What Can You Keep If You File Under Chapter 7 or Chapter 13?
You may have lost your job because of the COVID-19 pandemic, or other life events—divorce or personal injury, for instance—may be making it difficult to meet your financial obligations. You might be considering bankruptcy to get a fresh start and relief from creditors but fear that you’ll lose everything you’ve worked so hard to get. Can you file for bankruptcy without losing your property? What is the impact of filing under Chapter 7 or Chapter 13?
Chapter 13 Filings
With a Chapter 13 petition, you negotiate new payment arrangements with all your creditors. The treatment of property under Chapter 13 is straightforward—you get to keep it all, provided you honor the terms of your agreement. Your creditors must first approve your repayment plan (which typically extends over a three-to-five-year period), and you must follow the plan. If you don’t, your creditors can ask the court to convert your filing to a Chapter 7 petition.
Chapter 7 Filings
The treatment of property under Chapter 7 is a bit more complex. With a Chapter 7 bankruptcy, you have the opportunity to permanently discharge certain debts, but you must turn over some of your property to the bankruptcy court, which is then sold, with the proceeds disbursed among your creditors. However, you can claim some property as exempt from sale. Exempt property generally includes real property, motor vehicles, and personal property. There are specific exemptions under federal law and a separate set of exemptions under New Jersey law. You must select either the federal or state exemptions but cannot pick and choose between the two. We can help you determine which set of exemptions will be more beneficial to you.
Contact Attorney Howard N. Sobel
At the office of Howard N. Sobel, we work closely with people in New Jersey in personal bankruptcy filings. Contact our office online or call us at 856-424-6400 to set up a free initial consultation (on selected cases). We are currently available by phone, text message, or videoconference only. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.
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