An overview of bankruptcy exemptions in New Jersey
Bankruptcy exemptions allow the debtor to protect certain assets from creditors.
August 30, 2013 /24-7PressRelease/ -- An overview of bankruptcy exemptions in New Jersey
Article provided by Brenner Brenner & Spiller
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If you are struggling with debt, you may believe that filing for bankruptcy requires you to sell or give up your assets. Although the thought of losing your possessions may make you hesitant to consider bankruptcy, in the majority of cases you lose little or no property due to the existence of bankruptcy exemptions. Bankruptcy exemptions allow you to keep most of your important assets away from the reach of your creditors.
Depending on whether you file for Chapter 7 or Chapter 13 bankruptcy, exemptions work in different ways. Chapter 7 bankruptcy works by selling off certain assets to pay your creditors. Although this sounds scary, only nonexempt assets may be sold. In other words, none of your assets that fall under a bankruptcy exemption can be sold during bankruptcy.
Chapter 13 bankruptcy functions by consolidating your assets into a payment plan where you repay some of your debts by making monthly payments over three to five years. How much you need to pay towards certain types of creditors each month is largely dictated by the value of your estate. All your exempt assets are deducted from the value of your estate, lowering the amount that must be repaid to these creditors.
New Jersey exemptions
Both federal and state law controls which assets are exempt in bankruptcy. New Jersey is one of the states that allows you to choose whether you would like to take advantage of the federal exemptions or New Jersey's. However, you may not choose from both sets of exemptions.
Generally, the federal exemptions are chosen as they are more favorable in most situations especially when the case involves real estate.
A bankruptcy attorney can help
Bankruptcy is a complicated area of the law, as it is full of exceptions. To learn more about how bankruptcy would affect (and could help) your particular situation, contact an experienced bankruptcy attorney.
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