Business Debt Restructuring in Colorado: 7 Laws That Change Your Leverage (2026)

No Disclosure Law, and a Criminal Code That Does the Work Instead

Colorado sits in the forty states with no commercial financing disclosure statute. There is no state form your funder had to hand you, no registry to check, no finance charge line that had to be printed. If you came here looking for the Virginia or Connecticut analysis, it does not exist in this state and nobody should charge you to look for it.

What Colorado has instead is a rate line written into title 18 of the criminal code rather than into a banking statute. Section 18-15-104 makes it a class 6 felony to knowingly charge, take or receive money or other property as a loan finance charge exceeding an annual percentage rate of forty-five percent. That sentence says any person. It contains no business-purpose carve-out, no dollar threshold and no consumer limitation, and the only exceptions are four narrow ones in subsection (4). Three more sections in the same article make extortionate lending and extortionate collection their own felonies.

None of that is self-executing, and the argument still has to get past the threshold question of whether your advance is a loan at all. That fight, along with the true lender and rent-a-charter analysis that Colorado's attorney general built the public record on, is worked through in detail on our page covering the rate-cap arguments after Weiser, and we will not repeat it here. What follows are the seven other rules, from the criminal ceiling down to what a creditor can actually take once a judgment exists.

1. Nothing Required Your Funder to Tell You the Price

Eleven jurisdictions require a written cost disclosure on a commercial advance. Colorado is not one of them, and the state has enacted no registration duty for providers or brokers of this product either. The Uniform Consumer Credit Code at articles 1 to 9 of title 5 governs consumer credit transactions, and its protections run to consumers by definition. Even the DIDMCA opt-out at §5-13-106, added by House Bill 23-1229 and effective July 1, 2024, is drafted in terms of consumer credit transactions and says the rates in articles 1 to 9 control consumer credit transactions in this state.

So a Colorado owner should stop looking for a disclosure defect and start reading the agreement. What did the reconciliation clause actually promise, in what words, and did the funder ever perform it. What does the security agreement cover and where does the UCC-1 sit in the filing order. What did the broker say that is now provably untrue. In a state with no disclosure statute, those questions are the whole case.

One consumer-side prohibition is worth naming so you do not build on it. Section 5-3-207 says a consumer may not authorize any person to confess judgment on a claim arising out of a consumer credit transaction and that an authorization in violation of the section is void, and §5-16-125(2) makes it unlawful for a licensed collection agency or its attorney to invoke a cognovit clause so as to confess judgment. We searched titles 5, 6, 13, 18 and 38 and found no general Colorado prohibition on a confession of judgment clause in a commercial agreement. Whether a Colorado court would enforce one is a question of case law we could not resolve here, so treat any such rider as a live risk rather than a dead letter.

2. Forty-Five Percent Is Where a Felony Starts

Section 18-15-104(1) provides that any person who knowingly charges, takes or receives money or other property as a loan finance charge exceeding an annual percentage rate of forty-five percent, or the equivalent for a longer or shorter period, commits criminal usury, a class 6 felony. The reach of that sentence matters as much as the number. The article's definitions are drafted just as broadly: §18-15-101(3) defines a debtor to include anyone who guarantees repayment or undertakes to indemnify the creditor against loss, and §18-15-101(4) defines extending credit to include any agreement, express or implied, by which repayment of any debt or claim, whether acknowledged or disputed, valid or invalid, and however arising, may be deferred.

The definition of the charge itself is what does the work on advance pricing. Section 18-15-101(6)(a) defines a loan finance charge as the sum of all charges payable directly or indirectly by the debtor and imposed directly or indirectly by the lender as an incident to or a condition of the extension of credit, whether paid by the debtor, the lender or anyone else on the debtor's behalf, and it expressly includes interest or any amount payable under a point, discount or other system of charges however denominated, insurance premiums protecting the lender against default, and charges for investigating collateral or credit-worthiness or for commissions or brokerage. Origination fees, underwriting fees and broker points are inside that definition by name.

The civil side matches. Section 5-12-101 sets the legal rate at eight percent compounded annually where nothing is agreed, and §5-12-103(1) lets parties to a written instrument stipulate for a higher rate but not exceeding forty-five percent, with subsection (2) defining interest the same all-inclusive way. Two limits to state honestly. Section 18-15-104(2) supplies an affirmative defense where the rate could not have been determined by computation at the time of the charge to exceed forty-five percent, or did not exceed it computed on the assumption the debt is paid according to its terms, and subsection (3) makes that defense available only where the terms are in a written agreement signed by all parties and submitted to the court and district attorney at least ten days before trial. Section 5-12-103(5) also takes commercial credit plans outside that section, though §5-12-107(2)(a) applies its own forty-five percent ceiling to them.

