Connecticut Bankruptcy Exemptions

Laws which protect a debtor’s property when personal bankruptcy is filed in the state of Connecticut.

§ 52-352a Definitions for exempt property provisions. For the purposes of this section and §52-352b and §52-353, the following terms shall have the following meanings:
a) “Value” means fair market value of the exemptioner’s equity or unencumbered interest in the property

b) “Necessary” means reasonably required to meet the needs of the exemptioner and his or her dependents including any special needs by reason of health or physical infirmity

c) “Exempt” means, unless otherwise specified, not subject to any form of process or court order for the purpose of debt collection

d) “Exemptioner” means the natural person entitled to an exemption under this section or §52-352b

e) “Homestead” means owner-occupied real property or mobile manufactured home, as defined in subdivision (1) of §21-64, used as a primary residence.

§ 52-352b Exempt property. The following property of any natural person shall be exempt:
a) Necessary apparel, bedding, foodstuffs, household furniture and appliances

b) Tools, books, instruments, farm animals and livestock feed, which are necessary to the exemptioner in the course of his or her occupation, profession or farming operation

c) Burial plot for the exemptioner and his or her immediate family

d) Public assistance payments and any wages earned by a public assistance recipient under an incentive earnings or similar program

e) Health and disability insurance payments

f) Health aids necessary to enable the exemptioner to work or to sustain health

g) Workers’ compensation, Social Security, veterans and unemployment benefits

h) Court-approved payments for child support

i) Arms and military equipment, uniforms or musical instruments owned by any member of the militia or armed forces of the United States

j) One motor vehicle to the value of three thousand five hundred dollars, provided value shall be determined as the fair market value of the motor vehicle less the amount of all liens and security interests which encumber it

k) Wedding and engagement rings

l) Residential utility deposits for one residence, and one residential security deposit

m) Any assets or interests of an exemptioner in, or payments received by the exemptioner from, a plan or arrangement described in §52-321a

n) Alimony and support, other than child support, but only to the extent that wages are exempt from execution under §52-361a

o) An award under a crime reparations act

p) All benefits allowed by any association of persons in this state towards the support of any of its members incapacitated by sickness or infirmity from attending to his usual business

q) All moneys due the exemptioner from any insurance company on any insurance policy issued on exempt property, to the same extent that the property was exempt

r) Any interest of the exemptioner in any property not to exceed in value one thousand dollars

s) Any interest of the exemptioner not to exceed in value four thousand dollars in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the exemptioner under which the insured is the exemptioner or an individual of whom the exemptioner is a dependent

t) The homestead of the exemptioner to the value of seventy-five thousand dollars, or, in the case of a money judgment arising out of services provided at a hospital, to the value of one hundred twenty-five thousand dollars, provided value shall be determined as the fair market value of the real property less the amount of any statutory or consensual lien which encumbers it

u) (u) Irrevocable transfers of money to an account held by a bona fide nonprofit debt adjuster licensed pursuant to §36a-655 to §36a-665, inclusive, for the benefit of creditors of the exemptioner.

§ 52-352d Exempt property of farm partnership
a) As used in this section, “exempt” shall have the same meaning as set forth in §52-352a and “farm partnership” means any partnership primarily engaged in the occupation of farming in which at least fifty per cent of the partners are members of the same family.

b) The farm animals and livestock feed which are reasonably required by a farm partnership in the course of its occupation shall be exempt. All moneys due the farm partnership from any insurance company on any insurance policy issued on such property shall also be exempt to the same extent that the property was exempt.

