When you come to a point that you simply cannot pay your bills, Connecticut bankruptcy gives you legal protection against your creditors. Before you file, make sure you understand what protections you receive under Connecticut bankruptcy law.

Bankruptcy Exemptions

Connecticut offers two exemption options. For some, the federal exemptions are the most beneficial. These are as follows:

• Up to $20,200 for your home
• Life insurance payments you receive from someone you depended on, like a parent
• Up to $10,775 in a loan value life insurance policy
• Up to $10,775 for household goods, $525 per item
• Alimony or child support
• Life insurance contract that has not matured
• Up to $3,225 for a vehicle
• Up to $1,350 for jewelry
• Health aids
• Up to $2,025 for tools of the trade
• Up to $1,075 for any property as a wild card
• Up to $10,125 of the value of unused homestead exemption, applied toward other property

Under federal bankruptcy laws, married couples can double the amount of their exemptions. For some, Connecticut bankruptcy laws may be more advantageous. Connecticut exempts are as follows:

• Up to $75,000 for the homestead
• All food, clothing, furniture, bedding and appliances
• Health aids and burial plot
• Up to $3,500 for a vehicle
• Security and residential utility deposits
• Health and disability insurance payments
• Wedding/engagement rings
• Public benefits
• Public assistance payments
• Proceeds from life insurance
• Alimony and child support
• Military equipment (musical instruments, arms, uniforms, equipment)
• Tools of the trade, farm animals and livestock for work
• $1,000 of any property chosen
• 75 percent of unpaid, earned wages
• Security and residential utility deposits

Chapter 7 Bankruptcy Information

Debtors who pass the means test may file Chapter 7 bankruptcy. This is the type of bankruptcy that liquidates assets to pay debts and then removes any other remaining debts. Certain debts cannot be removed under Chapter 7. These include tax liens and voluntary liens. If you do not pay your mortgage, for instance, your home will be foreclosed on, even if you have bankruptcy protection.

Chapter 13 Bankruptcy Information

Under Chapter 13, you will work with a Connecticut bankruptcy trustee to work out a repayment plan. Under the repayment plan, you will work to pay back your debts in five years using the support and accountability of the trustee. You still receive court protection from collections actions as you work to repay your debts.