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Last Modified on Aug 27, 2021
The Connecticut Legislature enacted a homestead exemption change in 2021, which went into effect in October of that year. This was great news for anyone with large amounts of debt, as well as anyone who had been contemplating declaring bankruptcy. It’s important to understand how the Connecticut Homestead Exemption can affect you, your financial well-being, and your debt resolution options.
What the Homestead Exemption Does?
The 2021 exemption was contained within an act called An Act Concerning Property That Is Exempt From a Judgment Creditor, which Governor Lamont signed into law in July. This act expanded the already existing exemption amounts.
As of October 1, 2021, the homestead exemption expanded 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. Prior to this change, the homestead exemption was set at $75,000 for a primary residence.
The law also updates the value of exemptions for a vehicle, personal property, and unmatured life insurance.
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 came at the right time because property values in most of Connecticut increased considerably over the two years prior to the change. 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.
How Does Homestead Exemption Affect Bankruptcy Filings in Connecticut?
The average individual in Connecticut with a credit score had $66,600 in debt in 2024. When filing for Chapter 7 bankruptcy, your non-exempt assets are sold to cover your debts before they are discharged. Homestead exemption protects your home’s value from this sale.
Approximately 83.4 percent of all bankruptcy cases filed during the 12-month period ending on June 30, 2025 in Connecticut were Chapter 7 bankruptcy cases. Attorney Tim Pletter can help you file with one of the three U.S. Bankruptcy Courts in Connecticut.
FAQs
Does Connecticut Have a Homestead Exemption?
Connecticut does have a homestead exemption, which protects specific property from court judgments, including your primary residence. This exemption protects up to $250,000 of the home’s value. This applies to real property, a co-op, or a mobile home. This amount of your home is protected from creditor judgments, bankruptcy liquidation proceedings, and other ordered judgments.
Will I Lose My House if I File for Bankruptcy in Connecticut?
If you file for bankruptcy in Connecticut, your house is protected under the homestead exemption. Not all types of bankruptcy result in the loss of assets, as some create a payment plan for your debts.
However, Chapter 7 bankruptcy does involve the sale and liquidation of assets to pay your debts. The state’s homestead exemption protects a certain value of your home from the sale. The state law also protects certain other essential assets and necessities from liquidation in bankruptcy.
Why Should I Hire a Bankruptcy Lawyer?
You should hire a skilled bankruptcy lawyer to better protect your financial health and ensure you pick the right method to deal with your debt. There are different methods of bankruptcy for individuals, and an experienced bankruptcy attorney can help you review your debts and financial circumstances. Your situation may be better suited for liquidation or a payment plan. Your attorney can review federal and Connecticut bankruptcy laws to assess this.
What Is the Cost of a Bankruptcy Lawyer in Connecticut?
The cost of a bankruptcy lawyer in Connecticut depends on the attorney’s experience and the type of fee structure used. It usually also depends on whether you have a home, your income, the debts you owe, and other potentially complicating factors in your case. For Chapter 7 bankruptcy, the attorney’s fee is due prior to filing, and any outstanding balance would be discharged in the process. When you speak with a bankruptcy lawyer like Attorney Tim Pletter, ask about costs.
Speak With a Bankruptcy Lawyer in Connecticut
If you are dealing with excessive debt and invasive creditors, it can be overwhelming. There are options, and a homestead exemption can help you maintain stability despite this strain. To learn more about the new Connecticut Homestead Exemption and how an attorney can protect your home from creditors, call Attorney Timothy Pletter today. The team at the Law Office of Ambrogio, Pletter & Associates, LLC, can help you assess options like bankruptcy for dealing with your debt.
