New Jersey Bankruptcy
New Jersey Bankruptcy Law
Bankruptcy Code and Exemptions...
Although Federal Bankruptcy Code and U.S. Bankruptcy Laws apply to everyone, each state has its own Bankruptcy Code and Rules of Bankruptcy Property Exemption that apply specifically in that state.
New Jersey Bankruptcy Law
Filing Successfully...
The State of New Jersey is unique in that no homestead allowance is available in bankruptcy under the state statute, however, the homestead exemption provided under Section522 of the Code is available. The amount of the exemption is tied to the consumer price index and changes regularly, and is considered to be below average of other state exemptions.
One of the most noted changes in New Jersey bankruptcy files is the addition of new Chapter 7 filing limitations. Several new tests were created to limit disposable income, require extensive debts, and force filers into Chapter 13 in all but the most extreme circumstances.
These new US bankruptcy laws were passed with haste, and as such haved failed to compressively ban Chapter 7 for many individuals under the initial purview of the means testing statute. As a result, many debtors may still qualify for full and complete discharge of all debts when carefully qualifying their filing.
Pre-Bankruptcy Planning and Preparation
Pre-bankruptcy planning is a delicate topic with many transactions prohibited, but with the assistance of a progressive bankruptcy attorney, other allowable exemptions may be identified.
In practice, most people who file for bankruptcy will actually improve their credit rating within 18 months or less. In fact, in a chapter 13 filing, credit will begin to improve once late payment reports stop, and secured loans and credit lines begin reflecting timely payments.
Overall, filing for bankruptcy can, for many Americans in many different circumstances, be an important and integral step toward financial recovery and new found fiscal stability. Ultimately, bankruptcy creates opportunities and improves net worth, so long as the decision to file was made wisely.
New Jersey Bankruptcy Exemptions
The State of New Jersey stands out because of one rather odd provision of New Jersey bankruptcy law. The New Jersey bankruptcy exemptions do not exempt homesteads, where as most other states provide at least a modest allowance to save the family home from creditors. Alternatively, New Jersey does permit state residents to claim the Federal exemption list provided by the new federal bankruptcy Code.
The homestead allowance under this new Code is $18,5000 for equity owned in land, real estate, improvements and attached property.
Owners of Multiple Homes and Real Estate...
To avoid unnecessary complications, all people who own multiple homes, tracts of land, or interests in real estate, should consider filing a formal designation of homestead with the county clerk. Once entered into the county real estate records, the filing has the effect of an election of property that carries through to any subsequent bankruptcy case.
If proof designation is not available, creditors may file objections seeking to avoid homestead status and seek foreclosure if the court sustains the objection. Dilatory motions, hearings and ancillary investigations easily result in adversary proceedings. The designation then acts as a policy of insurance, yet must be filed for record before instigating any bankruptcy proceedings.
Learn more about New Jersey State Bankruptcy Exemptions simply go to our U.S. Bankruptcy Exemptions page.
In most states you can legally protect your personal residence in a bankruptcy. The interesting thing is homeowners are treated differently from state to state.
Learn more about the Homestead Act and how it affects you.
New Jersey Bankruptcy Code
All New Jersey Bankruptcy cases are governed by Title 11 of the United States Bankruptcy Code, by U.S. Bankruptcy Rules, and by local New Jersey State Bankruptcy Rules promulgated by New Jersey court.
The US bankruptcy court websites generally have links to both, the Federal US Bankruptcy Rules and specific New Jersey Bankruptcy Code. Clerks in the bankruptcy courts will not give debtors, or even attorneys for debtors, legal advice, including advice about which bankruptcy rules apply to a given case.
Locate a US Bankruptcy Court in your federal judicial district.
Since US Bankruptcy Code and New Jersey Bankruptcy Rules are very technical, and since the case load in the US Bankruptcy Courts makes judges very unforgiving of mistakes or missed deadlines, it's highly recommended to seek the advice of an experienced New Jersey Bankruptcy Attorney and Certified Credit Counsellor.
The most recent Changes to the Bankruptcy Code and Bankruptcy Rules came about on April 20, 2005 as President Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act. This new Bankruptcy Law came into effect October 17, 2005.
Learn more about the 25 Most Recent Changes to Personal Bankruptcy Law and how they affect you.
