Consumer Bankruptcy

Consumer Bankruptcy Basics

Bankruptcy may be the direction to turn when, despite your best efforts to pay your debts, the amount owed is overwhelming and can not possibly ever be repaid, and creditors are threatening to garnish wages and levy property. Consumer bankruptcy is a legal proceeding designed to give a fresh financial start to creditridden individuals by legally eliminating most of their debts while allowing them to keep much of, and very often, all of their assets and income. If you have missed payments on your mortgage, your rent or your car, Bankruptcy may allow you to keep your home and your car and provide you with time to catch up on missed payments. Bankruptcy can allow you to restore your New Jersey driving privileges despite unpaid surcharges.

Bankruptcy laws allow you to keep:

• $20,200 in equity in your home
• $3,225 in equity in your car
• $475 per item in any household goods up to a total of $9,850
• $1,850 in things you need for your job (tools, books, etc.)
• $925 in any property, plus part of the unused exemption in your home, up to $10,100
• Your right to receive certain benefits such as social security, unemployment compensation, veteran's benefits, public assistance, and workers compensation - regardless of the amount.
• $18,450 in proceeds of a claim for personal injury
• Pensions, 401(k)s and IRAs
• Certain other assets
• The amounts of the exemptions are doubled when a married couple files together.

There are two forms of bankruptcy relief for individuals: Chapter 7 and Chapter 13. If you need to catch up on missed mortgage, rent or car payments, or if you need to restore your NJ driving privileges due to unpaid surcharges, or if the value of your assets is more than the value of assets the bankruptcy laws let you keep, or if your income exceeds a certain amount, you will need to file a Chapter 13 bankruptcy. In Chapter 13, you are given up to three to five years to make payments through a payment plan designed to save your home from foreclosure or eviction, save your car from repossession, pay some small percentage of your other debts. If your home and car payments are current, if your diving privileges have not been revoked, if the value of your assets is less than the value that the bankruptcy laws lets you keep, and if your income level is not over the federal limit, then you will likely file a Chapter 7 bankruptcy. Chapter 7 does not require a payment plan like Chapter 13. After filing for Chapter 7 relief, you continue to make your home and car payments, but you no longer have to pay your prebankruptcy debts such as credit cards and medical bills.

If your income is above average, you may be required to proceed with a Chapter 13 Bankruptcy and meet certain other requirements.

As with any area of the law, it is important to carefully select a bankruptcy attorney who will respond to your personal situation. The attorneys at Maselli Warren, P.C. have substantial experience in representing consumers in bankruptcy matters. Our attorneys are not too busy to meet you individually and to answer your questions as necessary. At Maselli Warren, P.C., we charge reasonable fees for our bankruptcy services. Although it may be possible for some people to file a bankruptcy case without an attorney, it is not a step to be taken lightly. The process is complicated and you may lose property or other rights if you do not know the law. The law often changes and the attorneys at Maselli Warren, P.C. are on top of it.

This information is intended to provide general information for New Jersey bankruptcy cases and it is not to give you specific legal advice.

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