When filing for bankruptcy your bankruptcy attorney will ask you to make a list of all of your assets. This is needed because you can only keep a certain amount of things in bankruptcy without having to pay your creditors back a portion or in some cases all of what they are owed. Though bankruptcy is meant to punish you, there is a requirement of indigence, which means you do have to owe more than you are worth. For most of us this is not a problem. The New Jersey Bankruptcy Court will use this list of assets and compare it a list of €exemptions€ to determine if you have to pay any money to your creditors in a Chapter 7 or a Chapter 13. The vast majority of the time all of your assets are protected from the bankruptcy through the €exemptions.€ However, where assets are owned in excess of the exemption amount, creditors have a right to compensation. Exemptions the amount of money creditors are due under bankruptcy.
An exemption limit pertains to any equity you have in your assets. Equity is the value of a piece of property (car, house, etc.) after any debts still owed have been deducted. For example, a house valued at $200,000 with a loan of $180,000 as an equity value of $20,000. If you are current on the payments of your loan and you choose to continue making payments you generally may keep this asset through the bankruptcy. If all the equity is not covered by exemptions the trustee, appointed by the New Jersey Bankruptcy Court, may decide to sell this property and use this income to pay off your creditors or you may pay back the excess through a series of payments under a Chapter 13 Plan.
In a consultation with your bankruptcy lawyer, you will be given the choice of using Federal Bankruptcy Exemptions found in the U.S. bankruptcy code or to use the New Jersey exemption statues. You must choose either the New Jersey state law or the federal bankruptcy code. You cannot mix and match exemptions between the State and Federal.
New Jersey Exemptions:
$1,000 in furniture and household goods
$1,000 personal possessions
Clothing
Burial plots
$500 a month in annuity proceeds
Certain life or endowment proceeds,
Certain life insurance
Disability benefits
Certain and health insurance or proceeds
Disability or death benefits for members of the military
Disability, death, medical or hospital benefits for civil defense workers
Pensions and most retirement accounts
Unemployment proceeds
Workers' comp
Federal Exemptions:
Residence: $18,450
Automobile: $2,950
Household furnishings and goods, clothes, animals and crops: $9,850 total and $475 for each
Jewelry: $1,225
Tools of professional trade: $1,850
Life insurance (does not include cash surrender value)
Health aids
Public entitlements: Social security, unemployment, public assistance, veteran's disability
Tax-exempt retirement refunds
Certain lawsuit recoveries
An exemption limit pertains to any equity you have in your assets. Equity is the value of a piece of property (car, house, etc.) after any debts still owed have been deducted. For example, a house valued at $200,000 with a loan of $180,000 as an equity value of $20,000. If you are current on the payments of your loan and you choose to continue making payments you generally may keep this asset through the bankruptcy. If all the equity is not covered by exemptions the trustee, appointed by the New Jersey Bankruptcy Court, may decide to sell this property and use this income to pay off your creditors or you may pay back the excess through a series of payments under a Chapter 13 Plan.
In a consultation with your bankruptcy lawyer, you will be given the choice of using Federal Bankruptcy Exemptions found in the U.S. bankruptcy code or to use the New Jersey exemption statues. You must choose either the New Jersey state law or the federal bankruptcy code. You cannot mix and match exemptions between the State and Federal.
New Jersey Exemptions:
$1,000 in furniture and household goods
$1,000 personal possessions
Clothing
Burial plots
$500 a month in annuity proceeds
Certain life or endowment proceeds,
Certain life insurance
Disability benefits
Certain and health insurance or proceeds
Disability or death benefits for members of the military
Disability, death, medical or hospital benefits for civil defense workers
Pensions and most retirement accounts
Unemployment proceeds
Workers' comp
Federal Exemptions:
Residence: $18,450
Automobile: $2,950
Household furnishings and goods, clothes, animals and crops: $9,850 total and $475 for each
Jewelry: $1,225
Tools of professional trade: $1,850
Life insurance (does not include cash surrender value)
Health aids
Public entitlements: Social security, unemployment, public assistance, veteran's disability
Tax-exempt retirement refunds
Certain lawsuit recoveries
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