Whether you can keep your house in a Chapter 7 Bankruptcy in New Jersey or any other state depends on several factors, including the equity in your home, the available exemptions, and your ability to continue making mortgage payments. Here's an overview of how Chapter 7 Bankruptcy can affect your home in New Jersey:
Homestead Exemption: New Jersey offers a homestead exemption that allows you to protect a certain amount of equity in your primary residence. The exemption amount can change, so it's essential to check the current figures. In some cases, if the equity in your home falls within the exemption limits, you can keep your house in a Chapter 7 Bankruptcy.
Equity in Your Home: If your home's equity exceeds the available homestead exemption, you may be required to sell your home as part of the Chapter 7 Bankruptcy process to pay off creditors. However, if your equity is less than the exemption amount, you may be able to keep your home.
Mortgage Payments: It's important to continue making your mortgage payments if you want to keep your home. Chapter 7 Bankruptcy can discharge unsecured debts like credit card bills and medical expenses, which may free up funds to cover your mortgage. Falling behind on mortgage payments could lead to foreclosure, irrespective of the bankruptcy filing.
Reaffirmation Agreement: If you have a mortgage on your home and you want to keep the property, you may have the option to enter into a reaffirmation agreement with the mortgage lender. This agreement essentially excludes your mortgage debt from the bankruptcy discharge, allowing you to continue making payments and retain your home.
In summary, whether you can keep your house in a Chapter 7 Bankruptcy in New Jersey depends on factors like the equity in your home, the available exemptions, and your ability to maintain mortgage payments.