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How to Discharge Federal Student Loans In A Chapter 7 Bankruptcy

How to Discharge Federal Student Loans In A Chapter 7 Bankruptcy

Under Section 523(a)(8) of the Bankruptcy Code student loan debt is dischargeable if it would impose an undue hardship on the debtor and the debtor’s dependents. The Bankruptcy Code does not define “undue hardship,” but the Second Circuit, which includes the State of Connecticut, defined a three-prong test in Brunner v. New York State Higher Educ. Servs. Corp., 831 F.2d 395, 396 (2d Cir. 1987) for determining its existence. The debtor must prove, before the Bankruptcy Judge, by a preponderance of the evidence,…

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CT Increases Bankruptcy Homestead Exemption to $250K

CT Increases Bankruptcy Homestead Exemption to $250K

On July 12, 2021, Governor Ned Lamont signed into law Public Act 21-161 which amended Connecticut’s homestead exemption by repealing the prior version of the statute and increasing the homestead exemption from $75,000 to $250,000, effective October 1, 2021.  This means that if you file bankruptcy and your house has less than $250,000 in equity, you will be able to keep your house and still discharge all of your debts in a Chapter 7 bankruptcy filing. If you own your…

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