What You Need to Know About Chapter 7 Bankruptcy in CT
There is a lot to know when it comes to chapter 7 bankruptcy in CT. In fact, there are many factors to consider, such as whether or not the debtor has a good reason to file for bankruptcy. It’s also important to remember that there are certain exemptions that you can take advantage of, such as those related to nondischargeable debts.
SUMMARY ON BANKRUPTCY 7 IN CT
There are a number of reasons that a person may consider filing for chapter 7 bankruptcy in Connecticut. It’s a quick, simple, and effective way to start over financially. If you’ve had a job loss or are facing a medical emergency, you might find that chapter 7 will be able to help you get your financial life back on track.
You’ll need to pass a means test to qualify for a chapter 7 bankruptcy in Connecticut. The test determines if you have enough income to afford certain monthly expenses. Generally, the test is based on your household’s income. But, some incomes are excluded from the test.
One example of this is when your family’s income is above the median. In this case, you’ll need to provide detailed information about your income and expenses.Another example is if you have a large amount of unsecured debt, like credit card bills. In this instance, you might not be able to eliminate all of your debts in bankruptcy. However, you can use a debt settlement program to lower your balance.
People who have a larger income and need more time to repay their debts might also be able to file a chapter 13 bankruptcy. This is a repayment plan that can be up to 36 or 60 months in length.
BACKGROUND AND INDIVIDUAL’S RIGHTS
Chapter 7 bankruptcy is one of the more common forms of personal bankruptcy. This type of filing allows a debtor to keep most of his or her possessions. The process can be complicated and can take many months to complete.There are a variety of debts that are not canceled during this bankruptcy, however. These include student loans, child support arrearages, and tax debts. In some cases, the court may declare certain debts nondischargeable.
Although it’s not officially discharged in bankruptcy, credit card bills are typically the first unsecured debts that are cancelled. Other unsecured debts include store charge cards, personal loans, and payday loans.There are some specialized cases, such as alimony, child support, and taxes, that are not included in the bankruptcy discharge. The court has the power to dismiss cases of fraud.
It’s important to know that Chapter 7 isn’t the only way to eliminate unsecured debt. You can also file for Chapter 13 bankruptcy. That allows you to keep your property while paying 20% of your unsecured debts over five years. If you file for Chapter 13, your creditors will have to approve your plan.A court can also object to a discharge if you engage in misconduct. For instance, you might commit fraud in order to avoid repaying your debt.
FEDERAL EXEMPTIONS
When you file for bankruptcy, your property can be protected by either federal or state bankruptcy exemptions. The laws are designed to help people struggling financially get a fresh start. However, some people may not notice the difference between these two types of protections.
Federal exemptions offer a wide variety of benefits, including an exemption for household goods. You can keep $12,625 worth of personal items and household items, such as furniture and clothing.There is also an exemption for jewelry, and a wildcard exemption that lets you exclude up to $11,850 worth of homestead property. For married couples filing jointly, the amount is doubled.
One of the downsides to this exemption is that the value limit applies to the entire value of the property. Thus, you might lose a car if the car’s value exceeds your exemption.If you live in Connecticut, you can choose between the state and federal bankruptcy exemptions. This option allows you to make a good decision on what you should protect.For example, the federal exemption for household goods can include items such as a refrigerator, stove, and washer. On the other hand, Connecticut allows you to exempt certain items, such as an electric car.
STATE OF CONNECTICUT EXEMPTIONS
If you live in Connecticut, you may want to consider filing for Chapter 7 bankruptcy. This type of bankruptcy eliminates debt and allows you to start over. However, the process can be difficult to understand. For a detailed overview, consult an attorney.
To file, you need to meet one of two means tests. These tests are designed to determine your income and assets. You are allowed to file for Chapter 7 if you have a monthly disposable income of less than $1,500.In addition, you must have lived in the state for at least 180 days before you file. Your exemptions must also be considered. The federal code has a similar rule.
Unlike many states, however, Connecticut does not have a reaffirmation agreement. A reaffirmation agreement is a voluntary contract between you and your creditors. Usually, these contracts are not helpful.One of the best ways to learn about the bankruptcy laws in Connecticut is to read the Bankruptcy Law. It is available at the Connecticut Judicial Branch Law Libraries. You can also browse the Bankruptcy Law section of the General Assembly website for additional information.In the state of Connecticut, you can exempt up to $75,000 in the equity in your home. Homestead is an important protection in chapter 7 bankruptcy.
NONDISCHARGEABLE DEBTS
Non-dischargeable debts are debts that cannot be discharged by a bankruptcy. They are a special category of debts that are excluded from the bankruptcy process because of their inherent nature and public policy interest.
Debts not dischargeable include child support, alimony, and loans guaranteed by a governmental unit. Generally, a loan secured by a house or car is non-dischargeable.When a person files for bankruptcy, he or she receives a fresh start. However, the debtor remains liable for non-payment on the debt. If the debtor fails to make the payment, the creditor may file a lawsuit against the debtor for money damages.
There are 19 types of non-dischargeable debts listed in the Bankruptcy Code. Some of these debts are based on the intent of the borrower. Typically, non-dischargeable debts include defalcation, fraudulent schemes, and torts.A recent case in the Western District of Michigan examined the status of non-dischargeable debts. The court held that a debt that was incurred by Sherry Trost during a common law conversion was non-dischargeable. This case was a test of the Bankruptcy Code’s presumption that abuse occurs when the debtor’s current monthly income is greater than or less than the median income for the state.
FEDERAL PROPOSALS
As we get closer to 2020, significant changes are expected to be made to the laws governing bankruptcy. In particular, a number of consumer proposals have been endorsed by Congress. These bills are meant to eliminate lawsuits, stop the collection of unsecured debt, and stop garnisheeing wages.
One such bill is H.R. 3150, which was passed by the House on June 10. It makes a number of changes to the Bankruptcy Code, including prohibiting the sale of nonexempt property to fund a chapter 7 filing. Another provision would require more debtors to repay their unsecured debts.
The Senate Judiciary Committee has not voted on a similar bill. But it is likely to have more changes than H.R. 3150.CBRA, or the Comprehensive Business and Consumer Reform Act, proposes sweeping changes to the Bankruptcy Code. These changes are designed to help consumers, and would repeal Chapter 13 and make financial relief easier for families.
This bill also proposes to create a pilot program for individuals who want to learn more about financial management. Additionally, it would remove the requirement to attend credit counseling. However, some creditors may object to the proposal.Under the proposed bill, creditors could reject the plan before it is officially filed. If the creditor is not satisfied, they can request the court to revoke the discharge. If you need assistance with chapter 7 bankruptcy in CT call us for assistance.
