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What property do I get to keep in Chapter 7 bankruptcy?

Making the choice to file for bankruptcy is not an easy one. However, taking this step is often a prudent and beneficial choice for many individuals who are struggling with overwhelming debt. If you find yourself unable to manage your financial obligations, and New Jersey creditors and debt collectors are constantly hounding you, you would be wise to consider seeking bankruptcy protection. 

Chapter 7 bankruptcy is a popular choice for many people who file for bankruptcy. It is a relatively fast process also known as liquidation bankruptcy, which often leaves people concerned over what property they may lose if they file. You may be surprised to learn that you can actually keep many things that are most important to you.

Exempt and non-exempt property 

It is completely normal to have concerns over what will happen to your property if you file for bankruptcy. Chapter 7 allows for certain property to be exempt from liquidation, which means you will not have to relinquish certain assets and belongings. Generally, the following is exempt:

  • Vehicles worth up to a certain value
  • Necessary clothing
  • Necessary items for the household
  • Household appliances
  • Pensions
  • Certain jewelry under a certain value
  • A portion of equity in your home
  • Tools of the trade
  • Unpaid but earned wages
  • Damages from a personal injury claim
  • Public benefits

As you can see, filing for bankruptcy does not mean that you will have to relinquish all of your personal property. You will likely be able to keep those things that are most important for your daily life. However, there are certain types of property that are not exempt. Non-exempt property generally includes:

  • Second homes or vacation homes
  • Expensive musical instruments
  • Family heirlooms
  • Valuable collectible items, such as stamps
  • Cash, bank accounts, savings accounts
  • Stocks and bonds
  • Second vehicles

Before you file for bankruptcy, you could be wise to seek a full understanding of your rights and what you may be able to keep in case you decide to move forward with bankruptcy.

Why choose Chapter 7 bankruptcy?

Chapter 7 bankruptcy offers many benefits to a consumer overwhelmed by debt. It allows you the opportunity to seek protection from creditors and debt collectors, as well as provide an organized way by which you can deal with your debt.

If you believe that you may benefit from Chapter 7 bankruptcy, you would be wise to first seek the counsel of an attorney who can help you understand your options. After this, you will be able to make a decision that will allow you to build a strong financial future.

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