R. Richard Croce, LLCRelief, Restoration, Repair & Renewal2026-08-06T05:18:24Zhttps://www.richardcroce.com/feed/atom/WordPress/wp-content/uploads/sites/1404774/2021/08/cropped-Favicon-32x32.pngOn Behalf of R. Richard Croce, LLC<![CDATA[Irregular income? How to qualify for bankruptcy]]>https://www.richardcroce.com/?p=473712026-08-06T05:18:24Z2026-08-06T05:18:24ZHow the means test works with irregular income
The means test is the income check used to determine whether you qualify for Chapter 7 bankruptcy. For most people, it compares household income to Connecticut's median for your family size.
If you earn inconsistently, the court does not look at your best month or your worst. It takes the average of your income over the full six calendar months before filing and uses that figure to calculate your Current Monthly Income (CMI). This six-month window can work in your favor if you have been through a slow period recently.
How your income is calculated when it fluctuates
For freelancers, contractors and the self-employed, the calculation looks at gross business receipts minus ordinary and necessary business expenses. If you brought in $70,000 over six months but spent $25,000 on equipment, software, mileage and supplies, the court works from closer to $45,000. That distinction often makes qualification more accessible than people expect.
Income includes 1099 payments, client invoices, seasonal wages, commissions and regular household contributions from others in the home. Social Security and qualifying disability payments generally do not count.
Why timing and documentation matter
Because the means test looks at your last six months of income, when you file matters. Filing during or shortly after a slow season can bring your average down enough to qualify for Chapter 7. That is not a loophole. It is simply how the calculation works.
Documentation is just as important. You need to show what you earned and what you spent. Helpful records include bank statements, 1099 forms, profit and loss statements, invoices and client contracts. Missing or incomplete records can slow things down or create problems with your filing.
What if you do not pass the means test?
Not qualifying for Chapter 7 does not mean bankruptcy is off the table. Chapter 13 allows you to reorganize your debt into a three- to five-year repayment plan based on your projected disposable income. For people with irregular earnings, Chapter 13 is an option, provided you can demonstrate sufficiently stable and regular income to meet plan feasibility requirements.
If you are unsure which path fits your situation, speaking with a Connecticut bankruptcy attorney can help you map out your options without any pressure or guesswork. A free consultation is a good starting point.
]]>On Behalf of R. Richard Croce, LLC<![CDATA[Could bankruptcy affect a co-signer’s credit?]]>https://www.richardcroce.com/?p=473292026-06-19T02:55:53Z2026-06-19T02:55:53ZHow co-signed debts may appear on credit reports
The effect on a co-signer may depend on whether you file Chapter 7 or Chapter 13. In Chapter 13 bankruptcy, a powerful legal protection called the co-debtor stay automatically halts all collection actions and lawsuits against a co-signer on consumer debts for the duration of the case, unless the court explicitly permits a creditor to lift the stay.
In Chapter 7 bankruptcy, your personal liability for the debt is discharged, but the co-signer remains fully and legally responsible for paying the entire remaining balance of the loan. Collection activity may still depend on the type of debt, any collateral involved and bankruptcy court restrictions that apply during the case.
Late or missed payments before the bankruptcy filing could remain in the payment history. For credit cards and other revolving accounts, high balances may increase credit utilization or the share of available credit being used. If a lender closes an account, that change might lower available credit or affect credit mix.
How you and the co-signer may review shared debts
After you identify shared debts, you may need a clearer way to track each account. A direct conversation could help you and the co-signer confirm the shared loans and the notices each of you might receive.
You may want to review loan names, account numbers, lender contact information and recent statements before notices arrive. It might also be beneficial for you and the co-signer to check your credit reports periodically. If the balance, payment history or account status differs across reports, you may need to contact the credit bureau or lender.
