What Can I Keep in Bankruptcy?

The question of "What can I keep in bankruptcy?" speaks to the topic of bankruptcy exemptions allowed by law. Most New Jersey bankruptcy filers apply federal exemptions to their bankruptcy plans. Federal exemptions take into account the needs of people to continue with self-sufficient lives even as they go through debt elimination or debt restructuring through bankruptcy.

Keep in mind that real estate that does not have any equity built up is not subject to liquidation. It may seem to be an asset in practical terms (because it is where you live), but it is not something you can sell in order to put money in the bank. In today's real estate market, a great many bankruptcy filers do not have much or any equity. In some cases, eliminating second and third mortgages is a viable option. Reducing the balance on the mortgage in a multifamily housing unit is also achievable in many cases. Keeping the house is part of the debt relief solution through bankruptcy for many of our clients.

The federal statute of 11 U.S.C. §522 spells out explicitly what assets are exempt in bankruptcy. Exempt assets are those which are not subject to liquidation in a Chapter 7 bankruptcy. (In a Chapter 13 bankruptcy, debtors do not have to liquidate assets.) The dollar amounts for these assets change often. Contact us to verify whether these dollar values are up to date:

  • Real estate, mobile home, co-op or burial plot: up to 21,625 in value or equity. Up to $10,825 of this can be applied to other assets as a wild card if not used for real estate.
  • Life insurance: Loan value and accrued dividends up to $11,525.
  • Retirement accounts: all are exempt.
  • Unemployment, disability and illness benefits: all are exempt.
  • Car or truck: $3,450 in value. (If your car is worth more and you can keep up with payments, you may be able to keep it by reaffirming the car loan after your bankruptcy.)
  • Household goods and other personal property: $11,525 total, plus any amount available through the unused real estate equity wild card.
  • Jewelry: $1,450.
  • Tools of a trade and books: $2,175.
  • Any property: up to $1,150.

This abbreviated list of federal bankruptcy exemptions helps illustrate why we can confidently say that most of our clients keep all their assets while eliminating debts through bankruptcy.

Learn About Your Federal or New Jersey Bankruptcy Exemptions · Attorneys Offer Free Consultations

Let us help you find the answer to "What can I keep in bankruptcy?" quickly and efficiently, in terms applicable to your unique circumstances. We welcome you to one of our law offices in East Orange, Paterson, Jersey City or Newark. Call our experienced Essex County, New Jersey, bankruptcy lawyers today for a free one-half hour consultation at 973-414-8069 or 888-827-5493. Our lawyers serve Essex, Union, Hudson, Passaic, Bergen, Morris, Middlesex, Sussex and other New Jersey counties.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.