Bankruptcy in Connecticut
What do you celebrate most about the state of Connecticut? The history? Or, is it the liberalism, forward thinking, art, architecture, culture, beauty, beaches, sports, boating, restaurants, or universities?
Connecticut was the 5th state and one of the original 13 colonies. The people of the state have struggled and prospered for more than 200 years. Our Founding Fathers laid down protections for those times of struggle in the U.S. Constitution.
They wrote: “The Congress shall have Power [t]o establish… uniform Laws on the subject of Bankruptcies throughout the United States” (Article I, Section 8, Clause 4, United States Constitution).
In this article, we’ll show you how Connecticut bankruptcy law differs from the laws other states; discuss whether you should file Chapter 7 or Chapter 13; and guide your through selecting and working with a bankruptcy lawyer.
How Connecticut Bankruptcy Law Differs from the Laws of Other States
In Connecticut, bankruptcy filers can choose between the federal and state exemptions (not so in all states). If state exemptions are chosen, federal non-bankruptcy exemptions such as 100% retirement fund protection are still available.
- Up to $75,000 in home equity, which is doubled for a married couple filing jointly, is protected.
- In addition, if your financial crisis was caused by medical bills, you may be able to protect even more home equity.
- You can keep up to $1,500 in a motor vehicle, again doubled for a married couple filing jointly. Many people use the proffered $1,000 wild card to protect more equity in their vehicle.
- Personal property, books, clothes, insurances, wages, tuition accounts, and the like are protected. Ask your bankruptcy attorney for specifics on what can be protected in your specific situation.
Your Choices in Filing Bankruptcy in Connecticut: Chapter 7 or Chapter 13
While, in general, #7 is thought to be a lucky number and #13, not so lucky, both offer and end to creditor harassment and clean slate. This means all filers “win” no matter which track they take.
- Chapter 7 is generally thought of as the track for lower income earners with a lot of unsecured debt.
- You qualify for Chapter 7 if your income is under $56,773 for an individual or under $99,440 for a family of four.
- Your attorney will analyze your individual situation and explain why Chapter 7 is either right, or not right, for you.
- Chapter 13 is usually the track taken if Chapter 7 doesn’t work.
- Chapter 13 requires repayment of debts and takes 3 to 5 years to get through.
- This makes it unappealing to many filers; however, some debts are indeed discharged and if you have to repay debts, it is likely under much better terms than before you filed for bankruptcy protection.
How to Select a Bankruptcy Attorney
Look for an attorney who focuses his or her legal practice on bankruptcy and is licensed in Connecticut. These are the most important qualifications.
In addition, personal and professional referrals are dynamite. Get those if you can. If not, you can find bankruptcy lawyers through your local bar association or an Internet search for “Find a Connecticut Bankruptcy Attorney”.
Lastly, most bankruptcy lawyers offer a free consultation so you can determine whether that particular attorney is a good fit for you. Your comfort level is important.
How to Work with a Bankruptcy Attorney
Don’t hold anything back. If in doubt, disclose all family and financial information. If you’ve already contacted a bankruptcy attorney, you likely have access to a lengthy form that requests a myriad of financial information.
If not, start gathering anything related to your financial situation such as your bills, assets, debts, contracts, and payments. Look through the mail, old tax returns, financial statements, checkbooks, and online records to make sure you include everything.
It’s a lot of work, but will get you where you need to be to start over and prosper like the beautiful state of Connecticut herself.