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You may keep some property, and some debts, in bankruptcy

New Jersey residents could have some misconceptions regarding bankruptcy. Many people believe that the court will require them to give up all of their property. Others believe that they will be able to discharge all of their debts. Neither of these statements about bankruptcy is true.

When it comes to keeping property after filing a Chapter 7 bankruptcy, the U.S. Bankruptcy Code allows certain property to be retained up to a certain value. Depending on the circumstances, you could be able to choose between using the federal property exemptions or the New Jersey property exemptions. If it appears that you could be forced to sell some of your assets under a Chapter 7, filing a Chapter 13 might be a better solution.

By the same token, not all debts are subject to discharge. The filer often retains certain taxes, student loans and child support and/or alimony obligations after Chapter 7 proceedings are concluded. In addition, there are other obligations such as criminal restitution and judgments in certain civil actions that you might not be able to discharge as well. However, they might be consolidated under a Chapter 13 repayment plan.

As you can see, whether you get to keep certain property and/or discharge certain debts in a bankruptcy depends on your circumstances. Therefore, in making the decision to file, it would be beneficial to enlist the services of a New Jersey bankruptcy attorney. Not only can he or she help to determine which chapter would provide you with the best outcome, but the attorney can also help navigate the process since it can be complex and frustrating.

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