Know About Exempt Bankruptcy Property

December 16, 2009 by  Filed under: Bankruptcy 

If bankruptcy filing is what is on your mind, then the most important thing to know is which bankruptcy property you can keep with you and which not. The code of bankruptcy offers help to individuals and corporations by providing exemptions. The state of New Jersey, for example, permits people to get exemptions and also federal exemptions by choosing between them. It is always recommended to use federal exemptions; the reason being that they give a much bigger sum of exempt property in comparison to what is set according to the state law. In case you are married then the exemption amount would be exactly double while giving double benefits too.

At the time of filing a bankruptcy petition, information regarding assets and properties also needs to be provided. The person has to provide information like the explanation of the bankruptcy property, its market value, and exemption provided for the property as per law. At the time of filing bankruptcy petition, each and every bankruptcy property becomes an element of bankruptcy estate. It happens that the trustee acquires the physical possession of the property at this particular time. Moreover, the creditors can also object regarding the property exempt, but this should be done within a time limit of 30 days. Now, if this is done by the creditors, they also need to prove regarding the improperly claimed property or exemption.

Regarding Your House

A few states do not offer farmhouse exemption. This means that the creditors are not being excluded from the exempted property. In case there is more than the required equity then it will result in a forceful sale. According to federal exemptions, the individuals are allowed to exempt almost 20,000 dollars for real property and around 40,000 for a joint exemption.

It is usually recommended to try and obtain an appraisal for understanding about the total amount of equity you can get on your bankruptcy property. In case this comes to be more than what is being allowed by federal exemptions, you can choose Chapter 7 bankruptcy law.
Regarding Your Car

It is great to know that under the exemption list of properties, you can hold on to your car whose worth should be up to 3225 dollars or less. Now, don’t think here that if your car’s worth is more than this amount, you will have to give up on it; it is not so. The reason is that the federal exemption also permits a wildcard exemption of around 1075 and 10,125 dollars.

However, if you are still into the payments of a car then this information regarding exemptions will be of no use to you. While filing bankruptcy petition, you have to also give the information if you want to keep this asset or give it back. A reaffirmation has to be provided and an approval also needs to be taken in such cases.

This is called a reaffirmation agreement where information related to income and expenses is to be mentioned so that a clear picture is there with the judge. Keeping things like these in mind if you prepare for your bankruptcy in a right manner, then the agreement would surely get an approval.

At the time of filing a bankruptcy petition, you may need to provide information regarding your assets. The bankruptcy code provides exemptions on certain properties that are meant to be forfeited. You may need to consult a bankruptcy attorney to know about the various legal options available.

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