One of the main benefits of filing for bankruptcy is the ability to protect your property. However, these federal laws can be superseded by state laws regarding exceptions. Two states with very specific laws regarding these exceptions are Colorado and Connecticut.
In the western state of Colorado there are many different kinds of income and assets that can be considered as exceptions. First, there are a number of kinds of property or income that can be one hundred percent free of the threat of liquidation. This can include payments from regular life insurance and group life insurance. Secondly, there are some assets that are only partly protected. Unfortunately, this protection will not cover rental homes or vacation homes. Also, motor vehicles are protected but only for up to three thousand dollars in value. People with special needs, such as the disabled, may be able to protect up to six thousand dollars in value however.
The eastern state of Connecticut also has some very specific laws regarding bankruptcy exceptions. This state is thankfully more generous with certain exceptions. Things that are likely to be one hundred percent protected include payments from worker’s compensation, unemployment benefits, retirement plans, life insurance, and certain kinds of physical property such as household furniture and tools that are used in a debtor’s line of work.
The homestead exception in Connecticut is also much more generous. For a house, mobile home, or condominium, up to seventy five thousand dollars in equity can be protected. Unfortunately, the total claimed by two spouses who file cannot exceed this number. Unlike the homestead exception, the exception for motor vehicles can sometimes be less than it would be in Colorado. In Connecticut, up to fifteen hundred dollars in value of a vehicle can be protected. However, if a person files with a spouse, up to three thousand dollars can be protected.
Connecticut law also allows for something called a wild card exception. Using this wild card exception, a debtor can protect one thousand dollars in value of any kind of property he or she owns. This kind of protection does not exist in Colorado.
There are many other exceptions in these two states, and laws regarding exceptions can change rather quickly. This is why it is suggested that if you live in either Colorado or Connecticut and are considering filing for personal bankruptcy. This way, you can discuss exactly what property of yours can be protected during bankruptcy proceedings.
Coan, Lewendon, Gulliver & Miltenberger, LLC is a Connecticut bankruptcy law firm with expertise in the full range of commercial and personal bankruptcies and business reorganizations. For 28 years they have provided thoughtful and effective representation for clients in each bankruptcy court in the District of Connecticut.
Their practice in issues affecting the elderly and the incapacitated for the past 28 years has included counseling clients about options when planning for their health, housing, finances, and estate plans. Their reputation throughout the Connecticut legal community is one of respect for our exceptional depth of knowledge and for their dedication to their clients’ concerns. Their record of results speaks to the success of that dedication. Contact them by phone or email for more detail.