If you are a Connecticut resident who feels as though you are drowning in debt, you do have options available to you for debt relief. Bankruptcy options are designed to help you discard the debt in its entirety or to reorganize and set up payment plans in situations where your income cannot meet the demands of what you currently owe.
According to the U.S. Courts, federal courts handle all bankruptcy cases, which are referenced by their chapter in the government’s bankruptcy code. The chapter you file under is based on your eligibility.
Perhaps the most common options when filing for bankruptcy are Chapter 7 and Chapter 13. Chapter 7, also known as liquidation bankruptcy, involves selling non-exempt property such as collections, a second car, a second home or stocks, and using cash and bank accounts to repay lenders with the proceeds. Your primary residence and the vehicle you use for work are often exempt along with retirement funds, pensions and other forms of benefits. Chapter 13 involves setting up a bankruptcy repayment plan to pay off all or some of your debts and bring you current, often using a plan that ranges from three to five years. Upon completion of the plan, your debts are erased and you can begin with a fresh financial start.
Chapter 11 is a type of bankruptcy that you may consider for your business. It is designed to help companies remain open while reorganizing the business’s finances in order to pay creditors. Chapter 12 also relates to businesses but focuses on family farms and fishing. It provides debt relief while you are under a repayment plan that may be set up over the course of three to five years.
Chapter 15 bankruptcy will only apply to you if you have debts or assets in the U.S. in addition to another country. Chapter 9 is the least utilized form of bankruptcy and applies to municipalities such as towns and cities. It provides protection while a plan is created to handle current debts, often after a shift in industry.
This post is meant to be used for informative purposes only and should not be used in lieu of professional legal advice.