Buy Properties Below Market Value

When filing for a chapter 7 bankruptcy, it is important to know what property you can keep. This property is called “exempt”. The bankruptcy code recognizes the needs of individuals and provides for exemptions. New Jersey allows you to choose between the set of state exemptions and federal exemptions. We typically recommend using the federal exemptions because they provide for a larger amount of exempt property than the New Jersey set. If you are married and filing jointly, the amount of the federal exemptions doubles.

Your property will be listed on the bankruptcy petition. It will include a description of the property, the market value, and the law authorizing the exemption of the property. As soon as your bankruptcy petition is filed, all your property becomes part of the “bankruptcy estate”. The trustee, however, will not take physical possession of your property during this time. Additionally, your creditors have 30 days after the meeting of creditors to object to any exemptions on your petition. The burden falls on your creditors to prove that you have improperly claimed the exemption.

1. Your Home

New Jersey does not have a homestead exemption. This means that your property is not exempt from attachment by creditors. If you have too much equity in your property, there will be a forced sale. The federal exemptions allow individuals to exempt $20,200 for real property (including co-op and mobile home) and $40,400 for joint (husband and wife).

We will recommend that you obtain an appraisal to determine how much equity you have in the property (if you do proceed with the filing, the bankruptcy trustee will require a recent appraisal to determine the value of the property). If you have more equity than allowed by the federal exemptions, we recommend that you choose an alternative to a chapter 7 bankruptcy unless you do not have an intention to keep the property. A chapter 13 bankruptcy will be an option you can explore.

2. Your Car

By looking at the Federal Exemptions listed below, you will see that it allows you to retain a car that is worth up to $3225. This does not necessarily mean that you will have to give up a car that is valued at more than this amount. This is because the Federal Exemptions also allow for a wildcard exemption of $1075 and $10,125 of unused homestead exemption. Therefore, if you do not own a home, you can exempt a car that is valued up to $14,425. If you have multiples cars, you can split this amount amongst those cars.

If you are still making payments on a car or leasing a car, the above exemptions do not apply. On your bankruptcy petition, you can list whether your intention is to keep the car or give it back. If you decide to keep the car, your lender will prepare a reaffirmation agreement which will be signed by you and approved by the bankruptcy judge. This reaffirmation agreement is between you and the lender and it states that you will continue to make payments. On this reaffirmation agreement, you must specify your income and expenses to convince the judge that you will be able to afford making the payments post-bankruptcy. If you cannot afford to make the payments, the agreement will not be approved.

3. Other Assets

There are also exemptions for household goods and furnishings, retirement funds, clothing, jewelry, etc. Below is a list of the federal exemptions and of the New Jersey state exemptions.

A. Federal Exemptions

Homestead:522(d)(1) Real property, including mobile homes and co-ops, or burial plots up to $20,200. Unused portion of homestead, up to $10,125, may be used for other property.

Personal Property:522(d)(2) – Motor vehicle up to $3,225.522(d)(3) – Animals, crops, clothing, appliances and furnishings, books, household goods, and musical instruments up to $525 per item, and up to $10,775 total.522(d)(4) – Jewelry up to $1,350.522(d)(5) – $1,075 of any property, and unused portion of homestead up to $10,125.522(d)(9) – Health aids.522(d)(11)(B) – Wrongful death recovery for person you depended upon.522(d)(11)(D) – Personal injury recovery up to $20,200 except for pain and suffering or for pecuniary loss.522(d)(11)(E) – Lost earnings payments.

Pensions:522(b)(3)(C) – Tax exempt retirement accounts; IRAs and Roth IRAs up to $1,095,000 per person.

Public Benefits:522(d)(10)(A) – Public assistance, Social Security, Veteran’s benefits, Unemployment Compensation.522(d)(11)(A) – Crime victim’s compensation

Tools of Trade:522(d)(6) – Implements, books and tools of trade, up to $2,025.

Alimony and Child Support:522(d)(10)(D) – Alimony and child support needed for support

Insurance:522(d)(7) – Unmatured life insurance policy except credit insurance.522(d)(8) – Life insurance policy with loan value up to $10,775.522(d)(10)( C ) – Disability, unemployment or illness benefits522(d)(11)( C ) – Life insurance payments for a person you depended on, which you need for support

B. New Jersey Exemptions

Personal Property:2A:17-19 – Clothing; goods, personal property, and stock or interest in corporations up to $1,000 total.2A:26-4 – Household good and furniture up to $1,000.45:27-21 – Burial plots.

Wages:2A:17-56 – 90% of earned but unpaid wages if your annual income is less than 250 percent of the federal poverty level. If income is higher, 75%.38A:4-8 Military personnel wages and allowances.

