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How Do You File For Bankruptcy In Ct

Contact Small Business Bankruptcy Attorneys Joseph J Dagostino

CT Bankruptcy Lawyer – Bankruptcy Tip # 5 – Insider Preferences

At Attorney Joseph J. DAgostino, Jr., LLC, we have been helping individuals and businesses achieve debt relief through bankruptcy since 1993. We are exclusively focused on bankruptcy and debt relief law and are dedicated to helping our clients realize their financial goals.

Contact us or by telephone at 203-377-9994 or 203-265-5222 to speak with an experienced Connecticut Bankruptcy Lawyer. For your convenience, we maintain two offices, one in Wallingford and one in Stratford.

How To File For Chapter 7 Bankruptcy

If bankruptcy sounds like it may be the right solution for you, learn more about the process in How to File for Bankruptcy in Danbury, Connecticut.

Or you may want to jump right into a more in-depth resource like Nolos book, How to File for Chapter 7 Bankruptcy, which walks you through the process step-by-step, including how to fill out and file your bankruptcy forms.

Connecticut Bankruptcy Lawyer Experienced In Chapter 7

Those who plan on filing for chapter 7 bankruptcy in Connecticut will follow the same general process as those in other states, although there is some information specific to Connecticut that will need to be included on the forms. You will also need to be aware of the Connecticut bankruptcy exemptions and find an approved credit and debt counselor in Connecticut. If this sounds complex and daunting to you, contact Connecticut Bankruptcy Attorney Susan M. Williams for assistance.

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Chapter 7 Bankruptcy In Connecticut

In the state of Connecticut, debtors can use either the federal bankruptcy exemptions, or the Connecticut state exemptions, but they cannot pick and choose from both lists. There are exemptions regarding a debtor’s home and car, known as the Homestead Exemption and the Motor Vehicle Exemption. The amount of the exemptions varies according to county for example, the standard mortgage or rent exemption for a family of four living in Hartford County is $1705, while it is $2575 in Fairfield County.

How Chapter 13 Payment Plans Work

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Under Chapter 13, you propose a plan to repay your creditors all or part of what you owe, usually using your future income. If the court approves your plan, you will make payments on your debts for either three or five years. The time and amount of your repayment plan will depend on:

  • your income
  • the kinds of debt you have
  • the value of the property you own, and
  • your expenses.

If your current monthly income is less than your states median income for your family size, your plan will usually be for three years. If your income is greater than the state median income, you must usually propose a five-year plan.

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Connecticut Bankruptcy Exemptions: What Property Can I Keep

Before you even start to fill out your bankruptcy forms with the help of an experienced bankruptcy attorney, youll want to decide whether or not to use federal exemptions that are part of the U.S. Bankruptcy Code or the state exemptions provided by Connecticut law. You must be consistent and choose one method of exemptions you cant alternate between the two, such as using the Connecticut exemptions for your house but federal exemptions for your car.

Should you decide to go with Connecticuts exemptions, you may also use additional exemptions that are called the federal non-bankruptcy exemptions, which may be found in various sections of the Bankruptcy Code. An attorney would review these with you. You cannot use these if you are using the federal bankruptcy exemptions.

Special Provisions For Small Business Debtors In Chapter 11 Cases

For the most part, small businesses and major corporations have to follow the same rules and meet the same requirements to reorganize under Chapter 11. There are, however, some special provisions for small business debtors that can help them fast track through the Chapter 11 process and reduce legal and other restructuring expenses.

Under the Bankruptcy Code, a Chapter 11 proceeding filed by a small business debtor is considered to be a small business case. A small business debtor is a person or entity who: is engaged in business or other commercial activities and owes no more than $2,725,625 as of April 1, 2019 in total claims, excluding obligations owed to insiders such as family members of the business owners.

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Learn The Basics Of Bankruptcy

Bankruptcy is a legal proceeding created to give people a fresh start after financial disasters. If you’ve explored your alternatives and can’t see a way out from under your debt, bankruptcy may be the right solution for you.

There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13. Chapter 7 can wipe out most of your debts in a matter of months in exchange for giving up all of your property that the bankruptcy law does not protect.

Chapter 13 takes three to five years. During that time, you repay some or all of your debts under a payment plan approved by the bankruptcy court. Its often used by people who are behind on mortgage payments and want to use Chapter 13 to catch up. Most folks who file for bankruptcy prefer to file for Chapter 7 if they qualify, because you can get out from under lots of debt in a matter of a few months.

To learn more, see How Chapter 7 Bankruptcy Works and How Chapter 13 Bankruptcy Works.

