The Connecticut legislature recently enacted a new homestead exemption, which will come into effect in October of this year. This is great news for anyone with large amounts of debt as well as anyone who has been contemplating declaring bankruptcy. Here’s what to know about how this new exemption will affect you.
What the exemption does
The exemption is contained within an act called An Act Concerning Property That Is Exempt From A Judgment Creditor, which Governor Lamont signed into law in July of this year. This Act expands the already existing exemption amounts.
As of October 1, 2021, the homestead exemption will expand to cover $250,000 worth of equity per homeowner. If two people own their home together, they could protect up to $500,000 worth of equity in the same home.
What this means for homeowners
The new homestead exemption will allow you to protect equity in your home from judgment creditors. It will also allow you to protect the equity in your home if you need to file bankruptcy. This will help you if you are worried about a judgment lien on your home.
If you owe money to a credit card, a bank, a hospital or the other party to a car accident, for example, and they sue you, all or most of the equity you’ve built up will be safe, even if you otherwise cannot cover the cost of the judgment.
This change in the law comes at the right time because property values in most of Connecticut have increased considerably over the past two years. Millions of Connecticut residents can now breathe easy knowing that they won’t lose the equity that they worked so hard to build up over the course of many years.
To learn more about the new Connecticut Homestead Exemption, and how it will protect your home from creditors, call Attorney Timothy Pletter today.