The choice to deal with your overwhelming debt through bankruptcy is not an easy decision to make. It is a major step for New Jersey consumers, and it requires careful thought and consideration before you move forward. Before you file for Chapter 7 bankruptcy, you may find it beneficial to learn about how this process will affect your property rights.
Some people wrongly assume that filing for bankruptcy will mean they have to relinquish their property. Despite the fact that Chapter 7 is liquidation bankruptcy, there are exemptions available. This means that you will likely be able to keep a significant portion of the property you own.
What types of property can I protect?
Chapter 7 bankruptcy is a legal process that addresses debt. Through the discharge process, it gets rid of certain types of debt and allows you to move forward to a better financial future. When you file, you may be able to secure exemptions that can protect certain types of property, including the following:
- Vehicles worth under a certain dollar amount
- Furniture and other household goods that you need
- Necessary clothing
- Tools of the trade and other things you need for work
- Jewelry worth under a certain dollar amount
- Unpaid wages already earned
- Public benefits or money won through a civil claim
The purpose of bankruptcy is not to take all of your personal possessions and leave you financially devastated. It is to give you the opportunity for a strong financial future, and you will likely be able to keep most of the things that are important to you. However, Chapter 7 bankruptcy does require the liquidation of some assets. Property that is not exempt includes the following:
- Expensive musical instruments not necessary for your job
- Second homes or second vehicles
- Coins, stamps and other valuable collections
- Certain family heirlooms
Before you initiate this process, you will find it helpful to fully understand both its benefits and the implications it can have on your life.
Securing a better financial future
When you file for bankruptcy, it is because you cannot hope to manage your debt balances on your own. This process may not be your first choice, but it is an organized way to stop debt collection efforts against you and make a better financial path for your future.
While it will impact various areas of your life, you will not have to relinquish most of your property and things of personal importance. You may find it helpful to seek an evaluation of your case to better understand how bankruptcy will affect you.