New Jersey Bankruptcy Attorney

As a bankruptcy attorney in New Jersey, another important point I must communicate to my clients is what property they can keep even though they are filing for bankruptcy.  Most of my clients have a misconception that when you file for bankruptcy you basically relinquish all of your property – this is a big misconception.  In fact, you can keep a large majority of your property even though you are filing for bankruptcy.

New Jersey has listed several items and their dollar amount of equity you can keep in certain pieces of property.  However, these exemption amounts are much less than the Federal exemption amounts and since you can choose to use either the Federal or New Jersey exemptions, I advise choosing the Federal exemptions because you get to keep more of your property.

What can you keep?

(Double all amounts if filing jointly with spouse)

Home

According to §522(d)(1) of the bankruptcy code, each debtor may keep up to $20,200 in the equity in their home (or $40,400 if filing jointly with your spouse).

Ex.  Your house is worth $150,000 and you have a mortgage of $130,000 that means you have $20,000 of equity in your house.  Since the exemption allows you to keep $20,200 of equity in your house (double it if married and filing jointly) you may keep the entire house.  On the other hand if you had $30,000 in equity, the bankruptcy trustee could sell your house and give you the $20,200 of the exemption and distribute the rest of the proceeds to the creditors.

Your Car

According to §522(d)(2) you can keep up to $3,225 of equity in your car.  Ex.  If you have a car that’s worth on the open market today given its condition, mileage, and use $6,000 but there is still a remaining $2,000 loan on the car, then you have $4,000 of equity in the car.  You are over the $3,225 exemption amount so $775 is unexempt and could be subject to the trustee.  For all practical purposes though, not many trustees will exhaust their efforts to sell the car only to distribute the $775 to your creditors.

Household Goods

You may keep an aggregate limit of $10,775 but no single item may exceed $525.

Jewelry

According to §522(d)(4) You may keep up to $1,350 of value in jewelry.

Wild card

You may apply $1,075, plus up to $10,125 of the unused homestead exemption to any other exemption amount.  Thus, a renter can gain the benefit of a full wild card exemption of  $11,200.

Tools of your trade

According to §522(d)(6) you may keep up to $2,025 of equity of the tools of your trade.

Unmatured life insurance

According to §522(d)(11)(D) you may keep up to $10,775 in an unmatured life insurance

Personal Injury Suit

you may keep up to $20,200 in a personal injury suit whose money you would have earned.

*These dollar amounts are adjusted every 3 years to account for inflation.

If you would like to find out what property you can keep if you file for bankruptcy, please call me at (732) 719-7801.