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Exemptions under Chapter 7

On Behalf of | Jun 16, 2020 | Bankruptcy |

Chapter 7 bankruptcy protection offers what is perhaps the fastest, most effective method of getting out of debt and returning to financial solvency. Unfortunately, many people are reluctant to avail themselves of this powerful tool. Some fear they will lose everything if they file for bankruptcy. This comes from a common misunderstanding of what Chapter 7 is and what it does.

After you file for Chapter 7 under the U.S. Bankruptcy Code, the court puts an immediate halt to all efforts by creditors to collect payments from you. With the help of a debt relief lawyer, you then work out a plan to eliminate most types of debt within 3-5 months.

Chapter 7 does require you to sell some of your assets in order to satisfy creditors. However, it does not require you to sell everything. There is a long list of types of assets that are exempt from the liquidation requirement.

Under New Jersey law, you can keep up to a certain dollar amount worth of personal property, furniture and household items. You can typically keep one car. You can also keep your pensions, retirement accounts, insurance payments and other types of assets. In many cases, you may be able to keep your home.

Unfortunately, you will probably have to give up your stamp collection or other valuable assets, but what you get in return is a freedom from debt. That can be wonderful for your peace of mind and that of your family.

Chapter 7 is not the right option for everyone, but it can be an excellent choice for many people who are struggling with overwhelming debt.