Connecticut Bankruptcy Law
Over the past few years, bankruptcy filing has increased in Connecticut. This increase is firmly connected to the rise in credit card use in America, medical expenses, and job loss due to the recession.
New bankruptcy laws in Connecticut
In 2005, the federal government enacted changes to bankruptcy law that make it harder for certain people to file bankruptcy. Most of these changes affect Chapter 7 bankruptcy. New bankruptcy laws include the following:
- Some filers with high incomes might not be able to file Chapter 7 anymore.
- Debtors must get special credit counseling before and after the bankruptcy process begins.
- Debtors must be prepared to back up their financial disclosures with significant documentation.
Bankruptcy means test
If your monthly income is more than the median household income in Connecticut, you need to pass a means test before you can file Chapter 7. The purpose of this test is to assess your financial situation—to find out if you have enough disposable income to enter a repayment plan under Chapter 13 rather than Chapter 7.
This test requires you to subtract specific expenses and debt from your monthly income in order to learn if you are eligible for Chapter 7. If the leftover income is particularly low, you might be able to file Chapter 7.
Credit counseling
In order to be eligible for bankruptcy, you must finish a credit counseling program. A counselor may be able to tell you whether bankruptcy is your only option or if an informal repayment plan might help.
At the end of the legal process, you will be required to attend another counseling session. This session will focus on personal financial planning.
In Connecticut, you are entitled to keep many assets after you declare bankruptcy. You must first determine if Federal bankruptcy exemptions or State law exemptions better fit your situation. These property exemptions include the following:
- Limited Insurance cash values
- Retirement plans and IRAs
- Certain value in personal injury actions
- Worker’s Compensation Benefits
- Your homestead up to $75,000 in value
Confer with a Connecticut bankruptcy attorney to learn more about what exemptions are available to you.
Bankruptcy attorneys in Connecticut
Connecticut bankruptcy laws are complex and may be used against you by creditors. If you are considering bankruptcy in Connecticut, consider the New Haven law firm of Coan, Lewendon, Gulliver & Miltenberger, LLC. Our attorneys focus their practice on bankruptcy law in Connecticut, and can provide the guidance you need during this stressful time.
For an initial consultation, contact Coan, Lewendon, Gulliver and Miltenberger today at (203) 745-0172.
