Choosing to file for bankruptcy is a difficult and involved decision. After dealing with many financial hardships to the point where you cannot keep up, you have to decide whether or not bankruptcy is the answer to your financial problems.

Many people weighing the options are wary of bankruptcy. This may be due to the negative connotation associated with it or because they are afraid of losing all of their property. In all honesty, bankruptcy should be viewed as a fresh financial start, not a negative. In addition, if you are considering bankruptcy, you can take comfort in the fact that many different exemptions exist through bankruptcy.

Property Exemptions Through Chapter 7 and 13

Property exemptions can play a significant role when filing for Chapter 7 bankruptcy, as well as Chapter 13. For Chapter 13, exemptions determine the minimum amount you are required to pay to credits through your repayment plan. It can make all the difference between being able to or not be able to fund a Chapter 13 repayment plan.

Under Chapter 7 bankruptcy there are many exemptions that apply to certain types of property:

• Many states utilize a homestead exemption that is designed to either help you keep your home or part of its’ value. In Chapter 7 bankruptcy, the appointed trustee will sell non-exempt property, including your house if it has nonexempt equity.  The trustee will sell the home, pay off the mortgage and reimburse you for the amount of the homestead exemption. The remaining proceeds would be used to pay unsecured creditors and any fees owed.
• Also under Chapter 7, there exists a motor vehicle exemption. This means you might be able to protect your equity in your car, truck, van, or motorcycle. You might even be able to keep your vehicle if you have enough equity.
•  Exemptions exist for household goods, furniture and clothing. In most cases, under state and/or federal exemptions you will be able to keep most or all of your furniture and household goods. Clothing is almost always protected when filing for bankruptcy. Some states let you protect your clothing up to a certain amount or allow you to protect a certain amount of value in your clothing, household goods and personal effects combined.

Many people also worry about Social Security income and retirement plans and pensions. If you have not mixed your social security money with other funds then it is protected under Chapter 7. Retirement plans and pensions are also mostly exempt from bankruptcy. Some are categorized as “excluded” while the rest are considered “exempt.”

NJ Attorney Can Help With Your Exemptions

When figuring out if bankruptcy is for you and the property you have that might be exempt, an experienced bankruptcy attorney can be a real asset. In New Jersey, the Law Office of Joel R. Spivack has a strong track record in helping clients with their financial hardships.

Mr. Spivack will review your circumstances and figure out a customized solution designed for your needs, making sure to explain any and all exemptions you might be able to claim. Filing for bankruptcy is enough of a struggle that you should not go it alone. Do not waste another minute. Contact the firm at 856-488-1200 for a free, face-to-face initial consultation.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.