Keeping expectations realistic
Shared debts may not always follow the same credit result for you and the co-signer. When a co-signed loan remains on their report, a credit report review could help explain its impact and help you come up with possible ways to address the issues.]]>On Behalf of R. Richard Croce, LLC<![CDATA[Why making minimum payments on credit cards will keep you in debt forever]]>https://www.richardcroce.com/?p=473172026-05-11T16:08:58Z2026-04-21T14:30:15ZYou send minimum payments to credit card companies every month. Your balance barely drops. Twenty years later, you still owe thousands while interest charges devour every payment you make. Credit card companies built this system to profit from your struggle.
How credit card companies profit from minimum payments
Credit card companies design minimum payments to keep you in debt as long as possible. These payments typically cover only 1% to 3% of your principal balance plus interest charges. Under the federal Credit Card Accountability Responsibility and Disclosure Act of 2009, creditors must disclose how long it takes to pay off your balance making only minimum payments. For a $10,000 balance at 18% interest, minimum payments can stretch repayment to 30 years or more. Meanwhile, you pay thousands in interest on top of what you originally borrowed.
The real cost of paying minimums
Minimum payments create a cycle that traps Connecticut residents in long-term debt. The consequences extend far beyond your monthly statement. Problems include:
Interest charges that exceed your principal payments each month
Balances that grow when you add new charges
Damaged credit scores from high credit utilization ratios
Decades of payments with little progress toward freedom
Without addressing the underlying debt structure, you remain stuck paying for purchases long after their value has disappeared.
When debt becomes unmanageable
Many people in Middletown, Middlesex County, Hartford, New Haven, New London and Meriden reach a point where minimum payments consume most of their income. Missing payments triggers late fees, penalty interest rates and collection calls. Creditors may file lawsuits that result in wage garnishment or bank account levies.
How bankruptcy can stop the cycle
Bankruptcy may offer relief by discharging eligible unsecured debts or restructuring payments through a court-approved plan. A skilled bankruptcy attorney can evaluate whether Chapter 7 or Chapter 13 bankruptcy fits your situation and help you understand which debts qualify for discharge. The minimum payment trap does not have to define the rest of your life.]]>On Behalf of R. Richard Croce, LLC<![CDATA[Does cashing out your 401(k) to pay debt solve the problem?]]>https://www.richardcroce.com/?p=472902026-02-09T14:43:25Z2026-02-09T14:43:25ZWatching bills stack up while the threat of foreclosure hangs over your home can push you to look for fast cash. Your 401(k) may seem like the one place where money still sits within reach. Even so, using retirement savings to cover today’s debt can quietly trade a short-term fix for a long-term setback.
At first glance, withdrawing funds may feel like taking control. Paying off credit cards or catching up on mortgage payments can slow collection calls and ease daily stress. Yet, pulling money from a 401(k) often means facing income taxes and early withdrawal penalties at the same time.Losing a large chunk of the balance right away can erase years of steady saving. Because of that, solving one financial problem can open the door to another later in life when earning back those funds may feel much harder.
Debt relief without draining your future
Looking at how bankruptcy works can shift the focus from quick cash to lasting stability. Federal law generally shields qualified retirement accounts, including most 401(k)s, during bankruptcy. That protection can allow you to deal with unsecured debt while keeping long-term savings in place.Instead of draining retirement funds, bankruptcy may help by:
Stopping foreclosure through the automatic stay which can pause collection actions
Seeing these options together shows how addressing debt and protecting retirement savings can happen at the same time rather than at each other’s expense.
Today’s choice shapes tomorrow’s security
Weighing future impact can change how today’s choices look. Rebuilding credit after bankruptcy can take effort, but rebuilding a retirement account after cashing it out in your 50s or 60s can feel far more difficult. Talking with a bankruptcy attorney can also help you understand how Connecticut exemptions and federal rules may apply to your assets and debts.]]>On Behalf of R. Richard Croce, LLC<![CDATA[Why medical bill debt is rising and what you can do about it]]>https://www.richardcroce.com/?p=472812025-12-22T08:27:48Z2025-12-22T08:27:48ZIncreasing demand in health care and insurance gaps
National health expenditures rose 7.5% from 2022 to 2023, according to the Centers for Medicare and Medicaid Services, far exceeding typical growth rates. This reflects the growing number of people relying on care and complex procedures, driving up demand in a system where costs are already outpacing wage growth.