When To File Chapter 7 Bankruptcy

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There are several warning signs that you should be considering Chapter 7 bankruptcy. Five strong signs that indicate filing for Chapter 7 may be the right solution include:

  • Your debts total more than half your annual income.
  • It would take five years to pay off your debt, even if you took extreme measures.
  • Your debt creates stress in essential aspects of your life, such as relationships and your ability to sleep.
  • You have little to no disposable income.
  • Your monthly income is below the median level in your state.
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    Choosing Whether To File Singly Or Jointly

    If you are married, you can elect to file by yourself or with your spouse. If only one of you is liable for substantially all the unsecured debt, then a single filing is usually be a clear choice. If both spouses have significant debt it is usually better to file jointly, however, to eliminate as much debt service from the family budget as possible. Your spouses individual preference will ultimately be the deciding factor. Some factors that should be considered in making that decision are as follows.

    In chapter 7 there is no protection for co-debtors during the case, and the liability of a co-debtor is not affected by a spouses bankruptcy discharge. For personal loans you would have to be either a primary obligor or a guarantor to be liable, but under Connecticut law authorized users are also liable on credit card debt. Even if a spouse is not an authorized user, he or she may become liable just by using the card under the account stated doctrine. So, these potential liabilities should be considered by the prospective non-filing spouse.

    Complete A Credit Counseling Class

    Sometime during the six months before you file for bankruptcy, you must complete a mandatory credit counseling session with a government approved credit counseling agency. You can satisfy this requirement in-person, over the phone, or online. It will take about 90 minutes and may cost as little as $0 or as much as $100, depending on your ability to pay. After you take the class, youll receive a certificate that you must file with your bankruptcy petition.

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    Do I Qualify For Bankruptcy Bankruptcy Means Test Standards For Fairfield County

    You may be surprised to learn that whether you can file for bankruptcy can come down to which state and county you live in.

    Which type of bankruptcy you qualify for depends, in part, on whether your annual income is more or less than the Connecticut median income. Before looking at numbers and formulas, however, you should be familiar with the two main types of personal bankruptcy:

    Undoing Preferential Transfers That You Made Before Filing

    How Much Does it Cost to File for Bankruptcy?

    One tool the trustee has is the authority to undo what are called “preferential transfers” — that is, money you transferred to someone else just before filing bankruptcy.

    Under this power, the trustee will be very interested in undoing any recent repayments of debts you made to your relatives or friends just before bankruptcy, as these are called a “preference.” The trustee can reverse these transactions and reclaim it for the “bankruptcy estate” because, by repaying these people, you have “preferred” some people you owe money to over others — and bankruptcy does not allow this.

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    Chapter 7 Bankruptcy Connecticut

    As Chapter 7 is the most common consumer bankruptcy filing, we will cover this bankruptcy first. In order to file Chapter 7 bankruptcy, you have to go through means-testing. The means test was added to the Bankruptcy Code in 2005 to prevent bankruptcy fraud. The income requirement for Connecticut helps ensure that a person with a sufficient income to pay back some of the debts may file a Chapter 13 instead of Chapter 7.

    Will Filing Bankruptcy In Connecticut Erase My Debts

    Bankruptcy wipes out many bills, like , overdue utility payments, medical bills, personal loans, and more. You can even get rid of a mortgage or car payment if you’re willing to give up the house or car that secures the debt.

    But you can’t discharge all debts. Nondischargeable debts, like domestic support arrearages and recent tax debt, won’t go away in bankruptcy, and student loans aren’t easy to wipe out . You’ll want to be sure that bankruptcy will discharge enough bills to make it worth your while.

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    Doesnt Filing For Bankruptcy Ruin My Reputation And My Life

    Not if it gets you out of debt. You might be able to run from creditors for a while, but eventually the stress of that overwhelms people. Bankruptcy lets you stop running and start over again. It may take a few years for you to get loans and obtain credit again, but at least youll have that opportunity. Bankruptcy is meant to give people who made financial mistakes a second chance. In todays turbulent economy, that is a good thing.

    How To File Bankrupcty In Fairfield County Ct

    Top Bankruptcy Lawyers CT | Bankruptcy Tip Number One – Bankruptcy Eligibility
    • Secured debt vs. unsecured debt: What’s the difference? Bankruptcy helps you get rid of unsecured debt. It does not eliminate secured debts, where you have pledged collateral for a loan, such as a car loan or a mortgage. When you file bankruptcy you must declare what you intend to do about your secured debts.
    • Do I need a lawyer to file for bankruptcy? The law does not require to have a lawyer, and if your case is simple and you have few assets, you can successfully file a Chapter 7 bankruptcy yourself. Chapter 13? Not so much. And if you have property to lose, or you’re not great with details, getting a lawyers help can be a good idea, no matter what kind of bankruptcy you’re filing. Also a lawyer may find ways to help that you haven’t’ thought of
    • Do I have to get credit counseling before I file for bankruptcy? Yes. You must complete a credit counseling course before you file your bankruptcy petition. Fortunately, it’s easy and can be done online. And your case cannot be completed (i.e. you can’t get your “discharge order” from the judge until you take a “Debtor Education” course.

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    Who Declares Bankruptcy

    Most individuals and business who file for bankruptcy have far more debts than money to cover them and dont see that changing anytime soon. In 2020, bankruptcy filers owed $86 billion and had assets of $56 billion. Most of those assets were real estate holdings, whose value is debatable.

