Connecticut Supreme Court Rules that New Homestead Law Applies to Protect up to $250,000 in Equity in a Home from Debts Incurred Prior to Act’s Effective Date

by Irve J. Goldman

In an important ruling for personal bankruptcy cases in Connecticut, the Connecticut Supreme Court has ruled that Connecticut’s new homestead law, which increased the exempt amount of a “homestead” from $75,000 to $250,000, can be used to shield the equity in one’s home from unsecured debts incurred prior to the law’s effective date - October 1. 2021 - in a bankruptcy case filed after that date.  The case, In re Cole, originated in the Hartford Bankruptcy Court.which came to the same conclusion as did the Connecticut Supreme Court, In re Cole, 642 B.R. 208 (Bankr. D. Conn. 2022). The case was then appealed by the debtor’s bankruptcy trustee to the Connecticut District Court.  Finding the issue to be of sufficient importance, the District Court certified it for decision by the Connecticut Supreme Court, which accepted the invitation and issued its ruling on July 18, 2023. In re Cole, 347 Conn. 284 (July 18, 2023).   

Connecticut’s homestead exemption is found at Conn. Gen. Stat. § 52-352b(21) and protects up to $250,000 in equity in an individual’s primary residence from the claims of his or her creditors.  Equity is defined as the fair market value of the residence less the amount of any mortgage, other consensual lien, or statutory lien (such as for real estate taxes) against the residence.    

An individual filing bankruptcy can utilize the homestead exemption of his or her state to protect whatever the state will allow as an exemption to its residents.  11 U.S.C. § 522(b)(3)(A).  Thus, many issues relating to the applicability and scope of a state’s homestead laws are commonly decided in the context of a bankruptcy proceeding.  In fact, the question that had been certified for decision by the Connecticut Supreme Court in Cole was modified by the Court itself to ask, “does the expanded homestead exemption contained in [Conn. Gen. Stat. § 52-352b(21)], apply in bankruptcy proceedings filed on or after the effective date of the act to debts that accrued prior to that date?”

The original Connecticut homestead exemption was enacted into law on June 29, 1993, with an effective date of October 1, 1993, and shielded from the claims of creditors the equity in a homeowner’s primary residence up to $75,000 (“Original Act”).   Section 3 of the Original Act, however, established a special carve-out for preexisting debts that provided: “This act shall take effect October 1, 1993, and shall be applicable to any lien for any obligation or claim arising on or after said date.”  The 2021 act creating the expanded homestead exemption did not contain this type of limiting provision. 

The Connecticut Supreme Court first rejected the bankruptcy trustee’s argument that the special carve-out for preexisting debts under the Original Act should be presumed to carry over into the 2021 law.  In doing so, the Court ascribed importance to the absence of a carve-out for preexisting debts in the new law, applying the rule of statutory construction that when a statute contains a provision dealing with one subject, and the provision is omitted from a similar statute dealing with a related subject, a court must presume that the omission was intentional, i.e., that the omitted provision does not apply.

The Court then turned to the principal issue in the case – did the new homestead law impermissibly operate retroactively by applying the expanded homestead exemption to pre-effective date debts, based on the rule in Conn. Gen. Stat. § 55-3 that a substantive change in the law must apply on a solely prospective basis.  Without addressing whether the change in the law was “procedural” or “substantive,” the Court ruled that the higher homestead exemption simply did not constitute retroactive legislation when applied to bankruptcy petitions that were filed after its effective date of October 1, 2021.   

After engaging in an incisive and in-depth analysis of what constitutes “retroactive legislation,” the Court held that the new law was not retroactive for two reasons:  1) unsecured creditors had no settled expectation that the Original Act would remain in effect indefinitely and 2) given that the new law applied only to bankruptcy cases filed after its effective date, it had no retroactive application because it was principally directed to allowing debtors to shield a portion of the equity in their home, not to regulating the collection and enforcement of debts based on when they accrued. 

Individual debtors filing bankruptcy in Connecticut after October 1, 2021 can now rest assured that up to $250,000 in equity in a primary residence will be exempt from unsecured debts regardless of when they were incurred.

Irve J. Goldman is the Chair of the Bankruptcy and Creditors Rights Practice at Pullman & Comley, LLC, and has been certified as a business bankruptcy specialist by the American Board of Certification since 1993.  He can be reached at

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