Archives for August 2017

The New Jersey Motor Vehicle Exemption in a Chapter 7 Bankruptcy

When you seek protection in bankruptcy under Chapter 7, the law allows you to permanently discharge certain debts in exchange for the sale of non-exempt assets. As a general rule, you can’t discharge student loan, tax and family law arrearages. In addition, you can choose either the New Jersey state exemption or the federal exemption, and you’ll be able to keep certain property.

Choosing the Right Exemption for Your Motor Vehicle

The state exemption in New Jersey allows you to keep some up to $1,000 of equity in your car, van, truck or motorcycle. If your equity in the vehicle is less than $1,000, the trustee cannot take your car and sell it. However, if you have more than $1,000 in equity, the trustee will likely choose to take your car, sell it and give you the $1,000 exemption, and use any additional proceeds to repay creditors. In New Jersey, if you file a joint personal bankruptcy protection, you can double that exemption to $2,000.

If, instead, you opt to use the federal exemption amount, you can protect up to $3,775 of the equity in your motor vehicle.

Determining the Equity in Your Vehicle

The equity in your vehicle is essentially that amount you would personally receive and keep if you sold the vehicle and satisfied any debts related to the vehicle. If you have paid off the loan on the vehicle or there’s no debt, the equity in the vehicle will be its fair market value (usually calculated using the blue book value). If there’s any amount remaining on your motor vehicle loan, the equity will typically be the fair market value minus any amount still owed.

It’s important to understand that it’s the equity in your vehicle that counts, not the fair market value. Accordingly, you could be driving an expensive vehicle, but if the amount you owe is more than you could sell it for, you have no equity and the bankruptcy trustee won’t be interested in it.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we know that the bankruptcy process can be intimidating and confusing. We offer a free initial consultation to every client. For an appointment, call our office at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

Can I Keep the Proceeds of Lawsuit if I File for Chapter 7 Bankruptcy?

Often, one of the consequences of a personal injury is a bankruptcy filing. You may be unable to work and meet your financial obligations and you may have no other sources of income. But what happens if you file for bankruptcy protection and then receive a settlement or a verdict in a personal injury lawsuit? What if your lawsuit is not resolved before the bankruptcy filing is finished? This blog outlines the rules governing if you can keep a settlement or verdict and, if so, how much you can keep.

When you file for protection under Chapter 7, you get to discharge certain debts, but you must also turn certain property over to the bankruptcy court, to be part of your bankruptcy estate. The proceeds of your bankruptcy estate are then used to pay part or all of the debt you owe your creditors.

If you have filed for protection under the provisions of Chapter 7 of the bankruptcy laws, any monetary award you receive, or will receive, becomes part of your bankruptcy estate. In fact, even if you have not filed a lawsuit at the time your bankruptcy is complete, if you are entitled to do so while your bankruptcy is in process, any money you would be entitled to receive in a lawsuit is the property of your bankruptcy estate.

The amount of the settlement or verdict that will be exempt from your bankruptcy estate depends on whether you choose the state or federal bankruptcy exemption. The New Jersey state bankruptcy exemption allows you to keep $1,000 of any judgment or settlement. The federal exemption is substantially higher–$23,675.

Contact Neuner & Ventura, LLP

We understand the stress, anxiety and confusion that can be associated with a potential bankruptcy filing. We offer a free initial consultation to every client. For an appointment, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

Being resilient in midlife debt crises

Many of the people we see and help are facing a debt crisis in midlife. This should not be surprising. Being laid off or having medical problems with high medical bills are common causes.

This article from the New York Times caught our eye as particularly helpful: “How to Boost Resilience in Midlife”. It contains many of the nuggets of advice we provide to clients.

We hope it is useful and helpful. If you are in a debt crisis, or are not sure whether a crisis is looming, I looking at your monthly net income and comparing it to what you have to spend to live and stay employed. We can help guide you and if you come to meet with us, we will ask you to do this beforehand so that we can help you get a handle on the finances. As always, we will explore the non-bankruptcy options, and if we recommend a bankruptcy we will explain why and what is involved.

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