§ 52-321a Trust or retirement income and certain retirement, education and medical savings accounts unavailable to creditors. Exceptions for qualified domestic relations order, recovery of costs of incarceration and recovery of damages by victim of crime.
a) Except as provided in subsection (b) of this section, any interest in or amounts payable to a participant or beneficiary from (1) any trust, custodial account, annuity or insurance contract established as part of a Keogh plan or a retirement plan established by a corporation which is qualified under Section 401, 403, 404 or 409 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, (2) any individual retirement account which is qualified under Section 408 of said internal revenue code to the extent funded, including income and appreciation, (A) as a roll-over from a qualified retirement plan, as provided in subdivision (1) of this section, pursuant to Section 402(a)(5), 403(a) or 408(d)(3) of said internal revenue code or (B) by annual contributions which do not exceed the maximum annual limits set forth in Section 219(b) of said internal revenue code, determined without regard to any reduction or limitation for active participants required by Section 219(g) of said internal revenue code, (3) (A) any simple retirement account established and funded pursuant to Section 408(p) of said internal revenue code, (B) any simple plan established and funded pursuant to Section 401(k)(11) of said internal revenue code, (C) any Roth IRA established and funded pursuant to Section 408A of said internal revenue code, (D) any education individual retirement account established and funded pursuant to Section 530 of said internal revenue code, (E) any account established pursuant to any qualified tuition program, as defined in Section 529(b) of the Internal Revenue Code, or (F) any simplified employee pension established under Section 408(k) of said internal revenue code to the extent such pension is funded by annual contributions within the limits of Section 408(j) of said internal revenue code or roll-over contributions from a qualified plan, as provided in subdivision (1) of this subsection, pursuant to Section 402(a)(5), 403(a) or 408(d)(3) of said internal revenue code, (4) any medical savings account established under Section 220 of said internal revenue code, to the extent such account is funded by annual deductible contributions or a roll-over from any other medical savings account as provided in Section 220(f)(5) of said internal revenue code, or (5) any pension plan, annuity or insurance contract or similar arrangement not described in subdivision (1) or (2) of this subsection, established by federal or state statute for federal, state or municipal employees for the primary purpose of providing benefits upon retirement by reason of age, health or length of service, shall be exempt from the claims of all creditors of such participant or beneficiary. Any such trust, account, contract, plan or other arrangement shall be (A) conclusively presumed to be a restriction on the transfer of a beneficial interest of the debtor in a trust that is enforceable under the laws of this state, and (B) considered a trust which has been created by or which has proceeded from a person other than such participant or beneficiary, even if such participant or beneficiary is a self-employed individual, a partner of the entity sponsoring the Keogh plan or a shareholder of the corporation sponsoring the retirement plan.

b) Nothing in this section shall impair the rights of an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended. Nothing in this section or in subsection (m) of section 52-352b shall impair the rights of the state to proceed under section 52-361a to recover the costs of incarceration under section 18-85a and regulations adopted in accordance with section 18-85a from any federal, state or municipal pension, annuity or insurance contract or similar arrangement described in subdivision (5) of subsection (a) of this section, provided the rights of an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall take precedence over any such recovery. Nothing in this section or in subsection (m) of section 52-352b shall impair the rights of a victim of crime to proceed under section 52-361a to recover damages awarded by a court of competent jurisdiction from any federal, state or municipal pension, annuity or insurance contract or similar arrangement described in subdivision (5) of subsection (a) of this section when such damages are the result of a crime committed by a participant or beneficiary of such pension, annuity or insurance contract or similar arrangement, provided the rights of an alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall take precedence over any such recovery.
c) Nothing in this section shall affect the status of additions or contributions to a trust, account, contract, plan or other arrangement described in subsection (a) of this section if (1) (A) the debtor-participant or the debtor-beneficiary is a self-employed individual, partner of the entity sponsoring the Keogh plan or a one per cent or more shareholder of the corporation sponsoring the retirement plan, or in the opinion of a court of competent jurisdiction, exercises dominion and control over such proprietorship, partnership, corporation or other entity and (B) the addition or contribution is made less than ninety days before the filing of the claim on which the judgment is thereafter entered or (2) such additions or contributions are determined to be a fraudulent conveyance under applicable federal or state law.

§ 52-321 Liability of income of trust fund to creditors. Expenses of trustee.
Except as provided in sections 52-321a and 52-352b:
d) If any such trust has been expressly provided to be for the support of the beneficiary or his family, a court of equity having jurisdiction may make such order regarding the surplus, if any, not required for the support of the beneficiary or his family, as justice and equity may require.

§ 52-361a Execution on wages after judgment.
(f) Amount subject to levy. The maximum part of the aggregate weekly earnings of an individual which may be subject under this section to levy or other withholding for payment of a judgment is the lesser of (1) twenty-five per cent of his disposable earnings for that week, or (2) the amount by which his disposable earnings for that week exceed forty times the higher of (A) the minimum hourly wage prescribed by Section 6(a)(1) of the Fair Labor Standards Act of 1938, USC Title 29, Section 206(a)(1), or (B) the full minimum fair wage established by subsection (j) of section 31-58, in effect at the time the earnings are payable. Unless the court provides otherwise pursuant to a motion for modification, the execution and levy shall be for the maximum earnings subject to levy and shall not be limited by the amount of the installment payment order. Only one execution under this section shall be satisfied at one time. Priority of executions under this section shall be determined by the order of their presentation to the employer.

§ 31-272 Protection of rights and benefits. (Unemployment compensation)
(c) Limitations on assignment or garnishment of benefits. Except as provided in subsection (h) of section 31-227, no assignment, pledge or encumbrance of any rights to benefits which are or may become due or payable under this chapter shall be valid; and such rights to benefits shall be exempt from levy, execution, attachment or any other process for the collection of debt until such benefits have been actually received by the employee. No waiver of any exemption provided for in this subsection shall be valid.

