Can I Keep My Home if I File for Bankruptcy in New Jersey?
Many people who want to file for bankruptcy in New Jersey refrain from doing so because they are afraid of losing their home in the bankruptcy. If you own a home and are overwhelmed with unsecured debts, filing for bankruptcy is still an option for you!
Keeping your home depends on a few factors/calculations. First of all, you need to figure out how much equity you possess in the home. In order to do this, you need to know the present market value of your home and the balance left on any loans on the home. You then calculate the difference between these two numbers in order to know how much equity you possess in the home. For example, let’s say you own a home in Newark, New Jersey which is valued at $500,000.00. You also have one (or more) mortgages on this home with a balance of $490,000.00. That means you have $10,000.00 in equity.
The second step is to compare the equity amount to the exemption amount in the state. In New Jersey, there is a $20,200.00 homestead exemption that consumers are permitted to claim. If your equity exceeds this exemption limit, then there may be an issue with keeping your home in the bankruptcy. However, you should keep in mind that market value of home varies and an appraisal may be required. In our example above, the equity amount ($10,000.00) does not exceed the permitted exemption. Therefore, the consumer would be able to keep their home.
Also, in order to keep your home after filing for bankruptcy, you must make sure to continue to be current with your monthly mortgage payments. Making your monthly payments is required in order to reaffirm the debt.
To discuss whether you will be able to keep your home if you file for bankruptcy in New Jersey, contact Daniel Gershburg, Esq., P.C. today!