Thank you for your question.
In the event of a judgment, the creditor has to take steps to enforce it. By changing the characteristic of your retirement funds, they no longer enjoy any protection against creditors.
In order to enforce the judgment, your creditor has the ability to attach the judgment to any of your assets, including your primary residence. In Colorado, the homestead exemption protects your primary residence for up to $45,000 in value. (See Colorado Revised Statutes Annotated, §38-41-201.) Your creditor also has the ability to garnish up to 75% of your Disposable Earnings
Filing of bankruptcy could discharge the judgment. However, in filing bankruptcy, it is likely that you would lose your rental property, or any property that is not your primary residence (depending on the type of bankruptcy you file).
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