Should You Declare Bankruptcy?

Not Until You Read This...
September 2008

Should You Declare Bankruptcy?
What Can You Do?
Are There Times When You Should File for Bankruptcy?
Where To Get Help...

Should You Declare Bankruptcy?

If you owe money, but you

• do not own real estate,
• do not have a car worth more than $3,500,
• do not have a bank account, and
• do not have a job or take home less than $306 a week ($320 as of 1/1/2009),

Note:  Bankruptcy laws changed in October 2005. However, people who need to can STILL file for bankruptcy. For more information call Statewide Legal Services.

Important Points:

• Your creditors cannot take what you do not have.
• Generally, you cannot go to jail for owing someone money.
• You do not have to take harassment from creditors and collection agencies. (See the Legal Aid pamphlet, Debt Collection Practices).
• Even if you owe people money, they cannot take your car if the car is worth less than $3,500. However, the creditor, dealer or bank from which you borrow money to pay for the car can repossess it no matter how much the car is worth.
• A creditor cannot attach your wages unless you take home more than 40 times the minimum wage. The law does this so that people do not go hungry, become homeless or have to go on welfare. Even if your creditor has a court judgment against you, your wages cannot be attached unless your net pay (that is, after taking out taxes, Social Security, union dues, etc.) is more than $306 per week ($320 as of 1/1/09).  See the Legal Aid pamphlet, A Guide to Wage Attachments.

• Generally, a creditor may not attach (or garnish) payments from

  • welfare payments
  • veteran's benefits,
  • workers' compensation benefits,
  • social security benefits,
  • unemployment benefits,
  • child support payments,
  • alimony payments, and
  • pension and retirement benefits
  • health and disability insurance payments.

However, you may have to file certain papers in court to protect this type of income.

• A creditor may not take your household goods or clothing.

Are there times when you SHOULD file for bankruptcy?

Yes, there may be times when it might be better for you if you do file for bankruptcy, for example if...

• the worry and stress from having these debts are too hard for you to handle, or
• you are about to get a job where your wages can be attached.

For more information on bankruptcy, please see the Legal Aid pamphlet,  A Guide to Bankruptcy.

Where To Get Help

• Cooperative Extension Service of the University of Connecticut provides budget counseling.  305 Skiff St., North Haven.  Call 203-407-3161.

• Statewide Legal Services for bankruptcy and other consumer advice and information. Call 1-800-453-3320 or (860) 344-0380.

• Consumer Law Project for Elders provides free legal assistance to seniors 60 and over who have consumer questions or problems. Call 1-800-296-1467.

This pamphlet was produced by the Legal Assistance Resource Center of CT in cooperation with Connecticut Legal Services, Greater Hartford Legal Aid, New Haven Legal Assistance Association, and Statewide Legal Services.  The information in this pamphlet is based on CT laws as of 9/2008. We hope that the information is helpful. It is not intended as legal advice for an individual situation.

If you need further help and have not done so already, please call Statewide Legal Services (see above) or contact an attorney. 

Copyright: 9/2008   www.larcc.org

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