Many individuals who are struggling to cover their bills will start to look into debt relief. They often settle on bankruptcy as the go-to option that they believe is best for their situation.
As consumers take time to learn about the different types of bankruptcy, they often hone in on Chapter 7 because they like the idea of eliminating virtually all their debt as quickly as possible. Many debtors don’t realize that they may have to liquidate some of their assets to discharge their debts. What you might have to sell off can depend, in part, on whether it’s classified as non-exempt or exempt property.
Not all debtors have to liquidate assets, as is the situation with individuals pursuing a no-asset case. Both the federal and state government maintain lists of non-exempt assets as detailed below to aid you in understanding how the bankruptcy process works.
What are non-exempt assets in Connecticut?
There are a few different exemptions that you can take in Connecticut, including:
- Up to $3,500 in equity you’ve built up in your vehicle.
- Up to 40 times the minimum wage or 75% of your weekly wages (whichever is greater)
- Retirement or pension, including on IRAs, 401(k)s and other defined benefit plans
- $1,000 wildcard exemption on any property of your choice
- Homestead exemption of up to $75,000 ($150,000 if you are married)
- Disability, health, life insurance and fraternal benefits exemptions (with certain limitations)
You can generally choose between federal or state exemptions in Connecticut, but most people find the exemptions offered by the state more useful.
Navigating whether you qualify to file bankruptcy, and if so, for which one and how to handle your assets can be a bit challenging. Learning more about your options can help you decide more.