Colorado Debt Collection for Creditors and Debtors

Guy Benhanan
May 23, 2023

Debt collection can be a complex and challenging process for both creditors and debtors. In the state of Colorado, there are specific laws, rules and regulations that govern debt collection practices to ensure fairness and protect the rights of all parties involved. Whether you are a creditor looking to collect outstanding debts or a debtor facing collection efforts, understanding the Colorado debt collection landscape is crucial.

Colorado debt collection refers to the process of pursuing payment from individuals or businesses who owe money to creditors. This can include various types of debts, such as credit card debt, medical bills, personal loans, or unpaid invoices. The debt collection process involves a series of steps aimed at recovering the owed amount, either through negotiation, settlement, or legal action.

Before diving into the debt collection process, it's important to have a solid understanding of the laws and regulations governing debt collection in Colorado. Let's talk about that below.

The Fair Debt Collection Practices Act (FDCPA)

Understanding Colorado Debt Collection Laws

Congress enacted the Fair Debt Collection Practices Act, commonly known as the "FDCPA," to combat abusive, deceptive, and unfair business practices employed by debt collectors. Its primary purpose is to provide affected consumers with a means to seek cash damages for violations.

The FDCPA specifically applies to debt collectors who are attempting to collect debts on behalf of someone other than themselves. As a result, the Act does not cover in-house collections, such as when a credit card issuer contacts you directly. However, an exception exists if the collector uses a name other than their own to contact you, indicating that a third party is involved in the debt collection process.

Colorado Statute of Limitations on Debt

Colorado Statute of Limitations on Debt
Colorado Statute of Limitations on Debt 
Type of Debt Statute of Limitations
 Written Debt  3 years
 Oral or Spoken Debt  3 years
Judgment   6 years
 Rent  6 years
On Account  6 years 

Source: Findlaw

In each state, there are specific timeframes established to determine when a debt collector company can legally sue a debtor for an outstanding debt. For instance, in Colorado, this timeframe can vary from three to 20 years, although the majority of debts fall under a six-year statute of limitations.

The six-year statute of limitations applies to debts arising from breaches of verbal or written contracts. This includes debts related to credit cards, mortgages, and medical expenses. However, auto loans have a four-year statute of limitations in the state. Additionally, creditors have the option to obtain a judgment lien through court proceedings, which allows them to place a lien on the debtor's non-exempt properties.

Once a judgment lien is in place, the debtor is required to repay the creditor using funds obtained from selling or refinancing the property. This type of debt collection falls under a six-year statute of limitations, which can be extended for an additional six or 20 years. It's important to note that debts owed to the IRS are handled differently. For instance, if you become delinquent in paying your taxes in Colorado, the IRS has the authority to pursue the debt for up to 10 years.

Colorado Debt Relief

Colorado debt relief

Debt can place a heavy burden on individuals and families, affecting their financial well-being and overall quality of life. If you find yourself struggling with debt in Colorado, it's important to know that there are options available to help you achieve debt relief and regain control of your finances. Here are some key avenues to explore:

Debt Consolidation

Debt consolidation involves combining multiple debts into a single loan or line of credit with a lower interest rate. This can simplify your monthly payments and potentially reduce the overall interest you pay. Consider contacting reputable financial institutions or credit counseling agencies that offer debt consolidation services to explore this option.

Debt Management Plans

A debt management plan (DMP) is an arrangement between you and your creditors to repay your debts over a specified period. In a DMP contract, a credit counseling agency negotiates with your creditors to lower interest rates and create a repayment plan that suits your financial situation. It's important to work with a reputable agency that can guide you through the process and provide ongoing support.

Debt Settlement

If you're unable to repay your debts in full and facing financial hardship, debt settlement may be an option to consider. Debt settlement involves negotiating with your creditors to accept a reduced amount as full satisfaction of the debt. This typically requires a lump sum payment or structured payments over a specific period. It's essential to approach anything such calls debt settlement cautiously and seek professional advice, as it can have consequences on your credit score and tax implications.


Bankruptcy should be considered as a last resort when other debt relief options have been exhausted. It is a legal process that helps individuals and businesses eliminate or repay their debts under court protection. Bankruptcy laws in Colorado provide different chapters, such as Chapter 7 and Chapter 13, each with its own eligibility criteria and implications. Consulting with a bankruptcy attorney is crucial to understand the process and determine if it's the right solution for your circumstances.

Financial Education and Budgeting

Improving your financial literacy and developing effective budgeting skills can greatly contribute to debt relief. Educate yourself about personal finance, debt management strategies, and wise spending habits. Consider attending financial workshops, utilizing online resources, or working with a financial advisor to create a realistic budget that allows you to allocate funds towards debt repayment while covering essential expenses.

Remember, debt relief takes time, patience, and discipline. It's important to stay committed to your chosen debt relief strategy and make consistent efforts to improve your financial situation. Avoid falling into additional debt by managing your spending habits responsibly and seeking professional guidance when needed.


Colorado Debt Collection

Debt collection in Colorado can be a complex and challenging process for both creditors and debtors. Understanding the debt collection laws, rights, and protections in Colorado is essential to navigate the process effectively.

For creditors, assessing the debt, negotiating settlements, and, if necessary, pursuing legal action are key steps in the debt collection process. It's important to maintain accurate documentation to collect debt, communicate clearly, and consider alternative dispute resolution methods when necessary.

Debtors, on the other hand, have rights and protections under the federal law. They can dispute the debt if they believe it is inaccurate and explore debt settlement options to resolve their financial obligations.

Working with a debt collection agency can provide valuable assistance in the debt recovery process by collecting due, ensuring compliance with the law and improving the chances of successful debt collection.

Remember, seeking legal advice and professional guidance is advisable to navigate the complexities of debt collection in Colorado effectively.