Connecticut House Bill HB05391

Connecticut 2020 Regular Session

• Introduced: 2/27/20
• Refer: 2/27/20

Caption

An Act Concerning Property That Is Exempt From A Judgment Creditor.

Impact

The proposed changes in HB 5391 could significantly impact individuals dealing with creditors and financial distress. By increasing the exemptions, the bill provides greater financial security for individuals, allowing them to retain more of their personal property when facing debt collection actions. This is especially pertinent for low to middle-income households that might find themselves vulnerable to losing substantial portions of their assets due to overwhelming debts. The amendments to the laws regarding homestead and life insurance policies could provide a critical safety net, offering individuals some reprieve from potentially crippling financial situations.

Summary

House Bill 5391, known as 'An Act Concerning Property That Is Exempt From A Judgment Creditor', aims to redefine whatassets can be exempted from a creditor's claims in cases of debt collection. The bill seeks to increase the limits on the value of certain property exempt from judgment, including a significant amendment that raises the homestead exemption limit from seventy-five thousand dollars to two hundred fifty thousand dollars. Additionally, it proposes that the cash surrender value of life insurance policies be exempt from creditor claims unless the policy is specifically assigned to the creditor, thereby enhancing the protections available for individuals regarding their life insurance assets.

Contention

Despite the potential benefits, there are points of contention surrounding the bill. Critics argue that increasing exemptions could make it more challenging for creditors to recover debts, potentially leading to a situation where unpaid debts are more prevalent. Opponents suggest that the bill could inadvertently incentivize financial irresponsibility, allowing individuals to shield their assets from creditors even in cases where debts are legitimately owed. As such, the discussion surrounding the bill centers on the balance between protecting consumers and the rights of creditors, highlighting the ongoing debate about personal responsibility and economic fairness in debt collection practices.