3. Three More Felonies Sit in the Same Article

Colorado did not stop at a rate. Section 18-15-102 makes it a class 4 felony to extend credit in any amount, regardless of the finance charge, where both creditor and debtor understand at the time that delay or failure to repay will result in the use of extortionate means of collection. Section 18-15-101(5) defines extortionate means as any means involving the use, or an express or implicit threat of use, of violence or other criminal means to harm the person, reputation or property of any person.

Section 18-15-107 covers the collection end, and it is the one worth knowing if the calls have turned ugly. It is unlawful to knowingly participate in any way, or conspire to do so, in the use of extortionate means to collect or attempt to collect any extension of credit, or to punish anyone for nonrepayment, and a violation is a class 4 felony. Subsection (3) allows a form of proof that matters in practice: to show an implicit threat, evidence may come in that other extensions of credit by the same creditor were, to the knowledge of the person threatened, collected by extortionate means.

Section 18-15-103 creates a rebuttable presumption of an extortionate extension of credit where three things coexist: the loan finance charge exceeded the criminal usury rate, the debtor reasonably believed the creditor had used extortionate means before, and the creditor's outstanding credit to that debtor exceeded one hundred dollars. Two related offenses round out the article, financing extortionate extensions of credit at §18-15-105 and financing criminal usury at §18-15-106. None of this is something you enforce yourself. All of it changes what a funder's counsel wants to be arguing about.

4. Colorado Changed Its Transfer Statute in August 2025

Almost every summary you will find online is now out of date on this. C.R.S. §38-8-101 reads that the short title of the article, which was formerly known as the Colorado Uniform Fraudulent Transfer Act, is the Colorado Voidable Transactions Act. Senate Bill 25-133 made the change effective August 6, 2025, and section 12 of that act provides that the amendments apply to claims filed on or after that date. So whether your transaction is analyzed under the old act or the new one turns on when the creditor files, not on when the transfer happened.

Section 38-8-105(1) makes a transfer voidable as to a creditor, whether the claim arose before or after, if made with actual intent to hinder, delay or defraud, or without receiving reasonably equivalent value while the debtor was engaged in a business for which the remaining assets were unreasonably small or expected to incur debts beyond its ability to pay. Subsection (2) lists eleven factors on intent, running from a transfer to an insider through concealment, suit or threatened suit before the transfer, a transfer of substantially all assets, insolvency at or shortly after, and a transfer of essential business assets to a lienor who passed them to an insider.

Two things in the amended section are Colorado-specific and new. Subsection (3) states that a creditor bringing a claim has the burden of proving the elements by a preponderance of the evidence, which settles a standard-of-proof question in the creditor's favor. Subsection (4) declares the general assembly's intent that the last paragraph of comment eight to section four of the uniform act, as amended in 2014, does not apply in Colorado. Section 38-8-110 extinguishes an actual-intent claim four years after the transfer or, if later, one year after it was or could reasonably have been discovered, with the constructive-intent and insider claims running four years. Section 38-8-102(2)(c) excludes from the definition of asset an interest held in tenancy by the entireties to the extent it is not subject to process by a creditor holding a claim against only one tenant.

5. Three Years, and the Six-Year Carve-Out Everyone Forgets

Colorado's contract deadline is the shortest on this page. Section 13-80-101(1)(a) requires all contract actions, including actions under the Uniform Commercial Code, to be commenced within three years after accrual and not thereafter, regardless of theory or of whom is sued, except as provided in §13-80-103.5. Subsection (1)(c) puts fraud, misrepresentation, concealment and deceit on the same three-year clock, and (1)(f) does the same for breach of fiduciary duty.

The exception in §13-80-103.5 is the reason you cannot stop at three. That section carries a six-year period for actions on liquidated debts and instruments for the payment of money, which is exactly the category a funding agreement or a note can fall into. Whether a particular advance agreement is a liquidated debt or an instrument for the payment of money is a real question about your document rather than a foregone conclusion, and it is worth having answered before anybody assumes an old balance is dead.

Judgments run on a different rhythm again, and §13-52-102 sets three numbers. A judgment becomes a lien on real estate only from the time a certified transcript is recorded in a county, and that lien expires six years after entry unless the judgment is revived and a transcript of the revived judgment recorded. Execution may issue on a district court judgment within twenty years of entry, after which it is considered satisfied in full unless revived. For county court judgments entered on or after July 1, 1981, that window is six years.

6. A Continuing Garnishment Runs 182 Days

Colorado's wage garnishment is a lien and continuing levy, and it lasts longer than most people expect. Section 13-54.5-102(1) lets a creditor apply to the clerk for garnishment on notice to the debtor, and to the extent earnings are not exempt it operates as a lien and continuing levy on earnings due or to become due. Subsection (2) sets the period at one hundred eighty-two days, or 182 days after the expiration of any writ with priority under §13-54.5-104, ending earlier if earnings stop, the judgment is vacated, modified or satisfied, or the writ is dismissed.

