Federal bankruptcy laws give consumers certain rights to retain some of their assets even if they start over. The purpose of the bankruptcy law is not to punish the debtor and prevent any fresh start.
The goal is to solve the problem of your debt so that the creditors are treated fairly while balancing the consumer's right to a cushion before starting anew, saving personal assets and having means to start from scratch.
For these reasons of balance, the Federal Bankruptcy Act allows the debtor to exempt certain property from its creditors. Even if the creditor has a security interest in the asset, the debtor can still protect certain assets based on the amount owed on the loans and the debtor's equity in the property.
Here are the main exemptions offered by the federal law. Please note that Connecticut has its own exemptions, which may be a better alternative. Generally, you must choose one or the other of the exemptions (federal or Connecticut). Some states require you to use waivers.
Connecticut is not one: you can choose federal exemptions, but you can not mix and match. An experienced Connecticut lawyer will explain the advantages and disadvantages of federal and state exemptions.
Married couples who both benefit from bankruptcy protection each receive their own exemptions. This means that married couples can double the amount of the exemption in most cases, provided that they both have an interest in the property in question.
The exemptions are adjusted regularly to take into account inflation and other economic factors. The next adjustment should take place in 2016. Adjustments occur only once every three years.
The Homestead exemption
This is the exemption in your property. It is intended to help you maintain the equity of your property. It's only good for your personal residence – where you sleep at night. The personal residence includes mobile homes and condos as well as detached homes. Starting in 2015, the federal exemption for family properties is $ 22,975.
This means that if you have a house worth $ 150,000 and you owe $ 75,000, then you will be able to keep your home (provided you qualify for the Connecticut exemption) (provided you continue to do the same. monthly mortgage payments). If you used the federal exemption, the trustee could sell your house and pay your $ 22,975 of the proceeds – if you file a bankruptcy under Chapter 7. If you file a bankruptcy under Chapter 13, the right the trustee to sell you your home becomes more complicated. It depends on how you handle arrears and other debts.
A real estate appraiser is normally used to determine the value of your home.
Exemptions related to movable property
The main exemption is $ 3,675 in your motor vehicle. This means that if you have a car worth less than $ 3,675, you should be able to keep it regardless of most other factors. If your car is worth $ 10,000 and you owe $ 7,500, you should be able to keep it as long as you continue to make the monthly payments on the car.
Other exemptions for personal property include:
- Jewelry – up to $ 1,550
- Tools for your craft, including books and tools – up to $ 2,300
- The health aids you need to stay healthy and healthy
- Life insurance policies whose life insurance loan loan value has not expired up to 12 250 USD. Credit life insurance policies are treated differently.
- Household items, home furnishings, appliances such as stoves and refrigerators, clothing, books, pets, pets, musical instruments and crops – up to a total amount of $ 12,250, not to exceed $ 575 per item. Do not forget that the value corresponds to what the object could get if you sold it, not what you had to pay to replace it.
Many personal benefits directly related to your ability to support yourself
These benefits have no limit in dollars. For example, you have the right to keep all your social security benefits.
The money you receive for alimony or alimony for your children is exempt. This means that the creditors can no longer seize it and that the trustee can not force you to use it to pay your debts.
Here are the personal benefits that are exempted:
- Social security payments
- Unemployment benefits and allowances
- Benefits because you are a veteran
- Disability Benefits or Benefits Due to Illness
- Benefits of public assistance
Money because you were hurt
Before settling a case through your personal injury attorney, it may be wise for your personal injury lawyer to talk to your bankruptcy lawyer or your credit report to maximize the funds you can keep. The federal exemptions for bankruptcy are as follows:
$ 22,975 in bodily injury benefits. Check with your Connecticut bankruptcy lawyer if the pain and suffering can be waived or you only pay for lost income and medical bills.
These amounts are not associated with a dollar amount.
- Future amounts needed for support. This amount of income is often reduced to a current value
- Unjustified death benefits because a person to whom you have trusted to obtain funds has died as a result of the wrongful behavior of another
- Victim compensation crimes
A global exemption from wildcard
This is an additional exemption that supplements the exemptions listed above. You can use $ 1,225 to save any property. For example, you can add $ 3,675 to your vehicle to save $ 4,900 in equity.
You are also allowed to use up to $ 11,500 of the family property exemption. This means that if you do not have a house, you can use this amount to save your money, your car or any other property. If you have a home, it all depends on the exemption you used to save your home. The federal exemption on family property is $ 22,975. If you used only $ 12,975 to register your home, you can use the balance of $ 10,000 to register some of your other assets.
Exemptions for retirement accounts
Many standard retirement accounts are also protected without any dollar limit. However, there are ceilings for standard IRAs and Roth IRAs. The ceiling is $ 1,245,475