People who file for bankruptcy in Connecticut have likely thought about the total financial picture before they made the decision to file. For some, one of the primary questions revolves around what will happen to the assets they’ve worked hard to obtain. If this is a concern for you, it’s critical that you understand the exemptions they have available.
In this state, you have the option of choosing either the state’s exemption laws or the federal bankruptcy exemptions. You can’t mix them together, but many filers find that the state’s exemptions provide broader exemptions.
Homestead exemption
Connecticut protects up to $75,000 of equity in your primary residence, or $150,000 for joint filers. This applies to real or mobile property used as your home. Though higher limits have been proposed, $75,000 remains the generally accepted threshold.
Motor vehicle exemption
You can exempt up to $3,500 in equity in one motor vehicle. If your car is fully owned. Even if the vehicle is owned outright, it may be fully exempt if the value is low enough.
Personal property exemption
Certain necessary household items, including furniture, appliances and clothing, are often exempt without a monetary limit. Burial plots, engagement rings, wedding bands and medical aids are protected from bankruptcy.
Tools of the trade
Items that are needed for your occupation are protected from bankruptcy. This can include books, tools and equipment. Farm animals can also be protected if they’re part of your occupation.
Public benefits and insurance
Public benefits, such as Social Security, public assistance and unemployment are all exempt from the bankruptcy process. Workers’ compensation and most retirement benefits are exempt, as is life insurance of up to $4,000. It’s also possible that other disability benefits and certain annuities are also protected.
Wildcard exemption
You may protect up to $1,000 of any property, plus up to $10,125 of unused homestead exemption, which gives flexibility to cover assets not protected elsewhere.
Just because you have non-exempt property doesn’t necessarily mean you’ll have to give it up when you file for bankruptcy. It’s up to the bankruptcy trustee to determine if liquidating the assets will make a big enough dent in the debt to be worth the court’s time. Seeking assistance from someone familiar with these matters may be beneficial, so you can find out what to expect.