Unsecured Versus Secured Property in New Jersey

Debt has become an inescapable part of life in America. Everyone from the highest politicians in the land to the hardest working private individual has to reconcile their earnings with the amount of money they owe creditors. The recent political maneuvering regarding the nation’s debt ceiling shows how serious a problem unmanageable debt poses. When your debt becomes more than you can handle, there is a way out. You can declare bankruptcy under either Chapter 7 or Chapter 13 in order to settle or discharge your debts.

Filing for bankruptcy does not mean you have to sell off or lose all of your property and assets in order to cover the debt. A Morris County bankruptcy lawyer can help you keep certain types of property, no matter how much money you might owe to your creditors, through the use of federal and state exemptions. Exemptions allow you to protect your property from the Chapter 7 trustee and possibly reduce the amount you must pay in a Chapter 13.

In New Jersey, you have the option of choosing either the federal bankruptcy exemptions set forth in the Bankruptcy Code or the exemptions set forth in New Jersey’s state statutes. Each option provides slightly different advantages and disadvantages when it comes to the manner of assets that they cover, but they both protect most of your property, including your car, your house and your household goods.

It is important to note that if you have property with liens attached, such as a car with a car loan or a house with a mortgage, exemptions are not the only thing you need to keep the property. Car and house loans are frequently secured by liens on the property — when these loans go delinquent because you fail to pay them, the lender can foreclose on the house or repossess the vehicle. While exemptions can protect any equity you have in the property, you must still be current on the loan and agree to repay the loan if you want to keep secured property. A skillful bankruptcy lawyer can help you protect as much of your property as the law allows.

Exemptions and secured loans can be confusing and complex. Contact an experienced Morris County bankruptcy attorney today for a free, initial consultation to assess your debt load and find a personalized debt relief solution.

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