Another issue is that your insurance does not always cover the full extent of your care. Many health plans now feature high deductibles that require you to pay thousands of dollars before coverage kicks in. Even with insurance, you may face unexpected expenses from denied claims or services that exceed your plan’s coverage limits.
Practical steps to manage medical debt
Early intervention can help you keep debt under control. Consider the following:
Review every medical bill carefully to check for errors or duplicate charges
Ask health care providers for itemized statements that show each service
Contact hospitals directly to negotiate a lower payment amount
Set up interest-free payment plans when they are available
In addition to these steps, Connecticut law requires nonprofit hospitals to offer financial assistance programs to patients who qualify. Most people do not realize how broad these programs can be.
Some hospitals cover households earning up to 400% of the federal poverty level. For example, a family of four earning about $124,000 per year may still qualify for reduced bills or partial debt forgiveness at certain hospitals.
Options that you can pursue
A Connecticut law that took effect in July 2024 now prevents health care providers from reporting medical debt to credit agencies. However, it is important to know that federal credit reporting laws (FCRA) generally govern these standards. Consequently, despite state-level protections, medical debt may still appear on credit reports and impact your credit score.
When the debt becomes unmanageable, bankruptcy provides a federally established mechanism for addressing overwhelming medical expenses. Because federal law treats medical debt as unsecured—similar to credit card balances and personal loans—it may be discharged through Chapter 7 in a matter of months for those who qualify or reorganize under Chapter 13 into a three- to five-year repayment plan with remaining balances eliminated at the end.
If you are unsure which bankruptcy option is ideal for your situation, speaking with a bankruptcy attorney can help. They can evaluate your full financial picture, explain how bankruptcy affects your other debts and guide you through the process. Many people find that bankruptcy gives them a fresh financial start and relief from the overwhelming feeling of being in debt.]]>On Behalf of R. Richard Croce, LLC<![CDATA[Can bankruptcy limit your mortgage and loans in Connecticut?]]>https://www.richardcroce.com/?p=472442026-05-11T16:10:01Z2025-10-27T13:59:41ZFiling for bankruptcy in Connecticut can make it harder to qualify for mortgages and other loans. Lenders often require waiting periods before approving financing, and interest rates tend to be higher than those offered to borrowers without bankruptcy histories.
The type of bankruptcy you file, whether Chapter 7 or Chapter 13, will determine which challenges and restrictions you face.
What you should know about bankruptcy waiting periods
After filing for bankruptcy, you may face specific waiting periods before becoming eligible for a mortgage. The timeframe depends on boththe type of bankruptcy and the type of loan you want to pursue. For Chapter 7 bankruptcy, most loan programs require at least two years from the discharge date. Federal Housing Administration (FHA) loans have a two-year waiting period. Conventional loans backed by Fannie Mae or Freddie Mac usually require four years from the discharge or dismissal date of the bankruptcy. Veterans Affairs (VA) loans for qualifying veterans also require two years after discharge.Chapter 13 bankruptcy allows more flexibility. You may qualify for FHA or VA loans as early as twelve months after filing if you make on-time payments under your repayment plan and receive court approval. After completing your Chapter 13 plan and receiving discharge, conventional loans typically require a two-year waiting period.
How bankruptcy can affect interest rates and terms
Beyond waiting periods, bankruptcy influences the cost and structure of your future loans. Lenders view bankruptcy as a significant credit event, which often results in higher interest rates compared to borrowers without bankruptcy on their record.Your available loan options may be narrower as well. Conventional loans tend to have stricter requirements such as:
Higher credit score minimums
Larger down payment requirements
More extensive documentation of financial recovery
Government-backed loans such as FHA and VA programs usually offer more flexible terms. These programs are often popular with Connecticut borrowers who are rebuilding credit after bankruptcy.
