When you file for Chapter 7 bankruptcy in Connecticut, you’ll have the opportunity to discharge most of your debts after you go through the process of liquidation. This allows you to pay off your creditors and start over with a clean slate.
What is liquidation?
In bankruptcy law terms, liquidation is the process of selling off your assets so that you can pay off your creditors. For example, you might sell your vehicle to pay off your car loan. Liquidation involves letting go of certain assets, but it allows you to convert these assets into cash and get yourself out of debt.
When you file for bankruptcy, some assets might be exempt from liquidation. Homes and vehicles are often exempt from the liquidation process. However, you’ll have to speak with an attorney to see if you qualify for any exemptions.
Once you’ve filed for bankruptcy, creditors will no longer be able to contact you while you get your financial affairs in order. You’ll also be free from wage garnishments and other challenges that you’ve been facing. If a lien has been placed on your home, you might be able to get the lien removed so that you can continue living in that property.
How do you file for bankruptcy?
Not everyone qualifies for Chapter 7 bankruptcy. You’ll need to have a certain income level and meet other qualifications before you can file for Chapter 7. If you’re not sure whether you’re eligible, an attorney may provide the answers you’re looking for.
Once you’ve qualified, you’ll be appointed a trustee to help you liquidate your assets. Your attorney may guide you through the process and help you figure out how to keep most of your assets. You might be surprised to find that certain assets are exempt.
Chapter 7 bankruptcy allows you to sell off properties that you can no longer afford. You’ll be able to rebuild your finances again without the burden of unnecessary debt. Over time, you can build up your credit score and your self-confidence again.