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 Watertown, Connecticut will have distinct rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Watertown, Connecticut
There are 2 typical forms of consumer bankruptcy in Watertown, 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 absolved. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Watertown, Connecticut is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Watertown, Connecticut
In Watertown, Connecticut, Chapter 13 is substantially different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your specific situation. Chapter 13 bankruptcy does not absolve debt, it restructures it. This involves a court coming up with an adjusted repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original arrangements that created the debt in the first place. This creates a new payment structure, typically involving a single monthly payment, that the debtor should find manageable.
Which Type of Consumer Bankruptcy Should I File in Watertown, Connecticut
The answer to this question depends heavily on your distinct situation. If you have enough steady income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 might be a good option. If you don't have much steady income, and most of your property is exempt, Chapter 7 might be better.
In any case, it would be a good idea to consult a local bankruptcy attorney in Watertown, Connecticut. Your attorney can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).