Bankruptcy

Can I Keep My Property If I File for Bankruptcy in Connecticut?

By Cara O'Neill, Attorney
You don't lose everything that you own when you file for bankruptcy. Find out what you can keep.

August 1, 2017

To learn what property you can exempt (protect) if you file for bankruptcy in Connecticut, you’ll look to Connecticut’s exemption statutes. What will happen to your nonexempt property—the property that isn’t protected by an exemption statute—will depend on the particular chapter that you file.

  • Chapter 7 bankruptcy. The Chapter 7 bankruptcy trustee (the official who oversees your case) is responsible for selling nonexempt property and distributing the sales proceeds to creditors.
  • Chapter 13 bankruptcy. A debtor (the person owing creditors) can keep nonexempt property in a Chapter 13 bankruptcy. However, the debtor must pay the amount that a creditor would get in a Chapter 7 bankruptcy (the value minus the cost of sale) as part of a three- to five-year repayment plan. The court won’t confirm (approve of) the plan if the debtor doesn’t have enough monthly income to pay the necessary amount. To lower the monthly payment, the debtor can sell the nonexempt property and give that amount to the trustee to pay to creditors (the Chapter 13 trustee won’t sell the property).

Connecticut offers its residents the option of using either the state exemptions or the federal exemptions; however, you can’t pick and choose between the two schemes. If you decide to use the state exemptions, the federal “nonbankruptcy” exemptions will be available to you, as well.

Connecticut Property Exemptions

Unless otherwise noted, references are to the Connecticut General Statutes (Conn. Gen. Stat.). You’ll find the statutes on the Connecticut General Statutes web page. Also, spouses who file together (jointly) can double the exemption amount on any item of property that they own together.

Homestead

  • Homestead—$75,000 for real estate, co-op, or a manufactured home that’s occupied at the time of the bankruptcy filing. (Conn. Gen. Stat. § 52-352b(t).)

Wages and Support

  • Wages—75% of disposable earnings or 40 times the minimum wage, whichever is greater. (Conn. Gen. Stat. § 52-361a(f).)
  • Child support payments (Conn. Gen. Stat. § 52-352b(h).)
  • Other support—exempt to the same extent as wages. (Conn. Gen. Stat. §§ 52-352b(n), 52-361(a).)

Motor Vehicle

  • One motor vehicle—$3,500. (Conn. Gen. Stat. § 52-352b(j).)

Household Furnishings, Jewelry, and Clothing

  • Household goods, furnishings, food, and clothing (Conn. Gen. Stat. § 52-352b(a).)
  • Health aids (Conn. Gen. Stat. § 52-352b(f).)
  • Engagement and wedding rings (Conn. Gen. Stat. § 52-352b(k).)

Tools of the Trade

  • Tools of the trade for business, profession, trade, or farm operation (Conn. Gen. Stat. § 52-352b(b).)
  • Military personnel equipment and arms (Conn. Gen. Stat. § 52-352b(i).)

Retirement Accounts, Pensions, and Other Benefits

  • State employee retirement benefits (tier II pensions) (Conn. Gen. Stat. §§ 5-192w, 5-171.)
  • State and municipal employee retirement benefits (including teachers) (Conn. Gen. Stat. §§ 10-183q, 5-171, 7-446.)
  • Vietnam veteran’s bonus (Conn. Gen. Stat. § 27-140i.)
  • Unemployment and worker’s compensation (Conn. Gen. Stat. §§ 31-272(c), 31-320, 52-352(b)(g).)
  • Retirement benefits for probate judges and employees (Conn. Gen. Stat. § 45a-481.)
  • Public assistance, including incentive earning program wages (Conn. Gen. Stat. § 52-352b(d).)
  • Veterans, Social Security, unemployment, and workers compensation benefits (Conn. Gen. Stat. § 52-352b(g).)
  • Qualified pension, profit-sharing, or retirement plan (Conn. Gen. Stat. §§ 52-352b(m), 52-321(a).)
  • Illness benefits (Conn. Gen. Stat. § 52-352b(p).)

Insurance

  • Unmatured interest in life insurance—$4,000 in cash value, dividends, or interest. (Conn. Gen. Stat. § 52-352b(s).)
  • Life insurance proceeds, dividends, interest, cash or surrender value (Conn. Stat. §§ 38a-453, 38a-454.)
  • No-fault insurance law benefits (Conn. Stat. § 38a-380.)
  • Fraternal society benefits (Conn. Stat. § 38a-637.)
  • Health or disability insurance payment (Conn. Gen. Stat. § 52-352b(e).)
  • Exempt property insurance proceeds (Conn. Gen. Stat. § 52-352b(q).)
  • Farm partnership insurance proceeds (Conn. Gen. Stat. § 52-352d.)

Miscellaneous

  • Liquor license (Conn. Gen. Stat. § 30-14.)
  • Some partnership property (Conn. Gen. Stat. § 34-328.)
  • Burial plot—for filer and immediate family. (Conn. Gen. Stat. § 52-352b(c).)
  • Deposits (residential and utility) for one residence (Conn. Gen. Stat. § 52-352b(l).)
  • Crime victim reparation award (Conn. Gen. Stat. § 52-352b(o).)

Wildcard

  • Wildcard—$1,000 of any personal property (anything other than real estate) of the filer’s choosing. (Conn. Gen. Stat. § 52-352b(r).)

How to Avoid an Unexpected Loss of Property

This list is available to give you a general overview of the types of assets a filer can protect in bankruptcy. Improperly claiming exemptions can result in a loss of the property. To prevent unexpected results, you should be aware of the following:

  • other exemptions are available
  • exemptions change periodically, and
  • exemptions are subject to conditions (you’ll find them in the statutes).

It’s important to verify exemption qualifications yourself. If you aren’t able to do so, you should consult with a local bankruptcy lawyer.

Questions for Your Attorney

  • Do I own any nonexempt property?
  • Can I pay to keep nonexempt property in a Chapter 7 bankruptcy?
  • Can you tell me how much my monthly Chapter 13 bankruptcy payment would be?
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