What it takes to rebuild credit after bankruptcy
The impact of bankruptcy on your credit report is substantial but not permanent. Chapter 7 bankruptcies remain on your credit report for up to ten years from the filing date, while Chapter 13 bankruptcies may stay for seven years from the date of filing.During the waiting period, you can take steps to strengthen your mortgage application. Lenders want to see that you have learned from past financial difficulties and can manage credit responsibly.Many Connecticut residents successfully obtain mortgages after bankruptcy by demonstrating financial stability through steady employment, improved credit scores and careful budgeting during the waiting period. Working together with professionals in the field can help you find your footing and help you get a fresh start.]]>On Behalf of R. Richard Croce, LLC<![CDATA[The pros and cons of joint bankruptcy filings in Connecticut]]>https://www.richardcroce.com/?p=472372025-08-28T08:42:25Z2025-08-28T08:21:28ZBenefits of joint bankruptcy filings
Couples considering bankruptcy often weigh the benefits of filing jointly. Some advantages of joint bankruptcy filings include:
Financial savings: A single court filing fee applies to both spouses, which is the same fee as for an individual case.
Streamlined proceedings: Joint filers can simplify the process by submitting a single petition, reducing paperwork.
Protection from creditors: Filing jointly provides an automatic stay that protects both spouses' assets and income from most creditor collection actions.
Unified plan: Joint filers can create a single repayment plan or liquidation plan, making it easier to manage their debt.
In addition, joint filers may experience a sense of unity during a difficult period. Filing jointly can provide emotional support during a challenging time, as couples can work together to navigate the bankruptcy process.
Drawbacks of joint bankruptcy petitions
Meanwhile, joint filings also have some drawbacks. These include:
Both spouses' assets and income are considered by the court to address the combined debts of both. This can be an issue if one spouse has incurred debt individually, as the other spouse's assets may be at risk to pay for the combined debt.
The combined income of spouses may exceed the means test threshold, which can disqualify them from filing for Chapter 7 bankruptcy.
A joint filing consolidates both spouses' financial difficulties and personal information in a single public document.
Deciding whether to file for bankruptcy jointly or separately can be complex and challenging. By seeking legal counsel, couples may make informed decisions about their future and take the first step toward regaining control of their finances.]]>On Behalf of R. Richard Croce, LLC<![CDATA[Can bankruptcy eliminate student loan debt?]]>https://www.richardcroce.com/?p=471542025-06-26T22:29:46Z2025-06-26T22:29:46ZSome loans may be dischargeable
There's a reason that people often assume they cannot discharge their student loans. Federal bankruptcy rules limit the scenarios in which the discharge of student loans is possible. The filer has a longer process ahead. They must submit paperwork requesting an adversary proceeding. During that separate legal case, the filer must convince the courts that repaying the student loans could lead to undue financial hardship.
They must show that they have made a good faith effort to pay previously. They must also show that they cannot reasonably maintain a minimal standard of living while also making the required student loan payments and that their circumstances are unlikely to change.
Bankruptcy could still be helpful
Even in scenarios where people do not qualify for the discharge of their student loans, filing for personal bankruptcy could help them take control of their finances. The discharge that eliminates repayment obligations can eliminate other debts, such as credit card balances.
Regardless of the type of bankruptcy pursued, student loan borrowers can pay off what they owe more quickly after they discharge other debts. They can rework their budget to allocate more of their income to their students to pay down what they owe as quickly as possible.
In some cases, it may be possible to negotiate more favorable terms during a Chapter 13 bankruptcy. Student loans are often part of the multi-year repayment plan in Chapter 13 cases. Private lenders, in particular, may be willing to work with borrowers who have fallen behind.
