When you file a chapter 7 bankruptcy, the trustee assigned to your case looks to see if there is anything you own that can be sold to raise money to pay creditors. This is because a chapter 7 is actually a "liquidation bankruptcy," and is what leads a lot of people to worry that they will lose their home if they file.
Fortunately, in over 90% of New Jersey bankruptcies, this does not happen because of the real estate market and exemption laws that allow debtors to keep assets up to a certain value. When a trustee looks at your home and decides not to sell it, this results in his "abandoning his interest" in it and filing certain papers with the court.
What Does "Abandonment" Mean?
This means that he is ceding ownership of the home back to the debtor because he does not want to sell it! This is good news! Unfortunately, despite my best efforts to explain it in advance, many of my clients panic when they get this in the mail, thinking that they have to abandon the home!
Nothing is further from the truth. Debtors in bankruptcy should see this as cause for celebration, not concern, and as a milestone towards their fresh start, which they so desperately need.
If you live in southern New Jersey and are considering filing bankruptcy, please feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office 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.