Understanding Connecticut Bankruptcy Exemptions

The Connecticut bankruptcy exemptions allow you to protect certain assets from creditors when filing for bankruptcy. The amounts vary per state, so if you live in Connecticut, it’s important to know to what extent your personal and real property is protected. The good news is that few bankruptcies are filed in Connecticut. For the year 2024, a total of 2,747 Chapter 7 cases were filed, compared to 572 Chapter 13 cases.

But before you file for bankruptcy in Connecticut, you must meet the residency requirements of the Bankruptcy Code.

Where Do You File for Bankruptcy?

Residency requirements in bankruptcy determine which state’s exemption laws you can use when filing. This is important because it will determine when you should file for bankruptcy.

For example, if you are moving to or out of Connecticut, comparisons can be made with both states’ exemptions. Based on the exemption amounts offered by both states, it will determine when it’s best to file for bankruptcy to protect your assets. But this depends on two key dates.

The first date to consider is known as the 180-Day Rule. This means you must have lived in Connecticut for at least 91 of the last 180 days before you can file for bankruptcy. However, you would be applying the laws of where you resided previously.

• Where Do You File Bankruptcy? Here’s What You Need to Know About the Residency Requirements

To use the Connecticut bankruptcy exemptions, you must comply with the 730-Day Rule. This means you have resided in Connecticut for at least two years. To claim the homestead exemption, you must reside in Connecticut for 1,215 days per Section 522 of the Bankruptcy Code.

Federal Bankruptcy Exemptions

Not every state has the option of the federal bankruptcy exemptions. Only seventeen states offer federal exemptions. That’s why exemption limits vary per state. But Connecticut is one of those states where federal exemptions can be used. But just like the residency issue, you have to figure out if federal exemptions are better for you, since you can’t combine them. You have to pick one or the other.

Connecticut Homestead Exemption

The Connecticut homestead exemption is $250,000. This means that it is the amount of equity protected. Note that in researching for this blog post, many sites were listing the previous amount. Always double and triple-check to confirm the right amounts. My suggestion is the state statutes website, and even that should be confirmed.

Now, let’s use an example of how exemptions work. Per Zillow, the average home price in Connecticut is $407,391. Per the credit reporting bureau Experian, the average mortgage balance is $252,505. By subtracting the mortgage balance from the home’s value, there is $154,886 in equity. Since the homestead exemption is up to $250,000, there’s still $95,114 to spare. So in this example, this home’s equity would be protected.

By comparison, the federal homestead exemption is $27,900. So, depending on the facts of your case, it is more likely to use Connecticut’s exemptions.

Other Connecticut Bankruptcy Exemptions

Besides your homestead, other exemptions protect other assets such as personal property and vehicles. Connecticut is generous with necessary items such as appliances, furniture, clothing, food, and bedding that are necessary for daily living. They are fully protected under Connecticut General Statutes § 52-352b(a). Even burial plots are protected, and this is an important issue to me.

Unfortunately, Florida treats a burial plot as real estate, so it’s never protected. It’s never easy to explain to a client that their cemetery plot, which was paid off, now belongs to the bankruptcy estate. As far as I am concerned, every state should exempt burial plots. If not, if a family can’t afford to bury their loved ones, then guess who will? The county or state will pay for it.

The motor vehicle exemption applies up to two cars and a total of $7,000 is exempt per Connecticut General Statutes § 52-352b(j).

There is also an exemption for tools of the trade, however, it is specific to farms. The tools of the trade exemption usually applies to any “tools” or equipment of a debtor. For example, if it applied to me, it would be my computers, etc.

Contact information for the Connecticut bankruptcy trustees can be found via this link. This link is for the contact information for the bankruptcy court system in Connecticut.

You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. For paralegals and students buying single copies, you can do so via Amazon Books. To access my YouTube channel, click this link. You can also listen to my podcast on Spotify.

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Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.