Are you concerned that filing for bankruptcy protection will leave you with nothing but the clothes on your back? Do not worry; that will not happen. There are a number of exemptions that allow you to keep most of your personal property and the equity you have in it. A qualified Morris County bankruptcy lawyer can explain the exemptions in detail.
Holding Onto Your Things
You cannot be swimming in money and assets when you file your bankruptcy petition. The bankruptcy process provides debt relief, and does not serve to shield your assets from creditors. You may have to change your lifestyle a bit, but most debtors get through it intact. That is because the law allows a certain amount of property exemptions, which prevents your things from becoming a part of the bankruptcy estate.
Depending on the state where you file your petition, you may have the choice between the state and federal exemptions. Discuss with your bankruptcy lawyer, but the federal exemptions are generally the better exemptions for most debtors. In New Jersey, the state exemptions are somewhat limited, and you will not be able to keep as much of your property as you would under the federal exemptions.
In New Jersey, choosing the federal exemptions will allow you to keep, among other things, (married couples can double the exemption amount):
- $1350.00 of value in your jewelry
- $3225.00 of equity in one vehicle
- $20,200 of equity in your home
- Social security benefits, Veteran’s benefits, unemployment compensation
- Wrongful death payments, health aids, crime victim’s compensation
Any property that falls outside the exemptions belongs to the bankruptcy trustee. The trustee can sell the property or return it to the creditor. Most debtors end up being able to keep the majority of their belongings, including their homes and vehicles.
Keep in mind that the bankruptcy trustee protects the creditor’s interest, not yours. The trustee will examine your petition and schedules, and has the duty to object to improperly claimed exemptions. The trustee may ask you about any claimed exemptions and how you arrived at their determined value. If the trustee objects to the exemption, he or she has 30 days from the Meeting of Creditors to file the objection with the bankruptcy court. You may respond to the objection and there will be a hearing on the issue.
The exemption laws can be confusing. Contact an experienced Morris County bankruptcy attorney for an explanation on what exemptions suit your situation.