are generally protected:
- Social Security, SSI, or SSDI benefits
- Veterans’ benefits
- Unemployment or workers’ compensation
- Public assistance (like TANF or SNAP)
- Child support or spousal maintenance you receive
Important!
- These funds are usually fully protected, but if they’re mixed with other money in your bank account, you may need to show where the protected funds came from if the account is frozen.
- When Social Security benefits are deposited directly into your checking account, up to two months of benefits automatically deposited into the account are automatically protected.
- Example: If you receive $1,000 each month, up to $2,000 in your account is protected.
- Funds moved from checking into savings accounts may not have the same automatic protection.
Are my wages protected?
Yes, in part. Colorado law protects a portion of your wages from garnishment. A garnishment is a court order that allows a creditor to take part of your paycheck.
- A creditor must first win a court judgment before your wages can be garnished.
- Only your disposable earnings can be garnished. Disposable earnings are what’s left after taxes and required deductions.
- Your disposable earnings must be above a certain amount before they can be garnished.
- If your income is high enough, a creditor can take whichever is smaller:
20% of your disposable earnings
OR
- The amount above 40 times the state minimum wage per week
Note:
You can request a court hearing if a garnishment would stop you from paying necessary household expenses.Your employer cannot fire or discipline you because of a single garnishment.
What property is protected?
Consumer debt is any money you owe for personal, family, or household purchases. Examples of consumer debts are credit card debt and personal loans. The law protects certain kinds of property from being taken to pay consumer debts. These are called property exemptions.
- Type of property: Home equity (primary residence)
- Protected amount for 1 person: Up to $250,000, or $350,000 if you are 60+ or have a disability
- Type of property: Vehicle
- Protected amount for 1 person: Up to $15,000, or $25,000 if you are 60+ or have a disability
- Type of property: Clothing
- Protected amount for 1 person: Up to $2,000 total
- Type of property: Jewelry, watches, adornments
- Protected amount for 1 person: Up to $2,500 total
- Type of property: Household goods
- Protected amount for 1 person: Up to $6,000 total
Note:
Other exemptions may apply depending on your situation. Talk with an attorney to confirm what protections apply to your income and property.
What if I receive a writ of garnishment?
A writ of garnishment is a court order that tells your employer or bank to take some of your money to pay your debt to a creditor.
If you are served a writ of garnishment, you may have to take action within 7 or 14 days to protect your property or income. Do not ignore a writ of garnishment. Read all documents carefully.
If you think something you own could be at risk, talk with a lawyer or a legal aid office.
What do I need to know?
- Creditors can’t take your income or property unless they sue you and win a court judgment. Even then, federal and state exemptions may protect much or all of your income and property.
- If everything you own and earn is protected, you are collection proof.
- Review your income and property to see what may be protected. Keep records showing the source of your income.
- Do not ignore court documents. Talk to a lawyer if you have questions.
Need more help?
If you are low-income, a senior, or a veteran, you may qualify for free legal help from Colorado Legal Services (CLS). To apply or ask if you might qualify, go to the CLS website and find the office that serves your area. If you call or visit, CLS can help you in your native language.
You can get help from the courts. Every judicial district has staff called “Sherlocks” to help people with their legal questions. To find the Sherlock in your county, visit the Judicial Department’s Sherlock webpage.