Having help when exploring personal bankruptcy as a solution for overwhelming debt can help people explore their options. Borrowers hoping to eliminate their student loans often need assistance with the complex process required to discharge these loans, and that’s okay.]]>On Behalf of R. Richard Croce, LLC<![CDATA[What kind of bankruptcy is right for me?]]>https://www.richardcroce.com/?p=469582025-05-06T20:55:55Z2025-05-06T20:55:55ZChapter 7 bankruptcy helps those with below-average income
One of the most important criteria for a Chapter 7 bankruptcy is the obligation to pass a means test. People calculate their current annual income based on their last six months of wages. They adjust their income level by deducting certain expenses. They then compare that adjusted income to the current state median income for a household the same size as theirs.
Those who passed the means test may be eligible for Chapter 7 bankruptcy. However, not everyone who qualifies for Chapter 7 bankruptcy chooses a Chapter 7 filing. Asset liquidation is sometimes necessary during Chapter 7 bankruptcy. People can exempt certain resources, including a specific amount of home equity and retirement savings. Reviewing personal holdings can help people determine whether Chapter 7 bankruptcy makes sense given their current debt levels and holdings.
Chapter 13 is a longer process
When people select Chapter 7 bankruptcy, they can potentially discharge their eligible debts within a matter of months. The process is relatively straightforward, and many people can discharge their debts without liquidating any of their property.
People can qualify for Chapter 13 bankruptcy even when they earn competitive wages. There is no means test that they need to pass. They also have no reason to worry about the liquidation of their assets. Instead, they have to negotiate a repayment plan with their creditors and a court-appointed trustee.
The repayment plan may include debts that are eligible for discharge and even secured debts such as mortgages. The filer makes a series of payments to the courts for between three and five years. They can then discharge the remaining balance due on their eligible debts. Chapter 13 bankruptcy is an excellent option for small business owners, successful professionals and others who worry about the potential loss of property in a Chapter 7 bankruptcy.
An individual's current circumstances and future plans, as well as the types of debt that they carry, can have a direct impact on the best option when choosing the type of bankruptcy to pursue. Reviewing personal finances with a lawyer familiar with bankruptcy cases can help people navigate the bankruptcy process and make the best possible decisions given their personal circumstances.]]>On Behalf of R. Richard Croce, LLC<![CDATA[Is bankruptcy a sign of personal failure?]]>https://www.richardcroce.com/?p=469542026-05-11T16:09:15Z2025-03-01T19:53:38ZBankruptcy stigma has significantly decreased
Years ago, an individual filing for bankruptcy could very well end up the subject of gossip at their church or office. Everyone read the local newspaper and may have noticed the legal publication about their pending case.
However, attitudes about bankruptcy have changed, and many people don't receive news about local court filings anymore. Career instability and the reliance of even successful professionals on revolving lines of credit have helped reduce negative attitudes about personal bankruptcy filings.
Most people now understand that successful professionals might only be a few weeks away from needing the relief of personal bankruptcy. Many of the most common causes of bankruptcy are outside of an individual's control.
Medical issues are a leading cause of bankruptcy. The combination of major expenses and lost wages can leave people unable to catch up financially. Job loss is another major risk factor for bankruptcy. Those who suddenly lose their jobs may be unable to make payments to their creditors. When they face vehicle repossession, foreclosure or lawsuits, bankruptcy may be the best option available.
Divorce and even an attempt to help a friend or family member financially could also leave people at risk of bankruptcy. While some bankruptcies do occur because of overspending, most people pursuing bankruptcy have a history of being financially responsible. There is no reason to feel like a failure for struggling due to factors outside of one's personal control.
While bankruptcy records are technically still public information, few people typically track court reports about bankruptcy filings. Many people can complete the bankruptcy process without their co-workers, neighbors or other social acquaintances even learning about their filing.
Individuals have less reason to fear social stigma now than in years past. Those who file for bankruptcy can often do so relatively privately and may be able to expect compassion rather than judgment from others who learn about their financial struggles.]]>