Once you realize that you have more bills than you have money, you may want to find a way to get out of that debt. One option for this is to file for bankruptcy. Consumers typically file a Chapter 7 or a Chapter 13 bankruptcy, depending on their financial situation.
Some people might be concerned about what’s going to happen to their assets. The answer to this isn’t simple, but some assets are protected during the bankruptcy process. Those protected assets are known as exempt assets. Learning a bit about these may help you as you consider bankruptcy as an option to regain control of your finances.
Classification of assets
New Jersey law allows people in this state to decide whether they want to use federal or estate exemptions. You should look at things like the homestead, motor vehicle, private benefits, wildcard and personal property exemptions to determine which one suits your exemption needs better.
Discretion of the bankruptcy trustee
It’s up to the bankruptcy trustee to determine whether liquidating assets is going to be worth the court’s time. If the non-exempt assets won’t pay a good portion of the debts, the trustee may opt not to liquidate them. For people who are filing for Chapter 7 bankruptcy, the chance that the assets are worth being liquidated is slim.
Discussing your situation and concerns with someone familiar with the bankruptcy process is beneficial. This ensures you can receive accurate information that helps you to make a decision in your best interest.