Connecticut Bankruptcy
Connecticut Bankruptcy Law
Bankruptcy Code and Exemptions...
Although Federal Bankruptcy Code and U.S. Bankruptcy Laws apply to everyone, each state has its own Bankruptcy Code and Rules of Bankruptcy Property Exemption that apply specifically in that state.
Connecticut Bankruptcy Law
Means Testing...
Connecticut residents retain one of the lowest rates of filing compared to all other states in the nation. This trend however is changing. Stagnation in the economy and outsourcing jobs has severely impacted state residents, and coupled with any unexpected financial emergency, the majority of Connecticut working men and women are simply not in a position to weather sever financial storms.
State laws in Connecticut play an important function in determining the relationships between debtors and creditors, property ownerships, and the extent of liability created in commercial transactions.
All Connecticut courts must rely heavily upon state law to determine property, claims, liabilities, and the legitimacy of contested claims. For instance, potential claims, although suspect, must be reported in both Chapter 7 and Chapter 13 cases. New bankruptcy laws also incorporate the state median income as a test measure (know as means testing) to calculate disposable income.
Persons earning more than the Connecticut median income is not qualified to file Chapter 7, and must file a 5 year Chapter 13 plan.
Connecticut Bankruptcy Exemption Provisions
All states are permitted an option of allowing residents to choose the Federal bankruptcy exemptions promulgated pursuant to Section 522 of the Code, or alternatively, creating exclusive state bankruptcy exemptions. Connecticut is an op-in state, that permits state residents to choose either state or federal statutes. Most states allow only state exemptions. The effect of opting-in creates opportunities for all state residents under the Connecticut bankruptcy exemptions, because of the relatively high homestead bankruptcy exemption value under state law.
Maximizing Connecticut's Homestead Exemption...
According to the Property Code of Connecticut, Section 52-352, the maximum value that may be claimed as exempt is $75,000. This value however, is hotly debated, because of the wide range of real estate appraisal methods. Equity value remaining after liquidation, is the proper method of calculation. Moreover, the trustee's liquidation value is subject further to reduction because of attorney fees and costs attendant to seizure, accounting, distribution, and reporting requirements under the Code.
Pre-Bankruptcy Planning and Preparation
Pre-bankruptcy planning is a delicate topic with many transactions prohibited, but with the assistance of a progressive bankruptcy attorney, other allowable exemptions may be identified.
In practice, most people who file for bankruptcy will actually improve their credit rating within 18 months or less. In fact, in a chapter 13 filing, credit will begin to improve once late payment reports stop, and secured loans and credit lines begin reflecting timely payments.
Overall, filing for bankruptcy can, for many Americans in many different circumstances, be an important and integral step toward financial recovery and new found fiscal stability. Ultimately, bankruptcy creates opportunities and improves net worth, so long as the decision to file was made wisely.
To learn more about Connecticut State Bankruptcy Exemptions, simply go to our U.S. Bankruptcy Exemptions page.
In most states you can legally protect your personal residence in a bankruptcy. The interesting thing is homeowners are treated differently from state to state.
Learn more about the Homestead Act and how it affects you.
Connecticut Bankruptcy Code
All Connecticut Bankruptcy cases are governed by Title 11 of the United States Bankruptcy Code, by U.S. Bankruptcy Rules, and by local Connecticut State Bankruptcy Rules promulgated by Connecticut court.
The US bankruptcy court websites generally have links to both, the Federal US Bankruptcy Rules and specific Connecticut Bankruptcy Code. Clerks in the bankruptcy courts will not give debtors, or even attorneys for debtors, legal advice, including advice about which bankruptcy rules apply to a given case.
Locate a US Bankruptcy Court in your federal judicial district.
Since US Bankruptcy Code and Connecticut Bankruptcy Rules are very technical, and since the case load in the US Bankruptcy Courts makes judges very unforgiving of mistakes or missed deadlines, it's highly recommended to seek the advice of an experienced Connecticut Bankruptcy Attorney and Certified Credit Counsellor.
The most recent Changes to the Bankruptcy Code and Bankruptcy Rules came about on April 20, 2005 as President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act. This new Bankruptcy Law came into effect October 17, 2005.
Learn more about the 25 Most Recent Changes to Personal Bankruptcy Law and how they affect you.
