Keeping Your Home In A Chapter 7 Bankruptcy

The increase in exemptions available in New Jersey to protect the equity in your home has made it easier to keep your home in a Chapter 7 Bankruptcy. As of April 1, 2019 the exemption a home owner is allowed under federal exemptions, which are used in New Jersey, increased to $25,150.00 per home owner. For example, if you and your spouse own a home in, say, Cherry Hill, NJ or Voorhees, NJ and the home is worth $200,000.00 and there is a mortgage of $130,000.00 you would be able to file a chapter 7 and keep your home as long as you are able to continue making your mortgage payments and as long as you meet the other chapter 7 eligibility requirements such as those relating to income. That is because there would be no reason for a trustee to sell your home since there would be no benefit to your creditors. If a trustee sold the home in this example, the trustee would have realtor and other fees of about $20,000.00, the mortgage of $130,000.00 and you and your spouse could protect from creditors a total of $50,300.00. Consequently, if you are in need of a bankruptcy but are concerned you will lose your home, you should immediately consult with an experienced bankruptcy attorney

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