Bankruptcy in New Jersey
Determining whether you qualify for bankruptcy in New Jersey, which debts you can extinguish through bankruptcy, and what property you can keep are all very important considerations and specific to New Jersey.
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 filing 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.
Here’s an example. 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%, and your income 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. 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, 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 vehicles. We determine the equity by the fair market (Blue Book) value versus how much you owe on the car or truck. In my experience, many of my clients are able to retain their cars. The same principle applies when 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 bankruptcy in New Jersey. Make sure you speak with a qualified New Jersey Bankruptcy lawyer.