Can I Keep Property Or An Asset I Receive During A New Jersey Chapter 13?

NJ. Attorney Explains What Happens To An Asset That Is Received During A Chapter 13 Case.

This issue deals with unexempt New Jersey bankruptcy assets. The determination as to whether an asset is exempt is always analyzed prior to a chapter 13 filing, with the assets the debtor owns at such time.  A debtor must pay to the unsecured creditors (such as credit card debt), at least the amount of the unexempt equity of any and all of his assets. I have explained how to analyze asset exemptions in numerous blogs within this website.
The bankruptcy code lists the federal exemptions in U.S.C. 11 section 522(d).  If the amount of the allowable exemption, is more than the value of any  such property, minus the secured interest, or lien, of the property, the debtor need not pay any funds toward the unsecured debt, as a result of owning such property. An example of a secured lien is a mortgage on a house, or financing on an auto. However, if the exemption amount that is applied to such property is less than the equity in a particular property, the debtor must pay the portion of the value of each asset that is unexempt, towards the total unsecured debt. This analysis must be performed for each and every asset and it’s relevant allowable exemption amount.
The following is an example of a person filing for chapter 13 bankruptcy protection in New Jersey. Based on the equity in the house, alone, the debtor must pay at least the unexempt amount of $9,325.00 towards the total amount of unsecured debt. Please note that the debtor may be required to pay more, based on the value of other property and the amount of the monthly household disposable income.
Value of House is                                                                                                                   $370,000.00
minus mortgage payoff balance                                                                                        -$300,000.00
equals                                                                                                                                        $70,000
minus allowable 10% cost of sale which may be deducted for real estate                -$37,000.00
balance                                                                                                                                     $33,000.00
minus allowable exemption for each person who owns a house                                -$23,675.00
balance                                                                                                                                     $9,325.00
The following code section deals with property that the debtor acquires after the chapter 13 bankruptcy case is filed.
Ҥ 1306. Property of the estate