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How to Get Debt Relief in Connecticut

Sarah Edwards | July 21, 2022

Get debt relief fast.

Summary: If you're struggling with debt in Connecticut, SoloSuit can help you find the relief you need.

If you're struggling with debt in Connecticut, you're not the only one. High state tax rates, property taxes, student loans, and credit card debt all play a role in making Connecticut an incredibly expensive state to live in. In fact, it's ranked as the eighth most expensive state by World Population Review, with a cost of living index of 121.6. In addition, residents of Connecticut earn an average wage of $66,130, which is only slightly above the national average of $58,260.

The average household carries approximately $8,425 in credit card debt. Given historic rises in inflation and housing costs that are up 20% compared to last year, it's no wonder that residents of Connecticut are having difficulty making ends meet, let alone finding the funds to pay off their debt.

If you're being pursued by a debt collector in Connecticut, make sure you understand your rights. Both the federal government and state government have put certain protections in place to protect consumers from unfair debt collection practices.

What federal rights do I have as a consumer in Connecticut?

The federal government established the Fair Debt Collection Practices Act in 1977 to protect consumers from abusive tactics used by debt collectors. This Act prevents debt collectors from engaging in methods that can be construed as harassment, including:

  • Calling you before 8 a.m. or after 9 p.m.
  • Using false or misleading statements when collecting a debt
  • Pretending to be someone they aren't, such as an officer of the law
  • Threatening to destroy your reputation if you don't pay the debt
  • Exaggerating the amount of the debt you presumably owe

All of these tactics are illegal when used to try to collect a debt. There are many other prohibited actions as well. If you feel that a debt collector's actions constitute a violation of the FDCPA, you can file a complaint with the Better Business Bureau or the Consumer Financial Protection Bureau.

How is Connecticut helping to provide residents with debt relief?

There are several laws that Connecticut has established to protect the rights of its residents. For example, if a default judgment is placed against you for an unpaid debt, Connecticut provides that certain items of value are protected. This includes:

  • 75% of your net income
  • $75,000 of the value of your home
  • $1,000 in your bank account
  • $3,500 of your car equity

Thus, debt collectors are prevented from seizing everything in the event of a judgment.

In addition, the state has enacted statute of limitations laws that limit the amount of time that debt collectors have to pursue legal action against you. The current statute of limitations time limits for specific types of debt are listed below:


Connecticut Statute of Limitations on Debt

Type of debt

Statute of limitations

Medical

6 years

Credit card

6 years

Auto loan

4 years

State tax

15 years


Source: FindLaw


After the statute of limitations has ended, the debt becomes “time-barred.” This means that they can no longer sue you to collect the money. However, keep in mind that you still owe the debt. Collectors can still contact you, and you may continue to receive phone calls and letters. If you admit to owing the debt or make a payment towards it after a debt has become time-barred, you reset the statute of limitations and open yourself up to a potential lawsuit.

Additional state resources for debt in Connecticut

Residents in Connecticut can also take advantage of state resources to obtain financial assistance. State programs include:

What options do I have for debt relief in Connecticut?

If you are seeking debt relief in Connecticut, you have three main options. These include debt consolidation, debt settlement, and bankruptcy.

Let's take a closer look at each one.

Debt consolidation in Connecticut

Debt consolidation involves taking out a loan with the intent of paying off all of your creditors. You can then provide a single monthly payment to your debt consolidation lender, which may be at a lower interest rate than if you were to continue to make minimum payments towards your outstanding debts.

For example, if you have eight credit cards with a balance of $1,000 each that you make minimum payments on equal to $50 per month, you pay $400 per month. If each of those credit cards had an annual APR of 12%, $40 of your payment is going to pay off the principal balance, while the remaining $10 goes to interest.

However, if you obtained an $8,000 debt consolidation loan with a 6% interest rate and made the same $400 payment each month, you pay $360 towards the principal balance and $40 towards interest. You'll save $480 in interest expenses each year that will instead be used to pay off your outstanding debts. Keep in mind that debt consolidation loans will require you to have a decent credit score. Usually, it must be a minimum of 650.

Debt settlement in Connecticut

Debt settlement is an option for those who want to reduce their overall balance owed and are willing to take a hit to their credit report in order to do so. You can try to settle your debts on your own or work with a debt settlement agency that will negotiate with your creditors for you. In some cases, debt settlement agencies may be able to reduce your debts by up to 70%.

More specifically, debt collectors are likely to settle for anywhere between 1%-70% of the original amount. On the other hand, original creditors (like banks, credit card companies, etc.) are known to settle for 20%-60% of the original amount. This is why debt settlement can turn out to be a fantastic option for many people who are drowning in debt.

Keep in mind that you will pay a fee for the services of debt settlement companies. It will likely be worth it, as the alternative could be losing a lawsuit and having your wages garnished.

File bankruptcy in Connecticut

Bankruptcy should be looked at as the option of last resort. This is most often used by individuals who have limited incomes and are unable to make ends meet without a fresh start. Chapter 7 bankruptcy eradicates most types of consumer debt, but you must meet certain income qualifications in order to file. It is best for those who don't have assets, such as a home. Chapter 13 is known as the reorganization bankruptcy. Some debts may be partially forgiven, but you will need to make repayments on others.

Have you been sued by a debt collector in Connecticut?

If you are being sued by a debt collector in Connecticut, you'll need to file a response in court before the deadline. You can use SoloSuit's Answer form to respond to the Summons and Complaint. Check out this video to learn more about how to draft an Answer that will help you win in court:

What is SoloSuit?

SoloSuit makes it easy to respond to a debt collection lawsuit.

How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James


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