Chapter 13

Some encouraging numbers have been seen on the Connecticut bankruptcy front, leading experts to suggest that consumers who file may have more optimism when it comes to paying down debts and turning their financial situations around. Although Chapter 7 bankruptcies are more common in the state than Chapter 13, the overall numbers for Chapter 7 have declined. Recent reports show Chapter 13 bankruptcies have increased by almost 1000 from 2011 to 2012.

The 10th U.S. Circuit Court of Appeals has solidified the ruling that Social Security income is safe from the "disposable income'" rule in a Chapter 13 bankruptcy filing. Currently, the Bankruptcy Code states the same thing, but one debtor ended up having to litigate the issue. This ruling could be reason for a sigh of relief for Connecticut residents and those who were watching this case to see the outcome.

Connecticut residents who have been watching the Olympics probably know of Gabby Douglas, the U.S. gymnast who won the all-around gold medal this year. While this Olympic story is certainly worth the positive media attention, her personal life is also making headlines for a completely different reason. Douglas' mother filed for personal bankruptcy earlier in the year. She sought Chapter 13 bankruptcy protection.

Connecticut residents faced with debt have the option of bankruptcy available to them. Several types of bankruptcy exist, so it is important to become familiar with the type that is most suited to one's unique situation. Many people are familiar with Chapter 13, but may not know the specific details about it.

As part of a multi-state settlement with some of the biggest lenders in the nation, many Connecticut homeowners may have some amount of debt relief coming to them. Part of the settlement includes a deal to reduce the principal on many mortgages across the nation. Moreover, Bank of America also announced a separate deal to write down underwater mortgages of about 200,000 homeowners to market value.

Owning a home used to be an essential element in attaining the ideal American Dream. Now, it seems for many homeowners, their mortgage has made this once wonderful dream the American nightmare. Many people are struggling to make their mortgage payments, but now new relief could be on the way. A proposal currently being considered could help those in Chapter 13 bankruptcy reduce the total amount owed on their debt.