Although there can be stigma to filing for bankruptcy, it may be necessary. If you have significant debt and haven’t been successful at alleviating it through other avenues, bankruptcy might be the best option available. If you’re worried about losing all of your Connecticut property, it’s helpful to know what you can keep after filing.
Your bankruptcy options explained
Depending on your financial situation, you can either file for Chapter 7 or Chapter 13 bankruptcy. To qualify for Chapter 7, you must pass the means test. If your income is under a certain amount, you can file Chapter 7 bankruptcy. Most people in this category have little to no assets.
Chapter 13 bankruptcy is suited for individuals who have higher incomes and are able to pay back their debts. Filing gives you more time to pay back your debt thanks to a repayment plan spanning three or five years.
Property you can keep after filing
Depending on the type of bankruptcy you file, you are able to keep certain property. With Chapter 7, you can keep all or almost all of your property unless it’s considered nonexempt. This includes your clothing, furniture, pensions, retirement accounts and life insurance policies, some jewelry, appliances and vehicles up to a certain amount. You can also keep your home if you’re current with mortgage payments.
If you file Chapter 13 bankruptcy, you can keep all of your property as long as you adhere to the terms of your three- or five-year repayment plan. As long as you continue paying off your debts regularly and in the agreed amounts, you shouldn’t have to part with any property. However, if you default on payments such as mortgage or car loan, you could lose your home or vehicle.
Bankruptcy is a scary subject for some, but it might be necessary. It can help you get a fresh start with your finances.