Connecticut Bankruptcy Law and Means Testing
Thus far, on average, Connecticut residents retain one of the lowest rates of filing compared to all other states in the nation. This trend however is changing. Stagnation in the economy and outsourcing jobs has severely impacted state residents, and coupled with any unexpected financial emergency, the majority of Connecticut working men and women are simply not in a position to weather sever financial storms. State laws in Connecticut play an important function in determining the relationships between debtors and creditors, property ownerships, and the extent of liability created in commercial transactions.
All courts must rely heavily upon state law to determine property, claims, liabilities, and the legitimacy of contested claims. For instance, potential claims, although suspect, must be reported in both Chapter 7 and Chapter 13 cases. New bankruptcy laws also incorporate the state median income as a test measure (know as means testing) to calculate disposable income. Any person earning more than the Connecticut median income is not qualified to file Chapter 7, and must file a 5 year Chapter 13 plan.
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