Two features are worth knowing. Subsection (2) lets the creditor suspend a continuing garnishment for a stated period by written agreement with the debtor, filed with the clerk, which is a negotiating tool almost nobody uses. Subsection (2.5), added in 2019, provides that tips are not owed by a garnishee to a creditor. Subsection (3) limits continuing garnishment to the earnings of a judgment debtor who is a natural person, so a company's receivables are reached through the ordinary writ under §13-54.5-103(2) instead.

The percentage changed and most sources still print the old number. Section 13-54-104(2)(a)(I) caps the garnishable share for ordinary debts at the least of twenty percent of disposable earnings for the week, the amount by which those earnings exceed forty times the federal minimum hourly wage, or the amount by which they exceed forty times the Colorado minimum wage under article XVIII, section 15 of the state constitution. Twenty percent, not twenty-five, with a forty-times floor rather than the federal thirty. Subsection (2)(a)(I)(D) then lets a debtor file a written objection and seek a hearing to exempt more, where the court weighs rent or mortgage, utilities, food, medical and dental expenses, child care, clothing, education, transportation, and support obligations. Section 13-54-104(1)(b)(I) defines earnings to include compensation paid to an independent contractor, which catches owners who pay themselves that way.

7. The Exemption Schedule Is Long, Itemized and Unusually Generous

Colorado protects a personal guarantor better than most states, and the numbers are specific enough to plan around. Section 13-54-102(1)(i)(I) exempts the stock in trade, supplies, fixtures, machines, tools, electronics, equipment, books and business materials used and kept for carrying on the debtor's primary gainful occupation up to an aggregate sixty thousand dollars, and twenty thousand for any other occupation. For an owner-operator that can cover most of what the business runs on.

The rest of the schedule fills in around it. Subsection (1)(j) exempts up to two motor vehicles or bicycles at an aggregate fifteen thousand dollars, rising to twenty-five thousand where the debtor, a spouse or dependent is elderly or disabled, and expressly excludes snowmobiles, ATVs, golf carts, boats and motor homes. Household goods get six thousand under (1)(e), jewelry twenty-five hundred under (1)(b), and a professional's library three thousand under (1)(k). Subsection (1)(w) exempts up to twenty-five hundred dollars cumulative in a depository account in the debtor's name, and (1)(v) exempts disability benefits up to five thousand a month.

The homestead is the largest single number. Section 38-41-201(1) exempts every homestead from execution and attachment arising from any debt, contract or civil obligation, to the extent of two hundred fifty thousand dollars in actual cash value above liens and encumbrances existing at the time of levy, or three hundred fifty thousand dollars where the homestead is occupied by an owner, spouse or dependent who is elderly or disabled. Subsection (2)(b) defines elderly as sixty years of age or older. Senate Bill 22-086 raised those figures effective April 7, 2022 from seventy-five thousand and one hundred five thousand, so anything quoting the old numbers is four years stale.

The Consumer Protection Act Is Open to a Business Plaintiff Here

Most state deceptive practices statutes turn a company away at the door. Colorado does not. Section 6-1-113(1) makes the article available in a civil action against any person who engaged in or caused another to engage in a listed deceptive trade practice, and opens it to three categories of plaintiff: an actual or potential consumer of the defendant's goods, services or property, a successor in interest to an actual consumer, and, at paragraph (c), any person who, in the course of the person's business or occupation, is injured as a result of the practice.

The damages provision has teeth. Section 6-1-113(2) makes a defendant liable for the greater of actual damages plus prejudgment interest at eight percent or the §13-21-101 rate, five hundred dollars, or three times actual damages where bad faith conduct is shown by clear and convincing evidence, plus costs and fees on a successful action. Subsection (2.3) defines bad faith conduct as fraudulent, willful, knowing or intentional conduct causing injury. Subsection (2) is expressly unavailable in a class action, where (2.9) allows actual damages, injunctive relief, fees and costs only.

Two cautions before anyone drafts. Section 6-1-113(3) makes a plaintiff whose action the court finds frivolous, groundless and in bad faith, or brought to harass, liable for the defendant's costs and fees. And the significant public impact element Colorado practitioners talk about appears nowhere in the text of §6-1-105 or §6-1-113; it comes from case law. Know which is which before you rely on either.

Who Should You Call? Our Top-Rated Business Debt Firms

One firm on this list works the entire lifecycle of a business debt file, from stopping the daily debits through attorney-led negotiation, UCC lien removal, and a signed release. The other two cover broader debt categories that often sit alongside the advances. Choose accordingly.