Which Property You Can Keep
By far the biggest surprise to my clients is that they can often keep most if not all of their property. You are probably wondering how this works.
The bankruptcy laws allow for each debtor to exempt i.e. to keep a his properties up to a certain dollar amount. Let me explain this through a few examples.
Your Home
I can help my clients retain up to $20,200 of equity in their home or if both spouses are filing $40,400 of equity in their home. Let’s say you own your home. It is worth $200,000. You have a mortgage on it for $190,000. Therefore, you have only $10,000 of equity in your house. So if you were filing either alone or with your spouse, in this example, you could keep your home as long as you stay current on your mortgage, even though you are wiping out $10,000, $25,000 or $100,000 of unsecured debt (i.e. credit card, medical bills, etc). If you are above that amount, that does not mean you will lose your house. There are many different ways I can help you retain your house even if you are over the exemption amount. Please call me for more details about your options.
Your Car
I can help my clients retain up to $3,225 of equity in their car. For example, let’s say you own your car outright and the market value is $3,000. So therefore, you could keep your car even though you are wiping out all of your unsecured debt. But now let’ say your car value is worth $20,000 and your payoff balance on the car is $15,000. So you have $5,000 of equity and I can only exempt $3,225. Not to worry, I can either apply the wild car exemption to exempt the remainder OR worst case scenario you will pay the difference over a 6-12 month period.
Household Furnishings
I am able to help my clients retain $10,775 of household goods but no single item may exceed $525.00.
Your Tools
You may keep up to $2,025.00 of equity of the tools that you use for your profession.
Your Life Insurance
Whole life insurance policies have an amount that you could take out at a certain time. Term life insurance policy does not have this feature. If you have a whole life insurance policy, you may keep up to $10,775.00 in an unmatured life insurance policy.
Your Jewelry
I am able to help my clients retain up to $1,350 of equity in their jewelry. The market value is based on yard sale prices (not necessarily what you paid for it).
Wild Card
I can apply an extra $1,075.00 to any item that you may be over the exemption if you are a homeowner. If you are renting, I am able to apply $10,125.00 to any item that you may be over the exemption.
Summary
The exemption laws as applied to New Jersey residents who are filing for bankruptcy is quite complex. I have only touched the tip of the iceberg here in how to exempt certain items. Please consult with a New Jersey bankruptcy lawyer such as myself so that you can be assured you can retain as many assets as possible through bankruptcy.