Connecticut Homestead Exemption

Can you file for bankruptcy in Connecticut and keep your home? Federal exemptions are available in Connecticut, although debtors can protect more value in their homes by utilizing the Connecticut state homestead exemption. Pursuant to Connecticut bankruptcy laws, debtors can protect up to $75,000 of equity in their homes. A married couple filing jointly can double the exemption and protect up to $150,000 of equity in their homestead.

Be aware that making normal monthly mortgage payments will be required if you wish to retain ownership of your home through bankruptcy. Connecticut homestead exemptions do not alleviate the obligation to pay the mortgage. Further, let’s say you own a home in Hartford or Bridgeport, CT that has a value of $150,000. Will this home be subject to sale in a chapter 7 bankruptcy? The answer depends on the amount of equity you have in the home. To determine home equity, subtract the mortgage balance from the appraised value of your home. If the Hartford home in our example has a mortgage balance of $100,000, the $50,000 of equity will be protected by the $75,000 homestead exemption. In such a case, the home could be kept through the bankruptcy process. See also: What is a homestead exemption?

Connecticut Motor Vehicle Exemption

How will your car be affected if you file for bankruptcy in Connecticut? Connecticut bankruptcy laws allow a debtor to protect up to $3,500 of value in their car. Just as mortgage payments need to be maintained in order to keep a home, the same is true with cars. While chapter 13 bankruptcy may be able to lowe your car payments, some monthly payment will be required if you wish to keep the car. The above equity examples apply to the CT car exemption. CT bankruptcy laws protect equity in property. See also: How to force your lender to lower car payments.

Protecting Your Personal Property

Exemption laws are in place as a matter of public policy. It is widely agreed that leaving an individual or family who files for bankruptcy with nothing is counter to the spirit of the Bankruptcy Code which was enacted so that debtors could obtain a fresh financial start. Connecticut bankruptcy laws recognize this policy and allow debtors to completely (100%) exempt necessary clothing, bedding, foodstuffs, household furniture and appliances, wedding and engagement rings, and hearing aids.

The above discussion of connecticut bankruptcy law is not intended to be exhaustive. If you have questions, contact a Connecticut bankruptcy attorney.