Pensions:11 U.S.C. § 522 – Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000 per person.A:9-57.6 – Civil defense workers.18A:66-51 – Teachers.18A:66-116 – School district employees.25:2-1 – Trust containing personal property if it was created pursuant to federal tax law.43:6A-41 – Judges.43:7-13 – Prison employees.43:8A-20 – Alcohol beverage control officers.43:10-57 & 43:10-105 – County employees.43:13-9 – City workers’ ERISA-qualified benefits.43:13-44 – Municipal employees.43:15A-53 – Public employees.43:16-7 & 43:16A-17 – Police officers, firefighters, and traffic officers.43:18-12 – City boards of health employees.43:19-17 – Street and water department employees.53:5A-45 – State police.

Public Benefits: 34:15-29 – Workers’ compensation. 43:21-53 – Unemployment compensation. 44:7-35 – Old-age, permanent disability assistance.

Insurance: A:9-57.6 – Civil defense workers’ disability, death, medical or hospital benefits. 17:18-12 & 17B:24-8 – Health and disability benefits. 17B:24-6b – Life insurance proceeds, dividends, interest, loan, cash, or surrender value, if not the insured. 17B:24-7 – Annuity contract proceeds up to $500 per month. 17B:24-9 – Group life or health policy or proceeds. 17B:24-10 – Life insurance proceeds if policy prohibits use to pay creditors. 38A:4-8 – Military member disability or death benefits.

While many fortunes have been made and lost in the real estate business, many people overlook the value of real estate investing when it comes to planning for retirement. There are many great ways that you can let real estate build a nice little nest egg for your retirement and the sooner you begin the process the better.
While there are all kinds of stocks and mutual funds that confuse even the most intelligent among us, real estate is a pretty straightforward business to get into. The problem is that many people feel it is too risky.
The truth is that there are many different types of real estate investing that all carry different risk to the buyer. One thing is for sure and that is that with proper care and attention properties tend to gain value over time rather than lose value.
If you purchase properties today and properly maintain them, you can not only reap years of rental income while paying the mortgage on these properties but you can also find your retirement home and pay today’s prices for it rather than the prices of tomorrow.
When it comes to real estate it is always good to arm yourself with knowledge before taking any steps and you should carefully discuss all plans for your financial future with your trusted financial planner or advisor.
His or her job is to give you guidance when making plans and purchases that will affect your financial stability and security. They can also help you with the matters of taxation, cost analysis, estimated inflation, and the average rise in property value for an area.
As I mentioned before there are always risks when it comes to any sort of investing. The same holds true for real estate investing. Things can go wrong. On occasion you will find lemon properties, for this reason you need to have a complete and thorough inspection performed before you purchase the property.
You should also make sure that you are aware of your state and local laws as they apply to landlords. For this reason it is a good idea to consult with an attorney that specializes in this type of financial investing in addition to your financial advisor.
Rental properties aren’t the only way to build a property investment portfolio. There are all kinds of property investment opportunities for those that are willing to take the risk. When it comes to property investing, the greater risks often net the greater potential rewards.
The thing you must remember is that you are gambling with your financial future. I tend to stick with rental properties as they are a fairly safe bet and actually pay for themselves over the years while building a nice nest egg for my future.
There is the eternally fascinating investment opportunity that property flipping presents for one. When flipping a property you purchase a property below market value-preferably one that requires minor cosmetic repairs. Make the repairs. Then sell the house for a substantial profit.
This is a risky venture for those who are novices to the field and many would be investors have lost a great deal of money doing this. Successful investors however can net significant profits in a very short amount of time if they have the knowledge and skills to do the work themselves and time things perfectly.
There are even more property investing opportunities that provide even greater risk, as they are highly speculative known as pre-construction investing. This is the type of investing that creates millionaires. On the flip side it has sent many into bankruptcy along the way as well so tread very carefully before engaging in this sort of real estate investing and take great care never to invest more than you can afford to lose.
As you can see there are ample opportunities in real estate to create an outstanding financial retirement plan for you and your family. The only decision you need to make is whether or not this type of investing is a good fit for your comfort zone.

There are many ways to make money with real estate that is about go into foreclosure. Foreclosure is a process that a property will go into if the mortgage it not paid on time. The bank that holds the mortgage will send a notice to the owner of the property. This notice usually tells the

owner of the property that the property is under delinquency, witch means all the payments is not up to date.

One way you can make money with this and held the property owner is by buying the property from the owner. the owner do not want to mess up his of her credit and get kick out on the streets, this is why he or she will be more motivated to sell it to the at a below market value. When doing this you must find out how much equity the owner has in property, if the mortgage can be assumed, the interest rates of the mortgage and if there is any liens on the property. Equity is how much of the mortgage is paid off so far, and when a mortgage can be assumed it manes that it can transfer to a new person with the same interest rates. Liens are put on a property if the property is put up as collateral. Liens have to be paid by any one who owns the property.

You can buy the house from the owner for the equity he or she has in the property, assume the mortgage and rent it out to the previous owner. It is important to do a credit check on the owner. If your credit is better than the owner, when you assume the mortgage you can do a refinance and get a lower monthly payment. This method takes a lot or time but if it is done right not only you will be getting a property below market value but you will also be helping someone out in the process.

A good web site where you can see more information on topics like this is Real Estate Facts which is highly recommended. Thank you and enjoy.