Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is typically considered as an option of last resort, because while it can stave off financial disaster, it has some substantial long-term consequences warranting careful consideration of the costs and benefits. Being a product of federal law, bankruptcy will go through federal courts. Accordingly, the procedure for filing for bankruptcy in Connecticut is basically the same as the procedure anywhere else in the United States. However, individual courts in Southbury, Connecticut will have distinct rules for exemptions, so you should speak with a local attorney before filing.

Chapter 7 Bankruptcy in Southbury, Connecticut

There are 2 typical forms of consumer bankruptcy in Southbury, Connecticut: Chapter 7 and 13. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This typically includes homes, vehicles, insurance policies, and retirement accounts. These do not need to be sold.

Once the non-exempt property is sold, the rest of the dischargeable debt is eliminated. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Southbury, Connecticut is not dischargeable, Chapter 7 may not be the best option.

Chapter 13 Bankruptcy in Southbury, Connecticut

Chapter 13 bankruptcy in Southbury, Connecticut is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your specific case. Chapter 13 does not excuse debt, but restructures it instead. Typically, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is typically manageable, as long as the debtor can make some sacrifices.

Which Type of Consumer Bankruptcy Should I File in Southbury, Connecticut

This depends entirely on the facts of your specific case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.

Regardless of your situation, you should speak with an attorney in Southbury, Connecticut who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely results of each one, allowing you to make a much more informed decision.