A common misconception about filing for bankruptcy is that you will lose everything you own and start life afresh. Does it mean a life of abject poverty and losing all your assets?
If you are thinking of filing for bankruptcy, you have probably heard of exemptions. They are intended to protect your property from unsecured debts when you go bankrupt, and they are something you ought to look at carefully if you are planning on declaring bankruptcy.
New Jersey has its bankruptcy exemptions just like most other states. It means that there are certain properties that you can get to keep as long as they don’t go beyond a certain threshold.
How do exemptions work?
Here is how a typical scenario may play out. Suppose you have a car worth $1,000 and the state motor vehicle exemption is placed at $2,000, then you may get to keep your vehicle. But, if the vehicle’s value goes beyond the exemption allowed, you are likely to lose it.
However, New Jersey bankruptcy laws do not have motor vehicle exemptions. Therefore, your only option may be using the wildcard exemption. It is a slightly different kind of exemption where you can choose to keep any property of your choice as long as it does not exceed a certain value.
Protect your legal rights
It is vital that you navigate your bankruptcy with the necessary knowledge of any applicable exemptions. This can help you protect and save some of your assets on your way to economic recovery. Remember, you still have legal rights which you need to safeguard even though you are filing for bankruptcy.
The decisions you make beforehand and how you go through this whole process will determine how soon you will reclaim your financial freedom.