Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
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).
Please let me know if you have any other questions, or require clarification of this matter. Otherwise please hit "ACCEPT", so I may receive credit for my response. Tips and feedback are also appreciated.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).