Keeping Your Home When You File for Bankruptcy in New Jersey

Distressed woman holding several credit cards

When a person files for bankruptcy in New Jersey, it is important for them to understand that there will likely be serious consequences as they embark on a highly complex process. That’s why it is imperative that an individual thinking about seeking bankruptcy protection first speak with a qualified bankruptcy and debt management attorney who can help them understand all of their available legal options.

If you are struggling underneath a mountain of debt and could use some relief, bankruptcy may very well be your best option. However, it is important to keep in mind that a mishandled bankruptcy can have negative repercussions that may include destroyed credit and even the loss of your home.

There are different types of bankruptcies for different situations, with each type of bankruptcy coming with its own set of rules and implications for a person’s property holdings. One of the most common forms of bankruptcy is Chapter 7 bankruptcy. Under Chapter 7, an individual consumer typically seeks to eliminate debt by selling off certain assets.

Keep in mind that your assets may be seized when you file for Chapter 7. However, your home, your car, your retirement accounts, and some other assets may be protected against seizure, depending on their values. The reason these types of assets can be exempted in a Chapter 7 proceeding is that the government doesn’t want to leave the person filing for bankruptcy with no hope of getting back on their feet and moving forward with their life.

Chapter 13 bankruptcy operates differently than Chapter 7, but the general philosophy of leaving the debtor with some ability to keep their home and rebuild their life remains in place. Under Chapter 13, the person filing for bankruptcy usually sets up some sort of payment plan with their creditors. As long as the debtor continues to make regular payments, they should be able to keep their home.

For further information, read the Washington Post article, “What Happens to Your House When You File for Bankruptcy.”


Joel R. Spivack, Esq., is an experienced bankruptcy and debt relief attorney who can assist you throughout the bankruptcy process. Contact Mr. Spivack today to schedule a free consultation.

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Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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