§ 38a-453 (Formerly §38-161) Rights of creditors of insured against beneficiary
a) The beneficiary of any life insurance policy, being a person other than the insured, whether named as beneficiary in the original policy or subsequently named as beneficiary in accordance with the terms of the policy, shall be entitled to the proceeds of the policy as against the representatives or creditors of the insured, unless the policy was procured or the designation of a beneficiary was made with intent, express or implied, to defraud creditors. b) If any such policy was procured or any such designation made with the intent, express or implied, to defraud creditors, the proceeds thereof shall become a part of the estate of the insured, and the executor or administrator of the estate shall collect the insurance and use the proceeds thereof so far as it is required for the expenses of administration and the payment of debts and pay over the balance, if any, to the beneficiary of the policy. If any premiums paid on the insurance policy were paid with the intent, express or implied, to defraud creditors, the amount of the premiums so paid, with interest thereon, shall become a part of the estate and shall be dealt with as above provided. c) The company issuing the policy shall be discharged of all liability thereunder by payment of the proceeds in accordance with the terms of the policy unless, before such payment, the company has received written notice, from a creditor, executor or administrator of the insured, that the policy was procured or premiums were paid thereon with intent to defraud creditors. That notice may be disregarded by the company unless proper legal proceedings to enforce the claim are begun within three months from the giving of the notice. d) This section shall apply to any policy of insurance issued before July 1, 1933, but not to policies which matured by the death of the insured before July 1, 1933.

§ 38a-454 (Formerly §38-162) Proceeds of insurance policies and annuities may be held in trust.
Any domestic life insurance company shall have power to hold the proceeds of any policy issued by it under a trust or other agreement upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as have been agreed to in writing by such company and the policyholder. Such insurance company shall not be required to segregate funds so held but may hold them as a part of its general corporate assets. Similar terms, restrictions and exemptions, for the benefit of any payee other than the purchaser, may be included by any such company in any annuity contract or any agreement issued in connection therewith or supplemental thereto. When any foreign or alien life insurance company doing business in Connecticut holds the proceeds of a life insurance policy or annuity contract under any trust or other agreement consistent with its charter or the laws of its domicile, beneficiaries of such trust or other agreement shall be entitled to exemptions from claims of creditors as hereinbefore provided to the same extent as if the trust or other agreement were entered into with a domestic life insurance company.

§ 38a-637 (Formerly §38-229) Money or other benefits not liable to attachment.
No money or other benefit, charity, relief or aid to be paid, provided or rendered by any society shall be liable to attachment, garnishment or other process, or to be seized, taken, appropriated or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society.

§ 5-171 Assignments prohibited. (State employees)
Any assignment by a member or beneficiary of any amount payable to either under the terms of this chapter shall be null and void. Each such payment shall be for the support of the member or beneficiary entitled thereto and shall be exempt from the claims of creditors of such member and beneficiary. If the provisions of this section are contrary to the law governing a particular circumstance, then, as to that circumstance, any payment shall be exempt to the maximum extent permitted by law.

§ 5-192w Assignment prohibited. (State employees)
Any assignment by a member or beneficiary of any amount payable to either under the terms of §5-192e to §5-192x, inclusive, shall be null and void. Each such payment shall be for the support of the member or beneficiary entitled thereto and shall be exempt from the claims of creditors of such member and beneficiary. If the provisions of this section are contrary to the law governing a particular circumstance, then, as to that circumstance, any payment shall be exempt to the maximum extent permitted by law.

§ 7-446 Assignments prohibited. (Municipal employees)
Any assignment by a member or beneficiary of any allowance or benefit payable under the terms of this part shall be null and void. Each such allowance and benefit shall be for the support of the member or beneficiary entitled thereto and shall be exempt from the claims of creditors of such member and beneficiary, provided, if the provisions of this section are contrary to the laws governing a particular set of circumstances, as to that set of circumstances, any allowance or benefit payable hereunder shall be exempt to the maximum extent permitted by law.

§ 10-183q Funds not assignable and exempt from attachment. (Teachers)
The portion of each member’s compensation deducted or to be deducted under this chapter and all rights of each member and of each survivor to receive benefits or other payments under this chapter shall be exempt from the operation of any laws relating to bankruptcy or insolvency; and shall not be subject to garnishment, attachment, execution, levy or any other similar legal process of any court. No assignment of any right of a member or any other person to receive benefits or other payments from the system shall be valid. The funds of the system invested in personal property shall be exempt from taxation.

Note: While this reference information is current as of August 2010, it may not reflect the most up-to-date exemption figures on official state of Connecticut bankruptcy court statutes.

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