Bankruptcy Exemptions In New Jersey and Pennsylvania

| Apr 1, 2016 | Personal Bankruptcy |

Bankruptcy exemptions are used to protect assets when a bankruptcy is filed. For example, a Chapter 7 bankruptcy is also called a liquidation but the reality is assets are only liquidated if there is equity in the assets and the assets are not exempt. New Jersey and Pennsylvania bankruptcies rely primarily upon the federal exemptions. As of April 1, 2016 those exemptions have increased. For example if an individual files a bankruptcy and they own a home the exemption in their residence is $23,675. This is an increase from the $22,975 utilized prior to April 1, 2016. By way of example, if an individual owns a home worth $200,000 and there is a mortgage for $180,000, for bankruptcy purposes there is no equity since the equity in the home can be exempted. As a result, a Chapter 7 bankruptcy can be filed and the home would not be liquidated. Exemptions also exist for other assets. The new exemption amounts as of April 1, 2016 utilized in New Jersey and Pennsylvania for federal exemptions include $3775 for equity in a car, $12,625 for household goods and furnishings, and $1600 for jewelry. In addition to the exemptions being increased, other amounts also increased such as the maximum amount of unsecured debt in a Chapter 13 which increased from $383,175 to $394,725.