In Most Chapter 7 Cases Bankruptcy Exemptions Allow People to Keep to Keep Their Property After Bankruptcy
Many people are afraid that if they file for Chapter 7 bankruptcy, they will lose their house, their car and all of their personal property.
Most Chapter 7 bankruptcy cases are considered no asset cases. That means that the debtor (the person who files bankruptcy) keeps all of their assets.
Bankruptcy exemptions are an important part of the bankruptcy system. In Chapter 7 bankruptcy, exemptions determine what property you get to keep. If the property is exempt you can keep it during and after bankruptcy. At Levitt and Slafkes, P.C. we will give you all the time you need to make sure that you understand how the bankruptcy laws apply to your unique situation.
In New Jersey there are 2 options when it comes to bankruptcy exemptions: using the New Jersey state exemptions or using the Federal exemptions.
The New Jersey state exemptions are very limited so we generally use the Federal exemptions to help our clients keep their assets. Here is a list of some of the exempt property that Federal law allows each debtor to keep after bankruptcy.
Property Protected with Federal Bankruptcy Exemptions
The following are the most common items that Federal law allows each debtor to keep after bankruptcy:
Up to $25,150 of equity in your principal place of residence
Up to $4,000 of equity in a motor vehicle
Personal property such as household goods, clothing up to $600 per item and $13,400 in total
Jewelry up to $1700
Wrongful death benefits for a lost loved one depending on you
Personal injury recovery up to $25,150 not including pain and suffering
Payments for lost earning
Up to $2525 of tools, books and implements you need to work
Alimony and child support
$1325 of any property and up to $12,575 not used to exempt real estate
The Federal bankruptcy exemption amounts adjust every three years. These exemption amounts became effective April 1, 2019.
It is important to remember that you will not be able to keep money or property that is not determined to be exempt. If the assets you own are more than the allowed exemptions, we can use a Chapter 13 Bankruptcy to help you keep those assets.
Exemptions Are Doubled for Married Couples Filing Together
All of these exemption amounts are doubled for married couples who file for Chapter 7 bankruptcy together.
Exemptions in Chapter 13 Bankruptcy
Under Chapter 13 bankruptcy, you can keep your non-exempt property, but you must create a three- to five-year payment plan to reimburse your creditors. The amount you have to pay back equals the value of your unprotected, or nonexempt, assets. This plan works best if you have enough income to afford the payment plan.
Contact Us to Determine if Chapter 7 Bankruptcy is Right for You
If you’re drowning in debt and don’t know where to turn, bankruptcy might be your best option. Most Chapter 7 debtors do not have nonexempt property, which means that they pay nothing to unsecured creditors and their debts are discharged.
Contact Levitt and Slafkes to schedule a free consultation to determine if bankruptcy is right for you. We know how hard this is for you and we want to help. Contact us at (973) 323-2953 to schedule a free consultation or contact us online.
We are proudly designated as a debt relief agency by an Act of Congress. We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years. The information on this website and blogs is for general information purposes only. Nothing should be taken as legal advice for any individual case or situation.