Connecticut Bankruptcy Exemption Laws

Some states allow residents who have lived in the state for two years or longer to choose between state and federal bankruptcy exemptions. Connecticut is one state, and we'll go over each exemption below.

Connecticut will also allow you to pick between federal bankruptcy exemptions and state law exemptions, and you can select the one that best suits your financial circumstances.

When you file for bankruptcy in Connecticut, you can exempt up to $75,000 of your equity in the property you live in. If you and your spouse jointly own the house and file for bankruptcy, the threshold increases to $150,000.

The homestead exemption covers any equity you have in real estate, prefabricated houses, or co-ops.

Exemption from Wages

Wages earned after filing bankruptcy are not included in your bankruptcy estate under the federal exemption. Wages earned after filing bankruptcy are not included in your bankruptcy estate. Your bankruptcy estate includes income you've earned but hasn't yet received. Wages can be used to pay your obligations.

Exemption for personal property

Connecticut does not impose a financial restriction on how much personal property you can keep in bankruptcy. The following items are exempt from the personal property tax:

Furniture/Appliances
Rings for weddings and engagements
Food
Health-related necessities
Funeral plot
Clothes
Damage to exempt property was covered by insurance money.
Spendthrift trusts that you or your family need to survive
Exemption for motor vehicles
You can deduct up to $3,500 in equity from your taxes if you own a car.

Exemption for wildcards

The $1,000 wildcard exemption applies to any property you own.

Exemption for Trade Tools

Connecticut exempts the equipment, manuals, and farm animals you'll need to do your job. Furthermore, animals and cattle necessary to manage a partnership farm are excluded if at least 50% of the partners belong to the same family.

Exemption for Insurance Benefits

Exemptions apply to the following insurance benefits:

Exemption for Public Benefits

Compensation for unemployment
Earnings from an incentive scheme
Compensation for crime victims
Benefits for veterans
Aid to the elderly, blind, crippled, and families with children in need (AFDC)
Additional Exemptions
To the extent that wages are free from alimony,
Child support
Social Security Benefits

Vehicle

The car cannot be sold to pay off your debts if its equity is less than the exemption of your chosen option. If your equity exceeds the exemption, the bankruptcy trustee will almost certainly sell it.

Pension/Retirement

Pension and retirement funds are generally excluded under Connecticut law. However, IRAs and Roth IRAs are subject to a $1,283,025 limit. Connecticut law protects state employees, municipal staff, professors, and health savings accounts.

Likewise, pension and retirement funds are generally excluded and subject to the same cap under federal law.