Filing for bankruptcy in New Jersey can cause a great deal of trepidation when it comes to being able to keep your furniture, television and other items. In a Chapter 7 bankruptcy, you are permitted to keep property that falls within certain exemptions. However, property that serves as collateral for an outstanding debt does not fall under any exemption.
Loans taken out to purchase passenger vehicles, household goods (furniture and appliances) and recreational vehicles such as boats are typically considered secured debt because the item purchased is usually also the collateral for the loan. If you are unable to make the payments on these items, the lender may be entitled to repossess them. When a bankruptcy is filed, the contract with the lender is considered to have been breached. If you want to retain the property, you may attempt to reaffirm the debt.
The first step is to anticipate what your financial situation will look like after the bankruptcy to determine whether you will be able to continue making payments on the property. If the court agrees that you are able to make the payments, it may approve a reaffirmation agreement between you and the lender. These agreements ordinarily contain the same terms as the original loan. After the expiration of 60 days from the approval of the reaffirmation agreement, the new contract can be enforced for non-payment. Here in New Jersey, mortgage loans or other real estate debt cannot be reaffirmed.
Making the decision to reaffirm a debt should not be taken lightly. Once the debt is reaffirmed and the 60 days has passed, you will once again be liable for payment of that debt. You may not file bankruptcy again for eight years should you find yourself unable to meet the financial obligation, and the property could be repossessed. Therefore, seeking the advice of an attorney can help you make the best possible choice for your circumstances.
Filing for Chapter 7 bankruptcy can help you sort out your financial situation and give you a fresh start. Even if the Bankruptcy Court would agree that you are able to continuing paying a debt, that does not necessarily mean you should. Our firm site can provide you with some of the answers you need in order to get started.