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Protect More of Your Stuff in NJ Bankruptcy After April 1, 2013

Posted on Mar 01, 2013

Folks in the Gloucester County, New Jersey, area thinking about bankruptcy are often worried that they will lose assets like their home or their car if they file.  In a chapter 7 "liquidation" bankruptcy, however, this rarely happens (perhaps 5% of the time) because of exemptions provided for in the law that protect your property from the trustee.  You can keep your stuff up to a certain value.

Due to inflation, these exemption figures are adjusted every three (3) years as instructed by the bankruptcy code.  The last time this was done was in 2010.  Therefore, as of April 1, 2013, the federal exemptions are going to be adjusted - this time upwards by 6.3%.  Here are some examples (per debtor, so double for a married couple filing jointly on jointly held assets):

  • Home Equity: $21,625 to $22,975
  • Car: $3,450 to $3,675
  • Household Furnishings, Clothing, etc.: $11,525 to $12,250
  • Jewelry: $1,450 to $1,550
  • Wildcard (Anything): $10,825 to $11,500

The "Wildcard" Exemption is the unused portion (if any) of your home equity exemption.

It might not seem like a lot, but it can make the difference between filing a chapter 7 and a chapter 13.  Many people have net equity in their homes above the current exemption levels that would put it at risk in a 7.  Therefore they file a chapter 13, proposing to pay out that non-exempt equity over time, and thus protect it.  Now, more of those people can file a 7 to get a fresh start.

If you live in southern New Jersey and have been considering bankruptcy, but were afraid that you would lose your home or other cherished asset, you should reconsider.  It could get easier after April first.

Don't wait;call my office at 856-432-4113 or contact me through this site for a free consultation to discuss your case. If you are looking for more information about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.

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