Connecticut Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as the wage earner’s plan, is available to individuals or sole proprietors of a business. The debtor will set up a repayment plan that allows three to five years to fulfill financial obligations. The debtor must complete a means test, which in Chapter 13 is called the Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income, that decides how much debt must be repaid and over how much time.

Chapter 13 eligibility

You may file a Chapter 13 if you have regular income, whether as an hourly worker, salaried, or self-employed. The proprietor managing an unincorporated business may file to reorganize business and personal finances. Individuals in the following situations are generally likely to file Chapter 13 bankruptcy in Connecticut:

  • They have large loans, such as mortgages, that they want to bring current so their property is not forclosed and liquidated
  • They have child support, taxes, or student loans that cannot be discharged by Chapter 7.

There are requirements that you generally need to fulfill before filing. These requirements include the following:

  • Stable income
  • Disposable income
  • Limited debt – the numbers change, but for instance in 2010, you are limited to $1,081,400 in secured debt and $360,475 in unsecured debt

Additionally, a debtor is ineligible for Chapter 13 if they had a bankruptcy dismissed within 180 prior to filing due to their refusal to appear in court or follow court orders. Also, the debtor must receive credit counseling within 180 days before filing for bankruptcy.

A debtor may be qualified to receive a discharge of some debt in Chapter 13 unless the Debtor received a discharge in Chapter 7, 11, or 12 in a case filed four years earlier, or in a prior Chapter 13 filed two years earlier.

Connecticut Chapter 13 Advantages

There are many benefits to filing for a Chapter 13 in Connecticut. These advantages include the following:

  • The repayment plan is generally interest-free or with greatly reduced interest
  • The reorganization prevents the foreclosure of your house, or repossession of cars, and other assets
  • The plan allows debt to be spread out over up to five years, often lowering the monthly payments

Keep in mind that bankruptcy law is complicated, and that a qualified bankruptcy attorney can help design the repayment plan that is optimal for you.

Bankruptcy lawyers in Connecticut

In these uncertain economic times, it is especially important to be prepared for change in your financial situation. A qualified bankruptcy attorney will help you reorganize your debt into a plan that appeases your creditors and allows you to protect your assets.

The New Haven law firm of Coan, Lewendon, Gulliver & Miltenberger, LLC has been practicing bankruptcy law for 28 years. Our successful record and excellent reputation testifies to our experience and dedication.

Contact Coan, Lewendon, Gulliver & Miltenberger, LLC today at (203) 745-0172 to find out if a Connecticut Chapter 13 bankruptcy is right for you.