Some New Jersey families hesitate to file for bankruptcy because they are afraid that they will lose every single one of those possessions. While the bankruptcy process does require surrendering control over some assets to give to creditors, not everything that a debtor owns must be given up in a bankruptcy proceeding.

First, federal law exempts certain assets entirely from the bankruptcy process. This means that the debtor can keep their retirement account and their pension in every bankruptcy. Creditors also cannot get their hands on someone’s paycheck and wages. One of the most important protections in bankruptcy laws is the homestead exemption. Creditors are not able to touch the debtor’s primary residence so long as the debtor has owned the home for at least 40 months before the bankruptcy filing. This also includes all of the household goods inside of the home.

The good news for debtors is that the exemptions in a Chapter 7 filing would cover most, if not all, of what they own. Most debtors do not own the type of property that they would have to give up during the bankruptcy process. In other words, debtors can breathe easier knowing that they are safer from unsecured creditors. This makes bankruptcy a viable option for families that are trapped in the cycle of debt and fearful that they may never escape.

Those who are wondering whether bankruptcy is the right move for them to make should consult a bankruptcy attorney. The lawyer could give them additional insight into how the process works and what their client may expect. The lawyer might then handle the necessary court filings to initiate the bankruptcy process. The client could expect their attorney to advise them at every step of the process until they emerge from bankruptcy with their fresh start.