Bankruptcy in New Haven, CT

Bankruptcy is not a sign of failure. It’s a legal tool to help individuals and businesses in New Haven find a fresh start. Otherwise, you may find yourself trapped in a cycle of debt.

You can start by immersing yourself in this comprehensive guide for New Haven locals. Learn about the types of bankruptcy, the process, and what it could mean for your future. Then, ask for a referral to a local attorney who can tailor their expertise to your circumstances.

Types of Bankruptcy in New Haven, Connecticut

Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. In New Haven, CT to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11 or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. You should also consider working with an experienced bankruptcy attorney.

Bankruptcy cases from New Haven residents go through the U.S. Bankruptcy Court for the District of Connecticut. Your attorney may need you to attend hearings with them in person or online.

Chapter 7 Bankruptcy

Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in New Haven  who can help you to decide if a liquidation plan is right for you.

Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car, or some other assets. However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.

Regardless, some financial circumstances and goals may not align with Chapter 7. As a result, you may choose to pursue Chapter 11 or Chapter 13. For instance, you may have valuable assets you would like to retain. Alternatively, businesses in New Haven may be strong candidates for a repayment plan.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is more complex than other types of bankruptcy. It is often used by businesses and certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, usually four to 18 months. The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.

Crucial forms for Chapter 11 bankruptcy include balance sheets and cash flow statements. Tax returns and schedules of assets and liabilities are also a requirement. You can submit a detailed reorganization plan once the court in New Haven has these essentials.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In New Haven, CT after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also give you the opportunity to have some or most of your debts discharged.

There are even more questions that a Chapter 13 applicant from New Haven must answer. Some of the most vital concerns for the process include the following inquiries:

  • What are your sources of income, and how much do you earn from each?
  • What are your monthly living expenses, including mortgage or rent, utilities, groceries, and other essentials?
  • What assets do you own, such as real estate, vehicles, personal property, and financial accounts?
  • What are your outstanding debts, including credit cards, loans, medical bills, and other obligations?
  • How will you propose to repay your debts over the 3 to 5-year period under Chapter 13?
  • Have you filed for bankruptcy before, and if so, when and under what chapter?

The Bankruptcy Process in New Haven, Connecticut

There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.

In New Haven to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets, and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.

Choosing exemptions is also a vital part of the bankruptcy process. New Haven residents must choose between what the state and federal government offers. There are exceptions for your primary household, personal property, and tools of your trade. However, you may benefit more from one set over the other. Your attorney will help you maximize what you can keep.

At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course, usually online or over the phone. Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate of completion from your credit counseling course, the courts will reject your bankruptcy petition.

Work With an Experienced New Haven, Connecticut Lawyer

Hiring a local bankruptcy lawyer in New Haven during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case, especially which debts that can be discharged or can’t be discharged. An experienced Connecticut attorney can also offer you guidance to improve the outcome of your case.

Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy, such as debt consolidation. Though bankruptcy is an attractive solution, it is best as a last resort. Do you need immediate help? Then one of our experienced lawyers in New Haven can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Connecticut state lines.

Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!

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