Chapter 7 Personal Bankruptcy Advantages in New Jersey
Individuals with heavy debt burdens who are exploring bankruptcy options may have a choice between filing for bankruptcy under either Chapter 7 or Chapter 13, assuming the specific requirements for Chapter 7 filing are satisfied.
Chapter 7 personal bankruptcy advantages in New Jersey are varied and will depend on the specific circumstances and goals of the individual who is seeking to file. A practiced New Jersey bankruptcy attorney can answer any questions you may have about the process or advantages of filing for Chapter 7 personal bankruptcy.
Chapter 7 Personal Bankruptcy
Of all the Chapter 7 personal bankruptcy advantages in New Jersey, the most significant to the majority of debtors is Chapter 7’s ability to completely eliminate the individual’s unsecured debt. Unlike Chapter 13 bankruptcy, discharge of indebtedness under Chapter 7 does not require the individual to submit a repayment plan—the slate is simply wiped clean.
In a Chapter 7 case, a bankruptcy trustee is responsible for selling the assets that the bankrupt individual owns to satisfy their debts to the greatest extent possible. However, only “non-exempt” assets must be sold in a Chapter 7 case. New Jersey exempts certain types of property from liquidation in bankruptcy. Exempt property under New Jersey law may include:
- Certain annuity contracts (up to $500 per month)
- Life or health insurance
- Certain life insurance proceeds (where the policy prohibits assignment to creditors)
- Furniture and household goods (up to $1,000 value)
- Public benefits such as Workers’ Compensation, old age or disability assistance, and unemployment compensation
- A percentage of wages (dependent upon income level)
Advantages of Filing in New Jersey
While the complete elimination of debt may be the most significant Chapter 7 personal bankruptcy advantage in New Jersey, it is by no means the only reason why individuals choose to file under Chapter 7. Additional advantages include:
- Immediate protection against collection efforts
- Elimination of the potential for wage garnishment
- Stops the process of existing lawsuits
- The debtor remains liable only for secured debts with respect to which the individual signs a reaffirmation agreement
- Property acquired after the conclusion of the bankruptcy case is entirely the individual’s
- Relatively fast resolution of the case
- Potential delayed collection of student loans,
- Elimination of a lender’s ability to repossess secured property
An Attorney Can Explain Chapter 7 Personal Bankruptcy Advantages in New Jersey
One of the Chapter 7 personal bankruptcy advantages in New Jersey is that the individual can choose between applying for the federal or state exemptions. The debtor should evaluate the allowable exemptions under federal law to determine whether the New Jersey exemptions are advantageous. United States Code Section 522, for example, also permits a dollar-limited homestead exemption, as well as exemptions for vehicles, jewelry, and retirement accounts.
A Chapter 7 bankruptcy lawyer can thoroughly review your case to help you better understand your options. They can also fully explain Chapter 7 personal bankruptcy advantages in New Jersey to help you determine whether that is the right option for you. Call today to learn more.