Bankruptcy is a legal procedure that allows an individual or business to have some or all of their debts discharged. It is usually considered as an option of last resort, because while it can stave off financial disaster, it has some significant long-term consequences warranting careful consideration of the costs and benefits. Being a creation of federal law, bankruptcy will go through federal courts. Accordingly, the process for filing for bankruptcy in Connecticut is essentially the same as the process anywhere else in the United States. However, particular courts in Thompson, Connecticut will have individual rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Thompson, Connecticut
There are 2 common types of consumer bankruptcy in Thompson, 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 usually includes homes, vehicles, insurance policies, and retirement accounts. These do not have to be sold.
Once the non-exempt property is sold, the rest of the dischargeable debt is cleared. Some forms of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Thompson, Connecticut is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Thompson, Connecticut
Chapter 13 Bankruptcy in Thompson, Connecticut differs significantly from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 does not discharge debt, but restructures it instead. Usually, 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 usually manageable, as long as the debtor can make some sacrifices.
Which Type of Consumer Bankruptcy Should I File in Thompson, Connecticut
Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your individual situation. If you have a stable income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a stable income, and most of your property is exempt, Chapter 7 might be a better way to go.
Regardless of your situation, you should speak with an attorney in Thompson, Connecticut who is accomplished in bankruptcy before making a decision. They will be able to advise you of your options, and the likely consequences of each one, allowing you to make a much more informed decision.