When you are in serious credit card debt or have some other major debt issues, then bankruptcy can solve those problems. So when it comes to buying a new flat screen or using that money to wipe out all of your credit card debt, the answer should be pretty simple.

If you would like to find out if you qualify for a chapter 7 bankruptcy, then give me a call today.

The New Jersey Bankruptcy Exemptions

The New Jersey exemptions are very weak. They provide the debtor with very little protection when he files for bankruptcy.

New Jersey Homestead Exemption?

For example, New Jersey has no specific provision to protect your home, also known as the homestead protection.  It should be noted though that there are 2 identiclal bills before the New Jersey legislature to create a homestead exemption.  Under the proposed legislation, the bill will provide a homestead exemption for up to $125,000 per debtor.    These bills were introduced on January 8, 2009 under the New Jersey Homeowners’ Equity Protection Act.  As of now, these bills have not been passed, so in the meantime the New Jersey bankruptcy exemptions are leaving the New Jersey residents high and dry if they have any equity in their homes.

Another example of how limited the New Jersey bankruptcy exemptions are is that there is no motor vehicle exemption.  This basically means that if you have equity in your car and you cannot exempt it with some other New Jersey bankruptcy exemption, then you must either give up your car or buy it back for whatever equity there is on the car.

Federal Bankruptcy Exemptions

The world of the federal bankruptcy exemptions is totally different than the New Jersey bankruptcy exemptions.  Let’s begin with the Federal homestead exemption.

Federal Homestead Exemption

Section 522(d)(1) of the bankruptcy code allows a debtor $20,200 of equity in his home or if married and filing jointly $40,400 of equity in his home.  Contrast this with the fact that currently New Jersey has no homestead exemption amount at all.

Federal Motor Vehicle Exemption

Another great example of the stark contrast between the federal and New Jersey exemptions is that the federal motor vehicle exemption of Section 522(d)(2) allows a debtor retain up to $3,225 of equity in his car, while New Jersey does not even have a motor vehicle exemption.

Summary

There are plenty more examples to show why a debtor will rarely use the New Jersey exemptions in bankruptcy.  Until the New Jersey legislature passes some sort of homestead exemption, the choice of exemption law will remain unified in using the Federal bankruptcy exemptions.

If you have any questions about your particular situation, feel free to give me a call and I will help you figure it out over the phone.

Establish Residency in New Jersey

If you are a resident of New Jersey and have been a resident for a period of time that qualifies you as a resident according to the Bankruptcy Code, then you may file for bankruptcy in New Jersey.

Reasons why you should consider bankruptcy

There are a lot of reasons why a person may consider to file for bankruptcy. If you have large debts that you are only making minimum monthly payments on with no future in sight for you to pay off the principal amount, then filing for bankruptcy may be a very good option.

Let’s go over a few examples. Let’s say you have $80,000 of credit card debt. You are only making the minimum payments on this debt, the interest rates are 18% let’s say, and your income you receive from your job will not help you cover these expenses. In this situation, filing for bankruptcy in New Jersey makes a lot of sense. If you file for bankruptcy in New Jersey, you may wipe out your credit card debt as in this example and probably be able to retain your home, car, and your personal belongings.

Keeping your property through a New Jersey Bankruptcy

When you file for bankruptcy in New Jersey, there are a number of pieces of property you can keep.

Keeping Your Home in New Jersey Bankruptcy

For a home, you can retain $18,450 of equity in your home. For example, if your home is worth $100,000 and your mortgage is $83,000 then you have $17,000 of equity in your home and all of that equity would be exempt in bankruptcy and you could keep your home. If you are married, the exemption amount is doubled.
If the equity in your home is above $18,450 then the trustee who oversees your bankruptcy case may take your home, sell it, and give you the exemption amount ($18,450 or $36,900 if you are married). In practice if the equity in your home is a little more than the exemption amount, the trustee probably wil not sell your house only to retain a small amount for the creditors.

Keeping Cars and Trucks in a New Jersey Bankruptcy

You may retain $2,950 of the equity in one of your cars. We determine the equity by the fair market value which we can research its blue book value versus how much you owe on the car or truck. It is my experience that many of my clients are able to retain their cars. The same principle applies that if the value of your car is above $2,950 the trustee won’t necessarily take your car. The trustee will only take your car if it is worth much more than this amount so that he can distribute the profit to the trustees. Of course, if it is sold you will first be given the exemption amount of $2,950 for the car.

Speak with a Qualified New Jersey Bankruptcy Lawyer

There are a number of other factors and details related to filing for bankrupcy in New Jersey. Make sure you speak with a qualified New Jersey Bankruptcy lawyer.

If you would like to speak with me please call me at 732-719-7801. I am happy to speak with you for free over the phone to help you figure out the best option for your personal situation.

Newark Bankruptcy

If you are living or working in Newark and are looking for an experienced bankruptcy attorney in Newark, then please give me a call today. I can meet with you and go over your financial situation in Newark, New Jersey and help determine whether you or your business qualifies for a Chapter 7 bankruptcy and whether it is right for you.

If you are suffering from too many credit card debts that you cannot afford the monthly payments, or medical bills that are just insurmountable, then filing for bankruptcy may be the best option for you. By filing a Chapter 7 bankrputcy you can literally wipe the slate clean of credit card debt, medical bills, and all other forms of unsecured debt.

Of course, bankruptcy cannot wipe away all of your debts. Filing for bankruptcy in New Jersey you cannot wipe away past alimony payments, child support, most student loans, and most old tax debts.

Help from Newark Bankruptcy Attorney

With the help of a bankruptcy attorney, you will be on your way to creating a fresh start for you and your family. I would be honored and privileged to help you start a new financial life for you and your family.