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New Jersey Chapter 13 bankruptcy filers seek to protect assets

Filing for a personal bankruptcy can lead many in New Jersey to have various questions. Among the most important to some in our state is what property can be retained and what income must be disclosed to the bankruptcy court. In a Chapter 13 bankruptcy filing, the pertinent questions may also include the amount and duration of the proposed payment plan.

In one recent case that may be of interest to readers considering a Chapter 13 bankruptcy in New Jersey, the 10th Circuit Court of Appeals held that a debtor did not have to list his Social Security (SSI) income in his disposable income disclosure. Though the 10th Circuit Court of appeals does not cover our state, their decision may be closely watched by others across the nation. It focused on the issue of asset retention that is important to many seeking bankruptcy debt relief.

The decision centered on the SSI income of a person who sought to file for a Chapter 13 bankruptcy. In the case, the bankruptcy trustee tried to argue that the SSI income should be included despite the fact that the bankruptcy code requires the opposite. However, the appeals court reversed that decision and the income did not count for the bankruptcy petitioner.

It is typically the case that consumers wish to protect as many assets as possible in a personal Chapter 13 bankruptcy. Because of that fact, those who must seek bankruptcy protection should consider making a careful review of all available materials in order to understand all aspects of the bankruptcy petition. Though no one enters a bankruptcy lightly, understanding the process may help to make the procedure less stressful.

Source: newsandinsight.com, "Chapter 13 debtors may keep Social Security Income," David Light, Oct 26, 2012

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