Chapter 13 Bankruptcy in Connecticut: Plan, Costs, Discharge

Chapter 13 bankruptcy in Connecticut is a court-supervised repayment process that lets you keep your home, car, and other property while paying creditors over three to five years through a plan approved by the bankruptcy judge. The moment you file, an automatic stay stops foreclosures, repossessions, wage garnishments, and most other collection efforts.¹ To qualify you need regular income, and your debts must stay under federal caps of $526,700 unsecured and $1,580,125 secured.² Connecticut’s single federal bankruptcy district handles every case in the state, and filers get to choose between Connecticut’s exemptions and the federal set when deciding which property to protect.

Who Qualifies

Chapter 13 is open to any individual with regular income. That includes wages, self-employment earnings, Social Security, pensions, and consistent support from a spouse or family member. What matters is whether the income is steady enough to fund monthly plan payments for years.³

How long your plan runs depends on how your household income compares to Connecticut’s median. For cases filed between November 2025 and March 2026, the state medians are $82,141 for a single earner, $103,501 for a two-person household, $131,022 for three, and $155,834 for four, with $11,100 added per additional person.⁴ Below median, you can propose a three-year plan. At or above, you generally need five years.³

The debt caps apply to cases filed between April 1, 2025 and March 31, 2028. Unsecured debts (credit cards, medical bills, personal loans) must total less than $526,700, and secured debts (mortgages, car loans) less than $1,580,125.² Only debts that are fixed in amount and not subject to dispute count toward these limits. If you exceed either cap, Chapter 11 reorganization is the usual alternative.

What It Costs

The court filing fee is $313. If you cannot pay upfront, you can apply to spread it across four installments over 120 days.⁵

Attorney fees are the bigger line. Most districts set a “no-look” fee, a presumptively reasonable amount an attorney can charge without itemizing every task, typically between $2,500 and $6,000 depending on complexity. In Chapter 13 those fees are usually folded into the repayment plan, so you pay them over time rather than all at the door. The Chapter 13 trustee also takes a percentage of every payment you make, generally 7% to 10%, before distributing funds to your creditors.

What Filing Stops

The automatic stay is the most immediate relief. The moment your petition hits the court, creditors are barred from almost any collection action.¹ Foreclosures stop. Repossessions halt. Wage garnishments end. Lawsuits freeze. Harassing phone calls must cease.

The stay has limits. It does not stop criminal proceedings, and it does not pause collection of domestic support obligations like child support or alimony. If you had a prior case dismissed within the previous year, the stay in your new case lasts only 30 days unless the court extends it. If two or more prior cases were dismissed in the last year, you get no automatic stay at all unless you request one and prove by clear and convincing evidence that your circumstances have changed.

What a Chapter 13 Plan Can Actually Do

Chapter 13 offers tools that reach well beyond consolidating payments. For many Connecticut filers these tools are the whole reason to choose Chapter 13 over Chapter 7.

Catching Up on Mortgage Arrears

If you have fallen behind on your mortgage, Chapter 13 lets you cure the default over the life of the plan while making your regular monthly payments going forward.⁶ This is often the primary reason Connecticut homeowners file. The automatic stay halts the foreclosure, and the plan stretches the missed payments across three to five years. As long as you stay current on both the plan payments and your ongoing mortgage, the lender cannot restart the foreclosure.

Cramming Down a Car Loan

If you owe more on a vehicle than it is worth and you bought it more than 910 days (roughly two and a half years) before filing, Chapter 13 lets you “cram down” the loan. The secured portion is reduced to the car’s current market value, and the remaining balance becomes unsecured debt that typically receives only partial repayment through the plan. The interest rate on the secured portion is usually recalculated using the prime rate plus a risk adjustment of 1.5% to 3%, often producing a lower rate than the original loan. Cars bought within 910 days of filing cannot be crammed down.

