The amount of cash you can keep when you file for bankruptcy depends on how much of it qualifies as exempt assets. When you file for bankruptcy, exemptions are your property deemed by the bankruptcy court to be necessary in starting over. The laws dictating them determine how much cash you can keep.
The Amount of Cash You Can Keep
Though there are federal exemption laws, exemption laws differ state to state. In New Jersey, you can either use NJ state exceptions or federal bankruptcy exemptions to determine what property you can keep. You cannot, however, mix between the two sets of laws. You must choose either federal or state exemption laws to work with.
In the case of both sets of laws, cash includes both money in your bank and paper cash as well. One type of cash generally not exempt under either set is cash from exempt property sold before filing for bankruptcy.
Examples of specific New Jersey bankruptcy exemption laws include household goods up to $1,000, personal property up to $1,000, and wages up to 90 percent of earned but unpaid wages (if your annual income is less than 250 percent of the federal poverty level).
As you can see, determining the amount of cash you can keep when filing for bankruptcy involves plenty of intricacies. It is common for people representing themselves in a bankruptcy case to make mistakes in calculating their exemptions. For this reason, it is essential that you consult an experienced bankruptcy attorney before you agree to anything.
Garland & Mason, LLC is a New Jersey bankruptcy law firm with professionals eager to help you find the best route to financial freedom. We offer free consultations to people thinking about bankruptcy or bankruptcy alternatives.