    On the other hand, bankruptcy can often be used as a financial planning tool when you do have enough money to repay debts, but need to restructure the terms. This is often in cases when people need to repay mortgage arrears or taxes in a structured repayment plan.

    What is surprising is that individuals not businesses are the ones most often filing for bankruptcy. They owe money for a mortgage, credit card debt, auto loan or student loan perhaps all four! and dont have the income to pay for it.

    There were 774,940 bankruptcy cases filed in 2019, and 97% of them were filed by individuals. Only 22,780 bankruptcy cases were filed by businesses in 2019.

    The other surprise is that most of the people filing bankruptcy were not particularly wealthy. The median income for those who filed Chapter 7, was just $31,284. Chapter 13 filers werent much better with a median income of $41,532.

    However, in the end, there is a price to pay and youll pay it for 7-10 years.

    What Is A 341 Hearing

    Everyone who files for bankruptcy must attend a 341 hearing, which is also called a “creditors meeting.” The meeting is conducted by the bankruptcy trustee assigned to your case. The trustee will put you under oath and may ask you questions about the information you’ve provided on your bankruptcy forms. Creditors may also show up at the hearing to ask you questions, but it’s not common for them to do so.

    Bankruptcy law also requires the trustee to ask you questions to be sure you understand how bankruptcy works and the potential consequences of filing bankruptcy, such as the effect on your credit record.

    For most bankruptcy filers, this will be your only trip to the courthouse . Most court websites post schedules of 341 hearings, and when you file, you will be notified of your hearing date. When you show up for your hearing, you will find that many other people have hearings set for the same day. You will sit and wait for your name to be called–usually in a room somewhere in the courthouse or federal building, but probably not in a courtroom.

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    Is There An Income Limit For Chapter 7 Bankruptcy

    To automatically qualify for Chapter 7, your disposable income must be below the median level for your state. That number varies from state-to-state. If your disposable income exceeds the median in your state, you still may be able to qualify through a means test that includes looking at your income and reasonable expenses to see if you can get that number under the median income for your state.

    Connecticut Bankruptcy Filing Process

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    The bankruptcy filing process in Connecticut is similar to other states. Generally, the process is as follows for Chapter 7 bankruptcy:

  • Understand bankruptcy qualification
  • Take the Credit Counseling Course
  • File Bankruptcy Petition and Other Forms
  • Connecticut trustee is assigned to the case
  • Attend 341 Meeting of Creditors
  • Take Second Mandatory Debt Education Course
  • Receive Bankruptcy Discharge
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    Here Are Some Other Special Procedures For Small Business Chapter 11 Cases:

    No Creditors Committee. Ordinarily, in Chapter 11 cases, a committee is appointed to represent the interests of unsecured creditors. A creditors committee can retain attorneys and other professionals at the debtors expense, which can significantly increase the cost of Chapter 11 reorganization. In a small business case, the bankruptcy court can order that prevents a creditors committee from being appointed.

    Additional Filing and Reporting Duties. Small businesses are subject to some reporting and filing requirements that are not imposed on other Chapter 11 debtors. A small business debtor, for example, must attach its most recently prepared balance sheet, statement of operations, cash flow statement, and federal tax return to its bankruptcy petition when it files for Chapter 11 relief.

    Additional U.S. Trustee Oversight. The United States Trustees office is the agency that oversees bankruptcy cases on behalf of the Department of Justice. Under the bankruptcy laws, small business cases are subject to more oversight by the U.S. Trustees office than other Chapter 11 proceedings.

    Plan Deadline. Generally, there is no deadline for filing a Chapter 11 plan unless set by the bankruptcy court. In small business cases, however, the debtor has only 300 days to propose a Chapter 11 plan. The court can extend the 300-day deadline, but only if the debtor proves that it will be able to obtain approval of a plan within a reasonable period of time.

    Bankruptcy Filings: Who Has Access To These Public Records

    Owing to your financial situation, the idea of filing for a Chapter 7 or Chapter 13 bankruptcy is under consideration. One of your concerns is who will be able to find out about the action if you do file. As your attorney will explain, all personal bankruptcy filings in the United States are part of the public record. What may surprise you is that people will often have to do some research in order to find those public files.

    Bankruptcy Notices in the Newspaper

    In many jurisdictions, personal bankruptcy notices are printed weekly in the local newspapers. The amount of information is generally limited. In the paper, the notice will include your name, present address, and the form of bankruptcy that youve filed. All other details, while available through the court, would have to be requested.

    The fact is that not everyone chooses to read these public notices anymore than they pore over the published reports of recent arrests. That means if you do file an action, only those who actually read that section of the paper are likely to notice.

    The Major Credit Bureaus

    Keep in mind that some of the creditors included in the bankruptcy action may also submit comments to the credit bureaus noting the accounts are closed due to a bankruptcy action. Again, anyone who is willing to register and request information on your credit history will see those notes.

    How About Obtaining Information Online?

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