Stripping a Second Mortgage

If your home is worth less than your first mortgage balance, Chapter 13 lets you strip a second mortgage or home equity line of credit entirely. The junior lien is removed from the property and the debt is reclassified as unsecured. When you complete the plan, any remaining balance on the stripped loan is discharged. This option does not exist in Chapter 7. The condition is strict: the first mortgage balance must exceed the home’s current market value.

Choosing Exemptions: Connecticut or Federal

Exemptions decide what property you keep safe from creditors. Connecticut is one of the states that lets you pick between the state system and the federal bankruptcy exemptions, but you have to choose one set and stay in it.⁷ The right choice depends entirely on what you own and where your equity sits.

Connecticut Exemptions

Under Connecticut General Statutes Section 52-352b, the state exemptions include:⁸

Up to $250,000 of equity in your primary residence (reduced to $75,000 for judgments arising from sexual abuse, sexual assault, or similar willful misconduct)
Up to $7,000 in aggregate equity across up to two motor vehicles
A $1,000 wildcard that can be applied to any property
Health and disability insurance payments, fully exempt
Retirement accounts, protected to the extent reasonably necessary for support

Federal Exemptions

For cases filed between April 1, 2025 and March 31, 2028, the federal homestead exemption is $31,575 and the wildcard is $1,675 plus up to $15,800 of any unused homestead amount, for a maximum wildcard of $17,475. Married couples filing jointly can double these figures.

The practical read for most Connecticut filers: if you own a home with significant equity, the state exemptions almost always win because the $250,000 homestead dwarfs the federal $31,575. If you rent or have little home equity, the federal wildcard reaches up to $17,475 in any property and protects cash, bank accounts, and tax refunds that Connecticut’s $1,000 wildcard would leave exposed. Run both calculations before committing.

From Filing to a Confirmed Plan

Before you can file, you must complete a credit counseling course from a provider approved by the U.S. Trustee Program. Skip this and the court can dismiss your case.⁹ The course runs about an hour and costs roughly $20 to $50. You file the completion certificate with the petition.

The petition itself requires full financial disclosure: every asset, every debt, monthly income, and monthly expenses. You must provide pay stubs or other proof of earnings covering the 60 days before filing, and your most recent federal tax return goes to the trustee at least seven days before the 341 meeting.¹⁰ Chapter 13 filers also must have filed all tax returns for the four years before the case; outstanding returns can get the case dismissed. You file a proposed repayment plan alongside the petition, and getting it right the first time matters because amending later means delays and sometimes fresh objections.

Within 30 days of filing, you must start making plan payments to the Chapter 13 trustee, even though the plan has not yet been confirmed.¹¹ Missing that first payment is one of the fastest ways to derail a case.

Between 21 and 50 days after filing you attend the 341 meeting of creditors. No judge is present. The trustee runs the meeting and questions you under oath about your finances, assets, and plan.¹² Creditors may attend but usually do not. The meeting typically runs 10 to 15 minutes when the paperwork is in order.

Then comes the plan confirmation hearing. The judge checks that the plan was proposed in good faith, pays unsecured creditors at least what they would receive in a Chapter 7 liquidation, commits all your projected disposable income, and is actually feasible given your budget. You also have to be current on domestic support obligations and up to date on tax returns.¹³ If the trustee or a creditor objects, you can usually amend to address the concern. Once the judge signs the confirmation order, that plan governs your financial life for the next three to five years.

Living Under the Plan

Confirmation does not just mean mailing a check each month. Chapter 13 constrains your financial life for the full plan period.

You cannot take on new debt without permission from the court or trustee. No car financing. No new credit cards. No cosigning. No borrowing against retirement accounts. The only real exception is a genuine emergency involving life, health, or property. Borrowing without authorization can get your case dismissed, and items purchased on unauthorized credit may need to be returned. To request permission, your attorney files a motion explaining the lender, amount, terms, and effect on your ability to keep paying the plan.

Tax refunds are the other pressure point. Many Chapter 13 trustees treat refunds as disposable income that belongs to creditors. Treatment varies by trustee and district; some plans let you keep part and turn over the rest. Ask the Connecticut trustee assigned to your case about refund expectations before you file, because this affects your real take-home budget during the plan.

