Preserving Assets Through Bankruptcy Exemptions

Regardless of which chapter you're filing under, you have the right to designate certain assets as exempt from creditor claims in bankruptcy. That means you'll keep your household goods, your retirement accounts, a portion of any home equity you might have, and a portion of equity in your motor vehicle. Contact Purrazzella & Purrazzella, P.A., in Toms River for a free consultation about the ways exemption analysis can support your debt relief strategy.

Understand Your Exemption Rights Under Bankruptcy Law

In our experience, people under intense debt pressure typically have little idea of their right to exemptions. As a result, people often make serious mistakes in the attempt to keep creditors at bay and stay out of bankruptcy, only to find that they later need bankruptcy relief anyway. Some of the more common mistakes include cashing out a 401(k) or IRA to pay down credit card bills, or borrowing from home equity to pay medical bills. In both examples, people are using exempt assets to reduce dischargeable debts.

Whether or not bankruptcy is right for you anytime soon, our New Jersey asset protection attorneys can show you the difference between exempt and nonexempt assets, and dischargeable and nondischargeable debts. You'll come to understand that an exempt asset is one that you can keep in bankruptcy, and that a dischargeable debt is one that you can get rid of in Chapter 7 or Chapter 13. You'll see that it makes no sense to use exempt assets to pay off dischargeable debts, but people do it all the time.

Bankruptcy Lawyers Protecting Your Assets

A sound exemption analysis can also guide the decision to file under Chapter 7 or Chapter 13. Few people who meet the income test of Chapter 7 will have nonexempt assets of any interest to creditors or a Chapter 7 trustee, but sometimes they do. If you're facing the possibility of an asset turnover to pay unsecured claims, you'll be able to keep the property in Chapter 13 if you can pay the nonexempt value of the asset over time.

Contact Our Law Firm To Learn More

Find out more about the ways a thorough understanding of bankruptcy exemptions can help you achieve your debt relief goals both in and out of bankruptcy. Contact Purrazzella & Purrazzella, P.A., for a free consultation in Toms River by calling 732-691-4589 or 888-825-9980 toll free. We serve clients in Ocean County and Monmouth County as well as the entire state of New Jersey.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.