Finishing the Plan and Getting a Discharge

After every plan payment is made, a few final hurdles stand between you and the discharge. You must complete a personal financial management course from an approved provider, separate from the pre-filing credit counseling.¹⁴ If you do not file proof of completion, the case can close without a discharge, which means years of payments and none of the relief.

You also have to certify that you are current on all domestic support obligations. The court will not grant a discharge without that certification.¹⁵

Once entered, the discharge wipes out most remaining unsecured debt covered by the plan, including credit card balances, medical bills, and personal loans. Some debts survive: domestic support, most student loans, debts arising from fraud, certain tax obligations, and debts for willful injury to another person or their property.¹⁶ A completed Chapter 13 discharge is broader than Chapter 7’s and covers some debts that would survive a Chapter 7 case. You cannot receive a Chapter 13 discharge if you received a Chapter 7, 11, or 12 discharge in a case filed within four years before your Chapter 13 filing, or a prior Chapter 13 discharge within two years.¹⁷ The bankruptcy itself stays on your credit report for up to 10 years from the filing date.¹⁸

If You Cannot Complete the Plan

Life changes. Job losses, medical crises, and divorces knock plans off track. Chapter 13 gives you three ways to respond, and knowing them before you file is part of deciding whether to file at all.

Modify the Plan

If your income drops or expenses climb, you can ask the court to modify the plan. That might mean lower monthly payments, a longer term up to the five-year cap, or reduced payments to unsecured creditors. Modification keeps the case alive and the protections intact.

Hardship Discharge

If you cannot complete payments because of circumstances genuinely beyond your control, the court can grant a hardship discharge even without finishing the plan. Three conditions apply: you are not at fault for the failure, unsecured creditors have already received at least what they would have in a Chapter 7 liquidation, and modification is not a workable alternative.¹⁷ A hardship discharge covers fewer debts than a standard completion discharge, so more obligations may survive.

Dismiss or Convert

You have an absolute right to dismiss your Chapter 13 case at any time, and the court cannot override that decision.¹⁹ Dismissal ends the automatic stay immediately, meaning creditors can resume collection, foreclosure, and repossession. Your debts revert to what you owed before filing, minus whatever the trustee already distributed. Refiling within a year carries the automatic stay penalties described earlier.

You can also convert the case to Chapter 7 at any time, provided you have not received a Chapter 7 discharge in the last eight years.¹⁹ Conversion means your nonexempt assets become available for liquidation by a Chapter 7 trustee, so this works best when you have little property at risk and simply cannot sustain monthly payments. You attend a new 341 meeting and may need to update your schedules to reflect your current financial picture.

1
Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
2
Office of the Law Revision Counsel. 11 USC 109 – Who May Be a Debtor
3
United States Courts. Chapter 13 Bankruptcy Basics
4
United States Department of Justice. Median Family Income Table – November 1, 2025
5
United States Courts. Application for Individuals to Pay the Filing Fee in Installments
6
Office of the Law Revision Counsel. 11 USC 1322 – Contents of Plan
7
Connecticut General Assembly. Exemptions Under Bankruptcy Laws
8
Justia Law. Connecticut Code 52-352b – Exempt Property
9
United States Department of Justice. Credit Counseling and Debtor Education Information
10
Office of the Law Revision Counsel. 11 USC 521 – Debtor Duties
11
Office of the Law Revision Counsel. 11 USC 1326 – Payments
12
United States Department of Justice. Section 341 Meeting of Creditors
13
Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan
14
United States Courts. Credit Counseling and Debtor Education Courses
15
United States Courts. Chapter 13 Debtors Certifications Regarding Domestic Support Obligations and Section 522(q)
16
Office of the Law Revision Counsel. 11 USC 523 – Exceptions to Discharge
17
Office of the Law Revision Counsel. 11 USC 1328 – Discharge
18
Consumer Financial Protection Bureau. How Long Does a Bankruptcy Appear on Credit Reports
19
Office of the Law Revision Counsel. 11 USC 1307 – Conversion or Dismissal